May/June 2015 by Grocery Business

May / June 2015 Vol 5 | No 3 $9.95

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Grocery Business May | June, 2015 Volume 5, Number 3

contents DEPARTMENTS 6

Front End

Open Mike No call for code of conduct

23 Independents’ Day CFIG’s case for beer

Making It

Launch It, List It

Manitoba Harvest Hemp Foods

New & now discoveries

26 6

May | June 2015

It Figures

Perry’s Point of View

People & News

The power of private label

Why the trade deficit matters

ON THE COVER

Canada’s Sandra Farwell 14 Walmart And the Rise of Private Label

37 PHOTO GALLERIES

FEATURES 29 Canadian Grand Prix

54 Innovation Lab

37 The Innovators

56 2015 Grocery Outlook

The year we’ve been waiting for

57 Grocery and

45 Shopper Army: Product

illennials: The Mindful M Consumer

Vancouver

Award Finalists

Spotlight on global trendsetters

Testing in the Field

Inspiration for grocery

49 Best New Product Award

9 Canadian Health Food Association West Vancouver

Specialty Food West

61 Canadian Produce

Marketing Association

Winners

Montreal

51 Taking Your HMR

Department Upscale

53 Perspective: Catering to the Next Generation

C O V E R P H O T O : PA U L E E K H O F F

grocerybusiness.ca

Front End

Transitions Michael Forgione (pictured) was promoted to chief operating officer of Longo Bros. Fruit Markets, as part of an organizational change that includes the appointment of Joey Longo as chief development officer; Dave Mastroieni as vice-president, central procurement & facilities management; Pat Pessotto as vice-president category management and merchandising; Mike Longo as vice-president business transformation; and Brian Grigat as director grocery/dairy/frozen, HABA and pharmacy. Grigat replaces Harpreet Ferron, who takes on a new role as director merchandising, pricing and planning. Eileen MacDonald was recently promoted to president of GS1 Canada. MacDonald joined the company in 2002, and previously was chief operating officer. Kellogg Company has appointed Paul Norman as president, North America. Norman most recently served as Kellogg’s chief growth officer, and led the U.S. Morning Foods business on an interim basis. Caroline Emond is the new executive director of Dairy Farmers of Canada (DFC). A lawyer and lobbyist, Emond previously worked for DFC from 1998 to 2006. John Lederer, US Foods president and CEO, and a former executive of Loblaw Companies Ltd., has been appointed to the board of directors of Walgreens Boots Alliance, Inc.

May | June 2015

The Clorox Company of Canada, Ltd. has named Dave Iacobelli vice-president of sales. He was previously with Kraft Foods / Mondelez. Iacobelli replaces Michael Pilato, who is now general manager and president of Clorox Canada. Ted McKechnie has been appointed to Naturally Splendid Enterprises’ corporate advisory board. Previously, he held executive leadership positions with several packaged food companies, including president of Maple Leaf Foods, and president/owner of Humpty Dumpty Foods. Andrea Nicholson is the new corporate chef at Maple Leaf Foods. Nicholson is a Red Seal certified chef, and has held positions in several prominent restaurants. Joe Magnacca, a former executive with Loblaw Companies Ltd., has resigned as CEO of Texas-based electronics retailer RadioShack, a company he has headed since February 2013. Joe Sawaged recently joined the Canadian Federation of Independent Grocers in the newly created position of national account manager. His background includes 12 years at Rogers Media in a B2B sales environment.

Sobeys re-organizes: Jason Potter to lead Sobeys’ Western Canada business

Sobeys Inc. is making significant changes to its national reporting structure related to the continued integration of Canada Safeway, including transitioning the Sobeys Multi-Format operation into two distinct business units. In an internal memo obtained by Grocery Business, Sobeys Inc. president and CEO Marc Poulin announced that Sobeys Multi-Format will no longer be a business unit, and will instead transition to two distinct business units – one for Western Canada, and a second one combining the existing Atlantic and Ontario regions. IGA Operations in Quebec remain unchanged as a standalone business unit. Jason Potter has been appointed president, operations, Western Canada, for Sobeys. Previously, Potter was president of Sobeys Multi-Format. As well, Sobeys plans to name a president to lead the Atlantic & Ontario Business Unit, Poulin said in the memo. The West Business Unit brings together operations from Sobeys West, Thrifty Foods and Safeway, and is designed to further strengthen the company’s position in the competitive landscape. The national support functions in the West Business Unit will be based out of Calgary. This will result in the majority of national support functions currently located in Victoria, Vancouver, Edmonton and Winnipeg transitioning to Calgary. Poulin also revealed that Sobeys is actively looking for a chief merchant officer (CMO) to lead and oversee the development of best-in-class tools and processes. The national functions that will report into the CMO include procurement, Category Management Centre of Excellence, merchandising, marketing and digital strategy.

Front End

FCPC launches Toronto-based Food and Beverage Cluster

When Mary Dalimonte, Sobeys’ senior vice-president of merchandising and commercial programs, visited the Grocery Business SIAL trade show booth in Toronto, we took the opportunity to photograph her alongside our poster featuring Mary’s recent cover story (January/February 2015 issue).

Food & Consumer Products of Canada (FCPC), with the strong support of public and private partners, has launched the Greater Toronto Area Food and Beverage Cluster, an initiative aimed at strengthening the region’s food manufacturing sector. The initiative includes a new information hub (gtafoodcluster.ca) where visitors will find an annual labour market survey; food-industryspecific post-secondary program offerings; business support opportunities with government, academia and stakeholders; and information to promote the economic clout of the sector. The GTA Food and Beverage Cluster will initially focus on skills and labour, and innovation. “Food and beverage manufacturing is an exciting, vitally important economic sector with huge impact and enormous potential,” says Nancy Croitoru, president and CEO of FCPC. “There are more people working in

Pictured (left to right): Anne Sado, president, George Brown College; Norm Kelly, Toronto City Councillor; Carmela Serebryany-Harris, president, Upper Crust; Nancy Croitoru, president and CEO, FCPC; Chef John Higgins; Janet De Silva, president and CEO, Toronto Region Board of Trade; and Dan Magliocco, president, Mondelez Canada International.

May | June 2015 Volume 5, Number 3

Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca

Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca

grocerybusiness.ca

food and beverage manufacturing in the GTA than anywhere else in North America, outside of Los Angeles. We can and should be first.” The Cluster, which is co-chaired by Dan Magliocco, president, Mondelez Canada Inc., and Carmela Serebryany-Harris, president of Toronto-based Upper Crust, will be a one-stop shop where companies and young innovators can go to find out about government funding programs. The Cluster will also support and promote regional innovation centres for the GTA, such as the Toronto Food Business Incubator. The Cluster will match industry leaders with thought leaders and the entrepreneurs of tomorrow to learn and share information.

Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Contributing Editors Angela Kryhul, Sally Praskey Contributors Thomas A. Barlow, Birgit Blain, Perry Caicco, Laurie Demeritt, Mary Del Ciancio, Michael Marinangeli, Dana McCauley, Rich Rotzang, John F. T. Scott

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 Thomas A. Barlow, Canadian Federation of Independent Grocers

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

Front End

How Brands Achieve Social Success By Dana McCauley

Regardless of how well-established a brand may be in Canada, savvy food marketers realize they need new strategies to connect with existing and new consumers. All demographics are spending more time online, so it’s not enough to merely repurpose print ad strategies on Facebook. Strategically led food companies are gradually shifting their marketing focus from aging Baby Boomers to the much younger Millennials. This younger group is an attractive target market because they are simultaneously moving into their peak earning years and becoming new parents with bigger shopping baskets. Millennial Mom and Boomer Mom have very different relationships with the brands they love.

While Boomer Mom loved being given information such as tips and recipes, Millennial Mom craves dynamic relationships. She wants to co-create content and interact with her favourite companies. Innovative companies are using these insights to form meaningful ties with Millennials. One of the best is McCain’s Foods, whose Modifry campaign has all the right elements to forge relationships with Millennials. The cornerstone of Modifry is a hashtag (#Modifry) that can be used on social media sites such as Instagram, Twitter and Facebook. The program prompts consumers to turn ubiquitous McCain SuperFries into unique culinary creations. Participants share pictures

and recipes of their Modifry efforts online so that others can vote for their favourites. Winning ideas are awarded prize packs containing more product so that participants can continue “modifrying.” In 2015, as we adapt to a whole new consumer dynamic, McCain’s strategic and tactical approach works because it builds loyalty and drives volume through brand engagement.

Dana McCauley is an experienced food marketing executive and host of Food Trends TV on YouTube. Contact: danamccauley@rogers.com

The Canadian Association of Family Enterprise has named Longo Brothers Fruit Markets the Central Ontario Family Enterprise of the Year. The award recognizes significant achievements made within a Central Ontario family enterprise. With 27 full-service grocery stores across the Greater Toronto Area, Longo’s has first, second and third generations of the family working together. Pictured (left to right): Nick Yeatman, Mike Longo, Joey Longo, Gus Longo, Rosanne Longo, Anthony Longo, Joseph Longo, Rosie Yeatman and Rose Buick.

Congratulations to all of the Finalists! Find out who the big winners are at the

June 3

Canadian Grand Prix New Product Awards

RECOGNIZING AND REWARDING NEW PRODUCT LEADERSHIP

Gala will be held during

June 2-3

Visit GrandPrixAwards.ca 3, ticket 2015today. to buyJune your Gala #RCCGrandPrix

CANADIAN HEALTH FOOD ASSOCIATION WEST April 9-12, 2015, Vancouver, B.C.

Ben Wahl and Marshall Rader, The Gluten Free Bar; Jim Kavanagh, Brandseed Marketing Inc.

Kyla Morishita and Gemma Gibbs, Nature’s Path Foods Inc. A. Lassonde team

Shaun McKenna, Acosta Sales & Marketing

Lauren Rebar, Happy Planet Foods Inc.; and Jordan Birch, Sustainable Produce

Chris and Peter Neal, Neal Brothers

Elysia Vandenhurk, Three Farmers

Jamie Moody and Chris Powell, Tree of Life Canada, with Olympic athlete Clara Hughes Ihab Leheta, Garden Protein International

grocerybusiness.ca

Bill Ivany, Marsham International; and Steve Hughes, St. Jean’s Cannery + Smokehouse

May | June 2015

Open Mike

NO CALL

FOR CODE OF CONDUCT By Michael Marinangeli

I am not an advocate of a code of conduct for the grocery industry in Canada. Over 35 years of negotiating deals, contracts and agreements with suppliers, not once did I feel it necessary to have a code to police the way we conducted business. In the past decade or so, we have had a changing of the guard on both the supplier and retailer side. Perhaps relationships are not as strong as they once were, and some are calling for a code to soften the edges. Advocates blame retailer consolidation as the catalyst, claiming: • Retailers are too big and make unreasonable demands; • They make too many unexplained deductions; • They sell their products at well below cost, affecting brand image; • It costs too much to get a product listed; • There are penalties for out of stocks or late deliveries; • U.K. and Australia have adopted a code of conduct, so we should too. (This argument is totally irrelevant. We are Canadians, and we do things differently.) I could have made the same list 20 years ago, with one exception: penalties became part of the equation when new retailers entered Canada from south of the border where these practices were established. And, of course, retailers, too, can complain about supplier consolidation. It is not unusual for two or three suppliers to do 80 per cent of the business in a category. I have been on the receiving end when suppliers have consolidated, triggering changes

May | June 2015

in policies, trade spending and procedures that would adversely affect our bottom line. In most cases, we were able to work through to a mutually agreeable solution, as everyone knew the consequences of not reaching a compromise. The food industry in Canada is not broken. We have a lot to be proud of. Rather than protesting the clout of the retailers, the supplier community should embrace the courage and fortitude that our Canadian retailers have shown in the face of new entrants with deep pockets and tremendous resources. Our retailers have made major investments in world-class store concepts, distribution centres, systems, technology and innovative private brands. Loblaw and Sobeys invested almost $20 billion buying Shoppers Drug Mart and Canada Safeway, respectively. As in any acquisition, there are synergies, and suppliers are expected to either align their trade spending or augment it due to the higher volumes generated by a larger entity. When suppliers merge – witness the recent Kraft/Heinz blockbuster – they, too, look for synergies. Without them, most deals would never happen. Although I do not advocate a code of conduct, neither do I condone the way some retailers have handled their “asks” the past few years. Letters have been sent en masse to suppliers, asking for cost reductions. Members of the press and competitors have these memos in their hands minutes after they are sent. This is bad judgement, both on the part of those who sent these letters and those in higher levels of management who approved them. The right way to do these things is through confidential face-to-face meetings and a healthy discussion. The outcome may be the same but the journey has a fresher scent.

