July/August 2015 by Grocery Business

July / August 2015 Vol 5 | No 4 $9.95

THE

GROCE GUIDE TROY

HEALTH WELLN & ESS

CHOICES MARKETS PM # 42211029

& ORGANIC GROWTH Choices Markets Owners: Wayne Lockhart, Lloyd Lockhart and Salim Ahmed

Grocery Business July | August, 2015 Volume 5, Number 4

contents

Trending: Breakfast in a Blender

DEPARTMENTS 6

Front End

People & News

Open Mike Technology: Making the old new again

It Figures

Perryâ&#x20AC;&#x2122;s Point of View

Dialing up digital

Unconventional thinking

62 Launch It, List It

New & now discoveries

30 C O V E R P H O T O : R O B E RT K A R PA

July | August 2015

ON THE COVER

Markets 14 Choices Ingredients for success

44 PHOTO GALLERIES

FEATURES 13 Perspective: The

Painful Pursuit of Shareholder Value

45 Focus on Healthier,

Safer Food

46 Advantage Report 49 Independent Does Not Mean Small

50 SIAL Canada 2015

Proudly Canadian taste-makers

53 Canadian Grand Prix

New Product Winners

44 81st Annual Food and Allied Industries Golf Tournament

60 Summer Fancy Food

Show, New York City

61 Instacart

Delivery express

WHOLE HEALTH 20

Change in Store

BrandSpark Insights

Healthy Discovery: CHFA East

New Food Rules

The Healthy Service Case

The List: Natural Health Distributors & Brokers ... and more

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Choices Markets, Surrey, B.C.

Front End

Transitions Lorne MacLean, a 35-year veteran of Sobeys Inc., has been named to replace Thrifty Foods president Jim Dores, who retired on July 10. MacLean most recently held the post of senior vice-president of operations and optimization at Sobeys. Former Loblaw executive Michael Lovsin has joined Australia-based Coles Supermarkets as general manager. From 2006 to 2013, Lovsin acted as senior vice-president for a number of Loblaw Companies Ltd. divisions, including Health and Wellness, DrugStore and Loblaw Brands Ltd. Hershey Canada has appointed Mike Renton to the position of vice-president of sales. Previously, Renton was sales director, and has held positions with The Clorox Company and Kimberly-Clark. Philip Lanzarotta has joined Barocco Coffee Company in a senior role. Lanzarotta spent 11 years in senior positions at Kellogg Canada, and most recently was president of RX Media Inc.

July | August 2015

In Memoriam

George Love

SunOpta Inc. has appointed Rik Jacobs (pictured) as president and CEO, effective October 1. Jacobs will succeed SunOpta’s current CEO, Steve Bromley, who will assume the role of vice-chair.

Bee Maid Honey Ltd. has appointed Greg Mohr to the newly created position of vicepresident, business growth. Mohr joined Bee Maid in 2008 as director of sales and marketing.

Lisa Vegso is the new general manager, Canada, for PECO Pallet. Prior to joining PECO in 2013, Vegso was Ontario regional sales manager for Challenger Motor Freight Inc.

Former Maple Leaf Foods executive Michael Vels has joined Hydro One Inc. as chief financial officer. Vels spent more than two decades at Maple Leaf, including 10 years as its CFO, before leaving the company in 2014.

Craig Murray has been named vice-president, sales–foodservice, at High Liner Foods. Murray’s packaged-foods experience includes VP sales at Mondelez International, and VP, general manager, foodservice, at Kraft Foods Group. The Ontario Produce Marketing Association has appointed Virginia Zimm as president, succeeding Ian MacKenzie, who is retiring at the end of this year.

Anthony Perrotta is the new director, membership and industry relations, for Food and Beverage Ontario. Previously, Perrotta held positions with Telus Mobility and Kellogg Canada. Mark Kreple (pictured) has moved into a consulting role with Wisconsin-based AltoShaam. Kreple’s previous duties as senior vice-president of international sales have been assumed by Matthew Cottrell.

George Love, founder of The Barn Fruit Markets in Hamilton, Ont., and a pioneer of Canada’s grocery industry, passed away May 7, 2015, at the age of 75. The eldest of 15 children, Love got his start working in his family’s produce wholesale business. His father and grandfather had a stall at the Hamilton Farmers’ Market, where Love worked from the age of nine. Love and his father would drive to Leamington, Ont., to pick up produce to sell at the market, according to a Hamilton Spectator article. Love opened his own stall at the farmers’ market and eventually founded The Barn Fruit Markets. Love sold The Barn chain to the Great Atlantic & Pacific Tea Company (A&P) in 1999, which expanded the banner to encompass 13 grocery stores in Hamilton, Halton and Niagara. A&P was acquired by Metro Inc. in 2005, which retired The Barn name in 2008.

Front End

Real Canadian Superstore’s new ethnic format

Cathy Antinozzi, director, client development, Advantage Sales & Marketing, was recently honoured as a Marzetti Master Salesman. Pictured here with past recipients, Antinozzi received the Green Jacket Award in appreciation of her outstanding achievements.

July | August 2015 Volume 5, Number 4

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

Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Contributing Editors Angela Kryhul, Sally Praskey Contributors Thomas A. Barlow, Birgit Blain, Perry Caicco, Krista Coventry, Helen Long, Michael Marinangeli, Rich Rotzang, John F. T. Scott, David Wilkes

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

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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

Loblaw Companies Ltd. has renovated a Real Canadian Superstore in Mississauga, Ont., to incorporate some of the merchandising practices, labels and foods of the T&T and Arz Fine Foods ethnic banners. The store serves the area’s increasingly diverse population, and features: a fresh fish and seafood section; a roasted nut and dried fruit counter; a pita bakery; and a wider variety of ingredients used in Middle Eastern and Asian cuisine.

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@grocerybusiness

Tim Berman, Kraft Heinz Co.

© 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 Heinz Co.

Perry Caicco, CIBC World Markets Nancy Croitoru, Food & Consumer Products of Canada

grocerybusiness.ca

Front End

SIAL Olive d’Or 2015

Recognizing Excellence SIAL has unveiled 15 winners of the 2015 Olive d’Or contest – Canada’s largest international extra virgin olive oil competition. A four-person jury of olive oil and gastronomy experts selected 10 extra virgin olive oils to receive Golden, Silver and Bronze Drop awards. An additional five olive oils were recognized with a Coup de Coeur award. Organized as a part of SIAL Canada, the contest attracted more than 110 olive oil submissions from 14 countries.

Ripe Fruit

Golden Drop

Oro de Bailen Reserva Familiar Arbequine

Light Fruit

Medium Fruit

OL ISTRIA Pendolino

Franci IGP Toscane

Profumi di Castro Coratina

CROATIA

ITALIA

Aura Premium Blend

Casa del Agua Oro Bailen

Muela Oliva Venta del Baron

SPAIN

Guadagnòlo Primus Fattoria Ramerino di Alampi Filippo

Casas de Hueldo Reserva de Familia

SPAIN

Silver Drop

Strong Fruit

CHILE Not Awarded

Agricola Guzman Organic Olive Oil SPAIN

Bronze Drop

Coup De Coeur

Huile d’olive Papillon Yannick Fromagerie Arbequine FRANCE

July | August 2015

SPAIN

ITALIA

Not Awarded

ACAIA GREECE

Almaoliva Almazara de la Subettica SPAIN Parquolita et Arbequine SPAIN

Finca la Reja Finca la Torre Selection Hojiblanca SPAIN

Front End

Overwaitea to add seven stores in Saskatchewan and Manitoba By Sally Praskey

presents

19th Americas Food and Beverage Show & Conference October 26-27, 2015

Miami Beach Convention Center, Hall C Miami Beach, Florida U.S.A • 10 Country Pavilions!

British Columbiabased Overwaitea Food Group (OFG) is continuing its rapid growth, announcing plans to open seven stores in Saskatchewan and Manitoba, provinces where it does not currently have a presence. The new stores, scheduled to open throughout 2016, are a combination of existing buildings and new construction, and will range from 40,000 to 65,000 square feet, depending on the market. Three of the stores will be in Winnipeg, while the others will be in Regina, Saskatoon, Yorkton, and Moose Jaw, Sask. Six will be Save-On-Foods stores, customized to the demographics of each community and featuring a full HMR component, OFG president Darrell Jones told Grocery Business in an exclusive interview. The Northgate Mall store in Winnipeg will be a destination “International Store” format, providing a selection of foods from around the world to cater to the large ethnic populations of Ukrainians, Filipinos and Asians, among others. The first seven communities in those provinces were selected based on the best opportunities available. “The city of

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Winnipeg in particular is the largest market, so that was a good reason for us to focus there,” explains Jones. “But these are just the communities we’re starting with. We have plans for over 40 stores in Saskatchewan and Manitoba in the next three to five years. We think our small-town roots plus our focus on local products and people will bode well for us in the Prairie provinces.” OFG recently established a distribution centre in Northern Alberta to facilitate the eastward expansion, but, at this time, the company has no plans to grow beyond Manitoba. “We have our hands full,” Jones jokes. Online grocery shopping and home delivery will also be part of the offering in Winnipeg and Regina. “To be successful today, we have to deliver Save-On-Foods anywhere, anytime – whatever the customer wants,” he says. Next year, OFG also plans to open at least 10 more Save-On-Foods stores in British Columbia and Alberta, bringing the grocer’s total store count to well over 150. At the announcement event at the Northgate Mall store in Winnipeg, senior executives were on hand to ask customers what they would like to see in their new store. “At the end of the day, it’s going to be their grocery store, and we better give them what they want,” says Jones.

