Jan / Feb 2015 Vol 5 | No 1 $9.95
Sobeys’
Mary Dalimonte PM # 42211029
Better Food For All
TRENDS WITH TRACTION
What’s driving consumer purchase behaviour now?
2014 THIS IS THE YEAR
THAT WAS
Grocery Business January | February, 2015 Volume 5, Number 1
contents
Michael-Angelo’s, Markham, Ont.
DEPARTMENTS
35
8
Front End People & News
New & now discoveries
62 It Figures
45 Rise and Shine
Innovation in the cereal category
48 Making It
January | February 2015
13 What’s Up With Apps 14 Open Mike Trust trumps all
6
56 Launch It, List It
Three Farmers
Town & country consumers
65 Perry’s Point of View
48
How suppliers build grocery stores
GB_Cover_JanFeb 2015 Final.pdf
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Jan / Feb 2015 Vol 5 | No 1 $9.95
ON THE COVER Sobeys’
Mary Dalimonte
TRENDS WITH TRACTION
What’s driving consumer purchase behaviour now?
16 Better Food For All
How Sobeys is creating a more immersive shopping experience
PM # 42211029
Better Food For All
32
50 38 PHOTO GALLERIES
FEATURES 22 SIAL Canada
54 BrandSpark Canadian
25 A Fresh Take on Salad Kits 29 Independent and
59 The New Digital Food Life 60 Same Time Next Week
Leading with innovation
Interdependent
31
Showcasing the Best of Italy
Shopper Study 2015
The rise of subscription shopping
S 2015 D N N O I ETRACT TWR ITH
42
35 Trends that will drive
King of Dates Reigns Supreme
44 Better For You
Food Options Take Flight
consumer purchase behaviour
38 McCormick’s 15th
annual Flavour Forecast
Cover Photo: Matthew Plexman grocerybusiness.ca
Awards Fresh Summit
53 Ontario Produce
Marketing Awards
32 Michael-Angelo’s Makes Its Mark
4 This is the Year that Was 50 Golden Pencil Awards 52 Produce Marketing
41 The case for beacons
42 January | February 2015
7
“
Front End
Quotable Quotes Retail executives had a lot on their minds in 2014, from digesting recent acquisitions to unveiling new marketing strategies. Here are some of the more succinct, and revealing, quotes of 2014.
“We won’t turn Target into a grocery store.” Brian Cornell, CEO, Target Corp.
“Everyone can fight for the lowest common denominator. We can move to that direction … but the vast majority of Canadians are seeking more than low price. If you try to chase everybody, as this market differentiates, you’re going to get killed.”
“This 2 per cent to 3 per cent growth range number just feels like it’s perpetual. And as I look ahead to next year, it feels like more of the same.” Doug McMillon, CEO, Walmart
Marc Poulin, CEO, Sobeys, CIBC Retail & Consumer Conference, March 2014.
“The President’s Choice brand has led and served Canadian taste buds and food interests for three decades. We’ve never witnessed a time when our role as a food manufacturer and retailer has meant more.” Galen G. Weston, CEO, Loblaw Cos. Ltd., at the Crave More campaign launch.
January | February 2015 Volume 5, Number 1
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 Contributors Tom Barlow, Perry Caicco, Rodney Daw, Mary Del Ciancio, Laurie Demeritt, Michael Marinangeli, Rich Rotzang, Maisie Vanriel
Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca
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January | February 2015
Creative Agency Boomerang Art & Design Inc. boomart.net Subscription changes & updates or general inquiries: info@grocerybusiness.ca Grocery Business Advisory Council Shaun McKenna, Acosta Sales & Marketing Tom Barlow, Canadian Federation of Independent Grocers
“ I have no idea.” D onnie Smith, CEO, Tyson Foods, maker of gluten-free products, when asked whether gluten-free is healthier for most people.
grocerybusiness.ca
@grocerybusiness
Tim Berman, Kraft Canada
© Copyright 2015. All rights reserved. No part of this magazine may be reproduced without written permission Mike Longo, Longo Brothers Fruit Market of the publisher. Michael Marinangeli, MIDEB Consulting Inc. GST Registration No. 83032 6807 RT0001 Darrell Jones, Overwaitea Food Group Publications Mail Agreement No. PM42211029 Cheryl Smith, Parmalat Canada ISSN 1927-243X David Wilkes, Retail Council of Canada Mailing Address Cori Bonina, Stong’s Market Grocery Business Media 390 Queen’s Quay W., PO Box 40085 Toronto, ON M5V 3A6 Mark Ayer, Kraft Canada
Perry Caicco, CIBC World Markets Nancy Croitoru, Food & Consumer Products of Canada
Sign up for our weekly digital edition at grocerybusiness.ca
Front End
“I was very outspoken with our suppliers when we had a meeting with them, that the procurement synergies that some people are claiming are not going to be at our expense.”
“There’s a lot of growth in supermarkets. It’s really important we win there. We’ve laid down a huge amount of food space; now it’s time to develop and innovate that space.” David Cheesewright, president and CEO, Walmart International
Eric La Flèche, CEO Metro Inc., CIBC Retail & Consumer Conference, March 2014.
“The biggest hurdle is convincing consumers they can get fresh food at a pharmacy.” Michael Motz, EVP, chief merchandising officer, Shoppers Drug Mart
“ The industry changed, we didn’t.” J effrey Jones, executive vice-president, chief marketing officer, Target Corp.
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Front End
Ontario Food Exporter
Award 2014
Ontario recognizes food innovators and exporters for expanding the presence of its food and beverage products internationally.
The 2014 winner of the Ontario Food Exporter Award is Mississauga-based Super-Pufft Snacks, one of North America’s largest manufacturers of private-label branded popcorn, potato chips, extruded snacks and canister crisps. Super-Pufft exports to more than 30 countries on five continents.
leadership and innovation offered in our province’s agri-food sector. Through drive and innovation, they are helping to create new jobs within the province while building Ontario’s brand around the world as a leader in food safety and quality,” said Jeff Leal, Minister of Agriculture, Food and Rural Affairs.
Two finalists were also acknowledged: Giraffe Food & Beverage Inc. and TWI Foods Inc.
According to Ministry statistics, Ontario is home to Canada’s largest food processing sector. Food exports increased by 10.2 per cent to $11.9 billion in 2013.
“The Ontario Food Exporter award winner and finalists represent the entrepreneurial
Jeff Leal, Minister of Agriculture, Food and Rural Affairs, with Yousif Al-Ali, president and CEO of Super-Pufft Snacks Corp., the 2014 winner of the Ontario Food Exporter Award.
Ali Kizilbash, CEO, and Yuhana Kizilbash (far right), vice-president, TWI Foods Inc., finalist for the 2014 Ontario Food Exporter Award, with Jeff Leal, Minister of Agriculture, Food and Rural Affairs.
Jeff Leal, Minister of Agriculture, Food and Rural Affairs, with Ari Powell, CEO, and Michelle Powell, Operations Manager of Giraffe Food & Beverage, finalist for the 2014 Ontario Food Exporter Award.
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January | February 2015
Transitions Jeanne Danubio has been appointed managing director, Nielsen Canada, succeeding Steve Churchill, who is retiring after 30 years with the company. The Women’s Executive Network named two consumer packaged goods professionals to its Most Powerful Women Top 100 list: Nancy Marcus (pictured), corporate vice-president, marketing, Kruger Products; and Sharon MacLeod, vice-president, marketing, Unilever Canada. Réal Raymond has been named chair of the board of directors at Metro Inc. Raymond succeeds Pierre H. Lessard.
Front End
Wal-Mart Stores Inc. named Judith McKenna (pictured) chief development officer for Walmart U.S. McKenna succeeds Gisel Ruiz, who becomes executive vice-president of the company’s international people division. Duncan MacNaughton, chief merchandiser for Walmart U.S., and former chief merchandising officer for Walmart Canada, exited the company in late November, as part of a larger management shuffle. Jeff O’Neill (pictured), who is currently vice-president, sales and marketing, retail, for High Liner Foods’ Canadian operations, will succeed Mario Marino as president and COO when Marino retires in April.
Aidan Tracey has left his role as president of Acosta Mosaic Group to become CEO of SGS International. Jeff Rogers (pictured), president AMG/ Mosaic Canada, will assume North American responsibility for all experiential marketing. ConAgra has promoted Ian Roberts to vice-president, general manager, strategy, a new role that replaces the position of president. Vince Mendes de Franca replaces Roberts as vice-president, sales. Restaurant Brands International Inc. recently announced its new senior leadership team, a result of Burger King’s $12.5-billion takeover of Tim Hortons.
Among the appointments: David Clanachan was named president and COO of Tim Hortons Canada. Former CEO Marc Caira is now vicechairman of the board of directors. CROSSMARK has appointed Steve Schuckenbrock as CEO. Schuckenbrock brings more than 30 years of executive leadership with companies such as PepsiCo and IBM. Rosanne Caron has been appointed president of the Canadian Out-of-Home Measurement Bureau. Caron is also president of the Out-of-Home Marketing Association of Canada (OMAC).
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Tech Talk
WHAT’S UP
WITH APPS? When it comes to grocery shopping apps, not all shoppers want – or will use – the same functions. Consequently, grocers need to simplify and customize their approaches to customer digital engagement. By Sally Praskey
SEGMENT THE USERS The more active a shopper is with social media, the less likely it is that he or she will use a grocery retailer’s app in a store, according to a 2014 study by the Food Marketing Institute and St. Joseph’s University titled Digital Grocery Commerce: Insights for Enhancing Consumer Connection with Grocery Shopping Apps. Perhaps not surprisingly, shoppers with large grocery expenditures are the most active in using grocery apps. “We segmented the users in order to help food retailers better tailor marketing of their respective apps,” says Nancy Childs, professor of food marketing at St. Joseph’s University. “We found that customers employing apps are also the heaviest shoppers.” The study found that the functions most important to all app users are: » Coupons » Weekly sales » Circular » Exclusive discounts » A shopping list grocerybusiness.ca
An app’s ability to track spend while shopping emerges as a desired capability, as does the ability to scan and check out while shopping. POINT-OF-SALE SOLUTIONS Pay with Drop is a beacon-driven, mobile payments consumer app and point-of-sale solution that encompasses loyalty, analytics, proximity marketing and payments. Installed on a phone, or wearable, the app allows consumers to order and pay from up to 200 feet away, move to the pickup area, grab their purchase, and go. Shoppers can also receive deals, discounts and rewards. DIGITAL SHELF INTERACTIONS Electronic shelf labels are nothing new, but Cincinnati-based Kroger has developed and is testing a digital shelf technology with which customers can interact. Shoppers can touch the LCD screens and find out more about the products, such as nutritional information. Grocers can change prices at the touch of a button, as well as use the technology for cross-marketing or other promotions.
THE PROMISE OF APPLE PAY One of the fastest-growing mobile-payment apps is Apple Pay, already rolling out to hundreds of grocery stores and other retailers in the U.S. To pay, iPhone 6 users simply hold the device near a contactless reader with their finger on Touch ID; there is no need to open an app or even wake the display. While it is not known when and if Apple Pay will come to Canada, it may spur the use of all mobile payment systems. THE RISE OF WEBROOMING Many retailers are all too familiar with “showrooming” – browsing in-store and then buying online – but the tide may be turning. “Webrooming” – studying products and prices online and then purchasing them from a brick-and-mortar store – is expected to become increasingly popular, and threaten online sales volumes, says P.K. Kannan of the University of Maryland’s Robert H. Smith School of Business. Says Smith: “The pendulum is swinging back, at least for now, to the offline retailers.”