Open Mike

Recently, an analyst from the U.S. asked me point blank why the grocery business in Canada hasn’t been a “basket case” like it has been the past few years in his country. The growth of Walmart and Costco in food over the past 20 years has taken its toll on many retailers down there. I explained that the food industry in Canada was better prepared to compete with these new entrants. We have modern stores, a large discount presence, strong perishables and great private brands. Consolidation has also played a big role in stabilizing the industry, ensuring that the Canadian retail presence remains strong. Large Canadian retailers such as Loblaw, Sobeys and Metro have invested heavily in their business, and through acquisitions, have sufficient size, scope and diversification to withstand competitive threats. Although fewer in number than in the past, the remaining regional grocers, along with progressive and well-established independents, continue to prosper and grow. Unfortunately, there have been casualties along the way, but this is not unique to our industry. The Canadian consumer has benefited immensely, and enjoys tremendous assortment and quality, as well as one of the lowest food costs anywhere in the world. In summary, I do not believe a code is necessary, but nor do I condone some of the behaviours that I have heard of in recent years. Integrity starts at the top. I encourage those suppliers who feel they are not being treated fairly to openly and honestly present their case through top-level meetings with their retail partners, without fear of reprisal. Collaboration between retailers and suppliers is built on trust, integrity and strong leadership. Today’s leaders on both sides must ensure that their current and future employees get the right training and practice good business judgement. And we don’t need a code of conduct to make this happen.

Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. Contact: mjmarinangeli@gmail.com Michael is a founding member of the Grocery Business Advisory Board.

grocerybusiness.ca

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May | June 2015

Congratulations

he 27th annual Foodland Ontario Retailer Awards Ceremony recognized 33 grocery retailers for their in-store promotion

of fresh Ontario food. The displays increase consumer awareness of the variety of fruits and vegetables grown in

the province. Stores submit photographs of their promotional displays to qualify for the awards. There are six award categories that recognize the support for promoting in-season local food. From individual store displays to overall retail banner endorsement, the Retailer Awards program is a true celebration of our Retailers’ commitment to sourcing local food.

Award of Excellence

Food Basics #697

Food Basics #932

Metro #147

Metro #453

Andrew & Emily’s No Frills

• Stewart’s Town & Country Market was unable to attend the ceremony. •

Platinum

Food Basics #697

Food Basics #932

Food Basics #989

Metro #73

Metro #147

Metro #453

Metro #479

Metro #800

Stewart’s Town & Country Market was unable to attend the ceremony.

Andrew & Emily’s No Frills

Sobeys Ira Needles

Allan’s Independent Grocer

Retailer AwardWinners

Foodland ONTARIO Gold Creative

Metro #808

was unable to attend the ceremony.

Food Basics #638

Food Basics #893

Metro #193

Gold Cross Merchandised

Food Basics #660

Metro #83

Sobeys #858

Vos’ Independent #835

Gold Seasonal

Food Basics #620

Metro #58

Jonsson’s Your Independent Grocer

Loblaw Great Food #1028

Vision Award

Conventional Metro Ontario Inc.

Discount Food Basics

Local Food Champion Brian Langley

Sandra Farwell in Walmart Canadaâ&#x20AC;&#x2122;s test kitchen, Mississauga, Ont.

P H O T O S : PA U L E E K H O F F

Walmart Canada’s

SANDRA FARWELL And the Rise of Private Label By Sally Praskey

As Walmart Canada’s private-label guru, Sandra Farwell has a deep understanding of Canadians’ growing appetite for quality products at lower prices. Grocery Business spoke with Farwell, vicepresident of brand management and product development, and a global officer for Walmart International, who explained how the company is developing its private-label offerings in concert with changing consumer expectations. WHY IS WALMART RAMPING UP PRIVATE LABEL AT THIS PARTICULAR TIME? There are three main reasons: First, we really appreciate how much private label drives customer loyalty, and we want to take advantage of that opportunity. Secondly, our private-label brands are good quality with the lowest price on the shelf. Our mantra at Walmart is about saving Canadians money (so they can live better), and offering private brands supports that. And the third reason is that we are opening more and more stores with larger food sections. We want to showcase innovation, and private-label lines also support that. TELL US ABOUT YOUR PORTFOLIO OF BRANDS. Great Value is our largest brand – our hero brand – and it is probably 75 per cent of our sales. Great Value is national-brand equivalent in quality but lower in price.

And then, Our Finest is a premium brand, better than national-brand quality. It’s really a more innovative and seasonally focused brand. Price First is a new brand that we’ve just launched with a low opening price point and a product lineup that is opening-price-point quality. For example, with paper towels, if the national brand is two-ply, Price First would be one-ply. We offer about 50 SKUs. Although we do have a few Price First food products, the line is primarily made up of consumables such as paper, cleaners and foil. We’ve already built good awareness, and Price First is performing very well because it’s a great alternative for customers who are on a budget. DO YOU HAVE AN ORGANICS OFFERING? At the end of August, we will be launching our certified Great Value Organics line. We’ll have 75 SKUs to start with. The lineup will be mainly across frozen and dairy, although we have some produce. Our Quality team ensures that all the products are 100 per cent certified. Continued on page 16

SANDRA FARWELL BRAND EXPERT Sandra Farwell is responsible for brand management, marketing, and product development for Walmart Canada’s private-brand portfolio. Before joining Walmart five years ago, Farwell worked in a variety of roles and categories with Loblaw Companies. Career Highlights: • Chair, Walmart Canada’s Home Office Women in Retail program, which works to develop gender equality and diversity in the workplace • Executive MBA, Harvard; BA (Honours), Economics, Queen’s University • Founding member, 100 Women Who Care Mississauga • Co-chair, United Way Peel Region

Continued from page 15 We get lots of requests for organic, so we asked our consumers if they would accept organics as a Great Value brand. Our research came back overwhelmingly “yes.” Organics aren’t going to be priced as low as our Great Value brand but the price points will be equivalent to the non-organic national brand. So, for instance, an organic ketchup will be priced the same as a national nonorganic brand. AND YOU RECENTLY RELAUNCHED THE YOUR FRESH MARKET LINE. Yes. Your Fresh Market is going to be the umbrella brand across all the fresh categories, and it’s probably our fastest-growing one at the moment. We’ve seen huge increases and we are getting lots of great comments about the quality. We relaunched Your Fresh Market in bakery about 18 months ago, and now we’ve grown it to include deli. It’s a mid-tier brand at the lowest price point. Recently, we launched it into fresh meat; the beef program is 100 per cent Canadian Angus Beef. We also have air-chilled chicken, pork and seafood, and we are slowly moving into produce. We put a 100 per cent guarantee on all of it. DOES WALMART HAVE AN ETHNICFOCUSED PRIVATE-LABEL LINE? We do have two brands that we’ve launched – Delicious Kitchen and Sitara – to appeal to the consumer who wants to go beyond mainstream ethnic products like butter chicken. The SKU lineup is limited right now, but it’s doing really well and we will be growing those two brands. TELL US MORE ABOUT WALMART’S QUALITY-ASSURANCE APPROACH. We feel that, at Walmart, price is a given, so quality is probably the most important thing in our private-brand program. We have a Quality team and product developers here in Canada,

May | June 2015

and all our vendors are certified by GFSI (Global Food Safety Initiative). Launching a product generally takes us about eight or nine months. We do extensive testing before the products are sent to the stores, and then we randomly test every single product once a year. For instance, we have 2,000 SKUs in Great Value; all those products will be tested at some point during the year and sent to the lab to ensure that they meet our specifications. I think an important indication of our product quality is that the six products we submitted to the Canadian Grand Prix Awards have all been selected as finalists. IS THE CURRENT RISE OF THE PRIVATE-LABEL SEGMENT A GLOBAL TREND? Yes. Europe is a much more developed market, but Walmart U.S. is growing its private-brand offering for the same reasons that we are. DO YOU SEE PRIVATE LABEL CONTINUING TO GROW? I see that there’s huge momentum right now. We have a focus on quality, and we’re looking to significantly increase our penetration and sales. And we’ve still got a lot of things that we want to do in the stores around building our presence and creating more theatre and entertainment around private brands. IS THERE ANYTHING ELSE YOU’D LIKE TO ADD? At Walmart Canada, we have a huge passion for private label, and we take great pride in the unique products and brands that we are developing. And because Walmart is international, we have the significant advantage of learning from what’s going on in other countries.

DELOITTE’S

JENNIFER LEE ON

PRIVATE LABEL : THE DRIVERS The price-conscious consumer is looking for increased value, lower prices and more selection; a properly designed private-label program will deliver on all these points. It’s important to note that, overall, grocery costs are increasing faster than household income, so consumers are looking for ways to save on their grocery bill. In the middle- and higher-income segments, consumers are attracted to well-differentiated private-label offerings that have a strong value proposition, so for them, privatelabel brands can be the key that builds loyalty. And for retailers, private-label brands are a way to improve margins, increase operational efficiencies, and counteract share erosion to dollar, discount and popular ethnic stores. Jennifer Lee, Partner National Retail and Omnichannel Leader, Deloitte

67%

of consumers

say that in-house brands deliver on both quality and value

23.5%

Source: BrandSpark

19.9%

MARKET SHARE FOR PRIVATE LABEL, GROCERY CHANNEL ONLY

MARKET SHARE FOR GROCERY PRODUCTS, ALL CHANNELS Source: Nielsen: State of Private Label in Canada 2012

Walmart Canada test kitchen, Mississauga, Ont.