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Open Mike

TECHNOLOGY

MAKING THE OLD NEW AGAIN By Michael Marinangeli

When it comes to home delivery and loyalty programs, grocers are taking a cue from the Broadway song “Everything old is new again,” because both of these programs were important to consumers over 50 years ago. Today, thanks to online shopping, scanning and the popularity of mobile devices, they are hot industry topics again. As a child, I remember going grocery shopping with my mother. Home delivery and loyalty rewards were two of her prime considerations for store selection. Several things come to mind when I think back to her weekly shopping routine. • Every Wednesday, my mother checked the newspaper for the weekly grocery ads; there were no colour flyers. Every grocery chain advertised their 20 or 30 weekly specials with a newspaper, and she used those ads to plan our meals for the coming week. • Staple items such as bread, milk, eggs and butter were delivered directly to the house by the local milkman, who deposited our order in the milk box from the outside of our home. • We had only one family car, which my father

July | August 2015

used to drive to work, so home delivery was very important to my mother. Most stores closed at 6 p.m. on Mondays, Tuesdays, Wednesdays and Saturdays, with extended hours only on Thursdays and Fridays. There was no Sunday shopping. Location and convenience were the deciding factors for store selection. • My mother shared her patronage between two stores within the same two-kilometre proximity to our house. One was a small independent store called Tumino’s, which had terrific produce and meat, and offered same-day home delivery. The other store was a small Loblaws, which had broader assortment, lower prices and a loyalty program utilizing “Lucky Green Stamps.” My mother’s purchases earned her stamps from the cashier that she glued into a special book the store provided. Once a certain number of books had been completed, she could redeem them for a free household gift, such as a toaster, kettle, pots, dishes, etc. Back then, almost all the major grocery chains offered their version of “Lucky Green

Stamps” for rewards. The retailer bore the cost of these programs, with no revenue recouped from the suppliers for data or points – the technology of the time didn’t allow for it. Neither did suppliers allocate any trade spending to these types of programs. Conventional grocers discontinued stamp programs in the late 1960s when price competition heated up, forcing retailers to divert monies to lower food prices in order to compete with the discounters. Loyalty programs didn’t return to the grocery industry until the late ’80s, when universal scanning and the launch of the Internet eventually facilitated the tracking and analyzing of customer purchases for rewards and target-marketing. Today, few grocery retailers promote online grocery shopping as a service. Selecting and shipping perishable perimeter-of-thestore items continues to be a challenge. While several independent grocers have provided home delivery over the years, major grocery chains have stayed out of it until recently, because of the limited demand and the poor economics. Margins in the grocery business are low to begin with, so it is difficult to make money

Open Mike

when you add the picking, delivery, refrigerated trucks and gridlock in most urban centres. Two main models have emerged for online grocery shopping: home delivery (Longo’s Grocery Gateway) and “click and collect,” used by Loblaw and some others in select locations. I think the biggest obstacle facing online grocery shopping is the fact that most shoppers are quite happy to go to a store and select their purchases themselves. Over the past several years, discount has been the growth tangent in the business. When the market has a high discount penetration as we have in Canada (over 40 per cent), online grocery shopping has little wiggle room to be successful. I have been told that most online grocery shoppers prefer

home delivery to pickup. Independent grocery chains, such as Longo’s, with their impeccable reputation for quality and fresh departments, stand a better chance of making it work; while customers prefer to pick their own fresh fruit and vegetables, Longo’s reputation for quality adds credence to its service. Although today’s retailers have embraced technology that makes online grocery shopping and rewards programs more feasible and cost-efficient, I do not see either of these as a focal point for building sustainable customer loyalty. I believe consumers are more influenced by low everyday prices, hot feature prices, the club store’s allure, and ad matching. But if your

competitors make these types of services available, you may have to as well to remain in the game, with the understanding that these programs may serve only as a satisfier for customers to continue to visit your store, rather than as a motivator for them to shop there.

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.

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Perspective

The painful pursuit of

shareholder value By John F.T. Scott

The objective of every corporation is to maximize shareholder value. This can be achieved in one of three ways – innovation, higher prices, or reducing costs. The first is difficult, and often a long road. The second is, in most cases, even more challenging, with a few exceptions such as shortages or changing conditions of acquisition (lower dollar, increased shipment costs). The third, cost reduction, is often addressed, but since it usually results in significant internal pain, is rarely used effectively except in instances of substantial distress. Now fast-forward to two events whose origin lies in that often elusive pursuit of increased shareholder value. The first is the unexplained-deduction behemoth that has been unleashed on suppliers by the major distributors. This, piled on top of the growing unreasonable pressure of the trade spend, is wreaking havoc in the supplier community. It clearly has its roots in either distributors’ inability to increase consumer prices in the reality of a highly competitive market, or their unwillingness to get serious about cutting costs. Because of scale, these companies can ostensibly “increase value” by securing it

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from suppliers. Sustainable? I think not. It’s unquestionably a short-term game, as it’s obvious that new entrants bold enough to embark on one of the three true drivers of value are also proving unafraid to set up shop. It’s time the distributors did the same. Which brings me to the second event – the presence of Brazil’s 3G Capital, which now controls, or will shortly control, three iconic companies with established, respected brands: Kraft, Heinz and Tim Hortons. The 3G approach is to deeply cut costs, laying aside human resources regardless of capability, dedication or tenure. I wasn’t surprised by its acquisition of Tim Hortons given that, in my opinion, the life cycle of that company was just over peak. There is no doubt in my mind that, as 3G desecrates the internal operations in the name of cost reduction, it will experience significant increased returns in the short run. The consequence, however, is that we may not recognize “Timmy’s” when it is finished. Kraft is a different issue entirely. Here we have a solid company comprising exceptional people dedicated to their brands and constantly working on new concepts for the

market. If the 3G model is applied (as it no doubt will be), our industry will lose the leadership that this company has provided through a few generations. It will be an unwelcome change equal or perhaps superior in scope to any merger we have witnessed. We will soon miss Kraft’s innovation, and we will certainly feel the loss of its people. So the three apparently simple routes to increasing shareholder value are each fraught with a plethora of unintended consequences. Irrespective of that fact, however, corporations will persist in making resolute choices in the interest of continued growth. Not always desirable but certainly the essence of reality.

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.

July | August 2015

Healthy

Choices Choices Markets, its healthy appeal still fresh after 25 years, shares the strategies that have it poised for growth in a competitive market. By Sally Praskey

Choices Markets store, South Surrey, British Columbia

P H O T O S : R O B E RT K A R PA

When brothers Wayne and Lloyd Lockhart were operating SuperValu franchises in British Columbia in the 1980s, customers often requested natural-food products. After all, there was nowhere for them to procure both natural foods and conventional groceries in one location. That was the inspiration for Choices Markets. The brothers opened the first outlet in 1990 with the goal of providing one-stop shopping for consumers who wanted a “choice” of both natural and organic products, as well as mainstream grocery items. The concept was a hit with Vancouver-area foodies. Over the years, the Lockhart brothers and partner Salim Ahmed, who joined them in 1998, opened six more stores in Greater Vancouver and one in Kelowna, with three more on tap for this year. Choices Markets is now Western Canada’s largest local retailer of natural, organic and specialty foods. And it continues to thrive despite an influx of competitors. Tyler Romano, director of marketing, attributes part of the retailer’s enduring success to being ahead of the curve with new products, and staying focused on its core mission of helping customers live healthier lives.

Choices Markets Ingredients for Success Trend-spotting Choices established a gluten-free bakery back in 2003, long before the trend went mainstream. The partners and other staff travel the world in search of new and unique products. “To us, it’s very important because we like to bring new products to the marketplace first,” says Wayne Lockhart. “It usually gives us a four- to six-month or even longer advantage, because then we’ll have products that others are still trying to source.”

Walking the Health Talk The retailer prides itself on providing a superior shopping experience, which also differentiates it from the competition. For example, customers have access to a registered dietician at each store to answer questions and even give a free one-hour store tour. “We just want our

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customers to live healthier lives,” says Romano. “That’s what the owners are passionate about.” For 25 years, health and wellness has been a way of life at Choices – for customers and employees. “We don’t just sell health; we preach health,” says Romano, “and so our services fall in line with that mantra.”

Sustainable Choices Choices’ commitment to healthy living extends to the environment as well; among many other initiatives, the stores recycle all the waste from each of their perishable departments, and send it to a facility where it is converted anaerobically (with no gas emissions) into compost that is bagged and sold in their garden centres. While environmental sustainability is always top of mind, the stores reinforce it each year in a month-long education campaign for customers and staff called “Reduce your footprint.”

July | August 2015

“ Our plan is to continue opening more stores in addition to the two we are opening this year. We see several opportunities for us still in the Lower Mainland.” – Ishkander Ahmed, CEO

Focus on Fair Trade Buy local has always been the mandate for Choices. But if that is not possible, the retailer looks to ethical sourcing. “We source local first; that’s our commitment,” says Romano. “If we can’t source it locally and it needs to come from abroad, our rule is always fair trade first, to make sure it is fair and equitable treatment to the farmers and growers abroad.” For the past four years, Choices has received major fair-trade awards for its efforts. In 2014, it was named Fair Trade Canada Retailer of the Year. Currently, each store carries approximately 550 SKUs of fair-trade items, yet another point of differentiation.

Organic Growth Choices’ strategy is one of managed growth – it opened seven stores in its first 17 years, and has waited another eight years to add more. But 2015 is a banner year, with three openings under way and likely more in the coming years. After acquiring the Drive Organics store in Vancouver earlier this year, the company recently announced plans to expand to Abbotsford. “There is a rich farming and food-producing culture in the Fraser Valley, so it seemed like a natural step for us to open a store there,” says CEO Ishkander Ahmed. “We were getting requests from not just customers, but also local businesses, to expand into the Fraser Valley.” The new store, to be unveiled in September, will have a selection of healthy gourmet grab-and-go meals, as well as space to dine. The retailer is in the process of replacing its existing commissary production facility with a new site in South Burnaby that will also feature a storefront, bringing the total store count to 10.

Choices Markets Milestones December 3, 1990 The first Choices Markets store opens in Vancouver.

1998

1999

2000

2003

2005

Second store opens in Vancouver.

Warehouse subsidiary, Canadian Choice Wholesalers, opens.

Third and fourth stores open in Vancouver.

Commissary production centre opens in Richmond, B.C.; gluten-free bakery opens in Vancouver.

Fifth store opens, in White Rock, B.C.

“ For 25 years, we have been a B.C. family-owned business focused on supporting local, fresh food. We sell health – for our customers, our community, our employees and, of course, for our planet.” – Ishkander Ahmed, CEO

Wayne Lockhart

Lloyd Lockhart

Salim Ahmed

The owners speak out… On their vision for Choices in 1990: “We saw a need that was not being filled, and went after filling it. It was a lot of hard work, but very rewarding.” On how consumer tastes and expectations have changed: “Consumers are more educated today than they were 25 years ago. They expect products that we sell to be GMO-free, be labelled correctly, and have nutritional information included on the label.”

A year to celebrate

On what makes Choices’ offering unique: “The care and concern for the customer and the environment, and we truly support local farmers.”

Choices Markets is in the midst of a year-long celebration, culminating in December, the month the first store opened in Vancouver’s Kitsilano neighbourhood. • Throughout the year, Choices is holding weekly draws for

On the factors driving Choices’ current growth: “Growth comes from providing consumers with what they want: a variety of great natural, organic and GMO-free products, a great shopping experience, and good customer service.”

free groceries at every store, monthly premium giveaways, and a final grand prize of $25,000 cash to be drawn at the retailer’s extravaganza party on the actual anniversary date. “It’s our way of thanking our customers for their support throughout the years,” says Romano. • Once a month, the retailer produces retro flyers featuring products priced at 1990 levels. Meanwhile a “Throwback

On plans for further expansion: “We are planning to expand in at least two more locations.” On operational changes over the next five years: “We are always changing little things, but basically keeping our business principles the same; we like a win for suppliers, customers and Choices.”

Thursday” social media campaign on the Choices website features images of the retailer’s early days.

2007

2015

Sixth and seventh stores open in Burnaby and Kelowna, respectively.

New production facility and storefront opens in South Burnaby to replace previous one; ninth and 10th stores to open in Vancouver and Abbotsford, respectively.