January | February 2015
13
Open Mike
Trust trumps all By Michael Marinangeli
The most important element in any business is trust. But seldom is trust in the foreground. Instead, we talk about leadership, efficiency, consumer research, marketing, merchandising, technology, etc. All of these things are important. However, if your organization or store doesn’t have a halo of trust surrounding it, your results will never be optimized and your long-term sustainability could be in jeopardy. Trust is fragile; it takes many years to build, but can be lost with one change of policy, leadership, or action. Trust needs to be part of your culture. It needs to start at the top and be engrained in the psyche throughout all levels of your business. True collaboration won’t happen unless there is a sense of trust between two parties. Without it, your business will fall victim to backstabbing, fear, suspicion and dysfunction. When employees are trusting, they spend less time watching their backs and more time being productive and forthright. Likewise, if consumers don’t trust your brands or your stores, all the strategies, policies, and procedures in the world won’t make you more effective.
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January | February 2015
Here are five areas where trust can impact your business: PRICING Once you have a bad price image, it is hard to shake. We have recently experienced a new retailer in Canada that stumbled out of the gate with an uncompetitive price image. The press was all over it, which accentuated the problem even further. Even after several attempts to fix the problem, consumers are still skeptical. Pricing strategy is at the heart of your value proposition. Once customers have lost trust in your pricing, it is tough to regain it. Conventional stores today are having a difficult time justifying the price gap with discounters. They need to regain consumer trust in their pricing if they are to reclaim lost ground. Better fresh and HMR departments alone won’t cut it. QUALITY If customers don’t trust the quality of your products, they will use your store only for convenience, and not as a destination to do their full shop. Trust is paramount in perishables and private brands. You can build a sustainable competitive advantage when customers shop your store or buy your brands when they are completely satisfied and are confident in the consistency of your quality. SUPPLIERS Collaboration between retailers and suppliers is not possible without trust. Retailers must deliver on their promises, and treat suppliers fairly and as true partners. Suppliers must ensure they are equitable and fair in their selling practices. Given the extent of consolidation and employee turnover in the industry today, if you are not trustworthy, you will not get the support and cooperation you expect. Often when there is a breakdown in a business relationship, broken trust is the root cause. Unfortunately, if this is not resolved, it can have a detrimental effect on your long-term sales and profits. Trust can’t be legislated; it must be earned, and must be part of your culture and heritage.
Open Mike
CUSTOMER LOYALTY Patronage is a privilege, not a right. You have to earn customers’ loyalty and trust every time they visit your store or purchase your products. When customers trust your value proposition, they spend more money in your store. Recently, I shopped at a store that was out of stock on an advertised item. I went to the customer service desk to get a rain check. There was nobody there. I waited 10 minutes, and still no one arrived. I finally left angrily, without a rain check. This store lost my trust – and my business. It is a mistake to be out of stock on an advertised item. It is inexcusable to have nobody at the customer service desk to remedy the complaint. It is no surprise that this banner is losing market share. EMPLOYEES The long-term success of any organization is contingent on having talented and fully engaged employees. If your employees have lost trust in your company or products, you will not win in this competitive environment. Employee engagement is a major concern today, as consolidation and downsizing have left their scars on morale and dedication. For me, a true barometer of employee engagement was whether or not our employees shopped in our stores. If they shopped at the competition, it was a clear sign that we
had lost the trust of our staff. Employees should be ambassadors of your company. Treat them well and they will be goodwill ambassadors. Lose their trust and they will create a negative halo around the organization that manifests itself in poor results. Once your employees stop caring, you’d better start worrying and take the necessary steps to fix the problem. The cost of untrustworthiness is enormous. Structure your internal and external surveys or questionnaires to get a handle on how your customers and employees perceive you and your brands. A lot of time and energy can be wasted on initiatives that don’t deliver the desired results, simply because your audience doesn’t trust you.
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.
IS A
PROUD SUPPLIER TO
SOBEYS grocerybusiness.ca
January | February 2015
15
Better
food for all! By Angela Kryhul
Sobeys is charting new territory among conventional grocery retailers with its Better Food For All brand positioning. Introduced 16 months ago, and with 11 Sobeys locations across Canada renovated to the new concept, the goal is to create a more immersive and sensory grocery shopping experience that delivers better food to Canadians.
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January | February 2015
Standing out from the crowd is crucial in Canada’s highly competitive grocery environment that has discounters battling it out at one end, and upscale specialty at the other. Retail veterans such as Metro, Loblaw and Sobeys are staking their claim in the mid-market by elevating the foodie experience. They’re enticing customers into their stores with promises of fine imported and domestic cheeses, artisan baked goods, locally sourced meats, and organic produce, plus a vast selection of restaurantquality home meal replacement options. Since Sobeys introduced its Better Food For All positioning just over a year ago, 11 stores across the country have been renovated to the new concept. Each carefully curated store perimeter guides customers on a journey of discovery through lush displays of fresh fruits and vegetables, ethically sourced meats and seafood, fully-stocked cheese boutiques, and show-stopping bakery departments. Shoppers are encouraged to slow down, savour the moment and discover new items. “Compared to an average grocery store, they’ve certainly made some really interesting changes,” observed Maureen Atkinson, senior partner with retail consultancy J.C. Williams Group, after a tour of Sobeys’ recently renovated Laird & Wicksteed store
Reinventing
SOBEYS’ LEASIDE LOCATION Sobeys’ former Urban Fresh format was renovated to the Better Food For All positioning in September, 2014. 10,000 sq. ft. were added for a total of 38,000 sq. ft., and selections broadened in areas such as organic and natural foods, and certified humane meats. The HMR experience includes a noodle bar, café, sushi and pizza stations, a carvery station, signature sandwiches and ready-to-heat entrees. The store features a well-being counsellor, in-store chef, and a cheese ambassador. In total, 50 new jobs were created with the expansion.
Pictured (top right): Sobeys senior vice-president Mary Dalimonte, and Sobeys Leaside store manager Joe Hastie.
in Toronto’s Leaside neighbourhood. “It’s a store that is meant for browsing, not for power shopping.” Atkinson notes that the new store design “groups all the interesting stuff together” early in a shoppers’ trip, so that the final experience is the centre store, “which is always the most boring part,” she adds. “So, you get to do all the cool stuff before you actually get to that centre store.” It makes sense for Sobeys to encourage shoppers to spend more time in the departments where it would see higher margins, adds independent retail consultant Ed Strapagiel. Plus, the elevated experience that customers enjoy during the first part of their shopping trip tends to have an “aura effect” through the rest of the store, he says. “They want you to be impressed by this stuff.” In a market environment where retailers are battling for every grocery dollar, the goal is to give consumers a strong incentive to visit and spend more time in stores. Sobeys is attempting to do that with its Better Food For All experience. Says Atkinson: “Better Food For All isn’t so over-thetop gourmet that a lot of people can’t afford it. They’re emphasizing that people actually can afford to shop and enjoy shopping here.”
grocerybusiness.ca
LOOKING FORWARD: WHAT’S EXPECTED IN 2015 This year, the Canadian grocery retail business will continue to fracture as online food shopping, specialty retailers and the introduction of upscale food retailers gain steam through the year, according to independent retail consultant Ed Strapagiel. “All of those little bits usually come off the middle market,” he says. The squeeze on middle-market grocery retailers will likely get tighter in 2015, Strapagiel explains. First, the decline of the Canadian dollar will boost prices for imported fresh produce. However, it will be difficult for retailers to pass those costs onto consumers, given the highly competitive market situation here, Strapagiel says. Strapagiel also expects to see the competition between Amazon and Walmart escalate during 2015. “It’s already happening in the States, so it’s simply going to spill over the border,” he says. “Also,
Target Canada is under terrific pressure to perform better, and while the Costco franchise is very solid, they will put up more locations and work harder to hold onto their niche in the Canadian market.” All of these factors make it more difficult for mainstream players, such as Loblaw, Sobeys and Metro, to position themselves to customers, Strapagiel says. That’s why creating a better in-store experience for shoppers is crucial, adds Maureen Atkinson of J.C. Williams Group: “If it isn’t about experience, then why am I bothering to spend time at your store? It’s about giving people something that they can’t get in a less expensive store, and really giving them a reason to shop there.”
January | February 2015
17
There’s Something About…
Mary Dalimonte Dalimonte is passionate about mentoring and supporting professional young women to become the best in the industry. In fact, Dalimonte says it’s her personal goal to “get to the point where I’m working for someone who once worked for me, and who I helped get to that position. For me, that’s success.” EDUCATION Bachelor of Arts in Sociology, York University GROCERY CAREER Dalimonte started as a cashier for a family-run grocery store. She held progressively senior retail management roles with Loblaw before joining Sobeys Inc. in 2008 as general manager of Sobeys Urban Fresh. Photo: Matthew Plexman
IT’S ALL ABOUT
’ r e t t e B ‘the
In 2012, she became senior vice-president of merchandising and commercial programs. PROFESSIONAL ACTIVITIES Network of Executive Women Women in Food Industry Management Inspired, an organization focused on mentoring future leaders. Italian Chamber of Commerce INDUSTRY HONOURS 2014 Progressive Grocer Top Women in Grocery award 2014 Pentola d’Oro Award – given by the Italian Chamber of Commerce in recognition of Italian culinary and food & beverage excellence in Ontario.
MARY’S FAVOURITE QUOTES:
“ I’ve learned that people will forget what you said. People will forget what you did. But people will never forget how you made them feel.” - Maya Angelou 18
January | February 2015
“ Y ou may have the universe if I may have Italy.” – Giuseppe Verdi
Mary Dalimonte, senior vice-president, merchandising and commercial programs, took Grocery Business on a journey of discovery through Sobeys’ Leaside store in an affluent area of mid-town Toronto, which recently received a Better Food For All makeover.
Unique Store Design Customers entering the store are greeted by a lively display of whole and fresh-cut fruits and vegetables, as well as a blackboard proclaiming that, on this particular day, the produce department features 164 locally sourced and 119 organic fresh items. “When you first walk in, it’s all about fresh – the colours, the ambiance, the variety, the quality and the selection. It’s the immediate impact that creates that sensation and emotional connection with our food. The actual flow helps you to really experience every department. “It’s all about getting our consumers to discover with us. But it’s also the solution. We are committed to helping our Canadian consumer eat better, feel better and do better, and this store is the living example of that in the way that we merchandise and the variety we bring in.”
Keeping it fresh Fresh produce is merchandised so that it’s easier for customers to make better food choices: the breakfast bar features pre-cut fruit and high-protein Greek yogurt; shoppers can also pick up fruit and vegetable trays for entertaining or for quick, healthy snacking. A refrigerated case offers fresh, pre-chopped vegetables – onions, butternut squash, yams, celery and carrots – for quick and easy meal preparation. A pear station features half-a-dozen varieties alongside a guide for pairing with wine and cheese. “Our consumers want better food. We help them do better by providing foods that are already cooked, ready to cook, or are pre-chopped. “And better doesn’t always mean that it’s all organic. Better can also mean local. So, it’s working with the farmers. It can mean what isn’t done to the products, like no preservatives. We have our certified humane meats … from just the main proteins … chicken, beef and pork … all the way to sausages. “Better can also mean fresher and better ingredients like real butter, real cream, and real Belgian chocolate. It’s about providing our consumers with the options and making it available.”
