January / February 2016 Vol 6 | No 1 $9.95
PM # 42211029
THE
PLUS
WAY AT 60
NEW DESIGN + PRODUCT IDEAS
w e N
2015 THIS IS THE YEAR
THAT WAS GB_Cover_SepOct2015.pdf
2
2015-09-04
4:11 PM
September /
October 2015 Vol 5 | No 5 $9.95
Calgary Co-op’s
PM # 42211029
Ken Keelor Perry Caicco: It’s a 3G World
+produce MANAGER
4
January | February 2016
GB_Cover_JanFeb 2015 Final.pdf
2
2015-01-12
1:51 PM
Jan / Feb 2015 Vol 5 | No 1 $9.95
Sobeys’
Mary Dalimonte
TRENDS WITH TRACTION
What’s driving consumer purchase behaviour now?
PM # 42211029
Better Food For All
grocerybusiness.ca
January | February 2016
5
ORY G E T CA OWTH GR OUGH THR TION
A INNOV
! W NE
SPEARS PERFECT WITH A SANDWICH
Farmer’s Garden
500 mL
946 mL /1 litre
2.25 litres
CONTACT YOUR PINNACLE FOODS REPRESENTATIVE |
vlasic.ca
The Longo Way at 60
Who’s on the Cover 4 3
2
7
5
6
9 8
1 13 12 15
16
11
18
10 14
17
1 Mitch Yeatman 2 Mike Longo 3 Carolyn Kelly 4 Anthony Longo 5 Marie Iuglio 6 Gus Longo 7 Danny Iuglio 8 Rosanne Longo 9 Jenny Longo 10 Rob Passafiume 11 Jackie Yeatman 12 Rosie Yeatman 13 Jesse Longo 14 Joey Longo 15 Joseph Longo 16 Frank Maiurro 17 Nick Yeatman 18 Thomas Longo Absent from photo: Rose Buick
grocerybusiness.ca
January | February 2016 Volume 6, Number 1
Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca
Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Contributing Editors Angela Kryhul, Sally Praskey Contributors Perry Caicco, Mary Del Ciancio, Joel Gregoire, Michael Marinangeli, Dana McCauley, John F.T. Scott
Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca
grocerybusiness.ca
Creative Agency Boomerang Art & Design Inc. boomart.net Subscription changes & updates or general inquiries: info@grocerybusiness.ca
© Copyright 2016. All rights reserved. No part of this magazine may be reproduced without written permission of the publisher. GST Registration No. 83032 6807 RT0001 Publications Mail Agreement No. PM42211029 ISSN 1927-243X
@grocerybusiness
Mailing Address Grocery Business Media 390 Queen’s Quay W., PO Box 40085 Toronto, ON M5V 3A6
Sign up for our weekly digital edition at
grocerybusiness.ca
January | February 2016
7
Grocery Business January | February, 2016 Volume 6, Number 1
contents
Courtesy of King Retail Solutions
DEPARTMENTS 11
50
Front End People & News
21
Open Mike The essential face-to-face
23 Perspective
A legacy comes full circle
60 Launch It, List It New & now discoveries 62 It Figures Marketing to Millennials 65 Perry’s Point of View Everyday low behaviour
59 Making It
ThreeWorks Snacks
25
THE
LONGO WAYAT
8
January | February 2016
ON THE COVER
Longo Way at 60 25 The Celebrating a milestone anniversary
56 48 FEATURES 46 Exit Interview: Marc Guay 55 Omer Moncion Remembered
S 2016 D N N O I ETRACT TWR ITH 48 Megatrends 49 Millennials start families
PHOTO GALLERIES 4
50 The year of the pulse
50 McCormick’s annual Flavour Forecast
51 Dana McCauley 52 The Store of the Future
015 - This is the Year 2 that Was
56 Golden Pencil Awards 58 Ontario Produce
Marketing Association Awards Gala
56
COVER PHOTO: MICHAEL COOPER
grocerybusiness.ca
9
60% less calories* The 1st low calorie fruit juice beverage with absolutely no sweetener
Better for You Innovations to Fuel Category Growth!
Made with real fruit juice MADE WITH SPRING WATER
HYDRAFRUIT
40% less calories*
The no-guilt smoothie to indulge yourself
A lower carb absorption*
No added sugar
High source of fibre
HEALTH BREAK CARBSMART SUNSHINE BLEND
SMOOTHIE BANANA-CHOCOLATE
Congratulations to Jean Gattuso, President and Chief Operating Officer at Lassonde Industries Inc. on receiving the Golden Pencil of the Year Award.
* Than a regular fruit juice
100% fruit juice and purĂŠe
Absolutely no sweetener
Front End
Grocery Business Advisory Council 2016 As we move into 2016, we at Grocery Business would like to acknowledge and thank our outstanding Editorial Advisory Board members for their guidance and leadership.