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On a pivotal moment in Choices’ history: “When we opened our second and third stores, we realized our potential for expansion without taking away business from our original store.” On the business philosophy for Choices: “Win-win-win. When everyone wins, everyone is happy and positive, and more great business is done.”

July | August 2015

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WHOLE HEALTH Trends and insights on the health-focused shopper

DISCOVER WHAT’S NEW IN THE HEALTH CATEGORY AT THE CHFA EAST SHOW grocerybusiness.ca

July | August 2015

“Let food be thy medicine and medicine be THY FOOD.” – Hippocrates

CHANGE IN STORE By Karen James, co-publisher and executive editor of Grocery Business

“The consumer trends are moving at a pace I’ve never seen in my 30 years in the business, toward more natural and more real ingredients. That’s happening everywhere.” – Brian Cornell, CEO, Target Inc.

July | August 2015

There was a time when healthy eating, as a lifestyle, was the domain of the folks on the fitness fringe. But not anymore. The wellness revolution has gone mainstream, creating a sea change in the way consumers experience food. Chalk it up in large part to the health-obsessed Millennials and their Baby Boomer parents, who are looking to age healthfully. Grocery Business staff are privileged to attend many trade shows throughout North America and beyond, and what continually stands out for us is the vast array of delicious and inventive healthoriented packaged-goods products that are looking for a home on grocery shelves. Beginning with the explosive popularity of Greek yogurt a few years ago, the landscape has now expanded to include unique products such as healthy hemp snacks, probiotic chia seeds and flavoured omega-3 camelina oils. Both established and new-to-the-game food manufacturers are creating real consumer excitement by infusing health into every aspect of their offerings. Astute retailers are taking notice. Kroger’s Simple Truth line of natural food products ballooned to sales of US$1.2 billion in just two years. Many other retailers are repositioning their stores as “wellness destinations.” Indeed, some grocers are starting to integrate natural and organic products into every aspect of their operation. Since centre store in most banners could benefit from a rethink, retailers have a lot to gain by weaving wellness products into every department. According to Michael Mechelse, director of research, industry insights and communications, at GMDC, a U.S. trade association, stores with wellness reputations attract consumers who are much less focused on price. He says that, done

correctly, wellness serves to differentiate a store from its competitors. It also shows that, by stocking the right categories in meaningful ways, the retailer has the customer top of mind, which supports the Holy Grail of consumer engagement – loyalty. By all accounts, centre store is in need of a renaissance. Could well-curated and merchandised natural health products be the lure that sparks consumers’ curiosity and entices them back into the middle aisles?

Michael Mechelse says retailers can maximize their wellness performance by:

• Identifying and marketing gateway categories to ease consumers into the store’s offering.

• Boosting bridge categories

by giving them more profile within the store.

• Messaging, merchandising and highlighting specific core products that are relevant to the shopper’s wellness mission.

THE HEALTHY

SHOPPER 17% 16%

1 in 3 shoppers

11%

estimate they are eating more fresh foods more often than 2 years ago

% of primary 6% shoppers who No Frills 4% cited “has the Walmart 3% freshest products” Maxi 2% as reason for preference Real Canadian SuperStore

59% just as often

61% Home cooking is considered important to a healthy diet

35%

grocerybusiness.ca

Product Labels

62%

I prefer cooking so I know what is in the food I eat

TOP SOURCES OF NUTRITIONAL INFORMATION

20% 19% 18% Nutritionist/ dietician

Loblaw

less often

more often

12%

Metro

36%

Friends of family

Sobeys

Doctor

Costco

Internet search

IGA

July | August 2015

DISCOVER EXCITING TRENDS IN HEALTH FOOD AT

CHFA EAST CONFERENCE AND TRADE SHOW Helen Long, president Canadian Health Food Association

Businesses across the country are tapping into the growing health food segment for a good reason: this market presents huge growth opportunities for retailers of all sizes. Consumers increasingly demand access to specialty products within the health food segment, whether it’s organic, gluten-free, non-GMO, or the newest and trendiest products. This year, we’ve seen exciting new products hit the market, and the trends point to an increased demand for certain types of products. For instance, with digestion being a key concern of many Canadians, foods and products that support a healthy digestion are increasingly popular; here we find raw, fermented or sprouted foods, all of which are extremely rich in many essential nutrients. The best place to learn about these and other trends in the health food industry is the Canadian Health Food Association’s conference and trade show, CHFA East, being held this year from September 17 to 20 at the Metro Toronto Convention Centre. CHFA East is Canada’s largest conference and trade show for natural health and organic products. It’s the place to meet the industry’s top manufacturers, distributors and brokers face-to-face. We all know that a successful retail business depends on keeping up with innovative new products and trends; CHFA

July | August 2015

East is your chance to see, touch and taste thousands of new, natural health and organic products, from vitamins and supplements, to foods and personal care. With over 800 exhibits on our 95,000-sq.-ft. trade show floor, there’s always something new to discover. The CHFA East Conference, held on the two days preceding the trade show, offers many educational opportunities, such as the Product Education Sessions, which are focused on sharing the latest science behind products and educating retailers on how to market them. Our sessions give those who sell the products the information and tools to successfully get them into customers’ shopping baskets. Attendees can also benefit from special educational sessions focused on topics that are directly impacting the retail industry. For example, our session discussing ways

specialty stores can differentiate themselves in a crowded market offers tactical approaches to engage customers in a deeper way by providing real value. Other educational opportunities include sessions on emerging trends in the retail business, such as: • how new technologies are changing the retail landscape; • merchandising and POS; • tips on marketing specialty health foods; • how to educate consumers on natural, health and organic products. Attending CHFA East is a must for businesses interested in growing their offering of specialty health food products. CHFA also offers a variety of programs specifically designed for independent retail businesses. When attending the trade show, swing by our CHFA booth to learn about the many benefits of CHFA membership.

September 17 - 20, 2015 Metro Toronto Convention Centre, South Building chfa.ca

itâ&#x20AC;&#x2122;s all here!

beverages snack food

where food trends

are born

organic food nutraceuticals natural health food

spe food

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

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

FIVE REASONS YOU SHOULD ATTEND CHFA EAST 2015 1

Discover future best-sellers from hundreds of products and new launches

Meet over 800 exhibitors, all under one roof, for your shopping convenience

See, taste and compare local and international brands

Enjoy show savings exclusive to attendees

Attend education sessions to help improve your business practices

â&#x20AC;&#x153;The show was exceptional. One of the best yet.â&#x20AC;? trition icals beautyy sports nu nutraceuttit

ce h experienro wt

health &

health food naturaprl od ucts specialty od organic fo

ronto metro to n centre, conventio ing ild south bu ce: conferen r 17 & 18 septembe : trade showr 19 & 20 septembe

PLAN YOUR VISIT Complete details on the exhibitors, conference program and social events are available on our website chfa.ca and on the official CHFA East phone app.

NEW PRODUCTS, BEST SELLERS

Demand for natural health and organic products is growing. Be sure you can meet your customer’s needs. Here are some of the products you can expect to see at this year's show.

Natural Health Products Anti-Aging Anti-Inflammatory Anti-Oxidants Aromatherapy Ayurvedic Medicine Botanicals Cough & Cold Remedies Diet Products Digestive Health Energy Products Essential Oils Extracts Herbal Remedies Herbs Homeopathic Products Immune Boosters Joint Health Mind / Memory Mineral Supplements Naturopathic Products Nutraceuticals Pain Control / Relief Pre / Probiotics Protein Products

Relaxation Products Sports Nutrition Tinctures Tonics Traditional Chinese Medicine Vitamin Supplements Weight Management

Food/ Beverage Baby Food Beverages Chocolate Coffee Condiments Cookies Dairy Products Dried Food Ethnic Food Food / Grocery Food Supplements Functional Food Gluten Free Grains Juices Kosher / Halal Low Carb

Personal Care Products

Pre / Probiotic Food Snack Food Soy Products Spices Teas Vegan Products Vegetarian Products Wheat & Yeast Free Products Whole Food

Body Care Collagen Products Cosmeceutical Cosmetics Dental Care Hair Care Skin Care Soaps

B2B Supplies & Services

Organic Food & Products

Brokerage Certification Consulting Contract Manufacturing / Private Label Displays / Fixtures Distributor Equipment Formulation Import / Export Labeling Packaging POS System

Organic Beverage Organic Food Organic Household Items Organic Ingredients Organic Pet Food & Products

“I loved the product education and the ability to try new products in person.”

PROUD SHOW SPONSORS GOLD SPONSORS

SILVER SPONSORS

ORGANIC SPONSOR

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

DID YOU KNOW?

93%

successful in sourcing new products

80%

successful in sourcing new suppliers

93%

took advantage of show specials and discounted pricing

Average number of new products sourced

Average number of new suppliers

CHFA East 2014 Post Show Survey Results

Retailers attend the show for FREE as guests of Grocery Business. Register now at chfa.ca and use code E15C1. CHFA East is a trade only event and is not open to the public. Proof of industry status is required.

FOOD REGULATION

MODERNIZATION By Krista Coventry

Canada’s comprehensive food regulatory environment is about to undergo a major overhaul. Grocery retailers can watch for big changes as the new Health Canada regulations for nutrition labelling and food safety are released. Canadian food businesses will be affected across the board, from grocery retailers to suppliers. The Canadian Health Food Association (CHFA) has highlighted these upcoming changes in order to help you better understand the potential impact to your business.

Other changes include:

1. Ingredient listings will also be simplified under the regulations, with common ingredients grouped together for ease of identification.

2. Grouping of sugars will

be of particular interest due to health concerns associated with their consumption.

3. Food colours will have

to be specified by name, helping individuals with allergies avoid illness due to labelling confusion.

Krista Coventry, M.Sc. Regulatory affairs manager at the Canadian Health Food Association

NUTRITION LABELLING CHANGES Making Canadian food labels easier to understand Health Canada has published its proposed updated Nutrition Labelling Regulations to help consumers make healthier food choices. Major changes to the nutrition labels of all packaged foods will be incorporated over the next five years as producers update their product labels to meet the new requirements. Consumers will notice various changes to the Nutrition Facts Tables of all food labels as a result of the proposed regulations:

4 Serving sizes will be standardized, making it easier for consumers to directly compare the nutrition information of similar food products;

4 The number of calories per serving will be easier to identify in a larger font;

4 Emphasis will be placed on 5% DV or less being “a little,” while 15% DV or more will be considered “a lot”;

4 Change to vitamins and minerals (potassium will be added; vitamins A and C will be removed).

4 A percent daily value (% DV) will be required for sugar;

THE SAFE FOOD FOR CANADIANS ACT Adding accountability Canada’s food regulatory system is considered to be complex, given that Health Canada currently has separate regulations for meat, fish, agricultural and organic products. As part of recent efforts to modernize Canada’s food regulatory system, Health Canada’s Safe Food for Canadians Act aims to streamline all existing statutes for food commodities into a single law.