TESTING, TESTING… As Walmart Canada cooks up different ways to develop and evaluate its private-label products, it relies extensively on its new test kitchen – an investment that is a testament to the focus the company is placing on this segment of its business. Opened in May 2014 at Walmart’s head office in Mississauga, Ont., the product-development facility consists of two separate and grocerybusiness.ca

fully-equipped domestic-style kitchens with microwaves, ovens, range tops, and an electric grill for food preparation and demonstration. A bar-height island anchors the central space in each kitchen, and also serves as a demonstration and meeting place for vendors and the food team. Stainless-steel wall freezers and fridges, a segregated dry-storage area, plus

a dedicated commercial-style wash-up wet room all complement the workings of the kitchens. Besides the daily business of product development and vendor meetings, the facility functions as a place for team member participation in sensory panels, product benchmarking and evaluation.

May | June 2015

Millennium Pacific

RISES IN THE EAST F

or 15-year-old family-run grocery and produce wholesaler Millennium Pacific, the sky’s the limit – or at least, the vast expanse of Canada from coast to coast. • The Delta, B.C.-based company is poised to

open a new distribution centre in Richmond Hill, Ont., to better serve its customers east of Eden (Manitoba!). “We have many customers in eastern Canada who are demanding our products for their stores, so we are

going to be opening an office and warehouses in the Greater Toronto Area this year,” says Reza Bakhtiari, vicepresident, sales and marketing, and son of founder Shirvan Bakhtiari, CEO of Millennium Pacific Greenhouses.

The Millennium Pacific team (from l to r): Bahman Karimi, Simonetta Cruciani (Limmi Company), Sayeh Karimi, Moe Eddine, Mahdi Torabi, Reza Bakhtiari.

FACTS & FIGURES

Reza is now busy outfitting the warehouse and securing delivery trucks, as well as hiring sales, warehouse, delivery

• Number of ethnic grocery items carried:

and office teams to service not only existing customers,

about 1,000 from around the world, for which

but also new ones it expects to attract through the

many it is exclusive distributor for Canada.

expansion. “I think I will have to be back and forth

• Number of employees: 80 to 180, depending

between the East and West coast many times for the

on the season.

next six to 12 months,” he says.

• Number of varieties of greenhouse-grown tomatoes: 10 (Tov, Beefsteak, Roma, Red Grape,

CULTIVATING GROWTH

Yellow Grape, Orange Grape, Red Cocktails,

The seeds for Millennium Pacific were sown – literally –

Yellow Cocktails, Orange Cocktails, Cherry Tov). • Bestselling shelf-stable products: pistachios,

in 1999, when Shirvan began growing greenhouse tomatoes.

lemon juice, pomegranate juice, rice, nuts, seeds.

Because it was the dawn of the new century, and the

• Best business advice, according to Reza:

greenhouse was based on the west coast, the family called its fledgling company “Millennium Pacific,” explains Reza. Since then, the organization has blossomed into a 30-acre greenhouse operation supplying both Canada and the U.S., and run by Shirvan, his two daughters, and Reza. When the company initially began to sell its tomatoes, it did so through marketers and distributors. Unsatisfied with the results, Reza

“WE ARE HERE TO SERVICE ALL THE MULTI-ETHNIC MARKETS — ALL THE STORES, WHETHER BIG OR SMALL.”

“Hope for the best; plan for the worst.”

myself in my own five-ton truck. After the management team saw that I was filling orders on time, and that I personally was delivering No. 1 Grade greenhouse tomatoes from our own green-

procured a wholesale license so the family could sell their tomatoes themselves. That became Delta Country

houses at very competitive prices, the word reached higher

Farms, the sales arm for Millennium Pacific.

management. A meeting was set with the produce team

The ability to operate as a wholesaler heralded a major

buyers and bosses, who told me that, not only were they

period of growth that culminated in Millennium Pacific being

happy with having this quality grade tomatoes from us, but

named the exclusive supplier of greenhouse tomatoes to

also that my prices were in line with or better than other

Overwaitea Food Group (OFG) – a major achievement for a

growers. So we started receiving larger orders, and two years

company that, at the time, had been in business for less than

ago, we became Supplier of the Year from among more

a decade.

than 1,200 OFG supplier partners for different commodities.”

As Reza describes, it was a case of persistence pays off. “It all started about eight years ago,” he recalls. “I wanted to become a vendor with Overwaitea, and kept calling the buyer

Besides the tomatoes, Millennium Pacific works with a grower that produces Persian cucumbers that it also supplies to OFG. Millennium Pacific also imports fruits and vegetables

until he finally gave me the opportunity. I was receiving only

from growers in California who purchase its tomatoes.

small – two- to four-pallet – purchase orders. The appoint-

“In season, we import a lot of Thompson grapes, sour cherries,

ments were all late at night and into the early morning, like

watermelons, oranges, pomegranates, and many other fruits,”

2:00 to 4:00 a.m. I was delivering the purchase orders by

says Reza.

UNIQUE LEMON/ LIME JUICE Named one of the Top 10 Most Innovative Products at the recent Grocery & Specialty Food West show, Limmi, the first product of its kind in Canada, is 100 per cent pure lemon or lime juice – not made from concentrate – from Italy. It is pasteurized briefly so that it stays shelf stable for a year. Each bottle cap is infused with essence of lemon, so that when the lemon juice is squeezed out of the bottle, it brings that flavour and scent with it. Millennium Pacific is the exclusive distributor of Limmi for Canada.

Reza Bakhtiari (r) with Simonetta Cruciani, export manager from Italy, at the Grocery & Specialty Food West show.

EXPANSION INTO ETHNIC

all the stores, whether big or small.”

A few years after Millennium Pacific had obtained its wholesale

He believes all retailers are looking for suppliers like

license, Overwaitea and some other customers asked if the

Millennium Pacific, “who can fulfill their needs, not only for

company could supply them with some ethnic groceries.

capturing the attention of the different ethnic buyers in

“We thought there was opportunity, and we had the

their stores, but also for helping them with their own private

connections,” Reza explains. After all, the family immigrated

labels for programs to promote their company to the

to Canada from Kuwait, settling in British Columbia because

different ethnicities.”

of the climate. Including relatives in Kuwait and Iran, the

Having taken the next big step by opening a distribution

Bakhtiaris boast some 60 years of experience in the industry.

centre in the GTA to service cities in Eastern Canada more

“So we got into that business, and since then, we’ve

efficiently, “we have a great opportunity, not only to supply

come a long way,” says Reza. Although the company began

retailer partners, but also other wholesalers so that they,

by importing products from the Middle East, it now sells some

too, could supply retailers with whom they have supplier

1,000 SKUs, “from countries in the Middle East all the way to

commitments,” says Reza. “At the end of the day, customers

Italy, France, Britain, the U.S., and Mexico,” notes Reza. In other

can buy my products on the store shelves near you in

words, one-stop shopping for ethnic groceries, as well as

the coming months, whether it is supplied by myself directly,

produce. “We are here to service all the multi-ethnic markets –

or indirectly through other wholesalers.”

www.millenniumpacific.com

FRESH

•

TA ST Y

•

F L AVO R F U L

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SW E E T

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CO N S I ST E N C Y

Millennium Pacific is a family-run 30-acre modern hydroponic greenhouse located in Delta, B.C. Our purpose is to bring the highest quality vine-fresh tomatoes from our plants to your customers as quickly and efficiently as possible. We offer quality and consistency — fresh, healthy, and tasty tomatoes direct from our farm to you. Although we are known for our tomatoes, we also offer a variety of other products, including pickeled goods, nuts, meats and spices.

Millennium Pacific Greenhouses • 3752 Arthur Drive, Delta, B.C. • V4K-3N2 • Tel: 604-940-4440 • Email: info@millenniumpacific.com

Specialty Food Sales Just Topped $100 Billionâ&#x20AC;&#x201D;Get Your Share at the Fancy Food Show!

Specialty Food sales grew 11% last year to over $100 billion in sales. Food sales in general only grew 2%. Register for the Fancy Food Show and get your share! The Summer Fancy Food Show is the largest specialty food trade event in North America and the leading showcase of industry innovation. 2015 will feature more than 180,000 products, 22,000 buyers, and 2,500 exhibitors.

Be there June 28 â&#x20AC;&#x201C; 30. Register at fancyfoodshows.com

Independents’ Day

Politics:

The art of the doable By Thomas A. Barlow

Last month, the Ontario government accepted a report by the former chair of the TD Bank, Ed Clark, on government assets, including how beer and wine are sold in the province. When asked why he had shied away from recommending that beer be sold in convenience stores, Clark stated that he was not interested in presenting a report that would just gather dust on a shelf. Rather, he wanted to craft his report around what he knew from his discussions was “doable.” If the government viewed having beer sold in convenience stores as a “non-starter” (the same position as the B.C. government), then Clark saw no need to spend time discussing how that option would work. In fact, the beer issue in Ontario is a perfect illustration of how associations must work with government. At the Canadian Federation of Independent Grocers (CFIG), we bring forward the views and positions of the majority of our members on a myriad of issues. But governments are not inclined to simply accept everything an organization advocates, no matter how sensible its position may be. In these cases, organizations must focus on the

grocerybusiness.ca

possible wins without compromising their beliefs. In the beer and wine scenario, for example, CFIG advocated to the government and the Clark Advisory Panel that, if the sale of those products was open to the grocery channel, it should be open to the entire channel, without capping the number of stores. We argued strenuously that if the government was determined to cap the number of stores, independents must receive their fair share of the licences awarded. CFIG also pointed out that we could not compete in an auction process with chain stores, which have much different financial models and deeper pockets. And if minimum pricing was going to be mandated, we explained that larger chain stores could use other avenues, such as listing fees or trade spend, to further their competitive advantage in beer sales. So, what did we end up with as a result of our efforts? The government did cap the number of stores at 450, equivalent to the number of Beer Stores operating in the province. We believe that this approach is only a first step towards a full-channel solution.

Obviously, more discussions and decisions lie ahead, for instance, around the sale of wine, as well as some of the logistical issues around shelving, checkout and staff training. But it is clear that the views of CFIG have been reflected in the report, and our members’ interests advanced in the context of this new policy. We win battles, but the war always continues on one or more fronts. In the final analysis, elected governments make decisions for which they will be judged at election time. But during the course of a government’s mandate, it is best to recall the statement by Otto von Bismarck that “Politics is the art of the possible.” CFIG will not compromise any of our core principles. But we do practice the art of the doable. We owe it to our members.

Thomas A. Barlow is president and CEO of the Canadian Federation of Independent Grocers.

May | June 2015

NSF-GFTC is now part of the NSF International family of companies. The NSF Global Food Division which includes NSF-GFTC provides expertise and accredited services across all supply chain sectors, from agriculture, produce, processing, distribution, retail and restaurants.

BRINGING INDUSTRY, REGULATORY AND CONSUMERS TOGETHER

Industry

Regulators

Consumers

Food, Water, Consumer Goods

HC, CFIA, FDA, USDA

Media, Educators, Consumer Groups

CANADIAN-BASED, INTERNATIONAL CAPABILITIES AUDITING • Supply Chain • Agriculture

FOOD SAFETY CONSULTING • • • •

Strategic Technical Crisis Management Recovery Management

TECHNICAL SERVICES • Food Labeling • Food Packaging • Product & Process Development

TRAINING • Customized • ELearning • Open Enrollment

by the

NSF employs 2,100 people worldwide, including certification specialists, food safety consultants, food labelling and packaging experts, food scientists and technical trainers.

NUMBERS

NSF offers services in 155 countries. We have 54 offices and 26 partner offices in 35 countries.