Shaun McKenna
Acosta Sales & Marketing
Bill Ivany
Marsham International
Thomas A. Barlow
Canadian Federation of Independent Grocers
Michael Marinangeli
MIDEB Consulting Inc.
Perry Caicco
Jim Slomka
Nancy Croitoru
Mike Longo
Clorox Canada
Food & Consumer Products of Canada
Tim Berman
CIBC World Markets
Darrell Jones
Cheryl Smith
David Wilkes
Cori Bonina
Denis Gendron
Stong’s Market
United Grocers Inc.
Overwaitea Food Group
Parmalat Canada
Retail Council of Canada
(retired, Kraft Heinz Co.)
Longo Brothers Fruit Markets
A new look for SIAL SIAL is celebrating its 50th anniversary with a new look, a new tagline, and a global communications campaign. The tagline “Inspire Food Business” reinforces the brand’s core values. SIAL has chosen a different fruit to represent the visual identity of each of the seven countries in which it has a presence. Canada (i.e., Montreal and Toronto) is represented by a red apple. The words “Look Deeper” underline the SIAL brand’s tight focus on the major challenges facing the world of food. The new visual identity will be rolled out beginning in April 2016, with SIAL Montreal. sialcanada.com/en
SIAL Canada 2016 takes place April 13-15, at the Montreal Convention Centre (Palais des congrès de Montréal). grocerybusiness.ca
January | February 2016
11
Front End
Transitions Acosta Canada has named Sam Magnacca vice-president for strategic channels, replacing Darrel Anderson, who has retired. Ted Kirkpatrick has been appointed to the new position of director of sales for the Sobeys, Metro Ontario and Independents accounts. Allan Cosman, previously president and CEO of Ferrero Canada Ltd., has moved to a consulting role with the Ferrero Group. Rudolph (Rudy) Sequeira, most recently managing director, South East Asia, has been appointed managing director, Ferrero Canada Ltd. Ron Sadler (pictured, left) has transitioned to a part-time role at Twinings, while retaining his title as managing director, Canada. Henry Evans has been promoted to vice-president, Canada, from director of sales and marketing.
Rob Gehring is the new global chief sales officer for The Hershey Company. Previously, Gehring served as president, Walmart Global Team, for Coca-Cola North America. Paul Medeiros is the new managing director of consulting and technical services, North America, and of Canadian Agriculture Certification Services, for NSF-GFTC. Paul Craft has joined Sofina Foods as vice-president, marketing. His previous industry experience includes roles at Nielsen and Kraft Foods Canada, where, most recently, he was customer vice-president, national channel accounts. Tom Szostok has joined Campbell Company of Canada as vicepresident, sales. Previously, Szostok was vicepresident, retail and food service sales, with McCain Foods Canada.
Eric Claus is the new CEO of Save-A-Lot, SUPERVALU Inc.’s hard-discount grocery segment. A former CEO of Co-Op Atlantic, and A+P Canada, Claus was, most recently, chairman, president and CEO of Red Apple Stores Inc. Shelly Hutcheson has joined the Neal Brothers Foods team in the newly-created role of key account manager. Hutcheson has held positions with Genuine Health and Nature’s Source. Tom Arnold is the new director, communications and marketing, for Food & Consumer Products of Canada (FCPC). Most recently, Arnold served in senior public affairs and communications roles at Union Gas and SNC Lavalin Inc. Matthew Holmes, previously the executive director of the Canada Organic Trade Association, is now the new CEO of Magazines Canada.
Acosta Canada Retirements Mike McKinley has retired as executive vice-president and GM, Atlantic Canada. McKinley began his career at AMCA Food Brokers in 1979 and moved through progressive levels of responsibility in the industry, including as EVP and GM for Thomas, Large & Singer. Darrel Anderson, former vice-president, strategic channels, retired last fall. Anderson’s industry experience included executive positions with Lipton Canada, as well as Thomas, Large & Singer. Daniel Armeni has retired as vice-president, finance, and Paul Currie as business manager – Atlantic Region. Currie began his career with McCain Foods in Nova Scotia, and became part of the Acosta team in 2002.
Industry Honours Eric La Flèche, president and CEO of Metro Inc., has been named a CEO of the Year by Les Affaires magazine. La Flèche shares the honour with two other Quebecbased business leaders: Richard Lord, president and CEO of Richelieu Hardware; and Pierre Boivin, president and CEO of Claridge Inc.
grocerybusiness.ca
Shelley Martin, president and CEO of Nestlé Canada, has been recognized by The Women’s Executive Network as one of Canada’s Most Powerful Women. Martin has executive responsibility for Nestlé in Canada, and is the vice-chair of Food & Consumer Products Canada.