Food safety has been a hot topic in the media over the past few years, with various food recalls making headlines across the globe. The goal of the new Safe Food for Canadians Act is to improve Canada’s food safety system to help identify and manage food-borne illness, while making it easier for grocery retailers to identify and recall foods

that pose a risk to consumers. CHFA monitors, evaluates and communicates the latest regulatory changes affecting its members’ businesses. We also maintain regular communications with key government officials to address members’ concerns. To learn more about CHFA, visit chfa.ca.

July | August 2015

FRESH

PLAIN & SIMPLE

Consumers are “circling back” to freshness with renewed excitement, valuing it as an indicator of quality and are looking for it at their local supermarkets. Are you ready to be their “fresh” destination? Freshness implies healthfulness and good nutrition – and in recent years with all the talk about obesity and sustainability, consumers are really focusing on fresh. It is also about artisan quality and full flavor with ingredients you can pronounce. Consumers are also assured that if something is “fresh” it’s more likely to be tender and juicy, firm and ripe, rich, delicious and colorful; and these are attributes that consumers want more and more.

Perishable or Short Shelf Life • •

Refrigerated Expiration Date

BY TOM O’BRIEN, TREE OF LIFE CANADA

QUALITY = FRESH In the past, consumers equated quality with big consumer packaged goods brands because they delivered convenience, consistency, affordability and safety – this was all achieved through factorymade mass production. The paradigm has shifted; consumers are now in pursuit of health & wellness, authenticity and distinction. No longer is quality equated with mass-produced products; today quality equals fresh. There has been a major cultural shift towards all things healthy, real, pure and special. Sounds plain and simple, right? Wrong. There are a multitude of product dimensions that convey fresh.

•

Known Processing • • •

Artisanal or traditional “Something I can make at home” Add Fresh components (meat, vegetables) to packaged products (cooking sauces) for “speed-scratch” options

• •

Unique and Distinctive

Minimal Packaging • • • • •

Simple graphics Brown paper or matte Cello wrap Transparent or view window Recyclable

“Real Ingredients”

Absence of Negatives ♦ No “chemicals” ♦ No trans fats, hydrogenated oils ♦ No high fructose corn syrup Presence of Positives ♦ Organic ♦ All Natural ♦ Non-GMO verified Short Ingredient List ♦ 3-5 ingredients ♦ Familiar not scientific Nourishing and Satiating ♦ High protein, “good” fats, good source of calcium, complex carbohydrates, high fiber, low sugar

• • •

Inspire discovery Available at Specialty Grocers Foodie Gourmet Cues ♦ Limited edition, vintage, single estate, heirloom, grass-fed, farm-raised, a sense of place SOURCES CITED: THE HARTMAN GROUP, EUROMONITOR

Be Prepared

THE

HEALTHY

SERVICE CASE By Rich Rotzang

Healthy eating is no longer a trend; it’s a lifestyle. In recent months, a number of consumer packaged goods brands and quickserve restaurants have announced they are moving towards clean, nutritious and noncontroversial ingredients. Supermarkets, too, are dedicating more floor space to healthier options, particularly in the produce and home-meal-replacement (HMR) departments. Today’s consumer is educated and well informed, and wants unique grains, fresh local ingredients, vegetarian or vegan options, and gluten-free dishes that please the palate. Your service case should reflect that. What are some of the latest fresh foods to hit leading-edge HMR service departments? So-called “Super Foods” are now extremely popular. This category is loosely defined as nutrient-rich foods with high vitamin counts, antioxidants, anti-cancer agents and other health benefits. Kale, Brussels sprouts and beets are some examples of ingredients that are attracting much attention these days, both for their high nutritional value and for their resurgence as versatile chef favourites. Grains have also seen a shift in consumer preferences. Whereas white rice and pasta used to be king, ancient grains have made a comeback recently. Of these, quinoa, farro

July | August 2015

and bulgur wheat are all sensible choices because they are high in protein and fibre, and low on the glycemic scale – the perfect combination for consumers with high blood sugar, or those looking to lose weight. Some grains, such as quinoa, buckwheat and amaranth, also serve double-duty in that they are gluten-free. HMR managers love these ingredients because they not only look and taste great, but they also hold up well in the service case. Many consumers have gone vegetarian, or completely vegan. For an HMR department, this means having options that are free of meat, dairy and eggs, while still maintaining the necessary nutrients of a well-balanced meal. A popular way to replace the lost protein is with beans and legumes. Chickpeas (aka garbanzo beans) and lentils, both of which are staples of international cuisines, have become popular additions to deli salads because of their taste, texture and nutritional value. Maintaining a service case with healthy options is just the first step. To ensure the success of your new items, it’s important to share those benefits with consumers. This can be done through educational pin ticket descriptions, call-outs of special ingredients, or even historical or geographical storytelling

(i.e., quinoa is an ancient grain grown in the Andes) that deli staff can share with consumers. Whatever the medium, this is a powerful opportunity to educate, empower and delight customers at the point of sale. Consumer preferences will change over time, but what is certain is that now those consumers have a better understanding of, and appreciation for, healthy eating – and that is here to stay.

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.

A CLEARLY HEALTHY SOLUTION By Birgit Blain

Offering consumers quick, healthy solutions to the daily “what’s for dinner” dilemma is a sure way for retailers to win at the HMR counter. One new product provides an inventive meal solution for both retailers and consumers. KlearCook Pro is the modern version of the “en papillote” method of cooking in parchment. This clear high-temperature cooking film for ovens, microwaves and skillets can withstand temperatures up to 400 degrees Fahrenheit. Because the food is cooked in a pressurized environment, flavour and nutrients are preserved without added salt or fat. Retailers can create a uniquely merchandised program of entrées, appetizers and desserts, while consumers can use the product to cook healthy, flavourful meals with minimal clean-up. Klearcook.com

42%

Our resources. Your results.

Acosta has expanded our Natural/Specialty Sales Channel into Canada Acosta Natural/Specialty Sales has acquired

of Millennials have changed Higgins Cohn Brand Management, the largest natural foods sales agency in Canada, further shopping patterns since expanding our reach in the Natural/Specialty becoming parents Sales channel.

Source: MetrixLab

Higgins Cohn’s extensive experience and strong local relationships will enable us to broaden our reach in Canada, expanding our team of dedicated, natural foods professionals and connrming our commitment to deliver channel leadership and the highest level le of service excellence.

Who’s Who

If you would like to learn how we can take your business to the next level, please call us at 905-856-8252 or stop by and see us at CHFA East in September to say hello and hear about our enhanced service oﬀerings in Canada.

Natural Health Distributors and Brokers www.acosta.ca/naturalspecialtysales Natural/Specialty Sales - acosta.ca/naturalspecialtysales Cyba Stevens Management Group - cybastevens.com Elco Fine Foods - elcocanada.com I-D Foods - Idfoods.com Horizon Distributors - horizondistributors.com

83%

Indigo Natural Products Management - indigonaturalproducts.com Marsham International Food Brokers Inc. - marsham.ca New Age Marketing & Brand Management Inc. - newagemarketing.ca Ontario Natural Food Co-op - onfc.ca United Natural Foods Inc. - unfi.ca Tree of Life Canada Inc. - treeoflife.ca

cook dinner at home 4+ nights/week

Source: MetrixLab

grocerybusiness.ca

CONTINUED ON PAGE 32 w

July | August 2015

CONTINUED FROM PAGE 31

“I’ve been doing this for 37 years, and this is the most dynamic, disruptive and transformational time that I’ve seen in my career.” – Steve Hughes, co-founder, Boulder Brands, and former ConAgra executive

Ito En booth at the Fancy Food Show, New York City, June, 2015

Mix ’n Matcha What is Matcha? It’s a finely milled green tea powder with a “umami” flavour, the fifth taste sensation, that, when mixed with hot water, creates a unique tea. Make the most of Matcha by serving up a special tea experience in your store.

†

#1 Selling Organic Broth Brand in the USA The Perfect Starting Point for Delicious, Healthy Recipes The Trusted Brand for the Inspired Home Chef Packaged in a Reclosable, Easy to Pour Carton Fat Free & Gluten Free Certified to the Source Organic Ingredients

July | August 2015

Marsham International Inc. Good Friends, Good Business Marsham International Inc. marks its 25th anniversary this year as a broker of natural and organic foods. It’s a category that has seen such dramatic growth and increasing complexity that company founder Paul Marsham likens his work to conducting an orchestra: “… you pull together all aspects – multiple accounts, multiple programs, individual targets – in harmony to achieve one common goal.” grocerybusiness.ca

P H O T O S : R O D N E Y D AW

By Angela Kryhul

Marsham International founder Paul Marsham (left), and Bill Ivany, president/COO

July | August 2015

G CONGRATULATIONS ON YOUR

25 ANNIVERSARY TH

GROWT TESTIMONIAL

GROWTH

AND GOODWILL

It wasn’t that long ago that a natural foods sales agent’s days were spent sitting behind a desk and getting paid as distributor orders came through on a fax machine, according to Paul Marsham. That was the early 1990s, but changes were afoot. The U.S. broker community was becoming more aggressive; field reps were becoming the norm, and Marsham realized it was only a matter of time before the practice made its way to Canada. He decided it was time to hire a sales team that would visit stores and drive the business forward. “Manufacturers saw the value in what we were doing, word spread, sales grew, and more and more clients started coming to us,” Marsham explains.

Established: 1990 Location: Concord, Ont. Staff: 65 employees

Brands: Marsham represents more than 50 homegrown and international brands in Canada across most categories, many of which are becoming household names.

Distribution: All trade and distribution channels, including major retailers such as Loblaw, Shoppers Drug Mart, Sobeys, Whole Foods, Longo’s, Metro, Walmart, Federated Co-op, Overwaitea, Choices Markets, London Drugs and Costco.

“The thing I like about Paul is that, from day one, he’s continued to drive his business and is not content to sit back on his laurels. He’s always hired really good people, and he’s never been afraid to invest the money to produce a quality product.” Steve Terre Owner, Sel de la Terre Former VP sales, Traditional Medicinals

Giving Back: Marsham supports several charitable initiatives, including the CN Tower Climb for United Way, the Ride to Conquer Cancer, and an annual Thanksgiving donation to food banks.

Marsham International Inc. is a natural and organic product specialist representing grocery and non-grocery CPGs. The company services all classes of trade and distribution channels throughout Canada, providing overall brand management, key account and distributor management, and retail coverage services.

grocerybusiness.ca

July | August 2015

4.375"

Dear Marsham, T hanks for having t he

Balls

Congratulations

5.375"

PAUL MARSHAM

25 years. That’s amazing.