4
The main pillars of the Better Food For All experience:
Enjoying fresh and tasty food Shopping for healthy and wholesome products Choosing sustainable products Saving time
January | February 2015
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with
brings new buyers to the category
of GLAD® with Febreze™ Freshness volume came from people who were new to the indoor bag segment
of volume came from people who increased their overall indoor bag purchase by buying GLAD® with Febreze™ Freshness
Febreze™ is a trademark of The Procter & Gamble Company, used under license.
of GLAD® with Febreze™ Freshness volume contributed to category growth Nielsen, Homescan, Waste Products, 52 Weeks Ending Feb 8, 2014, National All Channels
COMING FEBRUARY 2015 NEW GLAD® INDOOR PACKAGING: Better for the environment • Will allow for 24% more cartons on shelf • Bags now in a rolled format •
= SMALLER CARTON = LESS PACKAGING WASTE
POINTS OF DIFFERENTIATION: Selection and expertise You can feel the “food as theatre” vibe as you walk the perimeter of the Leaside store. Every afternoon, customers can sample dishes created by the in-store chef using featured ingredients. Cheese wheel “crackings” take place on a regular basis. The grab-and-go area recently started offering hot, ready-to-serve Blue Goose chicken. “Our staff have been well trained and they bring great skill, talent and passion. That’s a point of differentiation. We’re very focused on building the knowledge of our cheese ambassadors. They can talk about cheeses, let you taste them, tell you how to prepare them, and tell you how to create a fantastic cheese platter. “Our prepared foods area features spicy sausage, mushrooms, sundried tomatoes, pizza, sandwiches… Come to our hot bar if you want to take home something already cooked. Want to eat here? Done! Want to take it home and finish off the cooking? Done! “We are about providing opportunity, but we’re also about providing information and solutions, and helping to build the skills of our consumer so they can live healthier lives. The power of that is that it helps Canada become a healthier country.”
“Customers are time-strapped – everyone is caught between a clock and a hard place. They have different needs and wants when they come in, so we’ve merchandised to what our consumers have said they need.” – Mary Dalimonte
The Jamie Oliver Connection Sobeys’ alliance with celebrity chef Jamie Oliver is integrated throughout the store. A tireless crusader for better food and food education, Jamie Oliver-branded products – everything from olive oils, rubs, spices and sauces to housewares such as plates and cutlery – are prominently displayed throughout the store. “When we connected with Jamie, our values matched. We’ve got Jamie doing commercials and recipes; as you go through our store, you’ll see the pairing of our Compliments brand and Jamie Oliver together. [For example, the “Compliments Presents: Jamie Oliver Discovers Canada” line.] We have products that are developed exclusively for Sobeys by our team and Jamie’s team together, to create absolutely fantastic offers that you can’t get anywhere else.” PHOTO: BETTERFOODFORALL.COM
“The Food Network changed the world. It opened up the whole world to our customers so that now everybody is looking for a great new discovery when they come to our grocery store – whether it’s tamarind, juniper berries, Thai basil, or lemongrass for a fantastic noodle soup.” – Mary Dalimonte
January | February 2015
21
SIAL CANADA LEADS WITH
INNOVATION
Xavier Poncin, Executive Show Director
Now in its 15th year, SIAL Canada brings buyers and sellers together in a showcase of international food innovation. Xavier Poncin describes what we can look forward to at SIAL 2015 in Toronto.
How would you describe SIAL’s evolution in Canada? Our evolution has been a constant, but the largest impacts were first with the name change from SIAL Montreal to SIAL Canada, and then with the decision to alternate the show between Montreal and Toronto. To continue to grow, we are focusing on three core elements:
Innovation Our international product innovation contest, SIAL Innovation, is not only the most important event of its kind, but it gives exposure to all the finalists from around the world. These new products help to drive traffic. Every year, more than 70 per cent of our visitors tell us that innovation is their primary reason for visiting the show.
International representation With a growing ethnic population in Canada – and especially in Ontario – SIAL Canada will showcase 800 exhibitors from 50 different countries this year, and with attendance
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January | February 2015
coming from 60 countries. We are able to bring all these companies together because of our international network. However, we believe we can do better, and our ambition is to become the most important international trade platform in the Great Lakes region.
Strength of local representation
Strong Canadian representation brings local buyers, especially because of the current buy-local trend we see everywhere. SIAL Canada is also a platform for local products, with more than 400 Canadian companies from across the country exhibiting. And if we zoom in a little, we also see something very different going on in Toronto as compared to the other SIALs, and even compared with SIAL Montreal. With over 200 ethnicities living in the Toronto area, local buyers attending the show are keen to discover a variety of both local and international products.
SIAL CANADA GOING FOR G
45
%
ROWTH
GROWTH IN E XHIBITORS
40%
22%
GROWTH IN FLOOR SPACE
INCREASE IN VISITORS
What else can SIAL attendees look forward to? Three new events were launched in Montreal last year, and we are bringing these to Toronto this year: • T he LAB: The focus will be on pastry products. We bring together, internationally, a forum of renowned experts, passionate local professionals and students who are eager to learn. Attendee satisfaction reached 88 per cent for the first one held in Montreal in 2013. • C heese by SIAL: Because of the new Comprehensive Economic and Trade Agreement (CETA) regulations, this is a market that is changing. Therefore, we are showcasing cheese products from Canada as well as from around the world. • Central Experts’ Hub: Visitors and exhibitors can receive expert advice on packaging, innovation, pastry, cheese, food processing, etc., while at the show. This is unique in North America.
Indonesia is this year’s Country of Honour. Canada has a growing Indonesian population and there is a strong demand to source a broad selection of halal and kosher products. What trends stood out for you at SIAL Paris in October? Several things were noteworthy: • The farm-to-fork, do-it-yourself, consumer-chef/producer. People are growing, producing and consuming their own food; • Back-to-land recipes with fresh and wild products/food prepared in an ecologically sustainable way; • Growing consumer interest in traceability and origins, while still seeking the pleasures of discovering new, exotic flavours. What will be new at the upcoming Toronto show? We have a number of new features: • There will be a one-of-a-kind Supply Chain section as part of SET Canada (the National Food Equipment and Technology Show) where transportation, warehousing, packaging, logistics and handling companies will come together. With the emergence of e-commerce, we’re seeing food companies’ go-to-market strategies quickly evolving in ways that need to be addressed. • There will also be an international Supply Chain conference component, which will be held annually. The Toronto conference will be the first one in a series to be held at every future SIAL around the world. grocerybusiness.ca
Tell us more about the two U.S. buyers’ programs. We have established two exclusive buyers’ programs: The first one was jointly organized with the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) and Ministre de l’Agriculture, des Pêcheries et de l’Alimentation Québec (MAPAQ), and exclusively reserved to Canadian exhibitors. With this program, in 2013, more than 800 business meetings allowed Canadian companies to connect with 75 international buyers. We have a new program launching in Toronto. We are bringing as many as 80 U.S. buyers, 50 per cent from the retail side and 50 per cent food importers, to meet with all our Canadian and international exhibitors. B2B meetings will be organized over two days (April 29 and 30) and only in the mornings, so our buyers can walk the trade show floor in the afternoons. TORONTO 2015 APRIL 28-30 DIRECT ENERGY CENTRE, TORONTO SIALCANADA.COM
January | February 2015
23
The Italian Trade Commission presents The Italian Food & Beverage Delegation Tour 2015.
Don’t miss this delicious tradeonly opportunity to network with over 90 authentic Italian food and beverage producers, exporters and suppliers. Toronto
23 March
Montreal
25 March
Vancouver
26 March
To register today: Email: italybestfood@ice.it Toronto: 416-598-1566 Vancouver: 514-284-0265 Montreal: 514-284-0265
HOW ITALY DOES ITALIAN MEET THE MAKERS OF ITALIAN FOOD & BEVERAGES
In cooperation with:
Be Prepared
A FRESH TAKE ON SALAD KITS By Rich Rotzang
Over the past few years, salad kits have gained in popularity among Home Meal Replacement (HMR) managers as a way of improving the freshness and visual appeal of their service cases. The kit format consists of pre-packaged components that are delivered to stores, and then assembled by deli staff before being displayed. However, not all salad kits are created equal. For example, retail salad kits – those containing greens and some additional components such as croutons, veggies and dressing – are meant to be assembled by a customer, and consumed immediately. They are not designed for extended shelf life. Ready-to-eat deli salads, however, are different. Final assembly in store is just the first step. Deli salads need to stand up to the environmental conditions of a deli case – open containers, lighting, temperature fluctuations, etc. And they need to be just as fresh, safe and eye-catching on day two, or even day three at stores with less traffic, plus the few days after they have been purchased and taken home. To achieve these results, a salad kit needs to be designed with a solid understanding of the underlying chemical, micro-biological and physical properties of the
grocerybusiness.ca
components themselves, as well as how the open environment of a service case will affect the finished product. For example, certain ingredients lose moisture over time, while absorbing neighbouring flavours and spices. Without proper consideration of these factors, the flavour, texture and appearance of a deli salad will quickly start to deteriorate once it’s assembled and displayed. Food safety is, of course, critical. A properly designed kit takes into account the interplay between ingredients and environmental factors, while impeding the growth of harmful bacteria and extending the life of the product. A manufacturer that understands all of these complexities will design each salad from the top down – starting with the finished product – then customizing and processing each component so the deli salad can remain fresh and safe over a longer period of time. For grocers who are managing tight margins, it’s easy to fall into the trap of going with a lower-cost solution. After all, salad and prepared-food sales account for a relatively small portion of typical store revenues. However, in the longer term, supermarkets can grow revenues by turning their deli case into a beautiful focal point full of fresh, unique
and visually appealing products. Furthermore, by offering fresh salads with an extended shelf life, stores can significantly reduce shrink, thereby decreasing the effective cost of the product. Ultimately, the goal of the HMR department is to deliver a fresh, restaurant-quality menu that will keep consumers coming back. If that can be achieved, a kit program will more than pay for itself.
Rich Rotzang is senior director, marketing and communications, Tiffany Gate Foods
Tiffany Gate Foods designs and manufactures fresh gourmet salads, prepared foods, soups, dressings and other Home Meal Replacement solutions in complete kits or as individual components.
January | February 2015
25
VENDOR
ADVISOR • COFFEE • SINGLE-SERVE BEVERAGES
The single-serve segment remains an integral contributor to the growth of the overall coffee category, and will continue to evolve in the next few years. A key contributor to the potential growth of the segment will be the increase of beverage consumption per coffee brewer. Retailers can help encourage this trend by offering a wide range of beverage types and formats for consumers that will lead to more consumption occasions from their brewer throughout the day. When choosing where to buy their beverages, consumers are looking for great beverage variety, clear merchandising and good value. Therefore, retailers should ensure there is clear signage on shelves to help better guide shoppers in their path to purchase different types of beverages that can be used in their single-serve brewer. It’s important to make sure they have a good shopping experience when they visit their everyday grocery market, to bring them back again for their regular purchases.
SPONSORED BY
BEVERAGE VARIETY *
SPECIALTY COFFEE IS BECOMING
b
MAINSTREAM
SOURCE OF GROWTH
Million 300
250
SINGLE-SERVE SEGMENT EVOLUTION IS BRINGING NEW USERS INTO THE SYSTEM EVERY YEAR SINGLE-SERVE COFFEE SERVING VOLUME TREND
200
PERCENT DRINKING PAST-WEEK
70% Traditional coffee
Specialty coffees coming soon in Keurig system!
32%
35%
2012
2013
Specialty coffee beverages
Specialty coffee is increasing by +3% vs last year!
*Specialty coffee included cappuccino, café latte, café mocha, espresso, macchiato and café americano. Source: 2014 Coffee drinking trends, Coffee Association of Canada.