January | February 2016
13
Front End
Reporting Season Loblaw
Industry Performance: Total Sales Growth
Metro
10% 8%
Empire
6% 4% 2%
Industry Performance: Same-store Sales
0% -2% -4%
5%
-6%
4%
-8%
3%
-10%
2%
LQ-8
LQ-7
LQ-6
LQ-5
LQ-4
LQ-3
LQ-2
LQ-1
LQ = Last Quarter
1%
Q3 2015
0% -1%
Industry Performance: Gross Margins
-2% LQ-8
LQ-7
LQ-6
LQ-5
LQ-4
LQ-3
LQ-2
LQ-1
Q3 2015
LQ = Last Quarter
3% 2%
Consolidation Aftermath
–
+
-2%
* E asier to dictate * L arger stance vs. suppliers
anagement teams *M
co-ordinate pricing market pricing
(“asks” increasing)
grocerybusiness.ca
0% -1%
* D ecreasing ability to execute * T ougher banner co-ordination * S ystems and processes still
* E asier to manage/
1%
-3% LQ-8 LQ-7 LQ-6 LQ = Last Quarter
LQ-5
LQ-4
LQ-3
LQ-2
LQ-1 Q3 2015
a big focus
stretched thin
Charts from Perry Caicco, CIBC World Markets
January | February 2016
15
BUILD SALES THE GOOD WAY Give your consumers what they have been waiting for – a snack that is portable, packed with nutritional goodness and available in popular flavors that make snacking fun. CONSUMERS KNOW AND TRUST US • USE ONLY THE 2 TOP GRADES OF ALMONDS: NONPAREIL AND CARMEL • 100% DEDICATION TO ALMONDS • 100% PEANUT FREE
PRODUCT OF CALIFORNIA
© 2015 Blue Diamond Growers. All rights reserved.
“Quotable Quotes from 2015 “One of the easiest reactions when you lose ground is to increase promotions. You have heard this from others. You may hear it from us. But not yet.” Galen G. Weston, executive chairman and president, Loblaw Companies Ltd., during a Q1 analysts’ call
“I’m not losing share to P&G and other CPG companies. I’m losing it to small players who are finding niche products.” Shawn O’Neal, vice-president, global marketing data and analytics, Unilever
Front End
“We have a strong presence in this market and I’m confident we will defend well — but they will have an impact.” Eric La Flèche, president and CEO, Metro Inc., referring to the growing number of Walmart Supercentres in Quebec
“It’s a tectonic shift that’s going on in the food marketplace right now; absolutely tectonic.” Walter Robb, co-CEO, Whole Foods Market
“Five years from now, I would expect the largest sellers of organic foods will be Costco, Walmart, Whole Foods, and probably Amazon.” Mark Wiltamuth, managing director, equity research, Jefferies investment bank
“As a retailer, it’s obviously our task to try to get the best deal possible from the vendor. We want to achieve the best offer possible for customers and the best customer experience. Our current practices are not 100 per cent focused on that. ”
“We can deliver stronger financial performance in the short term simply by running our core business better, but that won’t be enough.” Doug McMillon, president and CEO, Walmart Stores Inc.
Marc Poulin, president and CEO, Empire Company Limited, in an interview with The Globe and Mail.
grocerybusiness.ca
January | February 2016
17
Celebrating 5 YEARS
Doing it Right. Together. CLIENT FOCUSED...SERVICE MINDED
Our passion is your performance. We possess the expertise in optimizing field sales to ensure our clients are successful in their most critical market channels. Going deep with few, being nimble and responsive for us is more than a turn of phrase, it is a way of life...and it compels us to outperform every day. CONSULTING
TECHNOLOGY
EXECUTION
From high-level strategy to
Leveraging the best that
Quality people, dedicated
ground-level coverage modeling,
technology has to offer, we design
exclusively to your brands,
capitalizing on years of extensive
and deliver solutions that drive
delivering on key priorities in every
market experience, we bring
accelerated results from your
store, every visit and ensuring
our expertise to bear on your
field sales team with
your business is not only growing,
most critical field sales and
complete line of sight to the
but is also delivering a compelling
merchandising challenges.
information that moves you.
return on investment.
Encore has rapidly become one of Canada’s most respected field sales organizations for selling, merchandising, technology and strategic consulting.
Ken Pickthall
Don Murray
Chris Marshall
Brian Vanstone
Monica Nagasuye
Kevin Therkildsen
Experience. The Difference. HAND PICKED...INDUSTRY PROVEN Encore Market Engagement
2421 Bristol Circle, Suite 101, Oakville, ON L6H 5S9
Email: info@encoreengage.com
•
Phone: 289.430.7285
•
encoreengage.com
Gary Nagasuye
CUTTING COSTS IS EASY…
Increasing the ROI of your Field Sales Team is definitely more important!
T
he recent trend towards 3G-like cost cutting, and Zero-Based Budgeting (ZBB) has garnered a lot of attention lately. Everyone is being asked to “cut costs”. In my opinion,
cutting costs the “old fashioned way” – through broad-stroke, proportional headcount reductions may appear to be the easiest way to deliver immediate budget relief – but it severely limits the OPPORTUNITY to improve the Return on Investment (ROI) from your Field Sales team!