OUR FRIEND AND BUSINESS PARTNER

Congratulations, Paul, on all you’ve achieved. And thank you for believing in Bounce and our delicious, nutritious Energy Balls.

tbd

PRINTING PROCESS

4c process

PRODUCTION ARTIST

DIE LINE NUMBER

.375"

PONSIBLE FOR CHECKING WORKING DRAWINGS BEFORE PLATES ARE MADE FOR ACCURACY IN MEASUREMENTS, PLATE UIREMENTS, REGISTRATION AND CONSTRUCTION DETAILING, ANY CHANGES MADE TO SUIT PRODUCTION REQUIREMENTS ROVED BY CLIF BAR’S CREATIVE DEPARTMENT. COLOR PROOFS SHOULD BE SUBMITTED TO CLIF BAR’S CREATIVE L COPY SHOULD BE PROOFREAD BY CLIF BAR AND LEGAL REQUIREMENTS CHECKED BY CLIF BAR’S LEGAL DEPARTMENT.

R&D:

July | August 2015

NOT FOR COLOR MATCHING

PRINTER

Grocery Business Magazine Ad

_0777_GBM_Ad.ai

REFER TO ACTUAL CLIF BAR APPROVED COLORS OR PANTONE® COLORS FOR PROPER MATCHING

ON YOUR 25TH ANNIVERSARY SUBSTRATE (for reference only)

WHITE

You and your team have put Bounce firmly on the retail map in Canada. We are forever grateful.

bouncelifestyle.com

PRINTING STATIONS

4/COLOR PROCESS

PANTONE®-identified Color information has been provided by Clif Bar for the guidance of the printer. The colors displayed have not been evaluated by Pantone, Inc. for accuracy and may not match the PANTONE Color Standards. Pantone assumes no responsibility for the final color generated. For the accurate PANTONE Color Standards, refer to the current editions of the PANTONE Color Publications. PANTONE® is a registered trademark of Pantone, Inc. PANTONE® Color references are protected by copyright. PANTONE Trademarks and copyrights used with the permission of Pantone, Inc.

Design:

Proofing:

Production:

GROWTH TESTIMONIAL

GROWTH AND GOODWILL (continued) The Marsham International team stands apart from competitors. While a number of brokers have sold out to larger CPG companies over the years, Marsham remains one of the few family-owned national brokers of all-natural products that continues to deliver on the manufacturer’s brand heritage. And Marsham International continues to evolve in the marketplace. Part of that leadership is the recent hiring of Bill Ivany in the newly created position of president and chief operating officer, with a mandate to take the company to the next level.

One thing hasn’t changed: the Marsham team still offers a deep understanding of the Canadian retail market, not to mention an intimate knowledge of all-natural and organic brands, along with extensive contacts and goodwill in the industry. Says Marsham: “Buyers respect the experience we bring to the table. And the manufacturer relationships we have nurtured over the years support our ‘Good Friends, Good Business’ philosophy.”

“Traditional Medicinals has been with Paul for 25 years, and so a very special bond has been formed between the two companies. Marsham’s team knows where their brands have been, where they are today, and where they are going, and they have a plan to get them there. What more could a principal ask for in their broker?” Blair Kellison CEO, Traditional Medicinals

Breakfast is becoming less about the bowl of cereal, and more about the blender. Imagine 10 different health-related products in the morning blender – from Hemp Hearts and frozen fruit, to Amazing Grass Green Superfood, gogi berries and flax seeds – that have been “prescribed,” discussed and sampled at the in-store juice station and bundled as a breakfast or meal solution. “That’s up to a $125 ring at a 40+ gross every 30 days,” Marsham says. “And there is a similar disruption story and natural solution for most major categories within the conventional grocery store.”

grocerybusiness.ca

July | August 2015

BUTCHER BY TRADE,

SALESMAN AT HEART Trained butcher… salesman… brand specialist… champion table-tennis player and avid golfer… Paul Marsham puts his heart into everything he does. In this personal essay, Marsham remembers his early years in the food business and how he built Marsham International into an industry leader. A means to an end… a small fib about my age to get that first job sorting pop bottles at Robinson’s IGA in Bell’s Corners, just outside of Ottawa. At $1.65 per hour, it seemed to be the quickest way to earn the money to buy my own set of golf clubs. That was 1970. Two years later, the family plan was to move back home to England. Cold Canadian winters, and my Dad’s promise to my mother to return to Britain, are among my excuses for never having made it to the NHL. Now living in England, my next stop was Tyler’s Wine Merchants (Fortnum & Mason Group) – off-licence on the High Street, Cranleigh, Surrey. Tyler’s catered to the wealthy – the store signage actually said “High Class Provisions.” I was the young

July | August 2015

Canadian (bacon butcher and deli-man by trade), off to college in London taking supermarket management courses in the hope of one day becoming a grocery store manager. Upon my return to Ottawa – Supermarket diploma in hand, combined with multiple butcher scars – I became a trainee at Woolco’s Lincoln Fields store in Ottawa, moving up the ranks, to eventually becoming one of their youngest division managers, stationed in Windsor, Ont. Experience with linear management, shrinkage, seasonal markdowns, were valued training experiences that have stayed with me to this day. After a few short stops – key account manager for Balderson Cheese in Ottawa, then a position

with Morris National in Toronto – I was introduced to the natural products industry by way of LifeSource Natural Food Distributors, as their sales manager. I incorporated my brokerage business in 1990. Traditional Medicinal Teas was my first brand, and we continue to represent them today. Natural food stores built the foundation. Their specialiazation and mission statements continue to be very important to our industry. Loblaw realized the potential 25+ years ago; in grocery, they put natural foods on the map. 1989 true story: My first meeting at Loblaw’s Toronto office. My mother dropped me off. Wet behind the ears, knees knocking, I had my first of many meetings with Dan Fellin, coordinated by Larry Lee, Tom

“Paul is one of the most creative, intelligent people I’ve ever met. He’s a real idea person. It’s never an easy business when you’re a broker – you’re in the middle of all the negotiations. Paul does a great job of coming up with solutions to difficult situations.” John Anthony Director, White Road Investments Former VP sales, Clif Bar, Kettle Chips, Nature’s Path Cereal

Burns and Chester Dziemanko. Natural Food Sections were born. And who was the cookie buyer down the hall? Glenn Murphy. How far we’ve all come! It may be a bit of a cliché, but our strength is our people. We started out with only three of us: my first employees were Lori Bygrave and Jane Karjala. Lori is still with us and Jane just retired after 25 years with the company. We shared a tiny office in my Ajax, Ont., home.

Helping my 65 employees put food on the table is a big deal for me. One of my proudest accomplishments was when I was first able to offer a company benefits program. What has driven me over the years, besides a passion for selling and connecting people with people, have been my parents, my three boys (Derek, Kyle and Dakota)… and a healthy fear of failure!

Paul Marsham’s formula for success:

“Be honest; never win at the expense of someone else; share your success; recognize your weaknesses; and treat your brands as if they were your own.”

grocerybusiness.ca

July | August 2015

M TM TM

Delicious homestyle recipes made with organic ingredients

W ! E N OK lO

NOT YOUR TYPICAL CAN OF SEAFOOD! Learn why!

raincoasttrading.com raincoasttrading.com

Amy’s Kitchen is a family-owned, independent food company. Since 1988, we have been cooking homestyle foods using organic and non-GMO ingredients to help busy families like ours enjoy nutritious, delicious meals. All Amy’s foods are free from eggs, peanuts and shellfish. We also have special lines for vegan, low sodium and more than 45 gluten free options. amyskitchen.ca

Raincoast does not produce typical canned seafood, it is just pure seafood goodness. We hope you enjoy what canned seafood is suppose to taste like! www.raincoasttrading.com/learn

congrats to marsham’s on a successful 25 years!

MARSHAM TESTIMONIAL

TEAM MARSHAM Earlier this year, Bill Ivany came on board in the newly created position of president and chief operating officer. Ivany will draw upon many years of CPG experience to help guide the company’s growth: “My role is handling day-to-day operations – putting in place the proper key account and distributor management processes, along with a brand business management model – to drive our clients’ business with the retail trade.” Ivany began his career in the food brokerage sector in 1984 when he joined William M Dunne & Associates. He has also served as director of sales and marketing, and then general manager, of GVMF Canada, a division of ConAgra Foods. Just prior to joining Marsham, Ivany was president and CEO of Melitta Canada Inc. for 13 years. Ivany is also introducing a more traditional consumer packaged goods discipline to the company – a move

necessitated by the explosion of the natural and organic category. Ivany explains that this move, coupled with his senior management group’s experience and enthusiasm, will be key to driving Marsham’s clients’ business well into the future. The Next Generation Paul Marsham’s three sons – Derek, Kyle and Dakota – are learning all facets of the family business: Vancouver-based Derek Marsham is a key account manager for Western Canada; in Toronto, Kyle Marsham manages the Whole Foods and Longo’s accounts; and Dakota Marsham works in the warehouse part-time and will join the company when he completes his university studies. Marsham has asked Bill Ivany to implement a mentoring initiative that will guide and train the next generation of Marshams, as well as other talented young people within the company. As the business moves forward, Paul Marsham is turning his attention to manufacturer relationships and sourcing new opportunities.

“Since our partnership began back in 2003, Marsham’s combination of expertise and passion has brought Clif Bar’s values to life with our Canadian customers. They not only understand the rapidly changing retail environment, but they also have the nimbleness to adapt quickly and take advantage of unique opportunities.” Kevin Cleary CEO, Clif Bar & Company

Food as Medicine Consumers are looking for functional foods that promote good health and reduce their risk of disease. In a recent study – Healthy Eating Trends Around the World, January, 2015 – Nielsen found that nearly 80 per cent of global respondents are actively using foods to forestall health issues and medical conditions such as diabetes and high cholesterol.

More than 54% of North American consumers are willing to pay a premium for foods with health attributes. July | August 2015

Congratulations on

25 years

Success

c ngratulati ns for celebrating 25 years

Naturally

TESTIMONIAL

A PRESCRIPTION

FOR SUCCESS Paul Marsham spoke to Grocery Business about trends in health and wellness, and what retailers need to know to be successful in this dynamic and competitive category. How is the retail landscape changing for natural foods? Conventional retailers are competing for their share of this lucrative pie. Loblaw continues to lead, and other progressive retailers such as Sobeys and Longo’s have very impressive natural programs that are impacting market share. Next year and beyond will see other conventional players develop their natural programs further. Because the natural category is now mainstream, I think the natural selection in grocery stores will not be limited to a section or specialized aisle. Natural products will be available throughout the entire store. Local supply, organic, non-GMO, gluten-free, dairy-free, grass-fed, and raw will also become the norm. What do the grocery store of the future look like? The future store will be mostly about health. There’s definitely a revolution taking place on grocery shelves. Consumer demand for healthy solutions is creating more traditional category tonnage disruption than ever before. I’m talking about a SEISMIC SHIFT!

grocerybusiness.ca

Consumers are figuring out what is healthy for themselves and their families, and using food as treatment. Conventional grocery retailers should think of their stores almost as a holistic doctor’s office, where multiple sit-down, food-courttype stations promote a healthy in-store dining experience. Successfully bundling those recipes down aisle 6 would guarantee “the double dip” of restaurant-meets-grocery. Take the experience of EATALY and imagine it as HEALTHALY, with a touch of Selfridge’s, Movenpick, and Harrod’s food halls thrown in. Add a sprinkling of Whole Food’s new food counters, and you’ll have the recipe for a healthy future. The future is now, somewhere. How can conventional grocery retailers get on board with the wellness trend? I have no doubt that the progressive retailers are miles ahead of my diagnosis; I just fear for those that aren’t.

