July | August 2014 Vol 4 | No 4 $9.95
WALMART
PM # 42211029
CANADA PRIX + GRAND WINNERS
grocerybusiness.ca
NEW
Feta without the crumble.
Brie without the rind.
Introducing a new family of Deli Spreadable Cheeses. For more details, contact your Parmalat sales representative. 1.800.563.1515
Grocery Business July | August, 2014 Volume 4, Number 4
contents DEPARTMENTS
13
6
Front End
People & News
11 Open Mike
Conventional stores: get back to basics!
64 It Figures
Millennials step up to the plate
66 Perry's Point of View
The cost of consolidation
41 Shelf Life: New Deli
Consumers go au naturel at the deli counter
62 Launch It, List It
New and now products
On the Cover (L-R): Sandra Sanderson, Lee Tappenden, Shelley Broader, Gino DiGioacchino Cover Photo: Paul Eekhoff
4
July | August 2014
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45
July | August 2014 Vol 4 | No 4 $9.95
ON THE COVER
22 Walmart Canada: Future Forward
WALMART CANADA
Growth through mass customization
PM # 42211029
Growth through mass customization
PRIX + GRAND WINNERS
Walmart’s
Shelley Broader with Executive Team
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38
60
FEATURES 13 Sustainability and the
Aspirational Consumer
15 Toonies For Tummies Evolves 16 IPSOS: Winning In-store
A game plan
21 Making It: Sable & Rosenfeld
PHOTO GALLERY 57 Canadian Health Food
60
Association Show & Conference - West
59
Distribution Canada Inc. Annual Dinner
80th Annual Food & Allied Golf Tournament
61 FCPC's 2nd Annual Invitational
Charity Golf Tournament
35
Trends: Who is the "Free From" Consumer?
38
Local Hero
45
Grand Prix New Product Award Winners 2013
Stemmler's Meat & Cheese
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WALMART CANADA
22 The Broader Perspective: Q&A with Shelley Broader 24 Meet Walmart Canada's Executive Team 30 BrandSpark: Decoding the Walmart Customer 32 POPAI: The Mass Merchant Shopper
July | August 2014
5
Front End Rohan Marley (centre) with Michael Higgins (left) and Paul Higgins Jr., co-CEOs and co-COOs, Mother Parkers Tea & Coffee
Mother Parkers is jammin' with Marley Coffee As it moves into single-serve coffee products, Mother Parkers Tea & Coffee Inc. has formed an alliance with the Marley Coffee brand, a sustainably grown, ethically farmed gourmet coffee company founded by Rohan Marley, a former linebacker for the Ottawa Roughriders and the son of legendary musician Bob Marley. Mother Parkers is now Marley Coffee's Canadian food-service distributor. It will bring the brand into key retail accounts across Canada, and will offer Marley coffee in Mother Parkers' RealCup single-serve capsules. Mother Parkers will also
provide $2 million towards the marketing of the Marley Coffee brand over the next two years. Mother Parkers receives a seat on the to-be-formed Board of Advisors of Marley Coffee to help shape the company’s growth. Additionally, Rohan Marley will be appointed lead ambassador for WaterWise, Mother Parkers’ environmental sustainability project.
July | August 2014 Volume 4, Number 4
Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca
Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Contributing Editors Angela Kryhul, Sally Praskey
Creative Agency Boomerang Art & Design Inc. boomart.net Subscription changes & updates or general inquiries: info@grocerybusiness.ca
grocerybusiness.ca Chris Terrio, CROSSMARK Canada Inc. Nancy Croitoru, Food and Consumer Products of Canada Tim Berman, Kraft Foods Canada Michael Marinangeli, MIDEB Consulting Inc. Cheryl Smith, Parmalat Canada
Contributing Writers Peter Diekmeyer (Montreal)
Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca
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July | August 2014
Contributors Perry Caicco, Rodney Daw, Michael Marinangeli Tricia Ryan, Kim Rapagna, Catherine Yuile
Grocery Business Advisory Council Phil Donne, Campbell Company of Canada Tom Barlow, Canadian Federation of Independent Grocers
Mark Ayer, Procter & Gamble Inc. David Wilkes, Retail Council of Canada Cori Bonina, Stong’s Market
@grocerybusiness © Copyright 2014. All rights reserved. No part of this magazine may be reproduced without written permission of the publisher. GST Registration No. 83032 6807 RT0001 Publications Mail Agreement No. PM42211029 ISSN 1927-243X Mailing Address Grocery Business Media 390 Queen’s Quay W., PO Box 40085 Toronto, ON M5V 3A6
Perry Caicco, CIBC World Markets
Sign up for our eNewsletter at grocerybusiness.ca grocerybusiness.ca
Front End
Tree of Life Canada Recognizes Excellence “Each year, we recognize people for outstanding achievement, not just in their results, but also in how they live the core values of our company. These values include accountability, courage and excellence, and represent the best of what we do and who we are as an organization. I was very proud to have this group represent us in our Chicago awards events this year.” – Jamie Moody, president, Tree of Life Canada Inc. Pictured: Mike Oliveira, costing manager; Robert Kingsbury, I.T. project leader; Jessica Wedley, territory manager; Allison Fairfield, senior key account manager; and Cindy Germain, territory associate. Oliveira and Kingsbury won the Living Our Values Awards for the year, and the others won for their achievements in sales excellence.
Marketplace News
Ken Berger was recently named Canadian representative for the California Cling Peach Board, succeeding Bill Westernoff, who has retired after 19 years with the organization.
Offer SELF SERVICE a convience that is EASY, EFFICIENT and ACCURATE. BIZERBA - K CLASS scale systems ... Ideas ... Change the World Bizerba K class Touchscreen scales
Bizerba North America In Canada: Tel. 905 816 0498 Fax. 905 816 0497
Husky Food Importers and Distributors Ltd. has been appointed to distribute the RAO's line of pasta and pizza sauces in Eastern Canada. grocerybusiness.ca
E-mail. sales @ Bizerba.ca www.bizerba-na.com
July | August 2014
7
Front End
Transitions Target Corp. has named Mark Schindele president of Target Canada, replacing Tony Fisher, who left the company in May. Schindele previously was senior vice-president of merchandising operations for the U.S. division.
Mark Ayer is rejoining Kraft Canada on August 18, 2014 as vice-president of field sales. Ayer, who started his career at Kraft in 1989, was vicepresident, customer business development (sales) at Procter & Gamble Canada. Cory Onell has been promoted to the position of vice-president, sales, for Mondelez Canada, from regional vice-president with the company’s U.S. sales team.
The Food Marketing Institute has appointed Richard Stein to the newly created position of vice president, fresh foods. Previously, Stein was vicepresident of retail merchandising and marketing execution for Safeway.
Philip Donne has stepped down as president of Campbell Company of Canada, a position he has held since 2002.
Paul Beesley, former EVP and CFO at Empire Company Limited, and chief corporate development officer at Sobeys Inc., has joined Hudson’s Bay Company as chief financial officer.
Yves Potvin, founder and president of Garden Protein International, Inc., the maker of the gardein plant protein brand, received an Innovation Award from the BC Food Processors Association to honour his contribution in creating innovative, meat-free products and for driving growth in the meat-free category. Nancy Kwon has joined the Canadian Federation of Independent Grocers as director of marketing and communications. Previously, Kwon was web and managing editor with Canadian Grocer magazine.
Where Walmart and suppliers plan the future
Anthony Longo, president and CEO of Longo Brothers Fruit Market Inc., and Rosanne Longo, chair, Longo's Family Charitable Foundation.
Longo’s Charity Golf Tournament raises $240,000 The Longo’s 25th Anniversary Charity Golf Tournament raised nearly a quarter of a million dollars to benefit local hospitals and kids’ camps across the Greater Toronto Area. Longo’s hosted its highest number of golfers, 502, over two shotguns held on June 17, 2014 at Lionhead Golf & Country Club. The list of charitable partners includes SickKids Foundation, Markham Stouffville Hospital, ErinoakKids, and the Canadian National Institute for the Blind.
8
July | August 2014
PURPOSE To provide a state-of-the-art facility and s grocerybusiness.ca that create a collaborative and innovative en to support the missions of Walmart and Sam
Habitat for Humanity accepts its portion of the proceeds from the 2014 Charity Golf Classic: (L-R) Ken Woo, CEO, Calgary Co-op; Carla Gervais, fund development coordinator, Habitat for Humanity; Laura Babin, director, Co-op Community Foundation; Laura Sullivan, board chair, Calgary Co-op.
Co-op Community Foundation raises $300,000 for local charities Over the past two decades, the Calgary Co-op Community Foundation has raised more than $4.4 million for community initiatives. This year, Calgary Co-op suppliers and partners participating in the 21st Annual Co-op Charity Golf Classic helped raise over $300,000. Six local organizations will share the funds: Mustard Seed, YWCA, Habitat for Humanity, EMS Foundation, Meals on Wheels, and MRU Kids University. “This event is a great example of what it means to be a part of the community,” says Laura Babin, director of the Co-op Community Foundation. “We have a long history with this event, and the funds raised help elevate and build meaningful partnerships.”
MEET ● SHARE ● INNOVATE ● PRESENT
services nvironment m’s Club.
Broker Bulletin
CROSSMARK Center for Collaboration opens in Bentonville
Sales and marketing services company CROSSMARK has opened its new Center for Collaboration in Arkansas, next door to the Wal-Mart Stores, Inc. home office. The centre is a collaborative environment that will act as a hub for Walmart, Sam’s Club and its suppliers to develop innovative ideas and to plan for the future. The centre features meeting and video conferencing rooms, modular digital walls, a presentation kitchen, and areas for studying impulse purchases and testing product launches. One of the centre’s sponsors is Alteryx, a data blending and advanced analytics firm that has provided the centre with a software platform that enables fast, advanced analytic decision-making in the consumer goods and retail industries.