NSF has certified

458,000 products, with 17,000 tested annually.

170,000 audits are conducted annually. 1,700 field auditors working worldwide .

84,000 companies served

70 years of public health expertise 50+ internationally recognized accreditations, including ANSI, IAS, OSHA, and the Standards Council of Canada (SCC)

As of April 2015

NSF-GFTC 88 McGilvray Street, Guelph, ON, N1G 2W1 Canada t: +1519 821 1246 | e: gftc@gftc.ca | w: www.gftc.ca

Making It

HEALTH, HAPPINESS AND By Mary Del Ciancio

HEMP

Mike Fata is passionate about hemp seeds and their nutritional value. It’s what prompted him to lobby the government to legalize the production of hemp in Canada in the 1990s. And it’s what drove him, along with friends Martin Moravcik and Alex Chwaiewsky, to co-found Manitoba Harvest Hemp Foods in 1998 when Health Canada legalized hemp for commercial production. Today, the Winnipeg-based company is the world’s largest hemp food manufacturer to grow, make and sell its own line of hemp foods. Its products – Hemp Hearts (which can be sprinkled over cereal, salad, yogurt and many other foods), hemp protein powder, hemp oil, hemp protein smoothie and Hemp Heart Bites (a sweet and crunchy snack) – are sold through 7,000 retailers, including natural food stores and grocery stores in Canada and the U.S., with distribution in Mexico, Europe and Asia.

Manitoba Harvest Hemp Foods has experienced growth of 50 per cent per year – and some years 100 per cent – since its inception. But Fata, the company’s CEO, admits he didn’t see the full market potential in the beginning. “The clarity on how big the market potential was didn’t come for several years,” he says. “It really started out with pure passion.” This passion came from Fata’s own life changes. The entrepreneur previously weighed 300 pounds. He lost weight through exercise and by cutting fat out of his diet, but still felt unhealthy. Then he started reading about essential nutrients, good fats and bad fats. He learned about hemp seeds – that they are prized for their protein and essential fatty acids, and that they’re also a good source of fibre, iron, zinc and magnesium. And when he first started eating hemp seed oil after the first batch was produced from trial

Mike Fata, Co-founder, CEO Manitoba Harvest Hemp Foods

crops, he instantly felt better. Fata set out on a mission to spread the word, but there were many roadblocks along the way. Misinformation was, and still is, the company’s biggest obstacle. Since day one, Fata and his team have focused on educating consumers and retailers about hemp and its health benefits. Because hemp and marijuana are both in the cannabis family of plants, there was a stigma attached to it. “Even though hemp by definition doesn’t have any psychoactive drugs – people can’t get high or fail a drug test after eating the products – that stigma of hemp’s relationship with marijuana was very, very strong,” says Fata. It has taken time for hemp to be seen as a healthy food product. Today, consumers and retailers are much more educated on its nutritional value, thanks to the company’s efforts.

NATURAL INDUSTRY PIONEERS “Manitoba Harvest’s culture, mission and innovation continue to raise the bar for all of us. It’s an absolute pleasure working with Mike Fata and his entire team.” Paul Marsham, Owner, Marsham International Food Brokers Inc., Manitoba Harvest’s broker for all channels in Eastern Canada

May | June 2015

FAST FACTS BUSINESS AND PERSONAL MOTTO:

“Dream bigger, because anything is possible.” Manitoba Harvest Hemp Foods does thousands of demos every year, whether in-store or at the more than 80 trade shows and events the team attends to educate retailers and consumers. Fata estimates they will hand out about four million sample sizes of their products this year. Building off-shelf product displays in-store is another strategy to help build awareness. The company has aligned itself with naturopathic doctors, dieticians and nutritionists, so that they can educate their clients about healthy eating and provide them with samples. Education, product samples and demos are key to the company’s strategy. But the main focus, says Fata, is to manufacture the highest-quality hemp food products. Manitoba Harvest Hemp Foods can ensure quality because the company controls every step of the process, from seed to shelf. It controls what seeds get planted, and how products are manufactured, packaged and distributed. The company works directly with more than 125 farmers throughout Manitoba, Saskatchewan and Alberta to grow the crop – more than 50,000 acres in 2014 alone – and owns the facility where it makes and packages its products. And it recently completed a $7.5-million expansion to the plant, tripling capacity and introducing more automation. Now the company is in “rapid innovation mode,” as it plans to launch a number of new products later this year. Thanks to the company’s efforts to educate consumers and retailers, expand its distribution and launch new products, it is poised for continued growth. “Starting a new industry is challenging because there isn’t a roadmap or a blueprint on how to be successful,” says Fata. “So we’ve had to really create that success.” And that’s exactly what Fata and his team have done.

Hemp Seeds

Year of incorporation

1998

Top-selling product

Hemp Hearts Number of employees

125

Manufacturing facilities One

35,000-sq.

-ft. facility

The grocery channel represents approx.

50%

of sales

Market share

90% in Canada 65% in the U.S. May | June 2015

AMAZING FRESH SCENT. SAME POWERFUL CLEAN.

DESTROYS TOUGH HAIR CLOGS* IN MINUTES.

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Food

22 ANNUAL ND

CANADIAN GRAND PRIX NEW PRODUCT AWARDS

Retail Council of Canada (RCC) announced 91 finalist products in food, nonfood and private-label categories, as selected by a 30-member jury. The contest was open to products introduced during the 2014 calendar year, and entries were graded on five criteria: uniqueness and innovation, product characteristics, presentation and packaging, overall consumer value, and consumer acceptance. Winners will be announced at the Grand Prix Gala on June 3, 2015 at the Toronto Congress Centre, as part of the STORE 2015 retail conference presented by RCC.

Congratulations TO THE FINALISTS…

A. LASSONDE INC. WESTON BAKERIES LIMITED

Oasis Smoothie Greek Yogurt

D’Italiano Bagelli grocerybusiness.ca

May | June 2015

is proud to introduce

NANNY HUDSON’S Homestyle Ketchup!

As a young bride at Burnbrae Farms in the early 1900’s, our Nanny Hudson began preserving tomatoes with vinegar, spices and brown sugar. This delicious recipe beca me a Hudson fa mily mainstay for generations. Nanny Hudson’s versatile Homestyle Ketchup, with just five simple ingredients, has an authentic homemade flavour; perfect for consu mers to use as a condiment or to add excitement to a recipe. nannyhudson.com @NannyHudson

Food MORE FINALISTS AGROPUR COOPERATIVE Natrel Partly Skimmed Maple Milk CANADA BREAD COMPANY, LIMITED Dempster’s 100% Whole Grains Signature Blends COCA-COLA LIMITED Coca-Cola Sleek Can

McCORMICK CANADA

Club House Skillet Sauce

BURNBRAE FARMS LIMITED Nanny Hudson’s Homestyle Ketchup

GAY LEA FOODS CO-OPERATIVE LTD. Gay Lea Foods Real Coconut Whipped Cream HAIN CELESTIAL CANADA Europe’s Best Fruit Cups Greek Gods Honey Salted Caramel Yogurt KRAFT CANADA Kraft Peanut Butter - Holiday Cookie Kit MARS CANADA INC. M&M’S Bottles Snickers Bites

KRAFT CANADA

McCORMICK CANADA

Limited Edition - Kraft Peanut Butter Plush Bear + 500g Smooth Peanut Butter

Club House Extract OLYMPIC DAIRY PRODUCTS INC. Chia Yogurt TREE OF LIFE CANADA VLC MADD Virgin Craft Brewed Lager WESTON BAKERIES LIMITED Country Harvest

FERRERO CANADA LTD. TREE OF LIFE CANADA VLC Keebler Mini Graham Cracker Pie Crust

Nutella & Go!

Food

PARMALAT CANADA

Black Diamond Cheese Spread

Astro Original

DARE FOODS LIMITED

PARMALAT CANADA

Président Spreadable

Président Feta Cheese Crumbled

Breton Bean Crackers (Gluten-free)

GARDEN PROTEIN INTERNATIONAL Gardein

SOFINA FOODS INC. Deli Naturally

SCOTSBURN DAIRY GROUP Scotsburn Premium Inclusion Ice Cream Bars

MORE FINALISTS DARE FOODS LIMITED Dare Cookie Chips HAPPY PLANET FOODS, INC. Happy Planet Fresh Soup

VEG PRO INTERNATIONAL INC. Asian-Style Stir Fries

May | June 2015

NUPASTA INC. NuPasta NUTRINOR COOPERATIVE Organic Nordic Milk

Food MORE FINALISTS BABY GOURMET FOODS LTD Baby Gourmet Plus

HAIN CELESTIAL CANADA Europe’s Best Fruit Cups

NATURALLY HOMEGROWN FOODS LTD.

HIGH LINER FOODS INC. High Liner Simply Fish

Hardbite Chips

INDUSTRIE GASTRONOMIQUE CASCAJARES Porchetta Festive Box KISKO PRODUCTS Mr. Freeze ElectroICE Sport MONAGHAN MUSHROOMS Belle Grove Mushrooms ULTIMA FOODS INC. iögo Moment

Non-Food

MORE FINALISTS KING’S CROWN (1774) King’s Crown (1774) Ultra-Rich Shaving Cream PROCTER & GAMBLE Charmin Basics Gillette Fusion ProGlide with FlexBall Technology Herbal Essence Naked Volume Collection

PROCTER & GAMBLE INC. Full Lash Bloom by lashblast mascara

WHIRLPOOL CANADA KitchenAid Produce Preserver

Olay Regenerist Luminous Tone Perfecting Treatment Tampax Pearl Active

Non-Food

MORE FINALISTS BERNARDIN LTD. [JARDEN BRANDED CONSUMABLES CANADA] Bernadin Frozen Herb Starter Tray Bernadin Sip & Straw Lids Vintage Collection Green Jar Pint by Bernardin

THE CLOROX COMPANY OF CANADA, LTD. LIQUID-PLUMR - Hair Clog Eliminator

DART CANADA Solo Premium Strength Plates

PROCTER & GAMBLE

PROCTER & GAMBLE INC. Always Discreet

Crest 3D White Luxe Whitestrips Supreme Flexfit

Crest Sensi-Relief Whitening + Scope Febreze First Defence Allergen Reducer Gain Flings Original Mr. Clean Liquid Muscle S. C. JOHNSON AND SON, LIMITED Scrubbing Bubbles Mega Shower Foamer with Ultra Cling - Rain Shower Windex Electronics Wipe&Go Wipe

DLM FOODS CANADA CORP. Milk-Bone Brushing Chews

THE CLOROX COMPANY OF CANADA, LTD. PINE-SOL Multi-Surface Cleaner, Mandarin Sunrise

SOBEYS INC.