Ken Pickthall
Achieving this “optimized state” for your field sales team, will ensure you get the Right People, in the Right Place, at the Right Time, with the Right Tools, focused on the Right Priorities to produce the Right Results for your company! I know of one CPG Manufacturer who
Of critical importance is knowing not only
2. Review your current organization design,
followed this approach and was able to
where to cut costs with surgical precision,
capacity, management ratios and people
reassess their Field Sales team - actually
• Utilize mapping and route planning tools to
adding more bodies by deploying some
but how to ensure that you have optimized the performance of your new, leaner Field Sales organization. Determining where to start, and taking the first
objectively assess current capacity. • What are the opportunities to spend wisely
place. Here are four steps outlining how this can be approached: 1. Assess and benchmark your Field Sales Organization vs. Tier One companies in your industry.
measure their results against key revenue-
elsewhere?
driving activities…and was still able to drop significant savings to the bottom-line!
3. Analyze Current Processes, Systems and Tools • Is your team equipped with field sales
Strategy and Go-to-Market Model. of your current team? • What are current industry best practices?
Following this approach yourself, or finding the right partner who can work collaboratively
tools & technology that can help measure
with you to move through this process, will
their ROI?
ensure that you not only effectively assess
• What are the revenue-driving Key Performance Indicators (KPIs) for my team?
your costs, but give yourself every opportunity to positively impact your sales revenue growth and ultimately, the ROI of your
• Objectively review your current Sales • What are the strengths and challenges
technology for their entire team so they could
and cut costs, if appropriate, to re-invest step before an urgent mandate comes down to “cut costs now!”, is key in today’s market-
part-time sales reps, paying for the tools and
4. Develop Recommendations and Financial
Field Sales team.
Modeling for Change • Are there Cost Savings that can help pay for the tools & technology for the “new team”? • Develop the Critical Path and Implementation Plan to move forward.
Ken Pickthall – Partner, Corporate Development Encore Market Engagement www.encoreengage.com
Open Mike
Face-to-face meetings essential in negotiations We must not lose the human touch in our business relationships By Michael Marinangeli
Technology is wonderful. It allows us to navigate through life with unbelievable amounts of information at our fingertips. Computers and smartphones have made us more productive. We are always connected. Email is fast and efficient. Voice mail can be very useful when used correctly. Conference calls and video conferences can save considerable time and money. Still, I am a firm believer in face-to-face meetings during the negotiation process. I always stressed the importance of such meetings with my staff, and was very upset on the odd occasion when an agreement or deal was struck without any human interaction. I considered the process incomplete, and always thought that money or benefits had been left on the table when face-to-face meetings weren’t part of the process. The most important element in any business relationship is trust, and it is difficult to ascertain the level of trust, commitment, sincerity and service through an email exchange. Today’s managers must encourage their staff to use a blend of communication avenues to get the job done. Face-to-face communication (when feasible) is of utmost importance at the beginning of the negotiation process. It allows you to physically, emotionally and graphically display what you are buying or selling. You can also determine the level of engagement of the other party through his or her gestures and body language. I always found it easier to convince or get a read on someone when I could look him or her straight in the eye.
Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. Contact: mjmarinangeli@gmail.com Michael is a founding member of the Grocery Business Advisory Board.
grocerybusiness.ca
I usually used face-to-face meetings three times during any negotiation. 1. Starting the negotiation process – I would arrange a face-toface meeting with a vendor to kick off negotiations, outlining the intent, bidding process, timelines and selection criteria. If I didn’t know the person I was dealing with, it helped both of us determine each other’s level of sincerity, enthusiasm and trustworthiness. 2. Vendor presentation – Instead of having vendors simply email their offer, I invited them to come in and present their proposal, address questions and issues, or seek clarity. 3. Awarding the business – Closing the deal should be done with a handshake. Looking someone straight in the eye and telling them that they got the business is important. You have put your faith and trust in them. You expect them to deliver on their promises. A true partnership and long-term business relationship has to be consummated and sustained. Face-to-face facilitates this outcome. To summarize, each form of communication plays a role in the negotiation process. Telephone or conference calls are highly effective when discussing issues, seeking clarity, or providing feedback. Email has made the exchange of data highly efficient; it allows documents, presentations and agreements to be shared within seconds, and gives both parties the opportunity to sell their company, products and services in a highly visible format. Lastly, we are in the people business, and face-to-face meetings bring the human touch that creates a stronger bond and a more effective result.
January | February 2016
21
ultimates™ New Look!
“What’s for dinner?” is always on customers minds. Luckily, with Janes
ultimates™ in your freezer case, you are ready to provide them with many delicious answers no matter what life throws their way. Janes premium whole white meat chicken fillets or hand-cut fish options are sure to be the star of their next meal – in fact, so will you! *According to results of the 2015 BrandSpark Best New Product Awards survey conducted by BrandSpark International. For more information visit BestNewProducts.ca. The Best New Product Award logo is a trademark of Best New Product Awards Inc., used under license.