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Open Mike
Conventional stores need to get back to basics! By Michael Marinangeli
We are at a crossroads with conventional stores, and time is running out. Discount stores (including ethnic) now account for approximately 40 per cent of dollar sales nationally – and growing – while conventional stores continue to slide. In Ontario, more than 50 per cent of sales go through discount. We have been talking about this problem for years, but nobody seems to be solving it. Loblaw has built a masterpiece at Maple Leaf Gardens. Sobeys has launched a Sobeys Extra store in Burlington, Ont. These concepts are what I would call “super-premium conventional stores.” Are they a viable solution to arrest the discount onslaught? Although I am impressed with the effort, I don’t foresee these types of stores being rolled out across the country in large numbers. They appear to be expensive to build and labour-intensive to operate, and fit the bill only in specific locations. In my opinion, we need neighbourhood conventional stores that provide compelling reasons to garner the patronage of the average family household. The really good independent grocers can serve as role models. Industry consolidation has played a role in precipitating the demise of conventional stores. Three large grocery chains do approximately 60 per cent of the grocery-channel business across Canada. All three operate conventional and discount banners. With the rapid growth of
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Walmart, Costco and ethnic stores, more focus seems to have been placed on the discount side of the business. Discount stores have improved their appearance and offering in most locations, and are becoming more “conventional.” Some have added back services such as service meat, seafood and pharmacies, so the premium charged at conventional stores is getting harder to justify. It is time for senior management to take the shackles off conventional stores, and make them more alluring for the average household. Better execution of the basics is a good place to start.
10 suggestions to improve conventional stores 1. Grocery Pricing – Narrow the price gap in grocery between discount and conventional stores. This is the most profitable department in the store, and conventional stores have let the discounters take it away from them. 2. Assortment – Conventional stores carry far too many grocery products. Get rid of the duplication and add back variety that distinguishes your store from others. Your customers will appreciate the simplicity. Continued on page 12
July | August 2014
11
Open Mike
Continued from page 11
3. Merchandising – Build impressive displays. Focus on moving tonnage. Load up your customers so they are less likely to shop elsewhere. Today’s conventional store merchandising lacks punch. Be more aggressive. 4. Training – The lifeblood of any organization is its people. Spend more time on succession planning, talent development, and training. Having a robust talent pool is costly; not having one will cost you more. 5. Advertising – Cut the number of items in your ad in half. Move from a broadsheet to a tabloid format, and use the liberated space to market your services and points of difference. 6. HMR – Cut back on the number of HMR items, and do a better job managing the ones that count the most. Controlling shrink is paramount, and having a more streamlined, efficient and compelling offering should help you to better manage labour, standards and waste. 7. Produce – Ethnic and discount stores price their produce well below that of conventional stores. My recent price checks showed conventional between 25 and 50 per cent higher. Unless this is corrected, you might as well kiss your produce business good-bye. This is an image maker or breaker. 8. Meat – Learn from retailers like Costco who have built a solid reputation on meat. They have great quality and they price the entire counter responsibly. Conventional stores’ regular meat prices are in the stratosphere. Also, don’t compromise your quality on feature items. If you sell Triple A beef on a regular basis, don’t lower your standards when it’s on feature. You want customers to be loyal to your store, so consistency is critical. This can be one of your competitive advantages. 9. Service – Put service back into your stores. Make sure you are properly staffed at peak times, and do whatever it takes to minimize lineups at the checkout and service departments. If you are not prepared to allocate sufficient hours to service
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July | August 2014
meat and seafood counters, take these departments out of your store and stay with self-serve. These service counters are a great asset when properly managed, but will destroy your quality image if poorly executed. 10. Bakery/Deli - Turn these two departments into a destination for your store. Examine how the independent bakery/deli operates. Don’t be shy to copy their best practices, pricing and merchandising. These two departments are your cornerstones in building sustainable customer loyalty.
The last word
Almost every new grocery store that opens has a pharmacy these days. Even the discount stores are expanding the number of pharmacies they operate. I don’t get it. Seldom do I see a customer at the pharmacist station in a supermarket. A tremendous amount of time, talent, treasury and space is being applied to this area of the business. Stores 50,000 square feet and under are compromising their “centre of the store” offering to allow sufficient space to put in a pharmacy and HABA items in order to make it a full-line drugstore. With the changes to government drug reimbursing rules, the viability of these pharmacies needs to be examined. From my observations, the sales don’t warrant the space and profile that pharmacies are given in the stores. Focus your time and effort on food. You want to turn your store into a great place for customers to shop for their full food order! Getting rid of the pharmacy and allocating the space to grocery or fresh could be an “intelligent loss of sales.”
Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. Contact: mjmarinangeli@gmail.com Michael is a founding member of the Grocery Business Advisory Board.
grocerybusiness.ca
Making Sustainability Cool Unlocking the Power of the Aspirational Consumer By Kim Rapagna
Sustainable products help bridge the gap between our fundamental need for things and wanting to lower our impact on the planet. However, product innovation in the space, while growing, has stalled in recent years. One of the simple reasons behind this is lack of demand. Recent consumer studies show that while the number of “consumers looking to buy a green product” is at an all-time high, consumer-sustainable activities, such as recycling, buying green products and energy conservation, is at an all-time low. Mainstream consumers have long treated living sustainably as an additional burden in an already full life.
Consumers and
the Future of Sust
CHAPTER OPEN
ainability
ER
However, there is a shift happening. In 2013, GlobeScan, BBMG and SustainAbility published an excellent report, Rethinking Consumption – Consumers and the Future of Sustainability, which identified a new cohort of “Aspirational Consumers.” These consumers make up 37 per cent of the consumer base, and effectively balance materialism and the need for status with a sense of responsibility to purchase products that are good for the environment and society. S/he is looking to be recognized as a person first – multi-faceted, complex – and as a consumer second. Aspirationals are different from the traditional Lifestyle of Health and Sustainability (LOHAS) consumer who is willing to pay extra for socially and environmentally responsible products and services. Aspirationals are looking for a mission, a higher sense of belonging. hey are less motivated by guilt about their • Town personal impact on the environment
and society, and instead seek meaning and a sense of belonging.
A majority of consumers across all six markets say, “as a society, we
need to consume a lot less to improve the
Brands can respond to this cohort by giving Aspirationals more than a product; they need to give them a platform in which to participate. The most successful brands will unlock consumer motivation by giving them something to believe in, and a community to belong to. Aspirationals love to be part of a story, to share their findings with friends and family and, especially, to be part of the solution. Aspirational consumers are equally interested in product brand innovation. On the product side, quality, value and performance still count; however, brands need to build their story, and engage consumers in innovation by finding out what features they want, and what ingredients they care about. Authenticity of voice in telling the story is important, but having advocates tell your story on your behalf is even better. Engaging in social media and the community – proactively telling your story – is the key. The aspirational consumer is a potential tipping point for sustainable brands, but it’s up to brands to harness their power.
hey are looking to discover new products, • Tservices and brands that speak to a higher
ideal. They are highly influenced through social media, and use it to shape the taste and culture of their peers. They have a pulse on what’s cool.
Kim Rapagna is manager, CSR and Sustainability, at Target Canada.
environment for future generations.”
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July | August 2014
13
2015
Nourish your neighbourhood. Build your brand. It takes a Toonie to fill a tummy.
Toonies delivers
IMPACT
1 in 6 children go to school hungry.* Monies raised improves independent work, initiative, problem-solving and class participation.
And we’re looking to raise $1,000,000 – that’s lots of tummies in many communities. Join the Toonies for Tummies campaign. Build goodwill by helping to
Toonies drives
ENGAGEMENT Flyers, in-store POS, Twitter, brand-tagged videos and a micro-site that invites shoppers to track their Toonie in their local community.
get nourishing meals to children AND gain increased visibility in-store through an integrated marketing campaign; two sides of a powerful coin. For brands, the impact includes reaching 13+ million Canadians via flyers, visibility on shelf in 1,000+ stores, and engagement with millions of fans in social media.
Toonies builds
BRANDS & COMMUNITIES One retail, one sponsor partner and one shopper at a time.
Find out more. Contact us: Gabby Nobrega, The Grocery Foundation, gabby@groceryfoundation.com *Ontario Student Nutrition Program, www.osnp.ca
Toonies for Tummies Toonies for Tummies re-launched in 2014 with a fresh approach to drawing consumers’ attention to the urgent need of hungry children in their communities. Michelle Scott, executive director of The Grocery Foundation, tells how the program will evolve for 2015. Q. When is Toonies for Tummies 2015?
A. Toonies for Tummies is slated to take place February 5-15, 2015. More than 1,000 retailers in Ontario and Atlantic Canada will be taking part as we look to raise $1 million.
Q. How much was raised in 2014?
A. We successfully raised $864,000. One hundred per cent of these funds are making their way to local programs in Ontario and Atlantic Canada, reflecting the donations raised by participating retailers in proximity to programs that help provide essential nutrition to countless children.
Q. What are the plans for the 2015 campaign?
A. The 2015 campaign will build on some key elements we introduced this year, including the concept of tracking your Toonie locally. We're also planning on leveraging the same great creative. We’ve made some considerable enhancements that will add even more in-store presence, activation and consumer engagement for sponsor companies, and are making the program even more hyper-local for shoppers. This will include showing them how much we raise and how many meals are actually needed by children attending school in their neighbourhoods where they live and shop.
Michelle Scott
of shoppers and profile their brands. We know it's important for companies to showcase their community-building efforts, so we're also going to give them branded campaign assets so they can showcase their support of Toonies to their fans.
Q. What is the cost to sponsor?
A. There are options depending on the number of products you want to feature and the markets where you'd like to participate. We're reaching out to sponsors now so we can truly integrate them into the marketing plan. We're excited and believe that Toonies is unique, offering both activation and corporate social responsibility.