CAPTURE MORE BEVERAGE USAGE OCCASIONS WITH A BROADER BEVERAGE OFFER FIRST THING IN THE MORNING
150
WITH BREAKFAST
100 50
LATE MORNING Jan 14 2012 Feb 11 2012 Mar 10 2012 Apr 07 2012 May 05 2012 June 02 2012 June 30 2012 July 28 2012 Aug 25 2012 Sept 22 2012 Oct 20 2012 Nov 17 2012 Dec 15 2012 Jan 12 2013 Feb 09 2013 Mar 09 2013 Apr 06 2013 May 04 2013 June 01 2013 June 29 2013 July 27 2013 Aug 24 2013 Sept 21 2013 Oct 19 2013 Nov 16 2013 Dec 14 2013 Jan 11 2014 Feb 08 2014 Mar 08 2014 Apr 05 2014 May 03 2014 May 31 2014 June 28 2014 July 26 2014 Aug 23 2014 Sept 20 2014 Oct 18 2014 Nov 15 2014 Dec 13 2014
0
YEAR OVER YEAR, SINGLE-SERVE COFFEE INCREASES SALES DUE TO NEW BUYERS IN THE SEGMENT Source: Keurig Canada calculation based in part on data reported by Nielsen through its Market Track servicesfor rolling 12 week period ending December 13 2014, for the National Grocery+Drugs+Mass Merchandisers. Copyright © 2014, The Nielsen Company.
AFTERNOON
EVENING
Decaffeinated Coffee/ Caffeinated Coffee
Tea
Flavoured Coffee
Espresso/ Specialty
Hot Cocoa
K E U R I G C A N A DA - Y O U R P A R T N E R T O B U I L D A S T R O N G E R C AT EG O R Y
CLEAR MERCHANDISING
Grocery channels and banners can differentiate themself by helping consumers shop the single-serve section.
GOOD VALUE
CANADIAN MARKET CONSUMERS’ WALLETS CONTINUE TO BE SQUEEZED
But less money to buy them!
Goods costing more and more… CPG Pricing
Wages Relatively flat
NEXT STEP IN SINGLE-SERVE CATEGORY:
Gas Prices
Debt to Income Ratio
ON SHELF SIGNAGE
Inflation (CPI) (June 14)
Unemployment (June 14)
Source: Statistics Canada – change versus year ago period
What are Canadians doing to save on household expenses? Save on gas & utilities
Reduce take-out
Spend less on clothes
Reduce entertainment
36%
33%
31%
26%
25%
SWITCH TO CHEAPER GROCERY BRANDS
25% OF CANADIANS WOULD SWITCH TO CHEAPER BRANDS TO SAVE MONEY
a
Source: % of the projected Canadian households, Nielsen Global Online Consumer Confidence Survey Q2 2014
GOAL OF SIGNAGE Educate consumers Help consumers identify segments within the single-serve offer Differentiate technologies and type of portion packs (i.e : Keurig Brewed K-Cup packs, compatible with all Keurig Brewers)
CLEAR AND INSPIRATIONAL SIGNAGE WILL RESULT IN: Increased consumption: of type of beverages by family members
CONSUMERS ARE LOOKING FOR BETTER VALUE
We can observe the impact in the single-serve coffee category where value and bigger packs are gaining in importance LARGE COFFEE PACK SEGMENT IN TL KEURIG SYSTEM
(SHARE PT CHANGE VS LAST YEAR) SMALLER COUNTS,
79.8
+8.5
VALUE SEGMENT IN TL SINGLE-SERVE COFFEE
(SHARE PT CHANGE VS LAST YEAR)
24 COUNT & OVER
ALL OTHERS,
77.3
+7.8
20.2
Source: Keurig Canada calculation based in part on data reported by Nielsen through its Market Track servicesfor the 52-week period ending October 18th 2014, for the National Grocery+Drugs+Mass Merchandisers. Copyright © 2014, The Nielsen Company. Value segment based on Cup price inferior to $0.50.
VALUE
22.7
“ We know our advertising in GROCERY BUSINESS MAGAZINE is effective” States, Sharon Baingan, National Sales Director, Organika Inc. “Our ad looked great and we were thrilled to have received calls from retail buyers who had seen our advertisement for our recently launched, Organic Coconut Palm Sugar and Coconut Vinegar products, in Grocery Business”.
Organika has evolved over 20 years to a world class manufacturer and distributor of superior health products selling to retail food stores around the globe. For more information regarding Organika, go to www.organika.com or call 604-277-3302. For more information on Grocery Business, go to www.grocerybusiness.ca or call 416-817-5278.
Independents’ Day
Independent and
Interdependent Why independent grocers shouldn’t be counted out when it comes to innovation and growth in the sector. By Tom Barlow
Last year, the Canadian Federation of Independent Grocers (CFIG) was at the forefront in dealing with a myriad of issues on behalf of our members – retail consolidation, credit-card swipe fees, increases in postage rates for business, changes to provincial recycling laws, and new retail frameworks for selling beer and wine in grocery stores, to name just a few. These issues, and many others, have a cumulative effect on the ability of independent grocers to stay on the retail landscape. So for CFIG, there is a keen sense of mission in our advocacy. What is often overlooked, however, is just how important the independents – and CFIG advocacy in support of them – are to the entire food industry. The combined revenue of independent grocers in Canada is around $13 billion annually – greater than some of the more well-known corporate retailers such as Costco and Walmart. This number is neither widely known nor recognized by government or within the grocery industry. Several factors have contributed to the success of independent retail grocers and that $13-billion figure – for example, their strong
grocerybusiness.ca
support for and presence in the communities they serve; an enhanced and more personable shopping experience; and a desire to differentiate their products and stores in a variety of ways. The latter is particularly important; independents are eager to list new products or, as one grocer put it, “to act as a retail incubator” to test consumer reaction to products. The interdependency that independents have on suppliers to help them differentiate themselves in a very competitive marketplace is an opportunity that many in the vendor community often overlook. Yet, many products and new concepts have started out in an independent retail grocery store. Home meal replacement (HMR) is an example of an innovation that independents successfully exploited. Today, HMR is a “must-have” throughout the retail community. Retailers, producers, and processors in the food industry must innovate, not only to remain competitive, but also to grow their businesses. Recognizing that, the industry needs to work more closely with one another to make our interdependency work for all of us. While CFIG will continue to make it a priority to advocate and speak out on any number of issues that we feel negatively impact our
members, we recognize that, at the same time, we need to take advantage of the positive opportunities that already exist within our industry. We know that the members of our manufacturing community are eager to innovate but, quite rightly, want that effort to help grow their businesses. Well, independent retail grocers represent a great opportunity to showcase innovation. They depend on the vendor community to do so, which in turn helps the independent retailer compete. In other words, they need you as much as you need them. In the year ahead, let’s spend more time working together to exploit the opportunities of interdependency. We owe it to ourselves, to our industry and, most of all, to the shared customers that we serve across Canada to get the grocery channel growing again.
Tom Barlow is president and CEO of the Canadian Federation of Independent Grocers. tbarlow@cfig.ca
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“Modern consumers are more health conscious than ever before. They are worried about the content of their food, its origin, freshness, and safety.” - Deloitte Report: The food value chain - A challenge for the next century © 2013
Our industry has been challenged as never before to meet more demanding consumer expectations and to perform in volatile conditions. We must EDUCATE ourselves as to the latest opportunities to grow; we must INNOVATE constantly so as to remain competitive, and we must CREATE new consumer experiences that satisfy the mind and stir the soul. Mark your calendars from April 15-17, 2015 because you will be attending Canada’s leading fresh fruit and vegetable industry event, the 90th CPMA Convention and Trade Show. Cosmopolitan Montréal will be the setting as we gather together all segments of the produce supply chain to take part in our industry’s largest business-to-business event. Networking in this unique forum will present you with opportunities to expand your business from coast to coast, all in the heart of Canada’s capital of joie de vivre! Registration opens in January online at: convention.cpma.ca
convention.cpma.ca
International
ITALY
SENDS ITS BEST Canadian importers, distributors and buyers will have the opportunity to meet dozens of Italian food entrepreneurs this March, as Italy’s trade mission makes stops in Toronto, Montreal and Vancouver. WHAT IS THE PURPOSE OF THE UPCOMING FOOD EVENTS IN TORONTO, MONTREAL AND VANCOUVER? Now that the CETA negotiations between the European Union and Canada have been successfully wrapped up, there is an opportunity to allow a wider range of quality Italian food products to enter the Canadian market, which, for our food producers, is already a key export market. In fact, Italy is the largest EU food exporter to Canada with total food exports of more than C$950 million, of which wines represent $415 million. The trade mission will cover three cities, Toronto, Montreal and Vancouver, March 23-27, 2015. Our objective is to help Italian businesses initiate new commercial relationships and promote their products. The trade mission will present a wide range of products through exhibitions, tasting events and other initiatives organized for Canadian importers, agents, distributors, food retail representatives, and the press. WHY HAS CANADA BEEN CHOSEN TO LAUNCH THIS FIRST AGRI-FOOD FOCUSED TRADE MISSION? Canadian consumers have a shown a growing interest for Italian products, so we decided to organize a varied program of activities. grocerybusiness.ca
This is the first trade mission exclusively focused on the agri-food sector, and it is part of a broad framework of missions taking place in various countries around the world. Supporting Italian exports is one of the Italian government’s priorities. The trade mission in Canada is one of the actions we have implemented to increase the visibility of Made in Italy products. This is important, particularly in light of Expo Milano 2015, which will take place May 1 to October 31 and will put Italy and the theme of nutrition on the world stage. HOW MANY ITALIAN COMPANIES WILL PARTICIPATE IN THE TRADE MISSION TO CANADA, AND WHAT TYPE OF PRODUCTS WILL BE FEATURED? Keep in mind that much of the success of the Italian agri-food industry is owed to Italian entrepreneurs. Approximately 90 Italian companies will participate in the trade mission, and at each stage they will exhibit and showcase their very best products in every category, from cured meats to beverages, cheeses and olive oils, wines, pasta, and more. Canadian buyers will have the opportunity to sample the products and learn about their qualities and characteristics.
Maurizio Martina, Italian Minister of Agriculture, Food and Forestry Policies
TELL US ABOUT THE MADE IN ITALY CAMPAIGN YOU WILL LAUNCH IN CANADA THIS YEAR. This trade mission is just one part of a larger strategy rolling out this year to promote the Italian agri-food sector in Canada. The mission will be supported by a comprehensive communication campaign aimed at the general public. We will promote Made in Italy products with a mix of advertisements, editorial content in national publications, and an innovative social media approach. We want Canadian consumers to know why Italian foods are so unique, to be aware of the traditional production processes involved, and to be familiar with European food standards that guarantee food safety. The trade mission will also provide specific promotional initiatives and targeted tastings involving importers, the food retail industry, trendsetters and the general public.
The Italian Trade Mission begins on March 23, 2015 in Toronto and ends March 27, 2015 in Vancouver. For more information, please contact the Italian Trade Commission office at 416-598-1566 italybestfood@ice.it
January | February 2015
31
MARKHAM, ONTARIO
Michael-Angelo’s
MAKES With half its floor space dedicated to home meal replacement (HMR), Michael-Angelo’s smartly revamped store in Markham, Ont., is a showcase to convenient meal solutions.
Michael Pugliese
It took one year to renovate the 15,000-sq.-ft. store, which puts an emphasis on food theatre and educating shoppers. The store features an authentic Italian bakery, fresh oven-baked pizzas, sushi and gelato stations, a juice bar, a 34-seat eating area that has applied for a wine and beer licence, as well as a cooking station where in-house chefs create fresh entrees and madeto-order à la carte items. The storefront features a resto-café look. Inside, the design is meant to blur the worlds of grocery and restaurant, according to Michael Pugliese, CEO of Michael-Angelo’s. “Am I a restaurant? Am I grocery store? That’s what we’ve created here, a place where you can eat great restaurant-quality food and pick up grocery items as well,” says Pugliese, who plans to renovate the company’s two other locations to this format.