“Paul has always told me to follow the people, not the brands. The Marsham family is like walking into a warm hug! Whenever we meet them at trade shows, it’s like a family reunion (and not the type you don’t want to be at!). All that being said about family, they are smart, hard-working, experienced and well connected.” Andy Hannagan CEO, co-founder Bounce Foods

Buyers must attend major industry trade shows and embrace the manufacturer / retailer relationship. They must educate themselves about manufacturers and product merits. There are more than 100,000 products in our industry, and 1,000 of them are great sellers. Don’t let your product selection be your Achilles heel.

July | August 2015

81ST ANNUAL FOOD AND ALLIED INDUSTRIES GOLF TOURNAMENT

JUNE 5, 2015

TORONTO, ONT.

Cheque presentation to The Grocery Foundation (l-r): Grant Campbell, Shaun McKenna, Michelle Scott, Jim Hunter

The Food and Allied Industries Golf Committee Back row (l-r): Kevin Smith, Doug Cussons, MichĂ¨le McMillan, Grant Campbell, Christine Tos, Peter Davies. Front row (l-r): Michael Marinangeli, Chris Powell, Forge Francella, Jim Hunter. Absent: Sam Magnacca, Michael Furgiuele, George Tzogas

Photos: Matthew Smith; Rodney Daw

July | August 2015

Focus on Safe Food

Focus on healthier,

safer food By David Wilkes

The Canadian food and grocery regulatory environment is internationally recognized, respected and complex. While navigating the various regulations and regulatory bodies is a well-refined core skill of grocery merchants, there is an important role for associations like Retail Council of Canada (RCC) in helping regulators formulate policy that ensures the food we eat is safe. One of the primary roles of the advocacy team at RCC is to be the Voice of Retail, both to the public and with Canada’s regulators. On behalf of our members, we work to ensure that existing and new regulations make sense from an implementation perspective, so they don’t limit grocery retailers’ opportunities to innovate and respond to consumer demand. Perhaps most importantly, we work closely with federal and provincial governments to ensure that these regulations continue to provide customers with information that is clear, accurate, and helpful. Grocery retail in Canada is a unique operating environment; RCC works with the federal government to ensure the regulatory approach reflects this reality. Here are three key programs we are actively involved with in 2015: 1. The Nutrition Facts Education Campaign is part of a broader government effort to help Canadians make informed food choices by learning how to use the nutrition information on food labels. Now in its second

phase, the “Focus on the Facts” campaign emphasizes understanding serving size and percent daily value in the Nutrition Facts table on packaged foods, helping consumers compare products. RCC is partnering with Health Canada, Food & Consumer Products of Canada and the Canadian Federation of Independent Grocers to promote nutrition fact awareness and comprehension among Canadian consumers. 2. The federal government is conducting one of the most comprehensive overhauls of legislation in Canadian history as it reviews the Safe Food for Canadians Act. The revised Act will ensure that all retailers and suppliers of food share the same standards and approaches to this fundamental responsibility, and that, by identifying the entire food supply and value chain, the industry can act quickly during food investigations and product recalls. RCC supports the principles of this review, and is engaged actively in federal consultations. We have also formed a unique partnership with McGill University and the University of Guelph, the leading food-safety university programs in Canada, to ensure that RCC members can access the best information for maintaining high safety standards.

3. Ontario recently passed the Making Healthier Choices Act, 2015, which will require food-service premises with 20 or more locations to post calorie counts on their menus. This includes grocery chains, with particular impact on their home meal replacement programs, and hot and cold deli counters. The government will be consulting on regulations over the summer, and the legislation will come into force in January 2017. RCC members have a strong history of providing consumers with nutritional information about the products they purchase in-store. Our challenge is that this law is designed primarily for chain restaurants rather than grocery retailers. Our members operate very differently, and the high degree of variability and broad range of items means implementing a program like this will be very complicated. Indeed, the inherent complexity found in applying nutrition labelling regulations in these categories is exactly why these products were exempted from the federal requirements. By advancing safe food initiatives, nutrition education and the practical creation / implementation of food regulation, RCC’s efforts in this area work to benefit all Canadians by helping merchants deliver the value Canadian consumers deserve, and a safe supply of grocery products that they need.

David Wilkes is senior vice-president, Government Relations & Grocery Division, Retail Council of Canada. Contact: dwilkes@retailcouncil.org

grocerybusiness.ca

July | August 2015

THE ADVANTAGE RETAILER REPORT

STRENGTHENING PARTNERSHIPS

By Sally Praskey

Following a year in which retailer/supplier relationships stagnated, retailers are optimistic that collaboration will improve in 2016, according to the most recent Advantage Report, the annual survey of grocery/mass/club/drug retailers conducted by Toronto-based Advantage. Many retailers attribute the overall brighter outlook to more long-term business planning with vendors,

as well as a successful adjustment to the shakeout that followed a flurry of acquisitions. While retailer/vendor relationships are expected to strengthen, retailers have identified supply-chain management, customer service, and category development as declining and thus key opportunities for improvement.

Opp o

rtun it

KEY METRICS: TAKING THE TEMPERATURE

Industry Average

26 22

rtun it

Opp o

Oppo rtun ity

30 28

19 15

Overall Performance

2014 48

July | August 2015

Business Relationship and Support

2015

Personnel

Category Development

Consumer Marketing Support

Customer Marketing/ Promotion Practices

Supply Chain Management

Customer Service/ Support

RELATIONSHIPS CONTINUE TO IMPROVE DESPITE REDUCED STAFFING LEVELS

34%

35%

57% We are seeing a trend to reduced staffing levels, which will affect collaboration because people will just try to get through their day.

62%

Relationships will:

Worsen Stay the same Improve

2014

2015

PRIORITY: DELIVER THE GOODS! Supply-chain fundamentals took precedence this year. Retailers listed their top 3 PRIORITIES in 2015 as:

IMPORTANCE RATING

Delivers orders at the date and time requested

Delivers completed orders/high % fill rate

3 grocerybusiness.ca

Delivers accurate orders

The suppliers are starting to see what the impact of a low inbound fill rate is on their sales, bottom line and our on-shelf availability. CONTINUED ON PAGE 48 w

July | August 2015

TAKEAWAYS

CONTINUED FROM PAGE 47

THE GROWING IMPORTANCE AND IMPACT OF E-COMMERCE INVENTORY MANAGEMENT

“Now that it’s all omni-channel retailing, we are looking at it more holistically, recognizing e-commerce is a significant part of our business and that the timelines for e-commerce inventory are significantly shorter than for traditional bricks-and-mortar sites. These factors are now being integrated into a centralized demand planning schedule.”

“We have more and more products hitting the website. There is such an opportunity that we are sure the business is going to throw a lot of weight behind this. E-commerce is going to get bigger and bigger.”

GROWTH OPPORTUNITY

• The majority of retailers agree that collaboration will improve in 2016 • Supply-chain fundamentals are top of mind for retailers

RESOURCING SKILLS AND TALENT

We are managing e-commerce out of a number of our stores; this will continue to grow. Ensuring we have the right processes and people in place is our responsibility.”

• Continual drive for category innovation and growth is putting challenging demands on inventory/logistics forecasting and efficiency • A lack of staffing/ resourcing is contributing to industry stagnation • Despite somewhat minor growth in e-commerce, its impact and influence cannot be overstated

Founded in Canada in 1988, Advantage™ operates internationally. Its jointly sponsored programs provide an ongoing industry benchmark for retailers and manufacturers to measure and track their relationships with key business partners. For more information or to participate, contact Vincent van der Heijden at 416-863-0685, ext. 134; vvanderheijden@advantagegroup.com

Independents’ Day

Independent does

not mean small A recent Economic Impact study details the vital role played by independent grocers. By Thomas A. Barlow

There is a saying: the more things change, the more they stay the same. That may not seem to reflect the dynamic grocery sector. However, when it comes to what makes a successful grocer, more and more it’s about getting back to the basics: know your customers’ needs and serve them well. The latest technology or app can’t replace a vibrant produce display that intrigues the senses; self-service checkouts will never beat out customer service with a smile; and knowing your customers by name never gets old. Independent grocers have maintained a commitment to their communities and customers. To find out just how vital independents are to the overall fiscal health of cities and towns across the country, the Canadian Federation of Independent Grocers (CFIG) recently embarked on a groundbreaking economic study. Here are some of the remarkable facts from the CFIG 2015 Economic Impact study: • Independent grocers’ sales total $11.5 billion; • they provide 105,000 jobs; • they account for an impressive 12.4 per cent of market share. grocerybusiness.ca

While the numbers alone are impressive, CFIG also wanted to find out the facts and figures that don’t steal the headlines. Having listened to our members’ stories, I’ve never encountered an industry that features such committed civic stewards as grocery. In fact, the study found that independent grocers give back 0.75 per cent of their sales to their communities. That’s a whopping $86 million that goes back to their neighbourhood Little League fundraisers, community events and charitable giving drives. The study has much more data that is sure to make the industry take note that the independent grocer is alive and well and thriving. For instance, independents in the West produce $6.7 billion in sales, provide 33,000 jobs, and represent 19.6 per cent of market share. The full Economic Impact study will be released at the Grocery Innovations Canada show this September. Canada’s only national grocery and specialty show takes place at a new venue this year, the Toronto Congress Centre, and is a great opportunity for companies with inventive new products to showcase them to independent, franchise and chain retailers from across Canada.

With more opportunities than ever on the floor to engage in retailer-manufacturer collaboration, the show is a hotbed for thought leadership and networking. Along with dedicated meeting rooms, there are opportunities for exhibitors to advertise trade show specials/offers to attendees. The major advantage of independents is their size and adaptability in the shifting marketplace. Attendees to this year’s show will gain inspiration and insight from such notable keynote speakers as: John Herdman, head coach of the Canadian women’s soccer team; and Sylvain Charlebois, a professor from the University of Guelph’s Food Institute. Along with concurrent workshops covering topics from sustainability to retail innovation trends, the trade floor will feature education sessions on produce, deli cheese, store design and more! I welcome all to join us in Toronto, September 28 and 29. Our independents are open for business! Check out cfig.ca for more information on Grocery Innovations Canada.

Tom Barlow is president and CEO of the Canadian Federation of Independent Grocers. Contact: tbarlow@cfig.ca

July | August 2015

Proudly Canadian Taste-makers By Birgit Blain

Every year, SIAL, the international showcase dedicated to food innovation, delivers a world of unique tastes to our doorstep. This year’s show in Toronto (April 28 – 30) was no exception. Making an impressive showing were Canadian exhibitors who stepped up to the plate with unique offerings. Take a look at these eight on-trend innovations.