“Helping to alleviate hunger is a cause that Campbell has been committed to for many years, and its partnership with Toonies for Tummies and The Grocery Foundation is For more information one of the ways it can help on sponsorship, contact: to make a difference as a food company.” The Grocery Foundation Philip Donne Campbell Company of Canada
Gabby Nobrega
gabby@groceryfoundation.com Office: 416-515-8433 Mobile: 416-930-9756
We've really dialed up the benefits to sponsors with a hardhitting integrated marketing program that will reach millions
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July | August 2014
15
The Shopper
PLANNED/UNPLANNED CATEGORY PURCHASE
WINNING IN-STORE:
A GAME PLAN By Catherine Yuile
Savvy marketers and retailers know that in-store promotions and product placement can influence even brand-loyal shoppers to change their minds. Although marketers can increase the desirability of a brand or product through pre-shop levers such as advertising, coupons, samples, website and direct-mail offers, both marketers and retailers will need to work more effectively in-store to influence shoppers’ behaviour. Currently, only a small segment of Canadian shoppers are strongly influenced by mobile offers, and with price-matching taking the competitive advantage out of coupons and flyers, Ipsos research has found that, increasingly, effective in-store tactics are key to building profitable category and brand sales. Understanding how to best help your customers find what they want (and what you want them to find) is important. Carla Flamer, executive vice-president, Ipsos Reid, outlines two kinds of shoppers that brands need to be aware of: the Finder and the Decider. Finders are those shoppers who decide which brand or category to purchase before entering the point of purchase, and who typically end up buying the same brand most of the time. These shoppers tend to be less influenced by in-store stimuli for a particular category. Deciders are those shoppers who decide which brand or category to buy or consume at the point of purchase, and are more heavily influenced by stimuli at the point of sale.
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July | August 2014
PLANNED FINDER
UNPLANNED FINDER
UNPLANNED DECIDER
UNPLANNED DECIDER
FINDERS
WHERE BRAND IS DECIDED
In 3 of the 4 quadrants, the shop influenced purchase behaviour
Based on how shoppers decide on the category and brand, we can differentiate among four paths-to-purchase segments: Planned Finder – they know exactly what they want, and have made both the category and brand decision before entering the point of purchase. Unplanned Finder – they have a brand preference selected before arriving at the point of purchase, but the category isn’t decided upon until they are in the store. Planned Decider – they arrive with a category in mind, but do not select a brand until in-store. Unplanned Decider – they make both category and brand purchase decisions when in the store. In order to satisfy the needs of Finders, ensure that key national and/or popular brands are stocked and that there is easy at-shelf access to the brands. If you are trying to shake up the category, have new innovations noticed, draw attention to more profitable products, or attract Deciders, your tactics should include special displays, in-store communications, promotions, new shelf plans, or secondary placements.
DECIDERS
Customization of shopper marketing plans by banner and store format is key. For example, in a store where most of a category is on price promotion, an end-aisle, mid-aisle or at-entry display might help to draw shoppers’ attention and encourage a purchase. In a category with lots of innovation (yogurt, for example), on-shelf information and a simply designed planogram based on the shoppers’ decision tree will work best. Although marketers can increase the desirability of a brand or product through pre-shop levers such as advertising, coupons, samples, website and direct-mail offers, both marketers and retailers will need to focus more on working with in-store sales levers to influence shopper behaviour in the store.
CATHERINE YUILE is a senior vice-president with Ipsos ASI, leading the client service team overseeing pre-testing and in-market tracking. Catherine is Ipsos ASI’s global expert on ad transferability across borders.
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速
Metro Toronto Convention Centre, South Building NEW LOCATION
Conference September 11 & 12 Trade Show September 13 & 14
Celebrating 50 years as the voice of the natural health industry Your one stop shopping experience for the latest in natural health products, health and beauty, sports nutrition, specialty food, nutraceuticals and organics.
FOR COMPLETE DETAILS AND TO REGISTER VISIT chfa.ca CHFA trade shows are not open to the public. Proof of industry status is required in order to gain admission to the conference and trade show. For additional information on the show and our show policies, please visit chfa.ca
BE AT THE HEART OF THE NATURAL HEALTH INDUSTRY CHFA East is Canada’s largest conference and trade show for the natural health and organics industry. It’s the place to meet the industry’s top manufacturers, distributors and brokers, and to discover the latest products coming to the Canadian market. In order to accommodate the tremendous demand for exhibit space, we have moved the show to the South Building of the Metro Toronto Convention Centre. Now boasting more than 800 exhibits, there’s always something new to discover.
PROUD SHOW SPONSORS: DIAMOND SPONSOR
PLATINUM SPONSORS
GOLD SPONSOR
SILVER SPONSORS
HAPPINESS OASIS IN ROOM 810
MEDIA SPONSOR
Pre-register by August 29th to save time and money! Visit chfa.ca for details.
EDUCATION = PROFITS Join us on Friday, September 12th for a full day of education developed specifically with Retailers in mind. There are a number of topics and concurrent sessions to choose from including our Product Education Sessions, 45-minute sessions that are included with your trade show registration. Check our website at chfa.ca for complete details and register your whole team!
8:30am - 9:30am OPENING KEYNOTE – Owning Customers for Life… 4 Powerful Steps to Increase Loyalty, Sales & Profitability! Donald Cooper Your customers are more demanding, more confused, more time-compressed and more cynical than ever before. They want your best service and your best price…and they want it now. On top of that, you have way too many competitors! So, to succeed you must stand out. You must create compelling value and experiences that make powerful connections with your target customers. Simply put, you must be extraordinary. Mediocrity is no longer an option. Creating loyal and profitable customers for life is not that complicated. In fact, you’ll be amazed at how simple and do-able it actually is. In this “bottom-line” session Donald delivers his clear and compelling insights into why people buy, why they don’t buy…and what they really want when they do buy.
Welcome to the CHFA East Park While visiting CHFA East be sure to make time to visit the CHFA East Park, located in the center of the trade show floor. Take your shoes off to walk in the grass, smell the flowers, enjoy the water feature, or relax in the zen garden area. The park will also play host to several activities sponsored by CHFA member companies. Details on activities and times will be forwarded to all pre-registered attendees.
WHAT IS CHFA? The Voice of the Natural Health Industry in Canada. The Canadian Health Food Association is Canada’s largest trade association dedicated to natural health and organic products. The natural health product industry contributes $3 billion, and the organic product industry contributes another $3 billion to the Canadian economy. CHFA is committed to promoting and protecting both. Our annual trade show, CHFA East, has experienced unprecedented growth in recent years, a testament to the industry it serves. Come and see for yourself. You won’t be disappointed!
• health and beauty • sports nutrition • vegan • gluten-free • nutraceuticals • organics • vitamins • supplements and more!
Register Today! chfa.ca CHFA East • Metro Toronto Convention Centre, South Building Conference – September 11 & 12 • Trade Show – September 13 & 14
Making It
Condiments are cooking Sable & Rosenfeld parlays a homemade condiment into an international success. By Sally Praskey
When Myra Sable – pregnant with her the Sable & Rosenfeld third child – teamed up with neighbour brand took off. Carol Rosenfeld in 1970 to import The two partners gourmet food products from Europe, began producing little did they imagine they were laying pears in Cointreau, the cornerstone for a popular and antipasto, apple Myra Sable ever-expanding line of condiments and butter, strawberry jam cocktail garnishes. in port, and zucchini The imported products were originally sold pickles in their home kitchens, later renting in the upscale and now-defunct Creeds store commercial kitchens and “hiring everyone we in Toronto, as well as at Holt Renfrew outlets knew to cook, chop, and can,” recalls Sable. across Canada. When the fledgling company’s They exhibited at the Fancy Food Shows, second Christmas shipment missed the boat winning some major awards in 1985 that – literally – Sable and Rosenfeld headed into brought instant success for the brand and the their kitchens to create foods that would fill company. the shelves of their own freestanding boutiques. But it wasn’t smooth sailing from there. “We Their first product was Sweet Honey then went through many growing pains,” says Mustard – at least until Canadian business Sable. “Hiring co-packers, some of whom stole magnate Garfield Weston, then owner of the our recipes, some of whom went bankrupt in iconic Fortnum & Mason specialty store in the middle of a production season; and London, noted that he didn’t have a Russian figuring out how to best reach the Canadian mustard. “The strange thing was it actually and U.S. markets, as shipping direct was no was an authentic Russian recipe, as it came longer working well.” The solution was to close from a Russian uncle of Carol’s,” explains all their retail outlets, and hire brokers and Sable. When Esquire magazine featured the distributors across both countries. Russian mustard in its 1971 Christmas gift Although Rosenfeld is no longer part of the centrefold, Neiman Marcus came calling, and company, Sable & Rosenfeld continues to grow.
grocerybusiness.ca
It now boasts more than 50 products, including mustards, sauces, bruschettas, “Tipsy” cocktail garnishes and, most recently, Tipsy Tapas–vegetables stuffed with imported Austrian cream cheese and hand-packed in an herb-splashed vegetable oil. Two more “exciting new products” are on tap for the upcoming Fancy Food Show. “Organic, gluten-free, all-natural products are no longer a trend, but a way of life,” notes Sable. “All products must follow these criteria.” Inspiration for her creations comes “at the weirdest times and places,” says Sable. “I love to travel, follow the new chefs and visit their restaurants. I suspect that this, combined with my love of cooking [she is currently re-issuing her cookbook, Elegant Entertaining] “is where the development of new products comes from.” She is never short of original ideas. “We have been copied numerous times, but I can honestly say I have never copied a product line. I always have new products that I’m eager to launch. As long as I’m true to our mission statement of creating easy-to-use, everyday condiments, I know what to do.”
July | August 2014
21
THE
BROADER
PERSPECTIVE By Sally Praskey
On the eve of Shelley Broader’s promotion to president and CEO, Walmart EMEA region – giving her responsibility for Europe, the Middle East and Sub-Saharan Africa, as well as Canada – she spoke with Grocery Business on her aims and achievements during her nearly four years at Walmart Canada. And as Walmart Canada celebrates its 20th anniversary, Broader and members of her executive team discussed several initiatives that are driving the retailer’s growth as it builds on its two decades of experience in this country.