ITS MARK
TORONTO 2015
yOuR fOOd busiNess capiTal
April 28 to 30, 2015
Direct Energy Centre, Toronto
shOp fOR iNNOvaTive, lOcal & iNTeRNaTiONal pROducTs! TeR TOda gis y! e R
ONliNe RegisTRaTiON special OffeR
-30%
Use the code gb15 to register
Visit the largest international food & beverage products and equipment show in Canada.
an event by an event by
SIAL, a subsidiary of Comexposium Group
siAlCAnADA.Com
5 S 1 0 2 D N N O I T E C A R TWITH TR What megatrends will be driving consumer purchase behaviour in 2015? As part of Grocery Business’s annual Trends with Traction feature, Carman Allison, Nielsen Canada’s vice-president of consumer insights, digs deep into the most current data to share his insights.
grocerybusiness.ca
January | February 2015
35
5 S 1 0 2 D N N O I T E S C D A R TWITH TR EGATREN
M
1 PRICE CUTS RULE
As consumers have been consistently trained to expect an unusual amount of feature pricing, the industry’s bottom line suffers. We expect this trend to continue for at least the near future.
36% of Sales on Deal
on the Horizon 2 Inflation Prices continue to drive modest growth, while units remain
+9% over pre-recession figures
soft. Although inflation has been moderate overall, it varies greatly by department. Meat, vegetables and seafood were the most affected categories in 2014. With continued pressure on the Canadian dollar, we can expect inflation to be a factor during 2015.
3 Smaller formats are leading in retail growth
+31%
Ethnic/Health Food/Dollar stores
36
January | February 2015
4 ONLINE SHOPPING EXPLODES 33% growth of CPG-related items
$80 basket size
+6% over last year
The impact of technology increases every year. Even when products aren’t suitable for online purchasing, consumers will turn to the Internet to research them.
5
Millennials
MOVIN’ ON UP
Even though this powerhouse generation is currently under-represented in CPG spending, Millennials will outnumber Baby Boomers by 2020. Their spending power will increase as they enter the workforce and start families.
27% of population = 12% of CPG $ 6 7
CHANNEL SHIFTS
URBANIZATION
1/3 MALE
Complex city clusters of consumers with considerably higher incomes and unique needs present grocers with a chance to create niche retail formats. Urbanites are younger, less likely to own a car, are on the go, and want more portability than the ruralites.
URBAN CONSUMERS
Channels continue to blur. Drugstore growth is now mainly fueled by grocery items
2/3 FEMALE
8 The Male Shopper
Role sharing and male-only households will be reflected in how consumers shop. Males account for a significant proportion of primary grocery shoppers, but are often overlooked. They spend less but shop more often; are less likely to browse and more likely to buy only what they need; are typically less deal-sensitive, and use fewer coupons than women – hence, are a more profitable group.
% OF MALE
SHOPPERS
24 grocerybusiness.ca
DRUGSTORES
9
+6%
Ethnic retailing is going mainstream as taste preferences evolve ETHNIC STORES = 11 TRIPS/YEAR UP 12% FROM 2013 January | February 2015
37
5 S 1 0 2 D N N O I T E C A R R TWITH T RENDS
T D O O TURNING UP THE HEAT F
U.S. HEATSYNC® HEAT INDEX 220 200
To understand just how far the preference for spicy food has come in the past few years, look no further than Mintel and Kalsec’s Heatsync Index. With a hockey-stick-like trajectory, this flavour trend shows no sign of cooling down.
180 160 140 120 100 80 2010
TASTE TOUR McCormick & Company’s 15th annual Flavour Forecast reveals eight flavour trends to watch in 2015. Global tastes, such as Japanese 7 Spice and Middle Eastern mezze, are influencing Canadian palates. The Forecast – created by a global team of McCormick experts, including chefs, culinary professionals, trend trackers and food technologists – also showcases new ways to create more intense flavours with simple pantry items, for example, pairing sour with coarse salt.
2011
2013
2014
SOURCE: Mintel Menu Insights
The Flavour Forecast has changed the way people eat at restaurants and cook in their home kitchens. “Many of our past predictions may have seemed unfamiliar at the time, but today they’re favourite flavours,” says Michael Cloutier, McCormick Canada’s executive corporate chef. “Take chipotle chili, for instance… Today, it’s a household name.”
Sour + Salt:
Global Spice Blends:
Middle Eastern:
Smoked Spices:
Umami Veggies:
Coarse salt combines with sours such as pickled ginger, sour cherry, dried mango and lemon zest to create a finishing flavour that lends brightness and layered texture to a dish.
Japanese and Shawarma spice blends offer warm and unique flavours to grilled meats.
Sweet, spicy and fermented flavours come together in this complex global cuisine, which is spot-on with popular taste preferences.
Smoking spices and herbs deepens their flavour and aroma. Watch for this trend to grow.
The “fifth taste” returns to its roots with the popularity of umami-rich vegetables such as mushrooms, tomatoes, sweet potatoes and nori.
SOUR SEA SALTS
PROTEIN PACKS A PUNCH PICK A PECK OF
THE MOST POPULAR
PEPPERS
Jalapeno Banana Pepperoncini Poblano
That Was Then, This is Now. A flavourful food journey YESTERDAY Beets Caviar Kale Salad Meat Cut: Chop Sweet Asian Fusion
TODAY Cauliflower Sea Urchin Cabbage Salad Belly Umami French
Protein comes in many forms, but rather than increasing their consumption of meat, consumers are increasingly choosing plant and dairy alternatives. Look for an uptick in egg and egg-based product sales as these staples find renewed life as convenient lunch and quick dinner options.
TOMORROW Radish Trout Roe Banana Blossom Salad Collar Sour Spanish
SUPER BOWLS Superfood mania and on-the-go healthful convenience are behind the drive to one-bowl meal mashups. Liquid Revolution:
Slow Cooking:
Cookies Re-imagined:
Create fresh fruit and vegetable purees blended with bold spices and herbs to intensify flavours and reduce fresh food waste.
Aromatic spices and comforting ingredients transform dinner into convenient one-pot meals.
Classic spiced cookie flavours take a new form with decadent desserts that redefine “milk and cookies.�
grocerybusiness.ca
SPICE!
SWEET ON SOUR Fermented foods such as sauerkraut, Korean kimchee and kefir (a type of sour milk) are part of the explosive popularity of fermented food. Known for their probiotic effects, fermented foods are riding the wave of interest in digestive health and are definitely having a large moment.
January | February 2015
39
5 S 1 0 2 D N N O I T E C A R R TWITH T
Technology Beacons Beckon Emerging and improved technologies are enhancing the in-store shopping experience for consumers, and introducing new ways for grocers to communicate with customers. BY SALLY PRASKEY
BEACONS SIGNAL IN-STORE OPPORTUNITIES Barely on the radar a year ago, beacon technology is being touted as the future of retail marketing, and more. WHAT ARE BEACONS? They are devices about the size of a quarter that contain a Bluetooth Low-Energy (BLE) radio. They emit signals that can talk to other BLE-enabled devices, such as smartphones and tablets. Beacons placed in various store locations detect shoppers (who have opted to download the retailer’s app) when they are in the immediate area, and can communicate with them.
WHY IS THE TECHNOLOGY BECOMING POPULAR? Beacons allow grocers to engage with consumers by sending customized offers and promotions to them in-store, where the purchase decision is being made. WHERE IS IT BEING USED? Hudson’s Bay Company became the first major department store chain in North America to pilot beacons when it launched the technology in several stores in Canada and the U.S. last summer. In the U.S. grocery channel, inMarket, which runs a mobile shopper marketing platform, is rolling out beacons to about 200 locations, including Safeway and Giant Eagle. Walmart reportedly has plans to use beaconequipped LED lighting fixtures from GE.
HOW IS IT BEING USED? Retailers can use beacons to send tailored offers to in-store shoppers, depending on whether the customer is new or returning, and where he/she is in the store. Beacons can also be used for indoor navigation, automatic check-in, and contactless payments. InMarket also lets specific brands target shoppers. The company partnered with McCormick & Company’s Zatarain’s line for the world’s first CPG beacon campaign. Users who received the company’s in-store alert were 1300 per cent more likely to buy the products.
The Case for Beacons
An independent study of 1,000 smartphone-owning consumers revealed:
72%
79%
80%
of consumers said a relevant mobile in-store offer would significantly influence their purchasing decision
of consumers who have received mobile device push notifications in the past six months have made at least one resulting purchase
of consumers would use a mobile app more often if it delivered relevant in-store sales and promotional notifications
Source: Swirl Networks, Inc.
grocerybusiness.ca
January | February 2015
41
Merchandising It
KING OF DATES REIGNS SUPREME
Profile: Natural Delights Medjool Dates By Sally Praskey
In just six years, Natural Delights Medjool Dates has made its way into virtually every Canadian chain and independent grocery store from coast-to-coast. But this coveted widespread distribution didn’t come easily. In the beginning, the company had to overcome the perception among buyers that Natural Delights dates were comparable to the dried Deglet variety, even though the Medjool – known as the “King of Dates” – is larger, plumper and fresher. The challenge was to secure shelf placement alongside the Deglets so consumers could see the difference and would be willing to pay a premium price for the Medjools. It took a lot of persistence, calling on corporate head offices, to achieve this, recalls Ken Berger, Canadian sales manager for Natural Delights Medjool Dates. The company started by targeting the large retail chains in major cities, offering frequent promotional
opportunities for retailers to feature Natural Delights products in their weekly flyers. “It was a two-pronged effort,” integrating trade advertising and consumer promotion, explains David Anderson, director of marketing. The consumer David Anderson marketing element began almost exclusively with a public relations campaign, consisting of many television appearances through various spokespeople who were marketing partners in Canada, he notes. That was supported with editorial in print publications. From there, the company expanded its consumer promotions to: » In-store display bins; » Sampling programs; » Flyer placements.
With the introduction of off-shelf display units a couple of years ago, demand has gone “through the roof,” says Berger. This crop year, the company distributed over 4,000 display units. Natural Delights also maximizes seasonal promotional opportunities, such as Ramadan and various holidays, several times a year (see chart). More recently, it localized its content with a website dedicated to Canada (naturaldelights.ca). As the marketing program evolved over the last three years, “we’ve gone to more of a vertically integrated type of campaign where we’re advertising on digital portals as well as in targeted print publications,” says Anderson. The company also hired brokers across Canada to drive sales on a store-bystore basis. Wholesalers in Vancouver, Toronto and Montreal service most of the independent customers.
Making the most of the prime selling months JAN
Health & Wellness
MAY
FEB
Valentine’s Day
JUN
Ramadan
OCT
JUL
Ramadan
NOV
MAR APR
42
January | February 2015
Easter
AUG
SEP
DEC
New Crop
Holidays
Merchandising It
AFFLUENT LIFESTYLE CONSUMERS CONTRIBUTE 55% OF TOTAL VOLUME Source: Nielsen, Spectra, 2014
During that same time period, the company began to focus on a target customer whom it calls a vitality seeker: a woman between the ages of 35 and 64 who enjoys food but is not a foodie; is interested in fitness, health and welfare but is not a fitness fanatic; is typically an urban homeowner; and is the “chief health officer” of her home. “All of our efforts, from a marketing point of view, are focused on that target; we’re not budgeted to market on a macro basis,” Anderson explains. Over the years, he says, the company has experienced significant shifts in consumption patterns. “Our consumer is getting younger, and that’s very exciting.” As this trend gains momentum, Natural Delights is no longer as reliant on the ethnic market. After all, the product was originally available in Canada as Bard Valley Medjool Dates some 25 years ago, but the rebranding to Natural Delights and the targeted marketing campaign has had a dramatic effect on its customer base. As the company evolves, it continues to innovate with new packaging and products, including date rolls, organic dates, and pitted dates. “We are the only Medjool date
supplier that offers a pitted Medjool date,” says Anderson. “That seems to appeal to a different consumer. It’s a product we can add to the mix that doesn’t cannibalize existing sales of the brand.” Next year, he adds, the company will extend the line to add “snacking types of applications, but done in a very compelling fashion from a packaging point of view.”