TREND

CONVENIENCE, ETHNIC

Mecca Meals feeds a need for convenient meal solutions for shoppers looking for halal products. The halal-certified, single-serve frozen entrees and soups are microwavable and ready in five minutes. Varieties include ever-popular lasagna and shepherd’s pie, and dishes inspired by Middle Eastern and Asian cuisine. meccameals.com

TREND

HEALTH, CONVENIENCE

Heat up tea sales in summer! The Four O’Clock spring/ summer tea collection, in whimsical, eye-catching packaging, makes creating brewed iced tea easy. Generate incremental sales with the display stand in your barbecue/ outdoor living section. Refreshingly innovative flavours include Pineapple Coconut Rooibos and Cucumber Mint Green Tea. transherb.com

CONVENIENCE, PLEASURE

Drive impulse purchases in HMR and the meat department with these innovative side dishes. La Filoche creamy and indulgent mashed potatoes are whipped with everyone’s favourite food – cheese. Just two minutes in the microwave and the consumer can enjoy tasty flavours such as Cranberry, Garlic & Herbs, Lemon Confit, Maple, and Spicy. la-filoche.com

July | August 2015

TREND

PLEASURE, ARTISANAL

Extraordinary sausage – for the confectionary aisle. La Fudgerie artisanal, gourmet fudge is presented in novel “sausage” packaging and handmade the traditional way in copper kettles. Unique flavour combinations include Whiskey & Cocoa Bean, Crème Brûlée, and Dates & Molasses. lafudgerie.com

TREND

ARTISANAL, CLEAN INGREDIENTS

Attract new shoppers to the carbonated soft-drink category with Just Craft Soda, a premium, artisanal beverage created specially for the adult palate. It’s so simple – unique flavours made with 60 per cent fruit juice and nothing but natural ingredients. The flavours, such as Peach & Habanero and Cherry & Cinnamon, are designed to appeal to the adventurous Millennial palette. justcraftsoda.com

TREND

CONVENIENCE

Increase the ring in frozen meat sales with this upscale, red-meat alternative. Brome Lake frozen duck tournedos, chops and marinated boneless breast take the intimidation out of cooking duck. Grilled, barbecued or pan-seared, these duck portions are ready in 15 minutes. bromelakeducks.com

CONVENIENCE, HEALTH

NuPasta offers up a plant-based pasta alternative that has one-tenth the calories of regular pasta, and is gluten-free, high-fibre and low in carbs. Ultra-convenient, these pre-cooked single-serve noodles are ready to heat and eat. Merchandise NuPasta in the prepared-foods section or with refrigerated sauces. nupasta.com

TREND

CONVENIENCE, HEALTH

Introduce meal solutions to the produce section with Veg Pro Fresh Attitude Asian-inspired stir-fry kits. The innovative, compartmentalized bowl has all the ingredients for a healthy meal – fresh vegetables, noodles, sauce, and even a fork. Two minutes in the microwave and it’s done like dinner. attitudefraiche.com grocerybusiness.ca

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

July | August 2015

“ Our first ad in Grocery Business magazine had our phone ringing.” Reza Bekhtiari, Vice President, Sales & Marketing, Millenium Pacific Greenhouses

“ Our ad looked great and we were thrilled to receive calls regarding our fresh, healthy and tasty tomatoes.” Millennium Pacific is a family-run 30 acre modern hydroponic greenhouse located in Delta, BC. They also offer a variety of other products, including fermented foods, nuts, meats and spices. For more information regarding Millennium Pacific, please call 604-940-4440 or visit millenniumpacific.com Grocery Business is Canada’s premier national grocery publication dedicated to producing results for advertisers. For more information, please call 416-817-5278 and visit grocerybusiness.ca

Congratulations! Grand Prix New Product Award Winners 2014 Retail Council of Canada unveiled the winners of the 22nd Annual Canadian Grand Prix New Product Awards at a gala event on June 3. The awards recognize excellence and innovation in food, non-food and private-label products introduced during the 2014 calendar year. A 30-member jury evaluated each entry based on five criteria: uniqueness and innovation; product characteristics; presentation and packaging; overall consumer value; and consumer acceptance.Â Presenting the 2014 Canadian Grand Prix New Product Award Winners.

grocerybusiness.ca

July | August 2015

SPECIAL AWARDS Food Lab

CANADIAN GRAND PRIX NEW PRODUCT AWARD WINNERS

Consumer Acceptance Award

All Canadian

Healthy Innovation Award Sylvia Moskala and Monika Giasson, Gay Lea Foods Co-operative Ltd.; and Diane J. Brisebois, Retail Council of Canada

Angela Kanaris, Parmalat Canada; Steve Johnston, CHEP Canada; Stephanie Morrison, Parmalat Canada

Parmalat Canada

Gay Lea Foods Co-operative Ltd.

Astro Original

Gay Lea Foods Real Coconut Whipped Cream

Innovation and Originality Paul Pomerleau, Nutrinor Cooperative

Nutrinor Cooperative Innovative Packaging

Sylvain Racette, Veg Pro International Inc.; and Steve Johnston, CHEP Canada

Veg Pro International Asian-Style Stir Fries

Matthew Kohler, The Clorox Company of Canada, Ltd.; Anwar Sumar, TC Media; Shahbaz Ahmad, The Clorox Company of Canada, Ltd.

The Clorox Company Of Canada, Ltd. Liquid-Plumr - Hair Clog Eliminator

July | August 2015

Organic Nordic Milk

FOOD

CANADIAN GRAND PRIX NEW PRODUCT AWARD WINNERS

Bakery Baking Needs Deli, Egg, Meat & Seafood

John Phillipson, Weston Bakeries; and Stephen Mandzak, Chase Paymentech

Weston Bakeries Limited Country Harvest

Steve Johnston, CHEP Canada; and Amy Rawlinson, Kraft Canada

Kraft Canada Kraft Peanut Butter – Holiday Cookie Kit

Vanessa Grekov, Sofina Foods Inc.; and Gilles M-Deschênes, Dairy Farmers of Canada

Sofina Foods Inc. Deli Naturally!

Beverages

Dairy Products

Confectionery

Glenn Broadley, MADD Virgin Drinks; Steve Johnston, CHEP Canada; Brian Bolshin, MADD Virgin Drinks

Tree of Life Canada ULC MADD Virgin Craft Brewed Lager Stephen Mandzak, Chase Paymentech; and TJ Kanaris, Mars Canada Inc.

Mars Canada Inc.

Paul Pomerleau, Nutrinor Cooperative; and Gilles M-Deschênes, Dairy Farmers of Canada

Nutrinor Cooperative Organic Nordic Milk

M&M’s Bottles

grocerybusiness.ca

July | August 2015

FOOD

CANADIAN GRAND PRIX NEW PRODUCT AWARD WINNERS

Fruits, Vegetables & Produce

Dessert Frozen or Refrigerated Prepared Food & Entrees

John MacKay, Scotsburn Dairy Group; and Stephen Mandzak, Chase Paymentech

Yves Potvin, Gardein; and Steve Johnston, CHEP Canada

Scotsburn Dairy Group

Garden Protein International

Scotsburn Premium Inclusion Ice Cream Bars

Ignacio Jimenez, Alfonso Jimenez and Janick Martin, Industrie Gastronomique Cascajares; Gilles M-Deschênes, Dairy Farmers of Canada

Gardein

Industrie Gastronomique Cascajares Porchetta Festive Box

Snack Shelf Stable Prepared Food & Entrees Condiments & Sauces Baby Care

Deborah Attwood, Dare Foods Ltd.; and Stephen Mandzak, Chase Paymentech

Johnny Cheung, NuPasta; and Gilles M-Deschênes, Dairy Farmers of Canada

Dare Foods Ltd.

NuPasta Inc.

Dare Cookie Chips Monika Giasson, Sylvia Moskala, Gay Lea Foods; Steve Johnston, CHEP Canada; Urszula Rojek, Gay Lea Foods

Gay Lea Foods Co-operative Ltd. Gay Lea Foods Real Coconut Whipped Cream

July | August 2015

NuPasta

Michael Watt, Baby Gourmet Foods Ltd; and Kevin Rieschi, Interac

Baby Gourmet Foods Ltd. Baby Gourmet Plus

NON-FOOD

CANADIAN GRAND PRIX NEW PRODUCT AWARD WINNERS

General Merchandise Household Products Health Care

Anwar Suma, TC Media; and Catherine Shaw, Bernardin Ltd.

Bernardin Ltd. [Jarden Branded Consumables Canada] Bernardin Sip & Straw Lids

Melise Panetta, S.C. Johnson and Son, Ltd.; and Anwar Sumar, TC Media Gord Meyer, Procter & Gamble Inc.; and Kevin Rieschi, Interac

Procter & Gamble Inc.

S. C. Johnson & Son, Limited Scrubbing Bubbles Mega Shower Foamer with Ultra Cling â&#x20AC;&#x201C; Rain Shower

Crest Sensi-Relief Whitening + Scope

Personal Care Pet Needs

Paper, Plastic & Foil

Gord Meyer, Procter & Gamble Inc.; and Kevin Rieschi, Interac Gord Meyer, Procter & Gamble Inc.; and Anwar Sumar, TC Media

Procter & Gamble Inc. Charmin Basics

Procter & Gamble Inc. Gillette Fusion ProGlide with FlexBall Technology

Niloufer Afzal and Nicole Murray, Big Heart Pet Canada; and Kevin Rieschi, Interac

Milk-Bone Brushing Chews DLM Foods Canada Corp. Milk-Bone Brushing Chews

grocerybusiness.ca

July | August 2015

PRIVATE LABEL Bakery Beverages

Sandra Farwell, Walmart Canada; and Stephen Mandzak, Chase Paymentech

Walmart Canada Our Finest Mini Croissants

Marie-France Gibson, Metro Brands, G.P.; and Steve Johnston, CHEP Canada

Metro Brands, G.P. Irresistibles Life Smart Juice Blend

Pet Needs Dairy, Egg, Meat & Seafood

Marie-France Dumont, Mondou; and Kevin Rieschi, Interac

Mondou Vetdiet â&#x20AC;&#x201C; Care

Gillian Kerr, Sobeys Inc.; and Gilles M-DeschĂŞnes, Dairy Farmers of Canada

Sobeys Inc. Compliments presents Jamie Oliver Sausages

July | August 2015

CANADIAN GRAND PRIX NEW PRODUCT AWARD WINNERS

Prepared Food & Entrées

Lyne Jetté and Jason Knights, Metro Brands, G.P.

Metro Brands, G.P.

Baby Care

Sandra Farwell, Walmart Canada; and Kevin Rieschi, Interac

Walmart Canada

Irresistibles Flatbread

Parent’s Choice Infant Formula (For babies sensitive to lactose)

Condiments & Sauces

Paper, Plastic & Foil

GRAND PRIX ADDITIONAL WINNERS

Kris Ramkissoon, Walmart Canada; and Anwar Sumar, TC Media Kristine Ramezani, Sobeys Inc.; Steve Johnston, CHEP Canada; Gillian Kerr, Sobeys Inc.