GB: How will your new position impact Walmart Canada?
GB: What is important to your Canadian customers?
SB: For the first time, we’re starting to see our customers talk about time and money with equal value, so they are very time-starved.
GB: How has Walmart responded?
SB: All 95,000 of us get up every day to save Canadians money so that they can live better. That’s been our mantra for 20 years now. The fact that we are focused on price leadership every single
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P H O T O : PA U L E E K H O F F
SB: Our company, Walmart Canada, as well as our ASDA business in the U.K. and our Massmart business in Africa, are world-class operations. We are also delighted to have someone of Dirk Van den Berghe’s calibre to lead our Canadian operation. His broad-based experience, including 15 years of international food retailing expertise, will help us build on our strong track record in Canada.
day fits right into the needs of the Canadian consumer who is starved for time, who is incredibly value-focused. We also are very focused on one-stop shopping, on giving customers back some time in their busy schedule. We’ve been famous for having a breadth of assortment on the generalmerchandise side, but we are now bringing fresh food from coast-to-coast to continue to enhance that one-stop-shopping experience.
GB: Are there any plans to add full-service fish and meat counters?
GB: Are managers able to adapt their stores to their communities?
SB: We believe that our stores are the absolute best complement to our e-commerce business, and that our e-commerce business is the best possible complement to the store. As we move from one-stop shopping to one-source shopping, a customer can get Walmart products that are great value any way they want. We believe that our physical locations give us the opportunity to service customers either with them physically coming in, or by getting product to them faster than anyone else because we are already located in every part of Canada.
SB: Yes. We utilize a term called mass customization. We’re a mass merchant, but we realize that one size does not fit all, and we can’t propose to know all the answers sitting in our office here in Mississauga. So we rely on the real experts in our business, who are our nearly 400 store managers in the field. They are closest to the customer, and we provide freedom within a framework.
GB: There is an epic battle raging for market share. Walmart's same-store sales have declined. Where will growth come from?
SB: We have to ensure that we’re changing right along with the consumer. We want to be the source of one-store shopping for low prices across Canada. We are rapidly expanding our e-commerce program – our online growth in Canada is 118 per cent. And we are continuing to grow through the addition of fresh food. Last summer, we brought fresh food from coast-to-coast with the addition of the Maritimes, and we still have over 100 stores to go.
GB: Walmart U.S. is testing several new, smaller formats. Will we see those formats in Canada?
SB: The year before last, we had quite explosive growth, where we had 73 new store projects across Canada, 39 of which were stores that we acquired from Zellers. In that group was a plethora of sizes and formats. So we have had the opportunity to test several different formats and pick ones that we would like to move forward with.
grocerybusiness.ca
SB: We’ve experimented and had some unique opportunities in working with some local partners. But the fact is that we are a mass merchant and so that particular model doesn’t work so well for us at this point.
GB: You’ve talked about your focus on e-commerce. How does that dovetail with your stores?
GB: What is the best career advice you’ve received?
SB: I have been lucky in my career and in my life. I have had so many meaningful mentors and such great career advice along the way. But I think it goes back to that idea about leadership as a coordinator of experts. There comes a point – and it’s pretty early on in your career – where your own individual efforts aren’t going to be enough to get tasks done. Understanding your own strengths and weaknesses, and surrounding yourself with people who complement your strengths and fill in your weaknesses, allows you to build that kind of team mentality that can propel your own career and your organization.
GB: What advice would you give to a young person contemplating a retail career?
SB: Go for it! Retail is a great career, and it’s different every single day. There’s lots of opportunity for growth. One-third of our store managers today started with us as hourly associates, so we’re very proud of the opportunities that we’ve created at Walmart.
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Future Forward roundtable with walmart’s executive team
On the occasion of Walmart Canada’s 20th anniversary, Grocery Business met with the retailer’s senior executives for a wide-ranging discussion on issues impacting the business today. PARTICIPANTS: Shelley Broader president and CEO, Walmart EMEA
Gino DiGioacchino chief operating offi cer and EVP e-commerce
Andrew Pelletier vice-president of corporate affairs and sustainability
Sandra Sanderson
executive vice-president, marketing
Lee Tappenden
chief merchandising offi cer
MODERATOR Karen James
co-publisher and executive editor, Grocery Business
On driving growth SHELLEY BROADER: One of the things that I think is exciting, whether you’re talking about Walmart in 2014 or Walmart in 1994, is the fact that we’re never finished growing, evolving. For example, we’ve only been in the food business for seven years, and are at the half-way point of store distribution, so we have a long way to grow just in food. LEE TAPPENDEN: The heart of the business has remained unchanged since 1994, which is basically focused on selling the products that customers want at unbeatable prices. And that level of obsession is in our DNA. It’s about making sure that we’re absolute price leaders in the market. GINO DIGIOACCHINO: At Walmart, the customer always comes first. You can find that with the local aspect of how we run things. It’s one store at a time. It’s not about chain stores. It’s really serving the local customer and the community, and that allows us to be nimble and always give the customer what they want, when they want it.
Shelley Broader
On the ethnic consumer
Gino Digioacchino
SHELLEY BROADER: Being part of an organization the size of Walmart, even though we’re very autonomous and we get to do our own thing in Canada for the Canadian customer, we get the opportunity to shop best practices from 27 other places around the world. It’s like a cafeteria plan of excellence. ANDREW PELLETIER: To figure out what the multicultural customer wants, we can go to Walmart India; we can go to Walmart China . . . LEE TAPPENDEN: We’re actually tapped into Walmart China for Chinese New Year. We used some of the suppliers who supply Walmart China. We’ve had two associates join our buying team from Walmart India. So it’s a great way to access true knowledge that is really close to first-generation new Canadians.
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Timeline: 20 years of Walmart Canada Adds grocery products to Woodstock, Ont., store
1994
1997
Enters Canada with the acquisition of 122 former Woolco stores
Begins to add fresh food in Supercentres
2006
2007
Supercentres launch in Canada
2010
Shelley Broader becomes president and CEO, Walmart Canada
Supercentres now coast-tocoast
2011
2013
Launches Women in Retail program
2012
Acquires 39 former Zellers locations
2014
Shelley Broader becomes president and CEO, EMEA Region, with continued responsibility for Canada, as well as Europe, the Middle East, and Sub-Saharan Africa; Dirk Van den Berghe replaces her as president and CEO, Walmart Canada.
2014
Now has 390 locations, more than half of which carry fresh food
On e-commerce LEE TAPPENDEN: Canadian household Internet penetration is one of the highest in the world. It’s just that the level of transactional confidence has been lagging, and it’s a pent-up demand. It’s starting to be unleashed now and we’re seeing the acceleration to the point that, within three years, we could be up to the U.S. level of transaction for online purchases. GINO DIGIOACCHINO: We just started our e-commerce business two-and-a-half years ago, and already we’re the number one retail site in Canada in terms of traffic. It’s driven through our relationship with Walmart Labs, and with what the U.K. is doing – giving the customer a level of knowledge or ease of shopability. Our website is one of the few in the world that has the ability to move from a laptop to an iPad to an iPhone with easy access.
Sandra Sanderson On mass customization SHELLEY BROADER: We’re a mass merchant, but if we want to be “store of the community,” we have to be unique and special for each store. So we try to group our stores so we can be the same where we can, to keep our costs down, but be fiercely different where we need to be special and unique for that customer. It’s not just about country of origin; it’s also knowing the geography, weather, festivals, holidays.
SANDRA SANDERSON: We’ve learned that time is the number one stress for moms, so we give them the ability to have one-store shopping, online or in-store. The price of gas keeps going up, so the ability to purchase from walmart.ca also saves on that piece. A third of the traffic to our site is through a mobile device.
LEE TAPPENDEN: We’re finding more and more that food is the driver of traffic and frequency of shop. But getting the right community assortment around food, and primarily fresh food, is really important.
LEE TAPPENDEN: The other thing is that e-commerce sometimes gives us a head start on trends. We can have endless aisles of extended assortments that we wouldn’t necessarily carry in all of our 400 stores. But “endless aisle” gives us the opportunity to look at the trends as they develop, and we’re surprised sometimes at how people are willing, in terms of the value equation, to trade up.
GINO DIGIOACCHINO: What’s great about Walmart is that we want the store manager running that store to represent the community, and be active in terms of what works. An opportunity in a new category comes through, we feed that information back to Lee’s team in real time. Our associate population reflects the community they’re in. The associates can give us feedback so we can react on a category basis. SHELLEY BROADER: A lot of mass merchants and companies our size just want people to feel they take plans from home office and execute them. We want that as well, but what we really want is for our plans to be right for that marketplace.
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© 2014 ® Registered and TM trademarks of Kruger Products L.P. ®’ Registered trademark of Kimberly-Clark Worldwide, Inc., used under license. ® FSC - Forest Stewardship Council, Eco Logo does not pertain to Purex products.
Sustainability in Action • We are the first Canadian tissue manufacturer to be FSC®-certified
At Kruger Products we’re reducing our ecological footprint to benefit our communitites by making our operations more sustainable.
• We offer one of the largest portfolios of third-party certified tissue products in Canada • Our use of recycled fibre diverts nearly 10,000 garbage trucks from landfills each year and has saved over 7 million trees since 2009 • Our award-winning technology has helped us reduce our energy consumption by 12% and our greenhouse gas emissions by 24% in Canada since 2009 • We are the official Partner of Earth Day Canada
For more information please visit
http://www.substainability2015.ca/
walmart canada
Future Forward On sustainability ANDREW PELLETIER: Sustainability has gotten so baked into the business, it’s indigenous to the operation. Our challenge now is to keep it new from a communications standpoint. But there are lots of initiatives going on under waste reduction, energy reduction, and sustainable products. SHELLEY BROADER: Nine years ago, we set some audacious sustainability goals about getting to zero waste, using only renewable energy, selling the products that sustain people and the planet. For example, three years ago, we opened a distribution centre near Calgary that is one of the most sustainable ones in the world. Last year, we introduced the supercube trailer, which can transport two or three times as much product. Lee and his team are working consistently on packaging, and we also know that our own associates are one of our best resources. So we have something called MSP – My Sustainability Plan, where our 95,000 associates say what they are going to do for the planet.