There is still much work to be done – distribution in northern Canada is lacking, for example. But as the company has broadened the appeal of Medjool dates to mainstream consumers, it has received more support from the media, including a coveted spot in the Dairy Farmers of Canada’s 2015 Milk Calendar. Says Berger: “Success breeds success.”
Who’s Munching on Medjools? LIFE STAGE
INDEX*
% VOLUME
Younger families with children
60
7.7
Older families with children
105
16.1
Adults, no children
63
12.0
Mature singles
84
15.0
Mature couples
140
49.2
*Index Base = 100 grocerybusiness.ca
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Commentary
BETTER FOR YOU
FOOD OPTIONS TAKE FLIGHT By Maisie Vanriel
With the festive season behind us and calendars reading 2015, making healthy choices takes an even more important role in our daily lives. As a dietitian, cook, and, most importantly, a mom, it’s a time of year when I always tell people about the diverse product options available on grocery store shelves, many of which are “better-for-you” options. I’m proud to say that Food & Consumer Products of Canada (FCPC) members are absolutely committed to producing new, safe, high-quality and nutritious foods for consumers to enjoy. It’s a long-standing trend and one that will continue in 2015. Our members are leading companies that are constantly reformulating and introducing new product options to respond to evolving science and growing public health concerns, while, at the same time, satisfying consumer tastes and lifestyles. We conducted a recent survey of our members and found that respondents have introduced 750 better-for-you food options since 2011, building on the 1,280 products reported in 2011. That’s almost 2,000 food and beverage products available in stores deemed better-for-you. And, there are definitely many more that aren’t captured by our survey.
According to the survey, companies have introduced 68 per cent more products with reduced sodium since 2011, and have also increased their reduced-calorie options by 39 per cent. These are products that people use to make great meals for family and friends. Readers of these pages know well that grocery store shelves look very different today than they did when we were younger. That shift is a testament to our industry’s commitment to helping Canadians lead more active and healthy lives. Companies are producing new, innovative products, investing in community health and wellness programs, and helping educate people in nutrition literacy. I work with these companies every day, and am proud to say FCPC members share a vision of a healthier Canada, and demonstrate leadership in helping Canadians pursue active, healthier lifestyles. With stretched resources and a challenging economy, companies continue to make health and wellness a priority. Why? Because it’s what consumers want and deserve: more choices and better choices.
Maisie Vanriel is a dietitian, and vice-president of scientific and regulatory affairs for Food & Consumer Products of Canada. More information about the survey is available at fcpc.ca.
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FCPC MEMBERS AND THE COMMUNITY
91%
are promoting nutrition with management of calorie intake*
85%
have established programs to support community/government fitness and health programs* *of members surveyed
FCPC members are introducing a wider selection of healthy products
52% Products containing whole grains and fibre
13% Products with added protein
48% Products with
plain-language ingredients
Shelf Life
Rise and Shine Innovation is the key to growing the mature ready-to-eat cereal category. Cereal is a staple in most Canadian cupboards, and is a category that has seen tremendous innovation over the decades – from the addition of oat bran in the 1970s, to fibre and, most recently, Vitamin D – as manufacturers respond to changing consumer tastes and needs. Canadians prefer to eat a nourishing breakfast, and grains have long been regarded as a key component of a healthy diet. However, consumers are now looking for items that will also help them stay full longer as they fuel up for their day. Ready-to-Eat (RTE) cereal is a mature category, with 93 per cent of households already purchasing this type of product. While sales are trending down overall, focused innovation is poised to inject new opportunity into the category with the introduction of fibre and protein offerings that appeal to both health-conscious Baby Boomers and convenience-craving Millennial consumers. New options that meet the needs of a changing consumer landscape may be just what the category needs to kick-start growth in new directions.
BUZZWORTHY INNOVATION PROTEIN Consumers are choosing protein-based products to enhance endurance and energy throughout the morning. PORTABLE Busy consumers see on-the-go breakfast bars with added protein as the perfect solution. PACKING A NUTRITIONAL PUNCH Fortified chia seeds and quinoa. HOT IS ON FIRE As a counter trend to portable products, hot cereals are enjoying a resurgence.
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Premium European Made Muesli, Granolas & Cereal Bars For more info contact: Daniel Bellas dbellas@belgobellas.com 1-450-434-5919 ext : 233 av2000.ca
Shelf Life
Breakfast: The Most Important Meal
1 in 4 Canadians eat a bowl
of cereal each morning THAT’S A FACT
81%
Canadian consumers who want to purchase breakfast cereals fortified with protein.
33%
Canadians who attribute their reduced cereal consumption to choosing breakfast foods that offer more protein.
40% 93% Canadians who eat cereal as an evening snack.
Canadian households who purchase RTE cereals.
$1 BILLION+
VALUE OF THE READY-TO-EAT CEREALS MARKET IN CANADA
Consumption Patterns are Changing
Source: Mintel, Breakfast Cereals Canada
$ Volume % Change -2
RTE Cereals +1 Nutritious Portable Foods +3 Hot Cereals Source: Nielsen, 52 weeks ending Oct 18/14
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Making It
Three Farmers
Sowing the seeds of invention
The Three Farmers team (l-r): Dan Vandenhurk, Elysia Vandenhurk, Natasha Vandenhurk, Ron Emde and Colin Rosengren
Saskatchewan company creates new natural food category. By Mary Del Ciancio
Three farmers from Saskatchewan are doing something that’s never been done in Canada before. They’re growing camelina — an ancient oilseed that originated in parts of Northern Europe and Central Asia — for food consumption, and launching it into the Canadian marketplace. Camelina is a non-GMO oilseed with many nutritional benefits, thanks to the high levels of Omega-3 and Vitamin E inherent in the oil. In 2007, the farmers – Dan Vandenhurk, Colin Rosengren and Ron Emde — learned of the seed’s benefits and that it was well suited for the growing conditions in Saskatchewan. They saw an opportunity to do something more with it. That’s when their company, appropriately named Three Farmers, was born. 48
January | February 2015
Today, Saskatoon-based Three Farmers sells three flavours of camelina oil, which can be used to replace any cooking oil and can also be used in salads, dips, dressings and marinades. The oils, which the company compares to a quality extra-virgin olive oil but with the Omega-3 profile of flax, can now be found in 950 stores across the country. But it hasn’t been an easy journey. For two years, the partners experimented with how to grow the seed properly before they were ready to move forward. In 2009, Vandenhurk’s daughter, Natasha Vandenhurk, jumped on board and is now the CEO. She focused on the business side of things and determined the markets in which to launch the oil, examining possibilities in skin care, nutraceuticals and food.
“We decided to go down the food path,” she explains. “It just has a competitive advantage there. It has this great taste [with light, nutty, earthy tones]; it has a high smoke point [up to 475˚ F]; and it has high Omega-3 and Vitamin E – a combination of characteristics that no other cooking oil on the market had.” That’s when Natasha’s sister, Elysia Vandenhurk – a Red Seal Chef who has worked under celebrity chef Susur Lee in Toronto – joined the Three Farmers team as chief operating officer. The company applied to Health Canada and secured novel food status for camelina, which had never been sold as a food product in Canada before. The sisters then started building the Three Farmers brand, which emphasizes natural and sustainable growing, healthy and
Making It
wholesome foods, and traceable products. The company makes every step in the production process transparent, applying a batch number on the back of every product it sells. By entering the number into the company’s website, customers can learn the complete history of their bottle of oil – from the moment the seed was sown, to the name of the farmer who planted it, the GPS location of the field, the area where the seed was pressed, and the bottling date. The idea is to close the gap between farmer and customer. “The only way you can really trust your food and understand it is to speak directly with your farmers,” says Elysia. “We’re really trying to take that farmer’s market kind of atmosphere on a larger scale.” In addition to traceability, sustainability is very important to the farmers. They practice intercropping – what you take from the earth, you put back in. For example, because camelina needs lots of nitrogen to grow strong and healthy, they intercrop with lentils, which puts nitrogen back into the soil. They also practice no-till farming so that the nutrients within the soil naturally build on their own. Three Farmers uses natural ingredients, minimal processing and no chemicals. The camelina is cold-pressed, ensuring that all of
its natural nutrients, flavours and colours remain intact. The sisters were so confident in their product that they brought it to CBC’s Dragon’s Den in 2012. Although the deal they made with Arlene Dickinson never closed because they couldn’t agree on the terms, the business has “completely exploded” since their appearance, going from 150 retailers to 950 in two years. Restaurants have also started using the oil, and online sales have increased. The company also produces packaged snacks. It has recently added two flavours of roasted chickpeas to its roster of offerings, with two more flavours coming out in 2015. The sisters are looking at moving into a larger facility so they can bring the production of their chickpeas in-house. And while its main focus is Canada, Three Farmers recently shipped its first container of oils to China. It’s an exciting time for the Saskatchewan sisters and their three farmers. “Camelina oil was non-existent until we built it,” says Natasha. “Not a lot of companies can claim they’ve started an entire category of food, but that’s what we’ve done here.” Three Farmers is now humming along like a well-oiled machine.
BIO INCORP. IN
2007
SOLD FIRST PRODUCT IN
2011
Camelina is cultivated in MIDALE, SASK., and transported to local facilities throughout SASKATCHEWAN and MANITOBA for processing and packaging.
SOLD IN 950 STORES ACROSS CANADA
Natasha and Elysia Vandenhurk
HEADQUARTERS
SASKATOON
MIDALE
PRODUCT LINE: Three flavours of camelina oil (original, roasted garlic and chili, roasted onion and basil), and two flavours of roasted chickpeas (barbeque, balsamic and cracked pepper). grocerybusiness.ca
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The
GOLDEN PENCIL AWARDS 01
04
03
06
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05
07
MONDAY NOVEMBER 24, 2014
MARC GUAY AND LOUISE WENDLING WERE HONOURED FOR OUTSTANDING SERVICE BY THE FOOD INDUSTRY ASSOCIATION OF CANADA
02
01 M arc Guay, PepsiCo Canada; Paul Higgins Jr., Mother Parkers; Tom Greco, Frito-Lay North America
02 L ouise Wendling, Costco; Paul Higgins Jr., Mother Parkers; Andree Brien, Pierre Riel, Costco 03 J acquelynn Moody, Government of Ontario; Jamie Moody; David Fellin, Tree of Life 04 R on Welke, Federated Co-op; Denis Gendron, United Grocers Inc. 05 M ichael Forgione, Longo Bros.; Michael Marinangeli, MIDEB Consulting
06 A nthony Longo, Longo Bros.; George Cowie, Crocs Canada; Bob Noble, past Golden Pencil recipient 08
07 K aren James, Grocery Business Media; Dino Bianco, Kraft Foods
08 E ric La Flèche, Metro Inc.; Lee Tappenden and Paul Del Duca, Walmart Canada 09 D avid Ganong, Ganong Bros.; Gaetan Lussier, past Golden Pencil recipient 10 C olin Glaysher, C.B. Powell Ltd.; Art Smith, GS1 Canada
11 E laine Smith, past Golden Pencil recipient; Leslie McKeever, GS1 Canada 12 T ony Matta, Chris Kempczinski, Tim Berman, Kraft Foods Canada 13
avid Wilkes, D Retail Council of Canada
09 10
11
13
12 PHOTOS: RODNEY DAW grocerybusiness.ca
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Produce Marketing Association Show OCTOBER 17-19, 2014 Anaheim, California
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ONTARIO PRODUCE MARKETING ASSOCIATION RECOGNIZES OUTSTANDING ACHIEVEMENT On November 14, 2014, 500 industry guests enjoyed the Ontario Produce Marketing Association’s Annual Gala Dinner and Awards Ceremony in Toronto. Congratulations to all of the 2014 OPMA award winners!