Private Label - Food

Compliments presents Jamie Oliver Condiments

WALMART CANADA Our Finest Mini Croissants

LONGO’S Longo’s Signature Keylime Cheesecake

May | June 2015

Private Label - Food

MORE FINALISTS FEDERATED CO-OPERATIVES LIMITED Co-Op Gold Cookies METRO BRANDS, G.P. Irresistibles Cream Cheese and Greek Yogourt Spread

METRO BRANDS, G.P. Irresistibles Herbal Tea

LONGO’S Longo’s Signature Fully Cooked Pulled Pork

Irresistibles Flatbread Irresistibles Gourmet Extra Virgin Olive Oil Irresistibles Greek Yogourt Cheesecake Irresistibles Life Smart Bread Irresistibles Life Smart Juice Blend SOBEYS INC. Compliments Gluten Free Breads

METRO BRANDS, G.P. Irresistibles La Collezione

Compliments Balance Fruit & Vegetable Bars Compliments presents Jamie Oliver Sausages

FEDERATED CO-OPERATIVES LIMITED Co-Op Gold Trail Mix

SOBEYS QUEBEC Flattened Chicken WALMART CANADA Our Finest Angus Beef Meatballs Our Finest Luscious Lemon Cookies

METRO BRANDS, G.P.

Our Finest Luscious Lemon Pie Ice Cream

Irresistibles Quinoa

Private Label - Non-Food

MORE FINALISTS MONDOU Vetdiet Vetdiet - Care Vetdiet Dental Care

METRO BRANDS, G.P. Irresistibles Dish Soap

WALMART CANADA Great Value Paper Towels - Strong and Absorbent (Family Size) Parent’s Choice Infant Formula (For babies sensitive to lactose)

grocerybusiness.ca

May | June 2015

Illinois is a diverse state, boasting a mix of agricultural and manufacturing industries. It is a huge supplier of agricultural commodities, including corn, pork, and soybeans. And like Toronto, Chicago is one of the key food- and beverage-processing clusters in North America. The state is home to 2,640 food-processing companies, many of which are located in the Chicago metropolitan area. Chicago also hosts three of the best-known food and beverage trade shows in North America: the National Restaurant Association, the Sweet & Snacks Expo and FMI Connect, all held at the city’s legendary McCormick Place. Illinois is the logistics capital of North America, accessible to every world market through a nexus of rail, road and air links: • Chicago is the hub for six of North America’s Class I railroads. • Nine U.S. Interstate highways intersect Illinois. • It is the number one container hub in the western hemisphere, linked to the Atlantic Ocean through the Great Lakes and St. Lawrence Seaway, and the Gulf of Mexico through the Mississippi River. • All major markets in Canada can be reached by commercial airline service from both Chicago O’Hare and Chicago Midway Airports. Illinois is an ideal location for a Canadian company looking to expand to the United States, through a sales office, distribution centre, or manufacturing facility. Its geographical location, world-class educational institutions, access to the huge American market, and skilled labour force are major assets – 217 Canadian companies already have locations here. The State is also active in Canada. Recently, the Illinois Department of Commerce and Economic Opportunity led a large delegation of Illinois food-processing and equipment companies exhibiting at Restaurants Canada, building upon the $3-billion cross-border trade in food and agricultural products.

For more information on the State of Illinois, contact its Toronto office at (416) 695-9888; illinois@iltrade.toronto.on.ca; www.illinois.gov/dceo.

Illinois

A Food, Agricultural and Logistics Powerhouse

International

The INNOVATORS

2015

By Maureen Atkinson Senior partner, research insights, J.C. Williams Group

Faced with an increasingly competitive marketplace and constantly shifting shopper interests, retailers around the world are innovating to secure their competitive edge. For a decade, Ebeltoft Group, a retail consultancy, has identified concepts and trends that shape the retail sector. This year’s publication, Retail Innovations 10, showcases a number of global retail innovation trends – including the merging of offline and online retail, stores as social gathering places, and the true power of being local and eco-friendly – and the retailers that are leading the way.

grocerybusiness.ca

May | June 2015

International

NETHERLANDS

Bilder & de Clercq Bilder & De Clercq separates itself from other food players by delivering meal solutions. The store is arranged by dish, and consumers can buy products in the exact quantities required, which minimizes waste. It has effectively created a recipe market by combining its own products and then selling the ingredients along with the recipe as one complete package. The concept provides consumers with convenience as well as the ability to cook healthy and delicious meals in the comfort of their own homes. Bilder & De Clercq is winner of the Ebeltoft Group Retail Innovations Award 2014.

TURKEY

Begendik Cayyolu Store The Begendik Cayyolu Store is a customer-centric and freshness-oriented retailing model. It brings production directly in the store for all categories, including noodles, pastries, chocolates and fresh yogurt and cheeses. The storeâ&#x20AC;&#x2122;s indoor greenhouse grows vegetables and fruits that are cultivated through soilless agriculture, and are freshly served to customers.

May | June 2015

LEADING INNOVATORS

FRANCE

Au Bout du Champ Au Bout du Champ is a click-and-collect concept dedicated to fresh products and prepared foods. It appeals to both the online and offline consumer by selling products from small food producers located just outside the city. For customers who purchase directly at the store, the operation is similar to that of a vending machine where customers indicate their choice of items and pay by cash or credit card. Alternatively, customers can select the click-and-collect option and enter a code into the locker, which then opens for them to collect their items.

grocerybusiness.ca

May | June 2015

International

SWITZERLAND

Jelmoli Food Market Recognizing that food is becoming an integral part of the shopping experience at department stores, the new Food Market from Switzerlandâ&#x20AC;&#x2122;s largest department store, Jelmoli, brings food retailing to a whole new level. The design of the Food Market is equivalent to a modern, contemporary market hall where food meets fashion, and food culture becomes a real experience.

EXPERIENTIAL

RETAILING

2.0

The concept focus of Jelmoli Food Market is convenience, so clients are free to combine foods and beverages from the various vendors.

HYPER SPAIN

LOCAL

Casa Ametller Sense Intermediaris Food producers have become food sellers at Casa Ametller Sense Intermediaris, which sells direct to the consumer through its own chain of 71 stores. It appeals to a growing market of consumers who prefer to purchase organic products directly from the food producer, so that freshness is assured.

May | June 2015

International

ONLINE OFFLINE MASHUP

FRANCE

Auchan, Click & Collect Since unveiling click and collect (referred to as Auchan Drive in France), Auchan has been testing dedicated self-serve click-and-collect models targeted to the pedestrian shopper in urban centres. Offering over 7,500 SKUs of both grocery and fresh products in its online store, Auchan has designed a store/depot that allows customers to pick up their order at a locker or from a specific fresh product area. Within three hours of placing their online order, pedestrian consumers can conveniently pick up shelf-stable and fresh products.

About J.C. Williams Group J.C. Williams Group is a full-service retail and marketing consulting firm offering clients practical, creative and in-depth knowledge, including up-to-date techniques to make retail operations better and more profitable.

About Ebeltoft Group Ebeltoft Group is a global alliance of 23 consulting companies that has, since 1990, helped retailers, as well as suppliers to the retail sector, remain competitive by blending global retail expertise with each member’s local insight.

jcwg.com ebeltoftgroup.com

About Retail Innovations 10th Edition Retail lnnovations 10 is Ebeltoft Group’s latest compilation of leading-edge retail innovation, highlighting individual ideas and the key themes that emerge from studying the whole. This year’s edition includes seven global innovation trends and 60 of the best innovation cases from 21 countries. To obtain a copy of this publication, visit jcwg.com.

May | June 2015

B U R N B R A E FA R M S I S A P R O U D S U P P O R T E R O F T H E T O R O N T O 2 0 1 5 P A N A M G A M E S A N D P A R A P A N A M G A M E S

About Burnbrae Farmsâ&#x20AC;&#x2122; Corporate Social Responsibility Initiatives

urnbrae Farms has been a Canadian family owned and operated business since 1893, and we have been producing shell eggs and innovative egg products for

more than 70 years. We aspire to achieve the highest standards in community support, environmental protection, animal welfare, and food and workplace safety. The roots of this philosophy come from the Hudson family, and are reflected in our Mission, Vision, Values statements on our website at www.burnbraefarms.com. Margaret Hudson President, Burnbrae Farms

Sustainable Egg Farming With seven billion people on the planet and the population rising to nine billion in the next 30 years, we will need to produce as much food in the next 40 years as we have in the past 8,000 (Bryan Weech, Director of Livestock Agric., WWF). And while the population continues to grow, the number of farmers has significantly decreased. The good news is that, thanks to research and innovation, agriculture has seen great economies of scale over the years, growing more food with fewer resources.

Solar panels at Lyn , Ontario

Burnbrae Farms is committed to ensuring consumers have an affordable, consistent supply of quality eggs. We use natural resources wisely to ensure our long-term success, and are always looking

We work hard each day to decrease waste to landfill and increase recycling. All Burnbrae Farms locations are encouraged to

for more efficient practices and production

plant native trees. On the home farm, we honour this

processes. Through the appointment of

commitment through a reforestation program that has

CSR (corporate social responsibility)

planted more than 15,000 trees over the past seven years.

champions, our employees participate directly, helping to drive our Corporate

Consumer Health and Nutrition

Sustainability Program.

At Burnbrae Farms, we are committed to providing natural,

Environment At Burnbrae Farms, we recognize that the environment

nutritious food products to help Canadians live healthy lifestyles. Eggs contain 14 essential nutrients, and are an

sustains us, and are committed to the efficient use

excellent source of protein, providing all nine essential

of resources, such as energy, fuel and water.

amino acids. Further, the US-based Dietary Guidelines

B U R N B R A E FA R M S I S A P R O U D S U P P O R T E R O F T H E T O R O N T O 2 0 1 5 P A N A M G A M E S A N D P A R A P A N A M G A M E S

Committee has recently withdrawn its

Community

warning about dietary cholesterol. This

We believe in giving back to the communities

effectively debunks the longstanding

in which we do business. Burnbrae Farms

myth of the negative impacts of dietary

supports many local community programs

cholesterol on the health of the average

as well as national charities, such as the

person. Eggs can once again hold their

Parkinson Society of Canada, the Canadian

rightful place of fulfilling the nutritional

Wildlife Federation, World Vision Canada and

needs of all age groups.

The Children’s Breakfast Club. Every morning, thousands of children from

Food Safety

The Children’s Breakfast Club enjoy hot meals, which

Burnbrae Farms and Agriculture and Agri-Food

include Burnbrae Farms’ omelettes and scrambled

Canada (AAFC) work co-operatively at the producer,

eggs. Eating a healthy breakfast that includes

grader, restaurant and retail levels to ensure that

protein-rich foods like eggs can help children stay

our customers can have confidence in the safety

full longer and concentrate better throughout their

and quality of our eggs. We are certified with the

school day. Burnbrae Farms is proud to play an

British Retail Consortium (BRC) Global Standard

important role in this charity.

for Food Safety. BRC certification requires the implementation of controls proven to reduce food

This year, Burnbrae Farms is a proud supporter of the Toronto 2015 Pan Am Games and Parapan

safety risk across the supply chain, and is an

Am Games. We will be powering the athletes with protein

international mark of excellence.

throughout the games, supplying both shell and liquid eggs at the Athletes Village in Toronto.

Animal Welfare Burnbrae Farms has been committed to treating our hens in a safe and humane manner for more than 70 years. We learned very early on that a healthy hen is a high-quality producing hen, and have taken steps to ensure our hens receive good care and attention. We continue to support research to determine the best ways to raise laying hens, as housing and husbandry systems are constantly evolving. Regardless of the housing system used, our farmers closely monitor their hens each day to ensure they are healthy, clean and have access to an abundance of food and water.

The Burnbrae team at the Children’s Breakfast Club Egg Creations Competition.

ITâ&#x20AC;&#x2122;S A WINNER!