Perspective
A remarkable legacy
comes full circle By John F.T. Scott
November 2015 saw a number of long-time independent grocery retailers announce the sale of their stores to major corporations. It was really no surprise, as those who decided to move on had few options for family succession. It reminds me of a similar time in the 1990s, when terrific retailers like Jim Gaynor (Gaynor Foods), Jim Penner (Penner Foods), and Blane Hagedorn (Gibson’s Super Valu) hung up the skates. Today, it’s Pete Luckett, Wayne van de Licht, and the storied Moncion family. These people have contributed much to our industry and have earned the right to step back. There are, of course, many others who have a vibrant succession plan that will ensure that their well-conceived operations continue to flourish under the management of a new generation. I was particularly struck by the irony of the Moncion sale. The original store, which was built and operated by the late Omer and Reine Moncion, will now be franchised by Metro to Sylvianne Moncion-Duff, the youngest daughter in the family. When Omer built the store in 1963, he provided a head lease to LOEB Inc. in return for a long-term franchise agreement, which he followed to the letter. Not so the people at LOEB. In the ’80s, as its management structure, ownership and corporate goals changed, LOEB applied pressure on the successful franchise network and made significant changes to the program. The company required substantial investments, and squeezed margins to the point of making virtually every store unprofitable. Franchisees who disagreed were quickly bought out at minimal value and their stores repurposed as tightly controlled operations that left little room for the new franchisee to profit.
grocerybusiness.ca
Omer saw little merit in the new concepts because he was doing a booming business and didn’t require the demanded capital expenditure. To make a long story short, in 1988, LOEB pulled the franchise, demanded that Omer take the sign off the building (it was replaced by the CFIG logo), and refused to ship his grocery orders. In response, Omer filed suit. While the legal issues were before the courts, Omer’s groceries were ordered through legal counsel and he maintained the terms of his franchise agreement. In 1992, the case was ultimately resolved fully in his favour in an out-of-court settlement. That successful challenge proved to be one of the most compelling reasons why, in the late ’90s, Ontario’s Conservative government enacted the Arthur Wishart Act, designed to promote fair dealing between franchisee and franchisor. This Act, and similar legislation in other provinces, has facilitated a much more respectful relationship in the franchise community. Now the Moncion saga has come full circle. Omer had a rich career that made an incredible difference. He not only provided opportunity for his daughter, but protected her in her new venture. Ironically, the LOEB legacy and stores were ultimately purchased by Metro, which, of course, is the franchisor. An unexpected twist to a remarkable legacy.
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.
January | February 2016
23
Congratulations
Longo’s leadership in sustainability and dedication to the well being of the communities they serve is exemplified by their commitment to technologies such as Carbon Dioxide (CO2) refrigeration, performance optimization software and high efficiency rooftop HVAC systems. These sustainable measures are installed in every new or renovated Longo’s location. By reducing Green House Gases (GHG’s) and fossil fuel consumption through heat reclaim, Longo’s CO2 systems do not contribute to ozone depletion, a major cause of global warming. Over their lifetime, these Longo’s systems installed to date will significantly eliminate more than 88,000 tons of carbon emissions. Neelands Refrigeration congratulates Longo’s and is proud to be a partner in their sustainability initiatives.
4131 Palladium Way, Burlington ON L7M 0V9 Phone: (905) 332-4555 www.neelands.com
EXCLUSIVE
THE
LONGO WAYAT
By Sally Praskey
In the hypercompetitive Toronto market, it takes an extraordinarily savvy grocer to be able to not only stand out, but to win. With a potent brew of passion, guiding principles and three generations of experience, Longo’s is growing aggressively while continuing to respect the values of family and hard work on which the company was founded. In an exclusive and unprecedented interview, three generations of Longos sat down with Grocery Business to talk about how the family honours the past while embracing the future. PHOTOS: MICHAEL COOPER
grocerybusiness.ca
January | February 2016
25
Congratulations, Longo’s, on 60 great years! Acosta and our valued partners wish you continued success in the future.
THE
LONGO WAYAT
Just as the second generation learned by working side by side with the founders, a third generation is now learning from the previous two while bringing its own unique talents to the mix. There are now 16 second- and five third-generation family members working full time in the business, all committed to carrying on the legacy of founding brothers Gus and the late Tommy and Joe Sr. Although the company has evolved and innovated over the years, it always remains true to the values established by the founders.
A FRESH START Brothers Tommy, Joe and Gus Longo founded Longo Brothers Fruit Markets Inc. in 1956 with the most benevolent of intentions – to allow their Italianimmigrant father to quit his arduous job in a Toronto metal shop that he had needed to support his family. The brothers opened a 1,500-sq.-ft. fruit market in central Toronto and committed to providing customers with the best possible fresh-food experience. “So the business has always kind of stemmed from that, doing what’s right for others as well,” says president and CEO Anthony Longo. With the expansion to three stores in 1982, the second generation began to enter the business.