Andrew Pelletier
On diversity ANDREW PELLETIER: Our Women in Retail program, which is an initiative to promote female leadership in the business, is the key fulcrum to it in Canada. We’ve become a stronger, better business because we have achieved so much gender diversity. We’re exporting that to 27 other countries as a best practice. Retail traditionally has not been an industry that has been particularly friendly to women, and we are breaking that model and becoming a better business.
SHELLEY BROADER: We looked at our talent needs, and felt there was a real unleveraged opportunity in the female workforce. So we started working in the field, and had a tremendous amount of success on the store management front. We’re at the point now where 50 per cent of our management across the country is female. Our Women in Retail program selects high-potential women and gives them experience and exposure, and responsibility for their own development. We also export that program, even to our competition, because we’re committed to helping women in Canada. I was talking to someone in the retail world about our program, and after I explained how it works, he said: “Now I understand why we can never recruit women from your organization.” That made us feel good. It’s a great talentproducing tool, but it’s also a tremendous retention tool.
Partnering for social progress Earlier this year, Walmart kicked off its first Sustainable Product Expo by joining forces with more than a dozen global companies to sign commitments accelerating innovation in sustainable agriculture and recycling. The three-day Expo highlighted several initiatives to further expand access to sustainable products. The retailer also previewed plans to create a sustainability store on walmart.com. The shopping portal, expected to launch by the end of 2014, will allow customers to easily identify brands that are leading sustainability within a category. “No one should have to choose between grocerybusiness.ca
products that are sustainable and products they can afford,” said Manuel Gomez, vicepresident of sustainability for Wal-Mart Stores, Inc. “We want to make sustainability easy by taking the guesswork out of valuesbased shopping.” The retailer has also partnered with the Women’s Business Enterprise National Council (WBENC) and WEConnect International to promote female entrepreneurs. Starting this fall, it will identify products made by women through a certified “Women Owned” logo. In a statement from WBENC and Walmart,
MiKaela Wardlaw Lemmon, senior director of Women’s Economic Empowerment at Walmart, said the retailer hopes the new logo will “make customers around the world more aware of great products from women-owned businesses, and help these women continue to grow their businesses.” This follows Walmart’s 2011 pledge to source $20 billion worth of goods from womenowned businesses in the U.S. by 2016.
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walmart canada
Future Forward
On serving consumer needs SANDRA SANDERSON: We ensure we’re leveraging our customer insights so we make business decisions that are right for them. We always ask ourselves: “what do we know about the customer that makes this decision right?” We have a panel of 20,000 Walmart customers, we field over 100 research studies a year, and we have a special piece of research that we call the “Mom-dex,” because moms are our core customer and we’re constantly asking what matters to them. One-third of moms tell us they’re having a tough time making ends meet, but 72 per cent say that Walmart is the store that helps keep them on budget. So we are really making a difference in their lives.
Lee Tappenden
LEE TAPPENDEN: One of the things we really look at is the basket of goods with Walmart. Customers will always save on the overall basket. And there are certain items in her weekly basket, the known value items, that we always make sure we’re the best price on. We have a whole degree of science around pricing. We check over 140,000 prices every single week across the whole country, across multiple banners. We know every Wednesday afternoon what our price gap is, and by Friday morning, we’ve taken action, if we need to. And at the same time, there are a few seasonal areas where we’ll overly invest, in order to reward the customers for coming into our stores. SHELLEY BROADER: I think the way we operate our business, too, is very connected. So from the moment those merchants make that purchase until the customer puts that item in their basket, we view that as a single transaction.
New Canadian president hails from global food retailer Replacing Shelley Broader as president and CEO of Walmart Canada is Dirk Van den Berghe, a veteran of 30 years of international experience across Europe, Asia, and the U.S. He joins Walmart from global food retailer Delhaize Group, where he was CEO for the company’s Belgium and Luxembourg operations. “I am excited to join Walmart Canada as the company celebrates 20 years of serving customers,” says Van den Berghe. “Delivering on our commitment to help lower the cost of living will continue to be our top priority, and our growing network of supercentres and expanding walmart.ca offering will enable us to do just that.” Van den Berghe holds a Ph.D. in economics from Sofia University, and speaks seven languages. He and his family are relocating from Belgium to Toronto.
grocerybusiness.ca
Dirk Van den Berghe
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THE
WALMART SHOPPER
Walmart has become a go-to destination for Canadian grocery shoppers, according to the 2014 BrandSpark Canadian Shopper Study. Walmart and Walmart Supercentres are where Canadians shop most often for groceries nationally, the study found. More than proximity, Walmart shoppers place value on lowest everyday prices and the convenience of one-stop shopping, with 52 per cent of respondents saying “I can get everything I need in one stop there.�
Why Walmart? Has New Products First
Has the Lowest Everyday Prices
Has the Best Selection of Brand Names
Has the Most Offers the Best Enjoyable Shopping Overall Value Environment
Has the Best Selection of Fresh Food
Walmart/Walmart Supercentre
27%
44%
25%
22%
35%
11%
Costco
22%
19%
14%
22%
35%
17%
Shoppers Drug Mart/ Pharmaprix
12%
4%
12%
14%
6%
2%
Metro
16%
6%
23%
21%
9%
28%
5%
48%
10%
9%
31%
12%
Real Canadian Superstore
19%
31%
29%
18%
29%
28%
Sobeys
17%
9%
22%
25%
12%
34%
Loblaws
23%
11%
30%
24%
13%
28%
IGA
20%
7%
26%
31%
14%
39%
4%
33%
8%
7%
22%
10%
Retailer
No Frills
Food Basics
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5 10 in
Walmart and the Ethnic Consumer: Retailers Shopped Most Often
shoppers purchased items they were not planning to buy
Purchased items I didn't plan to buy Redeemed coupons
Retailer
49% 32%
Checked the promotional displays Checked for in-store coupons
Walmart/Walmart Supercentre Real Canadian Superstore IGA No Frills
29%
24%
18%
10%
7%
20%
20%
11%
1%
2%
Metro
3%
4%
Sobeys
2%
3%
8%
4%
10%
4%
Safeway
5%
2%
Super C
7%
4%
Costco
Asked for price-match discount
South Asian
11%
Loblaws
Picked up the flyer/circular
Chinese
July | August 2014 Vol 4 | No 4 $9.95
WALMART CANADA
PM # 42211029
Growth through mass customization
CANADA'S PREMIER NATIONAL GROCERY MAGAZINE
B REAKI NG:
Walmart’s
Shelley Broader
PRIX + GRAND WINNERS
with Executive Team
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31
UNDERSTANDING
MASS MERCHANT SHOPPERS
POPAI’s 2014 Mass Merchant Study takes a close look at trends and shopper behaviour in the mass-merchant channel. By Angela Kryhul
Consumers are spending less time preparing traditional grocery shopping lists, and are making more decisions in-store, according to POPAI’s 2014 Mass Merchant Study. “The most significant trend we're continuing to see is shoppers are saving their final purchase decisions till they're in the stores,” says POPAI president Richard Winter. “In the Mass Merchant Study, we saw the in-store decision increase to 82 per cent, compared to the 76 per cent in the grocery channel. We're seeing less preparation with traditional lists and circulars, and more mobile use.”
POPAI surveyed close to 3,000 adults about their grocery shopping habits, including planned category and brand purchases, when visiting mass-merchant stores. More than 21,000 purchases were recorded during the study, and participants were asked about items purchased, their perceptions of a store’s shopability, and their attitudes towards the shopping experience. The study compares the 2014 mass-channel results with research conducted in the grocery channel in 2012.
Mass Merchant Shopper Profile
TIME STRESSED
EXPLORER
TRIP PLANNER
BARGAIN HUNTER
27%
23%
24%
26%
Average Basket
$54
Average Basket
$44
Average Basket
$48
Average Basket
$39
U.S. Dollars
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Mass Merchant: Average Basket Size BROWSING
4 ITEMS
QUICK TRIP
STOCK UP
6
15
ITEMS
ITEMS
NEED TO KNOW
Notably, even shoppers who had no intention of purchasing any products emerge from mass stores with an average of at least four products.
The two biggest takeaways for retailers are:
Of the adults participating in the study, a subset of 219 shoppers at six stores wore eye-tracking headwear to record their in-store behaviours. “We noticed shoppers look just 25 degrees below eye level, which goes against the typical thought of shoppers looking at the centre of shelving,” Winter explains. “We believe it's either the increased use of mobiles or because it's a comfortable reach for shoppers.” Retailers might be wise to alter shelf configurations, Winter suggests. For example, in the cereal aisle, shoppers are used to standard boxes being at the top and centre, and value packs being at the bottom. When a retailer moved the value packs further towards the centre, the study found that shoppers’ fixations were drawn away from the centre of shelf, he notes. “As for increased mobile usage, retailers don't need to be afraid of this fact, but embrace it," says Winter. "There are so many technologies available now to further engage the shopper.”
1
To rethink where items are stocked on shelves
2
To take advantage of the increased use of mobile phones RICHARD WINTER, PRESIDENT, POPAI
ON DISPLAY Displays are important sales drivers in both channels, but how do grocery and mass compare in the types of displays used? DISPLAY TYPE
GROCERY
MASS MERCHANT
31% 77% IN-LINE 13% 10% POWERING/SIDEKICK 2% 6% FLOOR STAND 52% 4% END CAP
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Trends
FREE CHOICE Foods that are labelled “free from” are resonating with consumers who are watching what they eat for medical or lifestyle reasons. By Tricia Ryan
As consumers increasingly seek out specialized foods that meet their lifestyles and specific dietary needs, front-of-package claims have become huge selling points. According to U.S. retail research, the three most compelling claims are those associated with gluten-free certified, GMO Project-verified, and USDA Organic. Food allergy is a potentially serious immune response to eating specific foods or food additives. There are only eight types of foods accounting for 90 per cent of allergic reactions. For the food industry, clean labelling has been the response to increased pressure from consumers and retailers to find
WHAT
IS “FREE FROM”?