New Janes Ultimates Battered Chicken Breast Fillets Tender, juicy whole chicken fillets wrapped in a light crispy batter, delicious with the Janes Signature dipping sauce included in each pack!

Shopper Army On the frontlines

Best New Products

in the battle of the brands Backed by the BrandSpark market research and marketing organization, super-engaged shoppers – dubbed “Shopper Army” – are enlisting in missions designed to help brands launch new products and gain marketplace traction. Shopper Army is the newest endeavour from BrandSpark, the company behind the annual Canadian Shopper Study and the highly successful Best New Product Awards. This platform, which is based on actual shoppers participating in specific product missions, “affords brands a new level of real-time consumer interaction and content creation,” according to BrandSpark president and CEO Robert Levy.

Leveraging multiple consumer databases of over 200,000 engaged shoppers, Shopper Army helps brands cost-effectively test a product in real-world scenarios across a large audience, providing instant feedback. Shoppers qualify based on set mission parameters and demographics, ensuring the data garnered matches the brand’s target demo. As the shoppers engage in their mission, they generate testimonials, photos and buzz about the product. Shopper Army works closely with brand teams, leveraging their research expertise and offering recommendations on the mission. continued on page 47

“The Shopper Army platform fosters collaboration between the brand and shoppers enlisted in the mission: the good, the bad, and the unintended are all uncovered. You get a completely unvarnished view of how the product was used and received.” Robert Levy, BrandSpark

grocerybusiness.ca

May | June 2015

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Gain Flings™

Olay Luminous Tone Perfecting Cream

Febreze First Defense

CoverGirl® + Olay The Depuffer Concealer

Olay® Sensitive Body Wash

Gillette® Venus® Embrace Sensitive Razor

Oral-B® Precision Black 7000

CoverGirl® + Olay Face Lift Effect Foundation Gillette® Fusion® Proglide® with Flexball™ Technology

Pantene Pro-V Damage Detox Collection Shampoo & Conditioner

Clairol Nice ‘n Easy AgeDefy Hair Colour Old Spice® Swagger™ Deodorant

Pantene Overnight Miracle Repair Serum

Crest® Sensi-Relief™ Whitening Plus Scope Minty Fresh

Touching lives, improving life.

*BNPA Category winners are chosen using consumer appeal and repurchase intent measures proprietary to BrandSpark International. Winners are based on the highest numerical scores, and not necessarily on statistical significance. For more information visit www.bestnewproductawards.biz The Best New Product Awards logo is a trademark of Best New Products Awards, Inc., used under license.

Best New Products

continued from page 45 Trial Missions, as they are known, are designed for new, soon-to-be-released products. Besides its fast turnaround time for data – anywhere from one to five weeks – Shopper Army’s level of engagement and depth of data compares favourably to traditional loyalty programs and panels. “We can pull data from shoppers across retailers; single retailer loyalty programs can’t do that,” says Levy. He cites a recent example in which a company leveraged Shopper Army to test creative that was in development. At the same time, another brand that was not originally part of the brief received valuable “unsolicited feedback” about a product’s design, based on Shopper Army input. The platform also gives eligible brands the option to license BrandSpark’s “Top Ranked” seal, touted as “the first credible consumervoted credential,” available upon launch and supported by shopper testimonials that can amplify marketing efforts. PRESCRIPTION FOR SUCCESS Dr. Oetker Canada Ltd. has used Shopper Army for a number of projects, including recipe formulation and packaging. According to brand manager Maura Kukaric, the results gave the brand “insight into what direction to go to with barriers, likes and dislikes, and allowed us to hit benchmarks for purchase intent.” Kukaric says she wants “an award-winning product in the market that meets and surpasses the Best New Product Award benchmarks. From a product innovation standpoint, Shopper Army gave us direction, and from a packaging standpoint (new design), it helped us validate design features

grocerybusiness.ca

and how best to link back to core brand attributes at a fraction of the cost.” COMPETITIVE ADVANTAGE When asked how Shopper Army compares to other research, the Dr. Oetker team notes several advantages: “In the case of Shopper Army, you see the dashboard live,” says Kukaric. “Combined with the cost, it’s hard to compare the value with any other offering out there, especially given the quality of insights.” According to Peter Macdonald, executive head of marketing, “the benefits are pretty clear: it cuts your cost, it cuts your time, and it allows you to connect on a one-to-one basis more effectively than most other vehicles. Few options, including focus groups or engaging with your own homegrown consumer base, would give you the same scope of data that you can slice and dice virtually any way.” Consumers also win, in that they now have a bigger voice in helping decide what products are developed and make their way to the shelves. In addition to specific feedback on the product formulation, the Dr. Oetker mission also verified shopability and usage occasions. Two products in the mission earned the Top Ranked seal, surpassing key benchmarks based on BrandSpark’s Best New Product Awards program for similar products. In addition to trial missions, Shopper Army is focused on helping underperformers get traction. This may be of even more interest to industry, especially given Nielsen data suggesting that as many as 85 per cent of consumer packaged goods that launch in the U.S. are not on the shelf two years later. Shopper Army is also helping brands leverage the Top Ranked and New Product Awards in the digital world through collaboration with

Google Adwords and other paid search channels. For no additional cost per click, brands can highlight third-party credentials while driving search traffic. BrandSpark reports that including reviews in Google ads has been shown to boost click-through rates by 10 per cent. In an industry rife with strategic and tactical moves, Shopper Army is on a mission to redefine brand success, one deployment at a time.

DR. OETKER

SHOPPER ARMY MISSION

20%

SHARED PHOTOS

50%

SHARED FEEDBACK ON MOBILE DEVICES

May | June 2015

And the winner is...

Because they’re tasty. Really tasty.

Like all Piller’s Simply Free® products, our Kolbassa Sausage Snacks are free of gluten and allergens.* Voted Best New Ready to Eat Packaged Meat by Canadian consumers,† they are high in protein, only 50 calories per sausage, and made with only pork and natural ingredients. * Free of all major food allergens (gluten, milk, peanuts, tree nuts, mustard, sesame, egg, fish, soy, sulphites) † According to results of the 2015 BrandSpark Best New Product Awards survey conducted by BrandSpark International. For more information visit www.BestNewProducts.ca The Best New Product Awards logo is a trademark of Best New Product Awards Inc., used under license.

Visit pillers.com for delicious recipes and more

Best New Product Awards

Congratulations

to the 2015 Best New Product Award winners!

Now in its 12th year, the BrandSpark Canadian Shopper Study provides comprehensive insights about Canadian shopping habits for everyday consumer packaged goods. More than 60,000 Canadians participated in the 2015 study and the results are used to determine the winners of the Best New Product Awards (BNPAs). The BNPAs are the real People’s Choice Awards for products Canadians buy every day, according to Robert Levy, president and CEO of BrandSpark International, and founder of the BNPAs.

Robert Levy

2015 BEST NEW PRODUCT AWARD WINNERS HEALTH & BEAUTY CATEGORIES

FOOD & BEVERAGE CATEGORIES

HOUSEHOLD CARE CATEGORIES

»» »» »» »» »» »» »» »» »»

»» »» »» »» »» »» »» »» »» »» »» »» »» »» »»

»» »» »» »» »» »»

»» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »»

Oral-B Precision Black 7000 Colgate Slim Soft Toothbrush Olay Luminous Tone Perfecting Cream Rimmel BB Cream Vaseline Intensive Care Dry Skin Repair Olay Sensitive Body Wash CoverGirl + Olay The Depuffer Concealer Trojan Naked Sensations Ultimate Collection Condoms 24ct St. Ives Even & Bright Pink Lemon and Mandarin Orange Scrub Neutrogena Oil-Free Pink Grapefruit Cleansing Wipes Poise Microliners CoverGirl + Olay Face Lift Effect Foundation Clairol Nice ‘n Easy AgeDefy Hair Colour Pantene Overnight Miracle Repair Serum Veet Natural Inspirations Collection Revlon ColorBurst Matte Balm CoverGirl by Lashblast Bombshell Curvaceous Mascara Old Spice Swagger Deodorant Gillette Fusion ProGlide with FlexBall Technology Colgate Total Mouthwash Sally Hansen Miracle Gel Trojan Arouses & Releases Personal Lubricant 88ml Pantene Pro-V Damage Detox Collection Shampoo & Conditioner Jamieson Melatonin 10mg Timed Release Dual Action Buckley’s Lozenges Crest Sensi-Relief Whitening Plus Scope Minty Fresh RUB A535 Extra Strength Heating Cream Trojan Multi-Thrill Intimate Massager Adult Essentials Gummies Men’s & Women’s Multi-Vitamin Lady Speed Stick Nutra-skin Antiperspirant Stick Gillette Venus Embrace Sensitive

grocerybusiness.ca

»» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »»

Somersby Blackberry Cider Crisco One Cup Stick All-Vegetable Shortening Robin Hood Quick Bread Mix Mad Jack Premium Apple Lager Dempster’s 100% Whole Grains Supergrains Bread Shreddies Morning Break Twizzlers Extra Soft Bites Kraft Shredded Cheese with a Touch of Philadelphia AERO Strawberry and Caramel Big Bubble Bars M&M’s Bottles McCafe Coffee Dare Cookie Chips Sabra Classic Guacamole Danette CLIF Energy Bar (Coconut Chocolate Chip and White Chocolate Macadamia) Healthy Choice Gourmet Grilled Chicken Pesto Breezer Freeze Maple Lodge Farms Fresh From The Farm Boneless Skinless Chicken Breast BlueWater Roasted Garlic & Tuscan Herb Sole Janes Ultimates Battered Chicken Breast Fillets Casa di Mama Inferno Pizza Klondike Kandy Bars Caramel & Peanuts Catelli Gluten Free Pasta 5 Gum Ascent Wintermint Simply Limeade KOOL-AID Liquid Drink Mix Piller’s Simply Free Kolbassa Sausage Meat Snacks Uncle Ben’s Bistro Express Stacy’s Pretzel Thins Maggi So Juicy Nature Valley Lunch Box Granola Bars Vega Protein and Greens Gay Lea Cinnamon and Brown Sugar Spreadables Butter Sugar in the Raw Activia Greek Yogurt

»» »» »» »» »»

Febreze First Defense Charmin Bathroom Tissue Ultra Soft 4 Double Rolls Arm & Hammer Clump & Seal Cat Litter Rubbermaid Reveal Power Scrubber Cascade Platinum Clean Packs Pedigree Marrobone Vitamin Enriched Treats Bacon & Cheese OxiClean White Revive Stain Remover & Booster Glad Stand up Bags Softsoap Décor Collection Hand Soap Gain Flings Tide Simply Clean and Fresh Laundry Detergent

KIDS CATEGORIES »» »» »» »»

Pampers Sensitive Wipes Children’s Benadryl-D Allergy & Sinus GUM Crayola Toothpaste Squeeze a Color Toothpaste Pampers Swaddlers

May | June 2015

Best New Products

How Shoppers Shop TYPE OF SHOPPING TRIP MADE MOST RECENTLY

Regular grocery shopping trip

44% Collected loyalty program points

43%

42%

Trip for a few needed items

Stock-up trip for more than a week’s worth of a few items

ACTIVITIES DURING THE LAST SHOPPING TRIP

Purchased items I didn’t plan to buy

25% Checked the promotional displays

21% Redeemed print coupons

Other

19%

S O U R C E : 2 0 1 5 B R A N D S PA R K C A N A D I A N S H O P P E R S T U D Y

Bravo!