Sobeys Inc.

Walmart Canada Great Value Paper Towels – Strong and Absorbent (Family Size)

GENERAL MERCHANDISE Jarden Branded Consumables, First Alert ATOM Smoke Alarm HOUSEHOLD PRODUCTS PRIVATE LABEL Metro Brands, G.P. Irresistibles Dish Soap

Compliments presents Jamie Oliver Condiments

grocerybusiness.ca

July | August 2015

SPECIALTY FOOD ASSOCIATION SUMMER FANCY FOOD SHOW

JUNE 28-30, 2015, NEW YORK CITY

2 8

4 6

1: Grocery Business live at the Fancy Food Show in New York

2: Nunzio Tumino and Tony Morello, Aurora Importing & Distributing 3: Mike and Ashley Tott, Gourmet Du Village 4:

Jim Kavanagh, Brandseed Marketing

5: Karen James, Grocery Business; and Lidia Bastianich, Food Network chef 6: Jeff York, Farm Boy 15

7: The Covered Bridge team of Jaimie, Mallory and Ryan 8: Jackson Platts and Shawna Bernard, Juice Works 9: Craig James, Fentimans; Ishkandar and Arif Ahmed, Choices Markets 10: Brad Bethell and Julie Nowe, Big 8 11: Derek Brawley and Julie Poitras-Saulnier, Prana 12: Stephen Clark and Marie-Pier Grondin, Grizzly 13: Sandra Lee, VIP Seafood 14: Ron Sadler and Henry Evans, Twinings North America 15: Scott Miller, Kory Ahman, Bill Benson and Terry Smith, Paper Chef 16: Kevin Smith, Grocery Business; and Lindsay Weatherdon, Concord National

July | August 2015

14 16

Online Shopping

Special delivery Rising star Instacart, the darling of Silicon Valley, picks and delivers groceries for customers who want them in a hurry and are willing to pay a premium for the convenience. By Sally Praskey Apoorva Mehta, founder and CEO, Instacart

What is Instacart? Instacart is a grocery shopping service, powered by a smartphone app, whose point of differentiation is its commitment to delivering groceries from retailers such as Whole Foods in a one- or two-hour window. Founded in 2012 in San Francisco by Canadian and University of Waterloo engineering grad Apoorva Mehta, Instacart currently operates in 15 U.S. cities. It was recently rated number one on this year’s Forbes “America’s Most Promising Companies” list, and is valued at more than US$2 billion.

How does it work?

• Consumers use the Instacart app or go online to place their orders, which are then gathered at a participating supermarket chain. They can choose to pick up their order at the store themselves (currently available only in some cities) or have it delivered, in one or two hours. • A crowdsourced labour force – part-time independent contractors, or, more recently, part-time employees, dubbed personal shoppers – is dispatched to pick the order at bricks-and-mortar grocery retailers. Using their own transportation, shoppers deliver the order to the customer in one or two hours. Call it the Uberization of grocery delivery. Unlike most other delivery models, Instacart does not maintain warehouses or trucks.

It employs sophisticated software to determine the best time to dispatch a personal shopper to a selected store location, based on weather, traffic patterns and other variables. Groceries are fresh when the consumer receives them. Originally, the company made all its revenue with a delivery fee of $3.99 per order plus a mark-up of around 10-20 per cent on each product. Realizing that this model was limiting growth, Instacart renegotiated its arrangements with retailers to take a cut of each order, rather than a markup percentage.

told analysts that average weekly online delivery sales had already passed the $1-million mark. Online delivery volume is as high as five per cent of total sales in some stores, Robb added. Whole Foods has also reported that basket sizes through Instacart are 2.5 times that of their in-store counterparts. For consumers, it is the convenience of receiving their groceries an hour after placing their order.

What’s in it for grocers and consumers?

CEO Mehta has said he wants to expand both geographically and into other categories that have frequency of shop. Recently, Instacart branched out to natural-food and pet-supply stores. He also wants to establish more partnerships with retailers. “Stores are getting incremental business with no additional infrastructure cost,” Mehta told Forbes. “They can pay us for that, and several dozen retailers across the United States already do. We’re moving toward a partnership base.”

For grocers, the primary benefit is incremental sales. Grocers are willing to surrender a piece of their razor-thin margins because, in theory, through the Instacart app, retailers are able to draw in and deliver to customers across a much wider geographical area. And there have been some notable successes. Since announcing Whole Foods’ 15-market partnership with Instacart last September, co-CEO Walter Robb recently

What’s next for Instacart?

INSTACART INSTA-FACTS

PARTNERSHIPS: 50 GROCERY CHAINS

PERSONAL SHOPPERS:

4,000+

$100 MILLION

in revenues in 2014, up from $1 million in 2012

Full-time employees: 200

Projected to be 500 by end of 2015 instacart.com

grocerybusiness.ca

July | August 2015

LIST IT

New & now discoveries

Go for Kefir! Donia Farms has launched its new portable Kefir Smoothies. Offered in four flavours, as well as plain, Doniaâ&#x20AC;&#x2122;s Kefir Smoothies are available in convenient grab-and-go bottles as well as in one-litre jugs. doniafarms.com

Delivering on delicioso To celebrate its 60th anniversary, Aurora Importing and Distributing is presenting 60 of its favourite recipes in a specially designed recipe tin. Developed by Auroraâ&#x20AC;&#x2122;s founding Tumino family, each recipe celebrates the tradition of deliciously authentic Italian food. auroraimporting.com

Stir it up with Sturdrinks Stur is an all-natural liquid water enhancer made with fruit and stevia leaf extracts. Each portable bottle makes 20 servings when mixed with water. sturdrinks.com 64

July | August 2015

Standout packaging from Piller’s Piller’s Fine Foods debuts new packaging for its authentic European all-pork sausages, which are naturally smoked and high in protein. The new packaging has product photography on-pack, to better stand out on shelf. pillers.com

Kick up the heat! Neal Brothers’ new line of mayonnaise showcases three on-trend flavours plus a classic recipe. Gluten-free and made with free-run organic eggs, these mayos can be used as a dip, condiment or flavourful cooking ingredient. nealbrothersfoods.com

Mamma Mia! Made in Sonoma, Calif., from the freshest ingredients by Mia Sebastiani of the famous wine-producing family, Mia’s Kitchen handcrafted pasta sauces are non-GMO and gluten-free. miaskitchen.com July | August 2015

it figures

Dialing Up

Digital 7%

of Canadians say they order grocery products online

49%

find going to the grocery store an enjoyable and engaging experience Takeaway Will clicks replace bricks? Not anytime soon! Infusing technology in the in-store experience is key, but there is no substitute for a great shopping experience where consumers expect innovative store design, ample selection, executional excellence and exceptional service. 66

July | August 2015

% 48 are willing to do so in the future

Takeaway E-commerce is a growing business, and while success may be elusive, early adopters often establish a lead position by:

» Knowing their market » Establishing credibility » Exceeding expectations » Making ease-of-use a priority

TOP grocery items consumers intend to buy online

Cookies / Biscuits

Breakfast cereal

Pasta

Chips / Crisps

Coffee

14% use online or mobile coupons

% 12

33% of consumers use self-service checkouts

Takeaway In-store digital tools can bring the ease, convenience and personalization of online into your store. Digital in-store strategies will potentially increase trip time, brand engagement, basket size and shopper satisfaction – all signs of increased loyalty.

of consumers under age 35 are ordering groceries online for home delivery, versus 4% of those over 55 Takeaway It is critical that grocers understand how younger consumers are using technology. Leverage today’s digital tools and put more control in the hands of your consumers – literally!

58% say they’re willing to use in-store computers to view extended product information (i.e., to locate a product in-store or check for more information) Takeaway Now that shoppers expect the benefits of using digital in grocery stores, retailers will win by leveraging technology to enhance consumers’ in-store experience.

Carman Allison is vice-president of consumer insights for Nielsen in Canada, and is responsible for creating thought leadership insights for CPG manufacturers and retailers. Carman Allison

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

July | August 2015

Perry’s Point of View

UNCONVENTIONAL

THINKING Gather ’round kids, and I will tell you about the days when the conventional supermarket was declared dead. You weren’t very old, so you might not remember that publications such as Fortune magazine and the Daily Telegraph declared that it was all over for conventional stores. Discount stores and specialty stores were the wave of the future, and anyone caught in the middle was toast. That was way back in, oh, twenty-oughtfourteen, but it still seems like yesterday. One year later, the conventional store is not only back, but grocers are dumping capital into it like creamer into coffee. And the vast majority of that capital is being lavished on the fresh departments, which are the apparent saviours of the conventional grocery business. It’s not surprising that grocers in Canada have suddenly rediscovered their old conventional assets. Most of their discount stores have been “conventionalized” beyond recognition. Better produce, more SKUs, premium products, service counters, loyalty programs and softer weekly ads have all contributed to reducing the gap between discount and conventional. As discount sales have finally begun to stagnate with a strong economy, it was time to renew those old conventional stores. And frankly, most had become extremely tired and were surviving strictly on their great locations.

July | August 2015

High prices were needed to pay for high-cost labour, and “service” had been reduced to bored high-school kids blankly slicing ham. Now, grocers are investing tons of capital into vast renovations of conventional store assets. Many of the renovations are remarkable multimillion-dollar spends, most featuring larger and luxurious produce, meat, deli, bakery and HMR departments. In these stores, the future is fresh, but the projected payback period on the massive freshoriented investments has been pegged at anywhere from seven to 10 years. The irony is that these stores will have to be renovated again before they even reach the end of the payback period. The myth supporting all this investment is that fresh departments are more profitable than grocery departments. Certainly, going-in or “invoice” gross margins are higher on fresh products, but the labour and shrink rates can be enormous. As well, the vast majority of vendor funding is generated on the supposed “low-margin” grocery departments. When you carefully include all the contributions and all the costs associated with each side of the store, the grocery department can generate a “contribution to fixed costs” almost double that of the fresh areas. This gets worse if the projected fresh sales don’t materialize and the store has to minimize inventory and reduce

labour, which begins a death spiral for the customer experience. What’s worse is that fresh departments require much more investment, since the gorgeous glass, wood and chrome fixtures are much more expensive. When this investment is taken into account, the payback period can be three times longer than for grocery. This does not mean that fresh departments should be avoided or minimized. But the rush to create better customer experiences and modernize neglected conventional assets has to be tempered by strong and comprehensive analyses of results and returns. We don’t want the conventional store to be declared dead again next year.

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.

CONGRATULATIONS TO ALL CANADIAN GRAND PRIX NEW PRODUCT AWARD FINALISTS AND WINNERS! Don’t miss your time to shine! 2015 submissions begin this summer. Visit RetailCouncil.org/events/grandprix for more information and to view a list of Finalists and Winners.

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