A marketing term
that is used to denote food items that have been designed to
exclude one or more ingredients.
products that have wide consumer appeal and address concerns around overly processed foods. This past June, at their annual industry meeting in Paris, 400 of the world's top food and drink companies outlined a platform that will significantly impact their go-to-market strategies. Among the commitments made at the annual summit of the Consumer Goods Forum (CGF) were industry-wide labelling by 2018 to help consumers make healthier food choices, and a commitment by the CGF board to have members make company policies on nutrition and product formulation public by 2016. In Europe, regulations go into effect this December that will change existing legislation on food labelling to require nutrition information on processed foods, origin labelling of unprocessed meat, the highlighting of allergens such as peanuts, and better legibility.
WHO
Top Marketing Claims that Capture Consumers’ Attention on Pack
Non-GMO
Organic
61%
54%
Gluten free Vegan
80%
11%
Vegetarian 8%
Local
Raw
16%
26%
Source: Natural Health Merchandiser
IS THE “FREE-FROM” CONSUMER? “Free-from” consumers have different levels of food intolerance, and all are trying to/ have to incorporate, or are considering incorporating "free from" into their lifestyles. Medically Diagnosed
HAVE TO
Core Audience
Self-Diagnosed
BETTER TO
Healthy Living
LIKE TO
Growing Audience Source: Free From Food: Back to the Future
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4
THE ORIGINAL DONUT SHOPTM COFFEE REGULAR 12 K-Cup® packs
"FREE FROM" PROJECTED GROWTH
+71%
2011-2016
The number of consumers specifically requiring any of these free-from foods have varying degrees of medical need associated with their rationale for purchase.
89% 60% 36% 30%+ 10%
Consumers are responding to more specific terms, including:
FREE FROM GLUTEN-FREE SIMPLE ORGANIC Essentially, these consumers believe that free-from food is healthier, less processed, less polluted, and more environmentally acceptable. As the demand for free-from food has increased, the industry has begun to step up. For example: Large, mainstream food companies are entering the free-from market by investing in dedicated facilities, better
•
8% 8% 7% 6% 1%
say freshness is important of consumers restrict at least one nutritional component of their diet restrict sugar have IBS (Irritable Bowel Syndrome) have known food allergies to items such as cereals, eggs, peanuts, soybeans, milk and sesame avoid dairy for health reasons avoid nuts avoid dairy for lifestyle reasons have been defined as gluten sensitive have celiac disease Source: Free From Food: Back to the Future
distribution networks, marketing and promotion. Some companies are rebranding glutenand dairy-free products as “free from,” and are examining existing product ranges to see if they can be modified. There is more focus on additive-free, “clean” ingredients, raw foods, superfoods and health foods.
• •
Consumers have never been more health-conscious, and their search for “free-from” foods is an opportunity for the industry to abandon the idea of solving a niche need, and to begin offering a new way for consumers to eat.
Tricia Ryan, BSC, MBA, is principal and director of The Gluten-Free Agency. Tricia@TheGluten-FreeAgency.com
Sainsbury’s freefrom line Back in 2002, British grocery giant Sainsbury’s was the first major supermarket to introduce its own line of “freefrom” products. Sainsbury’s freefrom brand was developed to address food allergies, and features an extensive selection of wheat-, gluten-, and dairy-free choices. All products in the freefrom range have been developed in a controlled
grocerybusiness.ca
environment using quality ingredients, and include allergy information on the packaging. There are packaged choices for meals, treats and snacks, including breads, cakes, cereals, baking goods, pasta, sauces, and readymade soups. The frozen line features a wide range, including sausage rolls, pizza, chicken nuggets, and beef lasagna.
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LOCAL
HERO Stemmler’s Meat & Cheese
ow Stemmler’s Meat & Cheese built its H success on a commitment to local sourcing and catering to food sensitivities. By Angela Kryhul
“They’ve got some of the most advanced equipment and processes in the country.” – Robert Slykhuis , president and CEO, Bizerba North America
P H O T O : J AY PA R S O N / K L I X P I X
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July | August 2014
It’s standing-room-only on any given Saturday at Stemmler’s Meat & Cheese, a tiny, familyowned retail outlet in Heidelberg, Ont., that’s made a name for itself by catering to customers with food sensitivities. Located in Ontario’s Waterloo Region, a picturesque farming area, Stemmler’s is a retail destination for anyone seeking locally sourced meats that are gluten-, MSG-, lactose- and nitrate-free. And the store is a foodies’ adventure, with such creative flavour profiles as apple cinnamon bacon, smoked Mediterranean sausages, and traditional European-spiced deli meats. Although the store is only 1,400 sq.ft., the Stemmler family sometimes sees as many as 20,000 customers walk through the front door in a month, according to co-owner Kevin Stemmler. That’s twice the population of the entire local township. And while customers are charmed by the rural location, Bavarian-inspired design, and friendly atmosphere, behind the scenes hums a sophisticated, 6,000-sq.-ft. manufacturing
facility that, together with the store, employs 40 people and produces 200 SKUs of meat cuts and processed meat products for the storefront as well as butchers, specialty retailers, seniors’ centres and health-care facilities across the province. “They’ve got some of the most advanced equipment and processes in the country,” says Robert Slykhuis, president and CEO, Bizerba North America. “We put in a state-of-the-art software program for them last year where they’re running all of their processes on touch-screen terminals with computer-driven order processing and traceability. They’ve invested heavily to be able to produce the way they do. Some of the largest plants don’t have that kind of sophistication in place, and it’s the type of thing that helps them to grow their business.” Stemmler’s got its start in 1985 when founders Gerard and MaryAnn Stemmler operated out of the family garage and sold their meats at a local farmers’ market. grocerybusiness.ca
MARKETING STEMMLER’S
Word of mouth is one of the most powerful forms of marketing for Stemmler’s Meat & Cheese, but the company is also a savvy social marketer, and has created alliances with restaurants, independent stores, and local chef Scott Yates, who creates recipes using Stemmler’s meats. The Stemmler website (stemmlermeats.ca) features a comprehensive list of cheeses, natural pet treats, baked goods and store-made meats, including flavoured bacons, burgers, sausages, deli meats, smoked meats and wieners. The Stemmlers have even created their own brand of cooking sauce. Looking to the future, the Stemmlers recently updated the website so that it can one day handle online ordering. Home delivery is not a cost-effective option for a company their size, but they may well offer online ordering for pickup at the store, Stemmler says. “It’s an opportunity to get more people and more product through our facility.” The Stemmler family (L-R): Terry Stemmler, co-owner, finances, HR, production; Kevin Stemmler, co-owner, R&D, government communication, five-year plan, customer service; Shawn Stemmler, co-owner, purchasing, production, customer service; Gerard Stemmler, patriarch, customer service; MaryAnn Stemmler, matriarch, produce and baked goods purchasing, customer service.
Today, Stemmler’s is a $5.5-million business co-owned and managed by sons Kevin, Terry and Shawn. The brothers have maintained that devotion to quality and customer service, and have pushed the business forward with a combination of savvy marketing skills and an intuitive reading of emerging market trends. The Stemmler family discovered its niche for fresh, healthy, local meats two decades ago when some customers commented that they had trouble digesting certain meat products. The Stemmlers responded by altering their recipes to address food allergies and sensitivities, including issues related to celiac disease. And they immediately saw an opportunity to increase sales by making specialty products that could be enjoyed by an entire family, not just those with food sensitivities, Stemmler says. “We stumbled onto this. It started out as a need for business and eventually became who we are.” Today, as more consumers demand to know where their food is coming from, the grocerybusiness.ca
Stemmlers have kept a sharp focus on sustainability and the locavore movement by sourcing local, drug-free meats, with some organic choices. They’ve declined offers to supply large retail grocery chains, and instead have built their business by distributing to smaller independent retailers, specialty niche stores, and restaurants throughout the province. And now that every major grocery retailer has twigged onto trends like gluten-free, the Stemmlers are keeping a step ahead by acting on emerging trends, and by continually tweaking their products, including almost halving the sodium levels in their sausage products, while maintaining freshness and flavour. “We have to change our products so that they’re different,” says Stemmler. “It really is a niche market mentality, but you’re banging your head against the wall if you want to compete against the big guys because you’re not going to win.” As they plan for the future, the Stemmlers
have identified the aging population as another growth opportunity. For older adults, visits to the Heidelberg store are an event where they can discover new products and flavours. They tend to shop often, have a higher disposable income, and like to buy marinated, dressed or rolled meats that they can cook at home. Stemmler’s is also starting to supply hospitals, seniors’ homes, and long-term-care facilities with products that address special dietary needs, for example, chicken, spinach and feta sausages that are very low in sodium, as well as gluten-, MSG-, corn-, and soy-free. According to Stemmler, these types of facilities are sourcing more locally produced foods. “We think that’s where a large part of our future is,” he says. Which is just as well, since the company isn’t changing its commitment to fresh and healthy products. Says Stemmler: “Our philosophy is that if you eat local and eat fresh, you’re eating healthy.” July | August 2014
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SHELF LIFE
CHEESEWHIZ Whether they’re craving a wedge of cheese or a slice of deli meat, consumers are looking for snacks and other foods that are not only healthy and nutritious, but offer a variety of taste experiences, with spices and unique flavour combinations. With knowledgeable employees and smart merchandising, grocers can capitalize on the rapid growth in both specialty cheeses and natural deli meats, say two deli experts.