May | June 2015

Checked for in-store coupons

2015 Best New Product Award winners!

Be Prepared

TAKING YOUR HMR DEPARTMENT

UPSCALE By Rich Rotzang

For HMR departments that want to appeal to a more discerning audience, moving to a higher-quality fresh food offering is critical. Today’s upscale customers expect restaurantquality salads and prepared foods at their favourite supermarket. Short of making everything from scratch in store – which is not practical for most supermarkets – the only way to achieve this is by converting from pre-made food to kits that are assembled in store. And while the transition can be a bit of an adjustment, knowing what to expect and how to guide your staff through the changes can mean the difference between making a big splash, or no splash at all. In the case of salads, the conversion process from pails to kits starts even before the product arrives at the store. The first important detail to note is the pack and size of the order. Oftentimes, the weight of a kit is different from that of a pail, so if your HMR staff continues to order the same number of physical units, you’ll end up with either too much product, or not enough. By confirming pack and size in advance, and providing your staff with a simple conversion calculator, you’ll receive the same overall quantity of product, even though your physical counts may change.

grocerybusiness.ca

Once you’ve transitioned your HMR, you may experience a marginal increase in up-front labour costs associated with assembling kits versus using pails. But the long-term benefits far exceed this slight disparity, because kits allow staff to better connect with the products they sell. When staff members mix all the ingredients themselves, rather than simply pouring the contents of a pail into a dish, they will take more pride and ownership in their service case. They will also improve their product knowledge considerably, as they’ve seen exactly what goes into the products they sell. This leads to a better customer service experience and, ultimately, higher sales. Handled correctly, moving to a kit format can also significantly reduce shrink. Because the final product is mixed for the first time in-store, the “life” of the salad begins right before the product is displayed. This leads to an immediate improvement in shelf life, longer availability for sale and a higher yield. With less shrink, a store may actually end up ordering less product. This can sometimes be misinterpreted as a reduction in demand, but if sales are consistent after making the switch, and you are throwing away less, then, naturally, you’ll be ordering less. Therefore, it’s

important to look at top-line sales, margin, yield and amount ordered to get a complete financial picture. In practical terms, making the switch from pails to kits requires a shift from short-term profit-centric thinking to a longer-term strategic outlook. By planning, training and managing staff expectations, you can ensure a smooth transition and turn a previously underperforming HMR department into a high-end food destination.

Rich Rotzang is senior director, marketing and communications, Tiffany Gate Foods. Contact Rich at rich@tiffanygate.com

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.

May | June 2015

PAC Summit

www.pac.ca/2015-summit.html

June 17, 2015

Design thinking is our focus as we explore hot trends for 2015

Here’s a sneak peek at four of our presenters…

Sandra Farwell

Mary Dalimonte

Vice President of Brand Management & Product Development

Senior Vice President of Merchandising and Commercial Programs

Mark Ferrier

President/CEO

Industry Sector Trends Retail, Brand Manufacturers and Food Service Is it a Restaurant or a Grocery Store?

Store Brand Lookin’ Good

Technology Innovations

Waste Strategies

Find out why grocerants are

Private Label never

Traditional design and

Billions of dollars are impacting

radically redesigning their

looked so good with

science are coming together

manufacturers manufacturers’ bottom line and

stores to offer convenient,

redesigned product

through new technology

consumers pockets due to food and

fresh food and even complete

lines that are capturing

platforms that are winning

packaging waste. PAC Award Winners

meals prepared on-site.

market share.

market share and increasing

share design solutions and strategies.

Good Design is Good Business

bottom line.

Package Design Strategies Graphic, Technology, Structural, Optimized, Sustainable

BACK BY POPULAR DEMAND

See six schools compete in our Interactive Student Packaging Design Competition… join in the fun of imagining the next Walmart brand. Winners selected by audience. Contact Lindsey Ogle for more information - logle@pac.ca or 416.646.4641

PACKEX Toronto June 16-18, 2015

Perspective

Catering to the

Next Generation By John F.T. Scott

I have great respect for Nielsen’s Carman Allison. He spins consumer insights in a manner that is entertaining, insightful and provocative. His signature style, punctuated with a wry sense of humour, often inspires me to reflect on the implications of his premise. After recently experiencing one of his refreshing presentations, I was left with the significant realization that we aren’t currently in another era of interesting trends. No, we are now engaged in a structural change of a magnitude that this industry has not experienced in a generation. From day one, the consumption patterns of everyone reading this column have been led by one demographic group – the Baby Boomers. In 2015, the youngest Boomer will turn 49 and the oldest, 69. But as we age, we consume smaller portions (although we may be more discerning), and we simply don’t need as much stuff. Our interests refocus on travel, leisure, health and financial well-being (plus warm winter destinations). Baby Boomers are becoming a marketer’s dream for high-end travel and adult living, but the sun is setting on this generation as the consumption leader.

grocerybusiness.ca

Allison suggests that the full transition of generational leadership to the Millennials will be around 2020, but I think it’s already upon us. Unemployment is declining; many Millennials are starting families; and collectively, this group harbours a great demand for consumer goods. Millennials’ expectations are dramatically different from those of the declining Boomer. Consequently, this new reality has landed with an unceremonious thud on corporations whose offerings have been traditionally geared to the whims of the Boomers. A wily food retailer or manufacturer should get ahead of the crowd, carefully analyze Millennials, and cater to their personification. It’s easy to identify low-hanging fruit: the use of technology to understand ingredients, origin, people behind products and commitment to social responsibility; embracing protein that is free from added hormones and unnecessary antibiotics; niche products; the relationship between food and health; and finally, the fact that Millennials consider ethnic products to be mainstream. These factors imply more fresh, adoption of

leading-edge technology, stances on issues of social import, and a focus on appropriate procurement. They suggest that the recent substantial investments in innovative concepts by several conventional grocers will reap significant rewards, as will the wellconceived offerings of some new entrants. It’s not hard to identify early winners in food service. Take a look at Chipotle, Panera, Starbucks, Five Guys and the proliferation of niche brands. Stand back and consider today’s retail market. You can already see who is winning by embracing – or losing by ignoring – the juggernaut of the structural shift!

John F.T. Scott speaks, writes and consults on the food distribution sector. He is the author of “Perspectives on the Retail Food Industry,” an itinerant publication that explores various aspects of the industry.

May | June 2015

Innovation Lab

Inspirational Innovations Want to peer into the future of grocery trends? Try taking a closer look at innovation in the restaurant business. By Birgit Blain

Tea + Vitamins from Twisted Leaves brings Canadian innovation to the tea category. The company presented three whole-leaf green

Just like packaged food brands, grocers need to innovate to meet changing consumer needs and differentiate themselves from competitors. Therefore, it’s important to keep an eye on trends and innovative products. The Restaurants Canada Show, which took place March 1-3, 2015 in Toronto, is a laboratory for concepts that will, in the short to medium term, find their way into the grocery channel. Now that grocery and food service are melding in a more meaningful way, the trends and products seen at the annual Restaurants Show are even more relevant. The growth of food trends is often attributed to the restaurant industry and spurred on by social media. Mega-trends like ethnic, indulgence, health and wellness, local and sustainable continue to drive innovation. Innovative products present an opportunity to motivate shoppers to trade up, and generate incremental sales. For example, one exhibitor at the show demonstrated how coffee steeped for 18 hours, with the cold brew method, has less acidity and no bitterness. This company’s versatile concentrate makes refreshing iced-coffee beverages and imparts unique flavour to marinades, desserts and cocktails. It’s a growing trend in café culture, as evidenced by the recent launch of Starbucks Cold Brew Coffee, that may very well find its way onto grocery store shelves. Noshing my way through the Restaurants Show, I discovered seven fresh ideas for HMR, perishables, grocery and private-brand programs:

Birgit Blain is president of Birgit Blain & Associates Inc., a packaged foods consultancy specializing in strategy, brand and packaging developments.

May | June 2015

and black teas enhanced with vitamins and contained in compostable pyramid sachets. twistedleaves.com

Mushrooms are emerging from the dark. Ponderosa Mushrooms offers more than 20 varieties of cultivated and wild specialty fungi, including exotics and organics. Drive trial by educating shoppers with flavour descriptors and cooking instructions. ponderosa-mushrooms.com

Innovation Lab

Entice the halal shopper, as well as mainstream consumers, to the deli section. Berbician halal-certified salamis, made with venison, veal, lamb, goat and turkey, are a premium alternative to beef. berbician.net

Elevate the espresso drinker’s experience by serving it in an edible, chocolate-lined wafer cup. Imported from Italy, Chocup is available through Importations Travaglini. nicolatravaglini.com Aqua Greens co-owners Pablo Alvarez and Craig Petten

Is Aqua Greens the farm of the future? Fresh organic herbs, greens and tilapia fish will be available year-round from this aquaponic food production facility in the Greater Toronto Area. In this closed-loop ecosystem, fish nourish hydroponically grown plants, which in turn provide clean water for the fish. It’s local, sustainable farming. aquagreens.ca

Ninettes Ice Cream raises the bar with

The goji berry is known for its high

unique, natural-tasting flavour

antioxidant content, and is hailed as a

combinations like Basil Lemon and

superfood. Gojiccino goji berry-based

Cinnamon Apple Pie, made with locally

beverage concentrate can be served in

grown apples. Kosher and peanut-free,

lattes made without coffee, frappes and

they are an indulgent treat with moderate

smoothies for health enthusiasts.

levels of fat, sugar and calories.

gojiccino.com

ninettes.ca grocerybusiness.ca

May | June 2015

2015 GROCERY OUTLOOK

THE YEAR WE’VE BEEN WAITING FOR Thanks to a slowdown in square footage growth, and increases in food price inflation, 2015 is shaping up to be a much better year for grocers, according to Perry Caicco, managing director for CIBC World Markets. Still, the Canadian market is facing a list of challenges, from the plunging Canadian dollar to Walmart’s growing food focus. A CHANGING WALMART

Grocery Square Footage

Share of Sq.- Ft

% of Industry Sq. Ft. Growth

Walmart Canada is under new mangement, both overall and in its food business. The retailer continues to open about one-third of all the new grocery space in Canada.

Loblaw (corp+ fran)

20.8%

16.0%

Metro

10.3%

7.6%

Sobeys & Safeway

19.1%

-75.4%

Walmart Canada*

5.7%

26.6%

Overwaitea

3.2%

28.2%

Costco

3.3%

16.3%

Whole Foods

0.5%

18.5%

Target

0.0%

-147.0%

Ethnic

5.8%

81.2%

Other

31.3%

128.0%

Total

100.0%

*Does not reflect acquisition of Target Canada leases

Revenues by Region WEST ONTARIO QUEBEC ATLANTIC OTHER

Loblaw

27.8%

33.5%

23.4%

15.0%

0.3%

3 reasons

why the conventional store is back: • Discount is reaching its saturation point; • Grocers need higher retail prices to cover higher conventional store labour costs; • Consumers expect a more “on-trend” grocery store experience. BUT INVESTMENTS IN CONVENTIONAL STORES COME WITH ISSUES: Chains are held back by expensive union contracts and rising shrink expenses (a by-product of investments in better fresh departments).