Simone Weber, director of communications, OPMA; and Ian MacKenzie, president, OPMA
Lifetime Achievement Award: Don Mastronardi (left), Mastronardi Produce, presented by Frank Spagnuolo, Loblaw Companies Limited
Outstanding Achievement Award: Oceans Fresh Food Market, accepted by Hunter Weng, presented by Virginia Zimm, Faye Clack Communications
Cory Clack-Streef Produce Person of the Year: Sam Silvestro (left), Walmart Canada, presented by Chris Cockle, Canada, Roll Global: Wonderful Brands
OPMA Fresh Award: Adam Donikian, Sobeys
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Canadian Shopper Study
2015
BrandSpark Canadian Shopper Study and BrandSpark Critical Shopper Factors are trademarks of Best New Product Awards Inc. and BrandSpark International. Al www.BrandSpark.com | www.BestNewProductAwards.biz | www.BrandSparkMostTrusted.com
Consumer shopping habits are evolving more quickly than at any other time in the past decade, according to BrandSpark International’s Canadian Shopper Study 2015. Now in its 12th year, the study – Canada’s most comprehensive source of attitudinal insights about shopping habits for everyday CPG products – addresses attitudes toward such topics as food and nutrition, health, media habits, the economy, the environment, and new technology. The study polled more than 70,000 Canadian shoppers online and found that, as they begin to fully leverage the power of their smartphones and e-commerce, shoppers will realize more meaningful value as well as new taste experiences, better health information and increased convenience. “The annual study provides a deep look at the current attitudes and habits of the Canadian shopper,” explains Robert Levy, president and CEO of BrandSpark International. “With more than a decade of research and data on Canadian shopping habits to draw from, we can see how past and current trends have shaped shopping behaviour.”
COSTCO CONTINUES TO GROW SHARE, WITH 7% OF SHOPPERS NOW CITING IT AS THE STORE THEY SHOP MOST OFTEN FOR FOOD AND BEVERAGE PRODUCTS.
HOUSEHOLD SHOPPERS’ TOP PRIORITIES
Health Price
Taste
CANADIAN SHOPPER STUDY
As shoppers continue to seek the most value for their money, discount banners are rapidly picking up market share. AT WHICH STORE DO YOU SHOP MOST OFTEN FOR FOOD & BEVERAGE PRODUCTS? CONVENTIONAL
2014 40%
60%
2013 45%
55%
2012 46%
54%
2011 48%
52%
The Skill-et Set
40% say they are “OK cooks”
Convenience
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January | February 2015
DISCOUNT
Household size is gradually increasing as Millennials start families HOUSEHOLD SHOPPERS AGED 25-34 WITH CHILDREN:
ANNUAL GROWTH:
52% 2%
25% OF SHOPPERS SAY THEY ARE COOKING AT HOME MORE OFTEN THAN A YEAR AGO TO SAVE MONEY AND FOR HEALTH REASONS.
Families with children at home spend more on groceries, but also want value I try to buy products that are on sale I study the flyers, promotions and discounts before my shopping trips
WITH CHILDREN
WITHOUT CHILDREN
58% 52% (+10%)
46% 39% (+10%)
60% FEEL THAT COOKING AT HOME IS HEALTHIER, AND THEY LIKE HAVING CONTROL OVER WHAT IS IN THEIR FOOD.
Take-out food still has a major role to play for busy shoppers, but cooking at home is a growing trend:
58% COOKED DINNER AT HOME 5X.
31% PICKED UP READY-TO-EAT MEALS FROM THE GROCERY STORE AT LEAST ONCE, MATCHING THE FREQUENCY OF RESTAURANT TAKE-OUT.
grocerybusiness.ca
45% ATE PREPARED FROZEN OR PACKAGED FOODS FOR DINNER ONE OR 2X.
27% ORDERED RESTAURANT DELIVERY IN THE PREVIOUS WEEK.
65%
3+
are having family dinners weekly
Among those who cooked only one or two dinners a week at home, the primary barriers were:
43% I don’t have time 32% I don't enjoy cooking January | February 2015
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LIST IT
New & now discoveries
Thick, rich and creamy Astro Athentikos Greek yogourt, made in the traditional Greek method, is now available in six fruit combinations. Made with all natural ingredients, and no artificial colours or flavours, Astro Athentikos is an excellent high-protein snack. astro.ca
In the NUD Handmade in small batches, NUD is a line of healthy organic, raw, vegan, gluten-free and paleo crackers in six flavours: Original, BBQ, Cheezy, Cranberry sage, Garlic, and Tomato herb. nudfud.com
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Pour it on New Club House Skillet Sauces offer a convenient homemade meal solution in under 30 minutes. Packed with real Club House herbs and spices, they put a unique twist on mainstream family dishes and are available in these flavours: BBQ Chicken with applewood flavour and bacon; Chili with roasted garlic; Fajita with roasted chili; Sesame chicken stir-fry; Sicilian chicken with tomato and herbs; and Taco with chipotle. clubhouse.ca
The skinny on caffeinated chocolate For those consumers who are looking for a convenient extraenergy food while on the go, Awake provides the kick they need. Each Awake chocolate bar contains an amount of caffeine that is equivalent to a cup of coffee or a 250-ml energy drink. awakechocolate.com
A clear choice Naturipe Farms is adding two new products to its Ready to Eat fresh fruit snack line: Mango & Blueberry blend, and Grape & Blueberry blend. Each new Blend pack contains 1.5 ounces of fresh fruit, and the packaging has been redesigned to include more product visibility and clear messaging to consumers. naturipefarms.com
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Peanut Butter Cheerios™
General Mills understands that some mornings are just hectic with long commutes and busy schedules.
With the irresistible taste of real peanut butter and the wholesome goodness of Cheerios™, it’s no wonder that this delicious cereal is coming back to Canada. Peanut butter lovers everywhere can’t get enough – just put it on the shelf and watch them go nutty for it!
That’s why they’ve come up with delicious new breakfast on-the-go options on Nature Valley™ and fibre 1™, to make mornings easier. Fibre 1™ Delights With new Fibre 1™ Delights 90 calories never tasted so good. The delicious soft baked bars come in Chocolate Chip and Lemon flavour. It’s also surprising that they pack in 20% of your daily value of fibre.
Nature Valley™ Breakfast Squares help you start your day off right with whole grains and a delicious fresh from the oven taste. Try the scrumptious Nature Valley™ Cinnamon Brown Sugar or Blueberry Breakfast Squares for a tasty addition to a complete breakfast.
EDGE™ with Protein Stacked with the nutrition of protein, fibre and vitamin B6, and loaded with maple flakes and almond-filled clusters, EDGE™ is built as a smarter cereal. EDGE™ has 11 grams of protein per serving, making it the highest protein cereal vs. leading cereals in the category. Your customers will love this great-tasting way to give their breakfast an EDGE™!
Liberté Kéfir: Liberté Greek 5% extra-creamy: Greek yogurt has never tasted better. Liberté Greek 5%, the perfect combination between high protein benefits, thick texture and the pleasure of extra creamy yogurt. Available in 3 flavours: Vanilla Bean, Raspberry and BananaCaramel.
Our non-effervescent Kéfir contains 10 strains of active cultures and provides two billion probiotics per 250 ml. This new way to enjoy the goodness of Kéfir is made from an all-natural and short ingredient list.
Yoplait® Source® Greek with Stevia yogurt: Our most natural Source® yet! With only 70 calories/100G serving, Source® Greek with Stevia is a delicious, thick yogurt with 2x the protein of regular Source®. Drive yogurt profits and stay ahead of the trend – offer this product today!
Yoplait® Minigo™ Greek yogurt: Introducing NEW Minigo™ Greek! 2x the protein of regular Minigo™ to help build strong muscles. Absolutely no gelatin, artificial flavours, colours or sweeteners, and no preservatives.
© General Mills Trademarks of YOPLAIT MARQUES S.N.C. (France) used under license. © Yoplait Canada WEIGHT WATCHERS and PointsPlus are registered trademarks of Weight Watchers International, Inc. and are used with permission
Perspective
WELCOME TO THE NEW DIGITAL FOOD LIFE High engagement with digital technology is causing seismic shifts in consumer culture and altering the way people eat, shop and live. By Laurie Demeritt, CEO, The Hartman Group
For much of the 20th century, consumers shopped and purchased meal ingredients in a predictable, utilitarian fashion. This was a consumer story of brands, uniformity and prices. But towards the end of the century, we evolved into a consumer culture that celebrates a higher quality of life, often with equal focus on health, wellness and indulgence. Consumers, with new lifestyle identities, began trading up. Now, however, we have fully transitioned to a participatory culture, and digital technology is the key driver. Consumers believe the world revolves almost completely around them, their activities, their desires and how they would like their world to look (and work). These desires are enacted not as work, but as play. Playing is about discovering, sharing, making and trading. And it’s about consumers doing it themselves. There is plenty of room in the sandbox for companies selling goods and services, but it works best if you are invited in and begin to play by consumers’ rules. Nowhere is this paradigm shift more strongly manifested than in food culture. As consumers experience new foods and learn how to cook them, they’re purchasing higherquality foods that are fresher and healthier. They seek out higher-quality food experiences, and are willing to share their food knowledge and passion through their social networks. All this leads to consumers’ wants, needs and daily activities being firmly anchored in digital. grocerybusiness.ca
According to research behind our Digital Food Life report, 70 per cent of consumers use digital food resources at least weekly. Because smartphones offer easy access to information, what’s trending represents the essence of discovery in the digital age. Fueled by the need for immediacy, consumers are instantly able to search online for food inspiration, while in the grocery store. So, what does this behavioural shift mean for retailers? Consumers do not want to get all (or even a portion) of their food experiences from a single, integrated food solutions provider. Digital food life resists the static and monolithic. Enabled by technology,
consumers want to discover, share, review, curate, remix and co-create their own food content. Successful retailers will offer a range of cooking involvement options that will create higher-quality food experiences. They will invent new ways for consumers to purchase their products. In short, grocery retailing, as a business, will be re-tooled to deliver a new, integrated, compelling food shopping and eating experience. The new digital consumer demands no less. The Hartman Group is an industry-leading research company, working with clients to develop successful marketing strategies. For more information, visit: hartman-group.com
SMARTPHONE USERS SAY THAT IN THE PAST 10 YEARS
TECHNOLOGY HAS IMPROVED: QUALITY OF LIFE
88% 82% Deciding where to purchase meals
44%
How well they eat
Learning to prepare foods
47%
Discovering and learning about new cuisines, flavours and ingredients
44%
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Same time next week THE RISE OF SUBSCRIPTION SHOPPING
HOW WOULD YOU DEFINE “SUBSCRIPTION SHOPPING”? Any situation in which a shopper agrees to regular future purchases of a product. HOW WILL RETAILERS BE AFFECTED BY CONSUMER ADOPTION OF SUBSCRIPTION SERVICES? The key challenges facing retailers will be: • A reduction in basket size because a number of key categories will have already been purchased. Core, high-traffic categories are also likely to be subscription-driven.