Grocery Business: Where is the cheese department seeing growth? Gilles M-Deschênes: Specialty cheese has been trending for a few
years; it experienced over three-per-cent growth in 2013, which is superior to that of the overall cheese category. Today’s fast pace impacts eating patterns, but nutrition and health are important considerations. Snacking now accounts for a significant proportion of eating occasions, often displacing meals. Close to 30 per cent of Canadian adults report eating between meals every day. Nearly 60 per cent of all snack foods are now positioned as being healthy. Canadian cheese, with its different varieties, is a tasty and convenient snack choice. Consumers’ interest in protein continues to grow. They are bracketing protein with fibre and calcium, and are looking for sustained energy, especially when starting their day.
GB: Millennials have adventurous palettes, and are often called the “Cheese Generation.” What are they looking for from cheese departments? GD: Millennials are more daring than baby boomers, and want to
try spicy cheeses with unique flavours. They are very interested in
grocerybusiness.ca
Gilles M-Deschênes is assistant director, market development, retail, with the Dairy Farmers of Canada.
local cheeses and expect retailers to help them experience new offerings, especially products from their own area. As well, Millennials often decide the same day what meal they will prepare, and will experiment with new products and recipes. So sampling in-store is important, and will often result in an impulse cheese purchase.
GB: How many consumer shopping trips per year are made to the cheese department? GD: Trips per household total almost 62 per year in the dairy/
refrigerated section (not including deli or specialty shops). Average consumer spend in the dairy/refrigerated section is $700.
GB: How are retailers responding? GD: Longo’s has been sending its cheese specialists to Quebec,
the U.S., and elsewhere to visit cheese makers and learn more about the cheeses in its stores. Sobeys and Loblaw hired cheese gurus a few years ago to ensure they have the right products and to train their deli staff. Continued on page 43
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Continued from page 41 More and more, we see retailers training staff to better serve the consumer. With knowledge comes passion, and with passion you can convince consumers to try new cheeses. As with wine, staff can speak to customers about the cheese maker, the milk, and the terroir. To help educate staff, the Dairy Farmers of Canada offers seminars, training sessions, and print and online educational tools to all interested retailers.
GB: Is the overall market demand for cheese growing? GD: Yes, there is growth for cheese in retail among consumers, with a shift towards natural cheeses. The wide variety of Canadian cheeses offers endless taste possibilities. On the nutrition front, cheese is a wonderful and versatile food, containing up to nine essential nutrients, including calcium and protein.
SHELF LIFE
NEW DELI Vanessa Grekov, marketing director, Italian Deli, for Sofina Foods Inc., talks to Grocery Business about trends in the deli meat department. GB: How are deli meat products being impacted by changing consumer tastes? Vanessa Grekov: When it comes to deli meats, consumers’ expectations have changed dramatically over the past decade. Consumers are continuing to seek out natural options; claims such as "no preservatives, organic, gluten-free, raised without antibiotics, no allergens," have become familiar. There is also much interest in trying bold new flavours. The choice of flavoured bread and condiments can certainly add a kick to any sandwich, but increasing numbers of consumers are looking to deli meats to add an extra touch of flavour to their lunch. There is also a growing trend to charcuterie. Over the past few years, restaurants have been offering charcuterie on their menus, and it has become a home entertaining trend as well.
GB: What are some new and interesting flavours we can expect to see in the deli case? VG: Cheese and wine flavours incorporated into Italian deli meats have become popular, and traditional products such as turkey, grocerybusiness.ca
chicken, ham and roast beef are now adding complementary flavours such as chipotle and fresh herbs for greater variety. Plain deli meats will always be a staple, but over the next couple of years, we will see more and more flavours challenging the traditional norms. Consumers now are willing to try combinations outside their comfort zones; no one would have thought we would be putting bacon in chocolate bars!
GB: How is the health-conscious consumer impacting deli? VG: Deli is a category that has undergone a great deal of scrutiny for high sodium levels and additives. Consumers, now more than ever, are looking for natural deli meats as an option. Consequently, the natural deli meats category continues to see double-digit growth year over year, outpacing the regular deli. Retailers are acknowledging this consumer preference by allocating more shelf space to this category.
GRAND
PRIX 2013 NEW PRODUCT AWARD WINNERS
The Grand Prix New Product Awards, presented by Retail Council of Canada (RCC), were presented at a gala during RCC’s annual STORE conference in early June. The Grand Prix program honours the top new food, non-food and private-label products across 24 categories, and includes five special awards. A 32-member jury evaluated uniqueness and innovation, product characteristics, presentation and packaging, and overall consumer value, and also factored in consumer acceptance (the household penetration rate). “These qualities underscore what’s at the heart of the grocery industry – a commitment to create products that reflect and shape consumer preferences and trends.” — Diane J. Brisebois, president and CEO, RCC
Presenting: the winners of the Canadian Grand Prix New Product Awards for products launched in 2013
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e adg b e anc s.com r t n ri ur e ialpa o y s w. er Ord at ww SIAL, The Global Food Marketplace
19 – 23 OCTOBER 2014
Images by
www.stockfood.com. www.stockfood.com. *
« I love SIAL »
Paris Nord Villepinte France - www.sialparis.com
SIAL, a subsidiary of Comexposium Group Group
SIAL Canada T el. 514-289-9669 / 2239 Tel. Email: jlesongeur@expocanadafr ance.com jlesongeur@expocanadafrance.com
w.sial-gr
GRAND
SPECIAL PRIX AWARDS
21ST ANNUAL
CANADIAN GRAND PRIX NEW PRODUCT AWARDS
AWARD WINNERS
All-Canadian Award Consumer Acceptance
Bryan McCourt, Angel Liang, Connie Morrison, Allyson Fenton
CANADA BREAD COMPANY Dempster’s Garden Vegetable Bread
Innovation Packaging Albert Borgo, Rachel Rawson
FINICA FOOD SPECIALTIES Zerto Fresh Mozzarella Pre-Sliced
Innovation and Originality
Katie Renner
THE CLOROX COMPANY OF CANADA güd from Burt’s Bees
Healthy Innovation
Frances Mitchell, Sharen Hills, Sal Polito
NESTLÉ PURINA PETCARE Beneful Baked Delights Dog Snacks
GROUPE SEB T-Fal® OptiGrill™
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GRAND
PRIX FOOD AWARD WINNERS
Baking Needs Bakery
Stephen Kouri
Isabelle Marquis
SMUCKER FOODS OF CANADA Robin Hood® Nutri Flour Blend™
PREMIÈRE MOISSON
Mini pastries 189 Harwood by Première Moisson
Beverages
Condiments & Snacks
Peter Mattson
A. LASSONDE
Del Monte World Mark Nerland
B&G FOODS CrockPot® Seasoning Mixes
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FOOD
21ST ANNUAL
CANADIAN GRAND PRIX NEW PRODUCT AWARDS
Deli, Egg, Meat & Seafood Dairy Products
Andy Colatosti
CLEARWATER SEAFOODS Clearwater® Scallops & Sauce
Albert Borgo, Rachel Rawson
FINICA FOOD SPECIALTIES
Zerto Fresh Mozzarella Pre-Sliced
Snack
Confectionery
Melissa McCauley
DARE FOODS Boulangerie Grissol® Sweet Thins™ Susan Hooper
TREE OF LIFE CANADA ULC
Green & Black’s Organic Chocolate
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GRAND
PRIX FOOD AWARD WINNERS
Fruits, Vegetables & Produce Shelf-stable Prepared Food & Entrees
Ihab Leheta
GARDEN PROTEIN INTERNATIONAL
Jason Bellas
A&V 2000
gardein
NuTerra™ Granola
Frozen or Refrigerated Prepared Food & Entrees Dessert
UNILEVER CANADA
Fruttare™ Frozen Fruit Bars Stuart Fleming
HAPPY PLANET FOODS
Happy Planet™ Fresh Soup
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NON-FOOD
General Merchandise
21ST ANNUAL
CANADIAN GRAND PRIX NEW PRODUCT AWARDS
Health Care
Kelly McLarty, Scott Lougheed, Richard Wong Jim Rotz
JOHNSON & JOHNSON
JARDEN BRANDED CONSUMABLES
Polysporin Eczema Essentials Daily Moisturizing Cream
First Alert ATOM Smoke Alarm.
Paper, Plastic & Foil
Alberto Lossada, Sarah Au, Elaine Li, Jeff Warren, Rachelle Somerville, Katie Renner
THE CLOROX COMPANY OF CANADA
Glad Indoor Easy-Tie Kitchen Catchers with Odour Guard & Febreze Freshness
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GRAND
PRIX NON-FOOD AWARD WINNERS
Household Products
Mandy McIntee, Ana Maria Dominguez, Melise Panetta, Darlene D’Souza
S.C JOHNSON AND SON Glade Wax Melts
Pet Needs
Frances Mitchell, Sharen Hills, Sal Polito
NESTLÉ PURINA PETCARE Beneful Baked Delights Dog Snacks
Personal Care
Katie Renner
THE CLOROX COMPANY OF CANADA güd from Burt’s Bees
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PRIVATE LABEL
21ST ANNUAL
CANADIAN GRAND PRIX NEW PRODUCT AWARDS
Metro Inc.
Condiments & Sauces
Beverages Irresistibles Life Smart Smoothie. Carlo Fantin, Vanessa Martin, Tania Amato, Pat Pessotto,
LONGO’S
Longo’s White Balsamic Vinegar
Marie-France Gibson, Jason Knights
Confectionery, Snack & Dessert Irresistibles Mini Sorbet Bars
Prepared Food & Entrees Irresistibles Gluten Free Frozen Meal
Non-Food
Sobeys Inc. Dairy, Eggs, Meat & Seafood
Chris Gruber, Dave Pullar, Mikael Schaltz
Debi Lilly Fluted Petite Vase Andrea Nowak, Mikael Schaltz
Sensations Stuffed Burger
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GREAT Circulation & Readership
Produces
GREAT Results
For more information contact: Kevin Smith, Co-publisher kevinsmith@grocerybusiness.ca 416-569-5005
PAC Symposium, Toronto Sept. 30, Oct. 1 & 2, 2014
REGISTER TODAY FOR THE PACKAGING EVENT OF 2014
Industry Speakers
Karina Espinel
Karen Bandhauer
Yasmin Siddiqi
FEATURING 30+ INDUSTRY SPEAKERS, COMPETITIONS, REAL TIME AUDIENCE INTERACTION
Thank you sponsors! Register today at www.pac.ca
CANADIAN HEALTH FOOD ASSOCIATION SHOW & CONFERENCE - WEST April 10-13, 2014 Vancouver, B.C.