SQUARE FOOTAGE BACKS OFF Caicco predicts that the former Target food space will only be redeployed later in the year. This chart displays the latest square-footage projections for the Canadian supermarket industry, with Target essentially removed.

Canadian Supermarkets Square-Footage Growth 2.5%

2.3 2.4

Empire*

34.2%

23.6%

30.1%

12.2%

0.0%

1.6

Metro

0.0%

38.2%

* Does not reflect Co-op Atlantic stores

May | June 2015

61.8%

0.0%

2.0%

1.8

1.5%

1.0

1.0% 0.5% 0.0%

2011 2012 2013 2014 2015e

CANADIAN FEDERATION OF INDEPENDENT GROCERS

GROCERY & SPECIALTY FOOD WEST APRIL 13-14, 2015, VANCOUVER, B.C.

Ken Nilsson, Cori Bonina , Stong’s Market; and Ken Schley, Quality Foods

Tony Morello, Aurora Importing & Distributing; and Joey Longo, Longo Bros.

Darrell Jones, Overwaitea Food Group

Lance Vanderlinde, Oberto a Inc. Gary Batey and Ryan Berrecloth, Nestlé Canad

Tree of Life team

Shannon Forner, Valu-Plus Foods

Millennium Pacific team

Mondelez team

Brian Parker, DCI;

Michel Manseau, Kruger Products; and Cashm

grocerybusiness.ca

and Harry Watso

n, Triple 4

ere model in an original design

May | June 2015

LIST IT

New & now discoveries

Satisfying belVita bites BelVita bites are delicious and satisfying bite-size crunchy biscuits, specially designed to be part of a complete breakfast. Available in both Cocoa and Mixed Berry, belVita bites are a source of energy, and are made with real fruit, three grams of fibre and whole grains. belvitabreakfast.com

Itâ&#x20AC;&#x2122;s a slice! Flavoured Apple Slices, by Freshline Foods Ltd., are a twist on a popular fruit snack. Peach- and grape-flavoured apple slices are offered in a user-friendly 400g package and snack-size 55g pouches. freshlinefoods.com

Three Farmers Roasted Chickpeas Crunchy Three Farmers Roasted Chickpeas are rich in protein and fibre, and make a unique snack or salad topping. They are also nut-free, gluten-free, and rich in protein and fibre. threefarmers.ca 60

May | June 2015

Gluten-Free Goodness GFB Bites are high-protein, vegan, and gluten-free snacks available in a variety of distinctive flavours. They are perfect for consumers who are looking for a healthy on-the-go snack.

brandseedmarketing.ca

Snack it Forward Snack it Forward, LLC, introduces Sunkist Fruit 2.0, a new line of freeze-dried fruit. Light, crisp and flavourful, Fruit 2.0 is fat-free, gluten-free and 100 per cent real fruit, with no added sugar or colours. snackitforward.com

Promise Gluten Free Promise Gluten Free offers a broad range of innovative gluten-free products that are also high in fibre and low in fat, calories and sugar, without compromising taste or texture. promiseglutenfree.com

grocerybusiness.ca

May | June 2015

Astro Athentikos Authentically Made. Athentikally Delicious.

A deliciously thick and creamy Greek yogourt inspired by the traditional way Greek yogourt is made. With all natural ingredients, no artificial colours or flavours, Astro Athentikos is high in protein and available in Plain and 6 exciting fruit on the bottom combinations.

www.astro.ca

CANADIAN PRODUCE MARKETING ASSOCIATION TRADE SHOW AND CONFERENCE April 15-17, 2015, Montreal

3 1

grocerybusiness.ca

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

New Jersey Fresh Team Ron Lemaire, CPMA; and Jim Steel, Thrifty Foods Spero Moukas, Francine Theriault, and Lisa Vegso, PECO Pallet Joan Wickham, Sunkist Serge Boulanger and Bernadette Hamel, Metro Inc. Chris Cockle and Molly Kathryn Flynn, POM Wonderful David Anderson, Ken Berger, Chris Sarantis, and Dave Nelson, Bard Valley Medjool Date Growers Association Reggie Brown and Brad Brownsey, Florida Tomato Committee Marcela Diaz and Ricardo Diaz, Mexico Eric Coy and Steven Shearer, Castle Rock Vineyards Jeff Lundberg, Babe Farms; and John Chamberlain, Limoneira Stephen Dean, Canadian Packaging magazine; and friend. Quite a pear!

May | June 2015

it figures

The Power of Private Label

64% of consumers believe

the quality of private-label brands has improved over time

80%

of consumers feel itâ&#x20AC;&#x2122;s important to get the best price on a product

Takeaway High-purchase categories and those with little differentiation will have a stronger private-label share. Ensure your marketing budget supports categories that will support your bottom line.

77%

say they purchase private label to save money

Takeaway Consider the products required to ensure a win, with the right item at the right price while delivering the right margin in your private-label assortment. 64

May | June 2015

72%

THINK THE PACKAGING BETWEEN NAME BRANDS AND STORE BRANDS IS EASY TO DISTINGUISH THE NUMBER JUMPS TO FOR MILLENNIALS

78%

Takeaway If you have a multi-tier strategy, your packaging should entertain the specific consumer you’re after. Brands are like people – make sure yours is one you’d like to hang out with.

48%

of Millennials are loyal to private-label brands vs. total population 44%

48%

of Canadians are willing to pay more for private-label brands if they like the product Takeaway A multi-tiered strategy for private label is an effective strategy for broad audience appeal.

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.

Takeaway This new generation of shoppers is more open to trying new products, offering a new growth opportunity for private label. Carman Allison

A L L S TAT S C O U RT E S Y: N I E L S E N

May | June 2015

The Consumer

MILLENNIALS:

THE MINDFUL CONSUMER By Laurie Demeritt, CEO, The Hartman Group

That we’re still fascinated with understanding how to reach Millennial consumers is a testament to their continued market impact. After all, they are the most studied and coveted generation in history, so you’d think that by now we’d have them figured out. More numerous than Boomers, Millennials (we define them as born between 1980 and 2000) are more diverse and highly-educated than any previous generation. So what motivates this unique generation of consumers? Our research finds Millennials to be a group of reflective adults who are resolved to make a difference and make the most of their lives. This is a group with strong convictions, and they understand the impact of their purchasing power. As Millennials mature, they are taking a more proactive stance towards their health, and making a conscious effort to develop better eating habits. This has significant implications for their shopping and buying decisions, and a profound impact on purveyors of food.

In the past 90 days, Millennials have shopped an average of 9 different retail banners

Millennials are mindful eaters. While price, nutrition and ease of use are always top consumer concerns, Millennials’ food choices are also influenced by wider social concerns, and this is reflected in their purchase decisions. Being spontaneous and flexible eaters, Millennials tend to shop impulsively. Millennials have redefined the idea of meal planning. The process typically starts by browsing online, discovering a recipe that triggers a shopping trip for their upcoming meal. Weekly stock-up trips and large baskets are less the norm with a generation that loves to be inspired and make in-the-moment decisions about what’s for dinner. Our Outlook on the Millennial Consumer 2014 report found that Millennials spread their shopping trips across multiple channels and retailers. Consequently, their lack of meal planning results in more shopping trips at conveniently located retailers.

Compared to a year ago, the % of Millennials who say they are purchasing more

37%

ORGANIC PRODUCTS

36%

NATURAL PRODUCTS

32%

LOCAL PRODUCTS

The Hartman Group is an industry-leading research company, working with clients to develop successful marketing strategies. For more information, visit: hartman-group.com

decide what to eat less than an hour before the meal 66

May | June 2015

IF YOU ARE MARKETING TO THIS GENERATION OF HYPER-AWARE CONSUMERS: BE RELEVANT. To gain, and keep, the attention of Millennials, you must offer something pertinent and compelling. DEMONSTRATE VALUE. Understand that Millennials have a different value equation than other cohorts. BE AUTHENTIC. Demonstrate you share the same values as Millennials in order to earn their trust.

beverages snack food

still looking for organic food the next nutraceuticals

food trend?

specialty food natural health food

#chfaeast

conference: september 17 & 18 trade show: september 19 & 20 metro toronto convention centre, south building

Perry’s Point of View

Why the

Trade Deficit Matters Canada’s trade deficit in food processing has been plunging since 2005, and finished 2013 at negative $6.8 billion. The final 2014 numbers will probably come in close to $8 billion. Simply, this means we import $8 billion more processed foods than we export. To most grocers and manufacturers, these types of numbers (and the various forces that cause them) seem too big and too abstract to matter. But they matter every single day, and have a huge impact on your purchasing costs, your customers and your suppliers. The root causes of our chronic processed food trade deficit are numerous, complex, and generally not well-understood. Contrary to popular belief, an overvalued Canadian dollar was not a big contributor to the problem. Numerous sectors were running negative before the Canadian dollar appreciated, and many more continue to run negative even after its recent steep decline. More notably, the opening of trade barriers, high-cost supply-managed ingredients, the changing tastes of consumers, and our increasing dependence on multinational suppliers are all complicit in the process. This is exacerbated by the continual demands for lower costs (and more support money) by consolidating Canadian trade customers. Between 2004 and 2014, 143 secondary food/beverage plants closed in Canada, half of those in Ontario, and over 90 per cent owned by multinationals. 68

May | June 2015

With more of the food we consume produced in other countries, we begin to increasingly rely on these countries for our food quality, security and pricing. This problem is now playing out in real time. The weak Canadian dollar is of course driving inflation in the food we purchase elsewhere, but this is no longer restricted to fruits and vegetables. With manufactured goods shifting to U.S. sources, the centre of the store is now facing a much more sizable push to inflate pricing. We are in the midst of heavy food inflation, and our reliance on imported goods makes that worse than ever. On top of that, we are shifting our supply base to countries that are facing serious water shortages. The drought in California is approaching epidemic levels, raising our food costs and putting supplies in jeopardy. Water shortages (which drive the increasing use of non-renewable ground water), could cause similar issues in China, Mexico, India and the Middle East. We need to ask ourselves exactly how dependent we want to be on other countries to feed our citizens. The exodus of food manufacturing to other countries has even more immediate impacts. The sector is the largest employer in Canada and processes over 40 per cent of our farm production (65 per cent in Ontario and Quebec). If you don’t think job loss from food plant closures matters to business, ask grocers in Leamington or Brockville, Ont., or

Moose Jaw, Sask., or Surrey, B.C. This is not a plea to “Buy Canadian” – that’s generally ludicrous, and ignores consumer demand for lower prices and more diverse products. But we do need a manufacturing base that invests heavily to reduce costs and develop innovative products, and we do need export markets opened up so these processors can expand and build scale. We know what consumers want: low prices, diverse selection and new ideas. As the gateway between consumers and suppliers, grocers have a serious role to play in the shape of Canada’s food future. Do grocers really want food prices, food supply and food quality to be increasingly dictated by countries, situations and forces outside their control?

Perry Caicco is the managing director for CIBC World Markets. His experience includes 15 years in the supermarket, general merchandise, and packaged goods industries with companies such as Coca-Cola, Consumers Distributing and Loblaw Companies Ltd. Perry is a founding member of the Grocery Business Advisory Board.

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