Four years later, Longo’s introduced a bakery, meat department and salad bar, followed by the first hot counter in 1987, and prepared foods in 1995. Longo’s Kitchen, with trained chefs serving up home-grown meal solutions, debuted in 1997. Over the years, there have been many other innovations, including: Corks on-site wine and beer bar; The Market by Longo’s, a smaller, urban format with a focus on prepared foods; Longo’s College (now Department Manager Program) in 1992; and in 2004, the very forward-looking purchase of Grocery Gateway, an online shopping service. Besides its traditional-format stores, the retailer has created such showpieces
The original Longo’s store at Yonge and Castlefield, in midtown Toronto
as Maple Leaf Square, the 48,000-sq.-ft. flagship store that opened in downtown Toronto in 2010; Longo’s Leaside, which transformed a historic railway building into a market-style food theatre in 2013; and, most recently, Longo’s Imperial Plaza, an urban Market-format store occupying what was once the lobby of the historic Imperial Oil headquarters. Since Longo’s was founded on produce expertise, it measures everything it does, whether it’s prepared foods, deli, meats, or anything else, against its impeccable produce. The current tagline “A Fresh Tradition,” adopted in 2010, honours the past while introducing exciting new changes for the future. Longo’s has succeeded where many other family businesses have not because the founders allowed the second generation to expand and experiment. For its part, the second generation has worked together to execute the decisions that they and the family have made. Although Joe passed away in 2008, and Tommy in 2010, Gus continues to work seven days a week, passing on his wisdom and values to a third generation of Longos.
January | February 2016
27
150 years of the finest weighing solutions
"Longo’s has been a valued long term partner of Bizerba's, and we would like to congratulate them on their 60 years of success". - Ian Longley , Vice President Bizerba Canada Inc.
CONGRATULATIONS LONGO’S ON YOUR 60 ANNIVERSARY TH
CONGRATULATIONS LONGO’S ON YOUR
60TH ANNIVERSARY We are honoured and privileged to be associated with such a great company. From your friends at Bachly Construction.
Construction excellence since 1962
www.bachly.com
THE
LONGO WAYAT
Gus Longo, Co-founder
LONGO’S:
3 Generations at the Table
Grocery Business welcomed a rare opportunity to sit with representatives of the three generations of the Longo family business to discuss company culture, lessons learned, and future focus.
“Always do the right thing, especially when no one’s looking.”
1ST GENERATION
GUS LONGO, CO-FOUNDER First of all, congratulations, Gus. You must feel especially proud to have reached this milestone anniversary and to have your family so involved. We feel privileged – it’s been a long journey and a lot of families don’t get to this milestone. The three founders – Tommy, Joe, and I – laid the foundation. The second generation is doing a great job, and now the third generation is joining the business. What were your guiding principles? Be honest, be respectful, and never forget where you started from.
Tommy Longo, Co-founder
grocerybusiness.ca
January | February 2016
29
tastes better , so you DRINK MORE WATER. †
†
shockingly powerful, NATURALLY-DERIVED
Compared to tap water.
CONGRATULATIONS ON
WISHING YOU CONTINUED SUCCESS FROM
THE
LONGO WAYAT
2ND GENERATION
ANTHONY LONGO Members of the second generation of the Longo family business, cousins Anthony and Rosanne Longo have long been two of the retailer’s most prominent representatives. Anthony was named president in 1998, while Rosanne has been Longo’s spokesperson since 2008 and chair of the Longo’s Family Charitable Foundation since 1998. Anthony Longo, President and CEO
What are Longo’s most compelling competitive advantages? I’d say that our team members are our biggest advantage. We could not have grown our business to where it is today without them. Second is our focus on the consumer, particularly when we think about fresh product and our fresh offering. It’s really all about what the consumer’s needs are. We keep that front and centre in all of our decision-making. There is a phrase that we use: “treating you like family.” That means how we treat each other as team members, how we treat consumers, how we treat our vendor partners and our community. When we work with our suppliers, we talk about what we believe our consumers’ needs are; we’re really working with them to build a long-term relationship. There are a number of
grocerybusiness.ca
They share their views on how family and team members honour the past while planning for the future.
suppliers that believed in us early on, and they continue to support us today. Same thing with our communities. When we open in new locations, we tend to get there early to sponsor things that are important to the community and to let people know that we support them. The founders were known for visiting every store each week. How have you managed to maintain this entrepreneurial spirit over a much larger organization? It’s definitely more of a challenge because it’s not just a small group of people who make it happen; it’s 5,000 people. So we try to ensure that we are consistent across all the stores and that our store managers have enough flexibility to do what they need to do in their communities. At the same time, we want to have the guardrails in place to
execute corporate programs. So it’s always that tension between encouraging entrepreneurship and the need for process and control. It’s a real balancing act. How does Grocery Gateway complement your bricks-and-mortar stores? Grocery Gateway is a nice business for us. We think it’s a really important channel in our long-term evolution. Our most important competitive advantage is our service at the door. We also have professional shoppers at our customer fulfillment centre, and they shop like they’re shopping for their own groceries. These two things set us apart from competitors.