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REFRESHING IDEAS.
SAY HELLO TO THE FUTURE AT FRESH SUMMIT. TAKE YOUR PLACE AT THE GLOBAL PRODUCE INDUSTRY’S HOME FOR INNOVATION. With more than 20,000 attendees and 1,000+ exhibitors from over 60 countries, Fresh Summit is a must-attend event. It’s your chance to share ideas with global industry executives, technology trailblazers and buyers from every link of the supply chain. And it’s your best opportunity to connect to the people and innovations shaping the future of our industry.
OCTOBER 17–19, 2014 | ANAHEIM, CALIFORNIA USA
REGISTER TODAY AND SAY HELLO TO THE FUTURE. FRESHSUMMIT.COM | #FRESHSUMMIT
DISTRIBUTION CANADA INC.
Your Partner in Selling
P H O T O S : R O D N E Y D AW
Brian Parker, president and CEO, and Peter Cavin, chair, welcomed vendors and other guests to the annual Distribution Canada Inc. dinner, in Toronto, on June 11, 2014.
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Food & Allied Golf Committee (L-R), Back Row: Mike Marinangeli, Grant Campbell, Michèle McMillan, Doug Cussons, Jim Hunter, Forge Francella, Rory Lesperance, Peter Davies, Ray Ibsen. Front: Sam Magnacca, Angelo Raso, George Tzogas, Kevin Smith, Mike Furgiuele Missing: Chris Powell, Christine Tos
80TH ANNUAL FOOD & ALLIED GOLF TOURNAMENT Golfers playing on three different courses in the Toronto area on June 6 helped raise funds for The Grocery Foundation. "Thanks to everyone for your participation in our annual tournament which has helped to raise over $230,000 for The Grocery Foundation over the years." – Grant Campbell, chairman, Food + Allied Golf Committee
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FCPC'S 2ND ANNUAL INVITATIONAL CHARITY GOLF TOURNAMENT Food & Consumer Products of Canada held its 2nd annual Invitational Charity Golf Tournament on June 23, raising $20,150 for Food Banks Canada.
P H O T O S : R O D N E Y D AW
Pictured (L-R): Jamie Moody, president, Tree of Life Canada ULC; Derek Nighbor, senior vice-president, FCPC; Marc Guay, president, PepsiCo Foods Canada; Katherine Schmidt, executive director, Food Banks Canada; and Dan Carruthers, director, Strategic Business Development, Lakeside.
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New products you need to know about!
Photo: Doug Bradshaw
LIST IT
It’s time to dine alfresco ACE Bakery’s new line of gourmet buns includes Rosemary Sesame and Classic, Roasted Onion Gourmet Brat Buns and Cheddar Ciabatta Gourmet Buns. ACE has also introduced a line of Crostino made using ACE Bakery White Baguette and Focaccia, and available in Roasted Garlic or Grated Parmesan flavours. acebakery.com
Low-sodium broths in a recipe-sized package Pacific Foods introduces its new multipack Organic Low Sodium Chicken & Vegetable Broths. Ideal for the inspired home chef, each 250 mL carton is designed to be recipe size, ensuring that no product goes to waste. The cartons are made for convenience – easy-to-pour and re-sealable. pacificfoods.com
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Fiery and Spicy, Cool and Icy! PÜR Gum has added two new flavours to its premium sugar- and aspartame-free family: PÜR Cinnamon and PÜR Coolmint. Like other flavours in the PÜR Gum line, the Swiss-made and naturally sweetened new flavours are sugar-free, vegan, gluten-free, non-GMO, nut-free, dairy-free, and diabetic friendly. pur-gum.com
A sweet and crunchy snack Naturally Homegrown Foods Ltd. debuts Hardbite Parsnip Chips, a tasty chip made from fresh, thin-sliced parsnips, hand crafted in small batches. hardbitechips.com
Mann's vegetable packaging gets a new look Mann Packing has redesigned its full line of fresh vegetable packaging to be more consumer focused and to better represent the company’s third generation of family farmers. The redesigned packages feature a new Mann’s Family Favorites logo, nutrition information, and a QR Code that directs customers to Mann’s website for recipe ideas. veggiesmadeeasy.com
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it figures
MILLENNIALS
STEP UP TO THE PLATE Millennials are drivers of growth. What do you need to know to engage them? BY 2020, MILLENNIALS WILL BE:
$24 billion 26% of the population 24% of CPG sales Worth
70%
purchase private-label products and
4 OUT OF EVERY 10 CPG dollars are spent at discount retailers
Takeaway Know what categories are sought after by Millennials and tap into the possibilities.
76 % 81 % of Millennials shop are easily persuaded at stores with lower prices
to purchase a different brand
Takeaway Millennials demand low prices and value, although loyalty can be built through social media and online interactions. Retailers who offer authenticity, and personal and useful interactions will be rewarded. 64
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70% find it important
to have programs to improve the environment. Takeaway Millennials take social responsibility to heart. Create a point of differentiation between you and your competition by raising awareness around your social involvement.
51
%
51% say their grocery shopping trips are “quick trips�
Takeaway Make the most of those flash trips. Eye-catching in-store displays focussed on key Millennial categories, quick checkout lanes and an easy in-and-out-of-store experience will increase chances of repeat visits.
60%
WOULD PREFER LOYALTY CARDS ON THEIR PHONE INSTEAD OF USING PLASTIC; AND
41%
WOULD USE THEIR PHONE TO PAY
38%
of Millennials are more likely to prefer streamlined meal preparation. Takeaway Millennials want quick and convenient meal solutions. Are you ready to meet this growing demand? grocerybusiness.ca
Takeaway Offer electronic loyalty program options and keep your mobile site/app fresh and easy to navigate.
Carman Allison is Vice-President of Consumer Insights for Nielsen in Canada, and is responsible for creating thought leadership insights for CPG manufacturers and retailers. Carman Allison
A L L S TAT S C O U RT E S Y: N I E L S E N
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Perry’s Point of View
THE COST OF CONSOLIDATION Oxfam’s Global Food Index, published earlier
should be supporting the research,
scores among the 125 countries surveyed.
healthier alternatives, and especially lower-
this year, gives Canada generally glowing
According to the Index, we have more than
enough to eat, our food affordability ranks in the top 10 per cent, and our food quality in
the top five per cent. And yet, our instances
of diabetes and obesity are in the top 15 per cent – among the worst in the world. How
development, testing and distribution of
unaffordable, as manufacturers are forced
supplier funds should be leading the way on
has made that type of innovation almost
to pay higher and higher fees just to stay on supermarket shelves.
We estimate that the flow of funds from
healthy manner?
probably growing faster than food tonnage.
We can take some comfort from the
products, particularly fruits and vegetables. Certainly, we are seeing strong growth in
organic foods, and in the number of natural/ organic specialty stores serving those who
want healthier eating alternatives. But the majority of Canadians cannot afford to
trade up to healthier alternatives. Various
local Nutritious Food Basket Surveys have shown that lower-income households in
Canada don’t have the money to procure nutritious food.
The Canadian food industry plays a big
role in this problem. Food manufacturers
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The massive transfer of dollars from
manufacturers to retailers should shift
food manufacturers to the retail trade in
growing supermarket sales of fresh
have gone to the grocers.
cost nutrition. But retail consolidation
can a country with so much abundance and such low prices fail to feed its citizens in a
stripped from their businesses – those funds
Canada is well over $3 billion annually, and is
the innovation burden. Grocers flush with affordable nutrition. And yet, the majority of supermarket innovation around health and nutrition is about finding ways for
consumers to spend more on food – to trade up into healthy eating.
Consumers want and need healthier,
The vast majority of trade spending adds no
affordable eating alternatives. That requires
of listing fees, volume rebates, fines, flyer
qualities a consolidated grocery industry is
value to the consumer: these are the costs support, and numerous other non-valueadded payments. Retailers lever more of
innovation, collaboration and vision – pricing out of the market.
these payments out of suppliers every year simply due to the sheer clout of a highly consolidated industry. The more recent
Perry Caicco is managing director at CIBC
worse, since over $200 million of pledged
in the supermarket, general merchandise
acquisitions will likely make the situation “synergies” are estimated to be coming from suppliers. As trade spending has soared
(and as the Canadian dollar has plunged), consumer products companies in Canada are having the capacity for innovation
World Markets. He has worked for 15 years and packaged goods industries with
Loblaw Companies Ltd. and Coca-Cola. Perry is a founding Grocery Business Advisory Board member.
grocerybusiness.ca
Scallops made simple.
2013 Scallops & Sauce - simple to prepare. Simply delicious. Wild-caught scallops coated in one of three signature sauces. Sauté in six minutes and customize with your favourite ingredients. Add them to your seafood lineup today.
clearwater.ca/scallopsandsauce • (905) 858-9514 • cdnsales@clearwater.ca
A food-focused program offering innovative meal solutions for Millennial Moms that will drive your basket sales!
get these.
crispy spicy peanut chicken
do this.
done. Some of your best customers are Millennial Moms, and their influence on the marketplace is growing. They’re busy raising their kids and need simple but inspired meal ideas. Kraft Food Hacks is an impactful retail campaign offering quick, innovative solutions to prepare meals in unexpected ways using fresh ingredients. That’s good for them – and good for growing basket size at your stores. See for yourself at kraftfoodhacks.com Talk to your Kraft rep to get in on the revolution today!