Mike Anthony, co-founder and CEO of engage, and co-author of The Shopper Marketing Revolution, explains why the rise of subscription services represents a coming of age for shopper marketing.
• A reduction in traffic because of basket fragmentation. The days of one-stop shopping are over: online and discounters have encouraged shoppers to seek out deals; convenience store and even drugstore penetration reduces the reliance on the weekly shop; and subscriptions take another chunk of the basket. • As basket size decreases, so does the need to go to a large grocery store (“why go through the hassle of shopping a big store when I only need a few items”) and the process of fragmentation intensifies. • A reduction in trade fees. Modern retail is built on a symbiosis between store sales and fees. Manufacturers want to put their brands in front of high volumes of shoppers but what if 40 per cent of a core brand’s sales have migrated to subscription sales? Trade fees would be reduced accordingly. HOW PERVASIVE ARE SUBSCRIPTION SERVICES? It’s important to note that subscription services come in many forms. Not all of this is about Amazon or Walmart. Of course, there are the big, regular consumption categories: families might subscribe to infant formula, diapers, razors, all of personal care, etc. Then there are gourmet or specialty food subscriptions. For instance, my sister gets a box of organic vegetables delivered to her house weekly.
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WHAT DRIVERS ARE MAKING SUBSCRIPTION SHOPPING A VIABLE ALTERNATIVE? Technological disruption via Internet and mobile devices. An entire generation of consumers has become very comfortable shopping online. The longstanding linear model of TV, to store, to purchase has been broken. IN WHAT WAYS WILL CPG COMPANIES NEED TO ADAPT THEIR GO-TO-MARKET STRATEGIES? This is a tough one. Major companies will be seriously considering their own digital subscription model, which opens up a few options. They may decide to partner with other CPG companies to create critical distribution mass. Or they can utilize third parties (e.g., Amazon, which already offers subscriptions). A number of them are now doing this. At the moment, it’s difficult to know what is going to happen. Most large CPGs have built their strategies on “big retail” being driven by volume growth. If that model reaches a tipping point of change, then a major rethink will be needed. IS THIS THE END OF SHOPPER MARKETING AS WE’VE COME TO KNOW IT? Actually, I like to think it is the coming of age of shopper marketing. It is no longer enough to imagine the shopper as part of a homogenous group with similar motivations. Shoppers have more and more choice of what to buy, and, critically, where and how to buy it, than at any time in history. Understanding shoppers, segmenting shoppers, prioritizing and targeting smaller specific shopper segments becomes critical. The idea of the stereotypical “Walmart Shopper” is over. Shopper marketing will be about truly marketing to shoppers, rather than just activating in front of them.
These two created a third impact: marketing dollars shifted from above the line, to retail. Brands accepted the idea that while the media scene was fragmented, retail wasn’t, and brand-building monies increasingly migrated to in-store promotions. These first three shifts created a problem. Brands were spending a disproportionate amount of money on promotions (training shoppers to buy around deals) rather than on brand building. The fourth shift was the proliferation of shopping access points. Shoppers now have online stores, convenience stores, dollar stores, discount stores and, of course, subscriptions. Reaching them requires a rethink of traditional methods. WHAT WILL MARKETERS LEARN FROM THE BOOK? The book is divided into three parts: The first is the background, what is going on now and why there is a need to change. The second digs deep into the key concepts behind shopper marketing, and how it affects the entire marketing world. The third is a practical how-to guide with advice, processes and cases on how to conduct shopper research, how to develop a shopper marketing mix, and how to use all this to improve trade investment and change trade relations. We cover pretty much everything you need to know and if we’ve missed something, let us know, and we’ll add it in the next edition!
WHY DID YOU WRITE THE SHOPPER MARKETING REVOLUTION? There were, I believe, three key shifts that have created a need to change shopper marketing approaches. The first was the growth of media fragmentation over the last 15 years, which has made it difficult for CPG companies to build relationships with consumers. The second is the growth of big retail and the subsequent growth of trade money support from vendors.
grocerybusiness.ca
After a consumer goods career spanning 17 years and three continents, Mike Anthony founded engage, a global management consultancy, working with companies such as Nestlé and Unilever to leverage the power of shopper marketing and customer engagement.
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it figures
Town & Country Consumers:
How are they different? URBAN
59% of urban
36% of urban consumers prefer stores with extended hours
Takeaway Consider that 66% of Canadian consumers do their main grocery shopping on a weekday, with Thursday and Friday being the most popular days. Extended hours would allow for extra shopping convenience.
consumers say fresh prepared foods and meal solutions are a top store-choice driver Takeaway If you make dinner options delicious, a quick trip to your store will likely translate into a dinner-to-go purchase.
URBAN CONSUMERS ARE
12% LESS LIKELY TO OWN A CAR
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Takeaway Fewer cars, more public transit result in smaller baskets, and a need for portability.
SUBURBAN
38%
OF SUBURBAN CONSUMERS SHOP AT SPECIFIC RETAILERS TO BUILD LOYALTY POINTS Takeaway With larger families, the suburban consumer values loyalty points. Find innovative ways to merchandise point-worthy items, engaging consumers more deeply in your loyalty strategy.
55% of suburban consumers buy larger sizes Takeaway Be strategic when it comes to the sizes you carry in store, and get to know your consumers’ shopping habits.
RURAL
69%
look for high-quality produce
57%
look for high-quality meats
Takeaway Offering the best-quality fresh products can be a point of differentiation for retailers. This is a great opportunity to win consumers’ trust in categories that are important to them.
42%
SAY THAT FRIENDLY AND KNOWLEDGEABLE STAFF IS A KEY STORE DRIVER Takeaway Rural consumers, in particular, value the social and personal aspect of grocery shopping. Don’t underestimate the power of customer service with a smile.
DEFINITIONS URBAN: High-density population, condominiums, office towers, subway/public transit system
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.
SUBURBAN: Medium-density population, cul-de-sacs, subdivisions, shopping malls RURAL: Low-density population, country roads, farmland grocerybusiness.ca
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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Jay Leno Entertainer
Martha Stewart Founder, Martha Stewart Living Omnimedia
Walter Robb Co-CEO, Whole Foods Market
Phil Lempert the Supermarket Guru
Harold Lloyd Founder, Harold Lloyd Presents
Youngme Moon Author and Professor, Harvard Business School
Arianna Huffington Co-founder & Editor-in-Chief The Huffington Post
Shaquille O’Neal NBA All-Star and Sports Analyst for TNT and NBATV
CMYK
• Learn from renowned food safety speakers • Improve delis with IDDBA Food Safety research • Engage in Listeria food safety training in the new Show & Sell Theater • Get credentialed in a free ServSafe® Certification Class
New Initiative!
Protect your customer’s well-being and strengthen your food safety culture with IDDBA’s new Safe Food Matters!
Go to iddba.org/safefoodmatters for more information.
The Evolution Continues
Hands-On Expo & Learning Opportunities
Grow with 8,500 other dairy, deli, bakery and foodservice professionals while you surround yourself with changing demographics and buying behaviors, increased emphasis on natural, and new convenient formats. See what it takes to increase store visits and have your products embraced by multi-generational buyers using digital strategies and omni-channel marketing. World-class presentations will expose you to many leaders and insightful business people and marketers in our industry.
Experience our jam-packed show floor with more than 1,800 booths filled with new products, services and new ideas that will move your business. Don’t miss our eye-opening New Product Showcase or our 10,000 sq. ft. Show & Sell Center. You’ll have plenty of networking opportunities while exploring the latest merchandising and new products – all in a retail setting that integrates actionable take-aways.
608.310.5000 • www.iddba.org
Perry’s Point of View
HOW SUPPLIERS
BUILD
GROCERY STORES In the world of retail accounting, the best
Here’s an example of how suppliers build
the consequences of this practice won’t –
way to get a finance chief excited is to
stores: in 2013, Loblaw averaged about
mention “negative working capital.” This
$2 billion of inventory, and almost $3.5 billion
eventually – be costed back into the product.
concept is the Holy Grail of store accounting
of accounts payable. By selling its inventory
because it is the greatest, and often the
before it paid for it, the grocer produced close
by any rise in interest rates. Retailers will need
cheapest, source of cash for a retailer. The
to $1.5 billion of negative working capital
these no-cost loans even more, but for
key to getting to negative working capital is to
(otherwise known as...cash). Loblaw spent
suppliers, the cost will increase. The lending
pay your suppliers slowly while turning your
$865 million on stores, equipment and
and borrowing of supplier funds needs to be
inventory quickly. When your accounts
systems. Because of negative working
incorporated into any serious joint business
payable is greater than your inventory, you
capital, not only could it avoid visiting its local
planning effort, and not just shrugged off to
have negative working capital.
banker, but it had enough cash left over to
those intrepid accounting folks.
This topic will be made much more urgent
help buy a prominent drugstore or two. In Essentially, retailers are borrowing money
Empire Company Limited’s case, it generated
from their suppliers at an excellent rate –
over $800 million, spent $570 million on stores
presumably zero per cent. Suppliers offer
and systems, and used the rest to purchase
payment terms specifically so retailers won’t
some notable western supermarkets.
Perry Caicco is the managing director for CIBC World Markets. His experience
do this, but it doesn’t stop the practice. In Suppliers should not dismiss or minimize
includes 15 years in the supermarket,
cent discount for payment within 10 days,
just how important this form of funding is to
general merchandise, and packaged
they know just how valuable their cash is
retailers; it can be vital to their health and
goods industries with companies such
to retailers, and how expensive that cash is
expansion. But for suppliers, it is a significant
as Coca-Cola, Consumers Distributing,
to fund.
cost of doing business, and can be even
and Loblaw Companies Ltd.
more costly when there is an imbalance of
Perry is a founding member of the
power. And yet, even minor co-op ads are
Grocery Business Advisory Board.
fact, if suppliers are willing to offer a two-per-
All the better if retailers push payments past the due date, since few suppliers will enforce
often subject to more analysis and negotiation
substantial penalties. After all, they need their
than this critical lending relationship. Retailers,
retail customers.
on the other hand, need to push supplier credit to the limit, but have to guard that
grocerybusiness.ca
January | February 2015
65
Attend CHFA West and gain access to thousands of products – some never before seen in Canada.
Here’s what your colleagues have to say about CHFA West: “CHFA West showcases current healthy food trends. I prefer this show to other industry shows because of the diversity.” Ray Robinson Robinsons Foods, Jasper
“The CHFA is the premiere food show in Vancouver because of all the exciting and innovative new items.”
The Canadian Health Food Association is Canada’s largest trade association dedicated to natural health and organic products. For more than 50 years, CHFA has set the standard for showcasing natural health and organic products through the industry’s most prestigious events. They are dynamic events where education, innovation and networking opportunities come together. Join us on April 11 & 12 at the Vancouver Convention Centre for what is sure to be our best event yet!
register today! chfa.ca
Eric Olson Nesters Market & Pharmacy, Burnaby
“This show is one that should not be missed. The amount of products showcased are second to none.” Blind Bay Village Grocer, Blind Bay
“I like attending the shows to see what may be on the horizon in terms of new products and trends.” Sam Heinrich Buy Low Foods, Walnut Grove
“I enjoy seeing the product trends and innovation that come with each new year.” Jeff Stewart Western Foods
PLAN TO ATTEND
速
health & beauty sports nutrition nutraceuticals
experience
growth
natural health products specialty food organic food
vancouver convention centre, west building
conference:
april 9 & 10 trade show:
april 11 & 12
chfa.ca
MARK YOUR CALENDAR!
速
conference: september 17 & 18 trade show: september 19 & 20 metro toronto convention centre, south building