January | February 2016
31
THE
LONGO WAYAT
2ND GENERATION
ANTHONY LONGO
(CONTINUED)
WHAT’S GOIN’ ON?
What is Grocery Gateway’s geographic reach now?
Is there a succession plan in place that formalizes the role of this generation?
Longo’s is celebrating its 60th anniversary all year long by hosting an array of special events with customers, vendors and team members:
We go as far east as Oshawa; in the west, we go out to Waterloo and into parts of Hamilton; and we also go as far north as Newmarket.
• Special-edition Longo’s anniversary private-label products
You have pioneered many industry firsts: Grocery Gateway, best-in-class HMR, Corks. What’s next?
We look at it not as a succession plan, but as a development plan for all second- and third-generation family members, and our team members. We use something called “the power of assessment tool.” It’s a system whereby we rank all our department and assistant department managers annually to understand the strength of our bench.
• Individual store celebrations, including recognition of specific stores and community partners through social media and other outlets • Thank You Rewards loyalty contests • Commemorative reusable grocery bag • CPG vendor partner anniversary specials • Limited-edition co-branded anniversary products
Our customers are telling us that health and wellness is playing a much bigger role in their decision-making. Being authentic and transparent is also critical. Longo’s now has a third generation working in the company. How is their perspective impacting the business? The third generation brings a fresh perspective, new ideas and lots of energy. It’s great to get their views on food shopping and the business overall.
You have suggested that while the first two presidents of the company were Longos, that may not necessarily be the case with the next one. Could you elaborate? For me, it’s not about who’s got the last name that gets the president’s job in the event that I’m not here; we want to have the best person to run the company. The company has used the phrase “growth with a long-term vision.” Please explain. We want to continue to grow, but not at any cost. My brother Joey has a great philosophy on this. He says we’d rather have “x” number of fantastic stores than “x” number of stores that are just mediocre. If we start to feel that we’re losing that edge in terms of taking care of our customers, we’ll slow our growth and refocus to ensure that the customer has a great in-store experience. We want to keep it simple, keep it authentic, know where our market is, and focus there.
grocerybusiness.ca
January | February 2016
33
THE
LONGO WAYAT
2ND GENERATION
ROSANNE LONGO Rosanne Longo, Longo’s spokesperson and brand ambassador; chair, Longo’s Family Charitable Foundation
Building on what Anthony said, what do you think is Longo’s main competitive advantage? We’re really proud of the tenure of many our team members – they’ve been so loyal. Some of them have been with the company 25, 30 years, and so it’s more than just a family; it’s 5,000 team members. Those who have been with us for that long are truly ambassadors of the legacy, our culture and values. What are the goals of the Longo’s Family Charitable Foundation? It’s really to give back to our communities in a meaningful way, which reflects the legacy of our founders. We give corporately as well, but the intent of the Foundation is to give in a more focused way and to have a significant impact. We want to do that in areas that have meaning for our team members and for our customers, whether it’s our local hospitals or health organizations. What are some of the Foundation’s cornerstone events? The golf tournament is our signature fundraising event. We’re heading into our 27th annual golf tournament. It’s a full-day event that over the years has raised almost $3 million.
grocerybusiness.ca
Our corporate giving is not just about writing a cheque; it’s also about participation. Road Hockey to Conquer Cancer is our largest event. Longo’s had nine teams participate, and we fed 2,000 participants and volunteers. The funds go to our local hospitals and kids’ camps with a focus on healthy child and youth development and empowerment. How many second- and third-generation members of the Longo family are now working in the company? There are 16 second-generation and five third-generation members working here now and, of course, from the first generation, there’s my Dad, Gus. He works seven days a week. And as long as they were able, Uncle Tom and Uncle Joe worked seven days a week too. What types of roles do the second and third generation play? It’s all based on their education, skill set, strengths and passion. In the third generation, we have someone who has worked his way up to be a produce manager. In the second generation, we have a lawyer and a chartered accountant. In part-time roles, we’ve had pretty much 100 per cent participation from family members – everything from
working in produce and the bakery to serving at Starbucks. They go where their interests lie and then they figure it out. And they’ve also been encouraged over the years to work in more than one department to give them a feel for the business. What is it about the Longo’s culture that has attracted so many family members, and what is their impact on the business? Because they’ve worked part-time in the business, family members know it’s a great place to work. Hopefully, their impact will be to continue to exemplify the values and the vision that our founders laid out, to act as ambassadors of that family legacy. As Anthony said, it’s not all about the family, but we are a family business and it’s key that there is family presence in the business and at events. It’s also important to remember that the family serves the business; the business does not serve the family. The first generation knew and obviously lived that. The second generation learned that, and the third generation grew up with that culture. Our fathers, and the whole family, remain humble. But we’re all very proud. We should be!
January | February 2016
35
Congratulations Longo’s on your 60 years of remarkable success
Aurora Importing has been a proud supplier since 1967
Canada Ltd.
CONGRATULATES ON THEIR
60 Anniversary! th
THE
LONGO WAYAT
2ND GENERATION
JOEY LONGO
Joey Longo, Chief Development Officer
What would you say drives the success of the business?
What did you learn from working with the founders?
I think it’s about building relationships and trust with your team members, vendors and customers. It’s also important that everyone in the organization keeps learning and innovating.
Growing up in this business, we had the advantage of working with our uncles and our father side by side. You can’t really put a price on that because we had the unique opportunity to learn from what they were trying to achieve.
And we’re now at a point where we have to set an example for the next generation. It’s important for them to know that you treat everyone honestly, fairly and with respect, and that you always do the right thing. Consistency is big in our business. You have to perform day-in and day-out.
Congratulations Longos on celebrating 60 years of success
Here’s to continued growth & success and many more years of business together!
from your friends and partners at Finica Food Specialties
But now, the third generation has different opportunities. There are a lot of really bright people who work with us, and the third generation can learn from them.
CONGRATULATIONS TO
ON
60 YEARS OF SUCCESS
CONGRATULATIONS on your
60THANNIVERSARY Proud to be a Longo’s preferred supplier.
• C O MPL E T E SIG N AG E
Well positioned for the future …
“The Canadian Sign team has always been helpful and resourceful in helping meet and exceed our expectations on signage design, production and installation”.
• L A R G E F O R MAT DIG ITA L G R A PH IC S • C USTO M L IG H T IN G • 3 D L E T T E R IN G • DIG ITA L SIG N AG E
We create innovative solutions for retail and our expansion into digital signage powered by Corum Digital, we deliver full support for the very latest advancements in-store LED marketing, including facial recognition and analytics.
- Paul Collette, Project manager, construction, Longo’s support Center
Plant: Dan or Chris Pudleiner 905-985-4505
www.canadiansign.com
Outside sales: Pete Scanlon 416-697-9421, Lou Panigas 416-727-8799
Canadian Sign/Digital 4 Easy Street, Port Perry ON L9L 0A1
THE
LONGO WAYAT
The entrepreneurial spirit that guided the Longo’s founders is evident in the family members who gathered to talk to Grocery Business about why they chose to work in the business and how the founders’ principles continue to inspire.
2ND GENERATION
3RD GENERATION
CAROLYN KELLY
DANNY IUGLIO
FRANK MAIURRO
JENNY LONGO
JOEY LONGO
JOSEPH LONGO
JACKIE YEATMAN
JESSE LONGO
MARIE IUGLIO
MIKE LONGO
ROB PASSAFIUME
ROSANNE LONGO
ROSE BUICK
ROSIE YEATMAN
MITCH YEATMAN
NICK YEATMAN
Q
You have worked in the business for several years. What would you say is the most important lesson you’ve learned?
Rob
It’s important to get involved in different parts of the business. Carolyn
Lead by example.
Danny
THOMAS LONGO
Jenny
When you say “all hands on deck,” everybody has to contribute to the success of the company, no matter what job it is.
Follow our founding values of honesty, trustworthiness and mutual respect. Mike
Marie
Don’t expect somebody to do something you wouldn’t do yourself.
grocerybusiness.ca
Frank
When I started, I realized that you not only have to adapt to the business, but you learn quickly that you have to embrace the culture.
Rose
There is no overnight success – it’s taken 60 years to get here. The values of the founders laid the foundation, and once a decision has been made, we move forward together as a family.
To treat people the way you want to be treated.
January | February 2016
39
60
CONGRATULATIONS
60 YEARS ON
YEARS AND
COUNTING cooking
OF SUCCESS!
CONGRATULATIONS LONGO’S!
Wishing you many more years of continued success
W W W. G B S C O O K S . C O M All trademarks are owned or used under license by Parmalat Canada, Toronto, ON, M9C 5J1. © Parmalat Canada, 2015. All rights reserved. All trademarks are owned or used under license by Parmalat Canada, Toronto, ON, M9C 5J1. © Parmalat Canada, 2015. All rights reserved.
sunsetgrown.com
THE
LONGO WAYAT
Q
Rosanne
What key piece of advice would you share with the third generation?
Something that we in the second generation grew up learning, and that hopefully will be instilled in the third, is this mantra: “The family serves the business; the business doesn’t serve the family.” Marie
Rose
Stick together – at the end of the day, we are family, first and foremost. Nothing is more important. Joseph Check your ego at the door. Recognize that being part of the third generation is a privileged position but that there’s a lot of hard work involved. You hear about this culture and how special it is, but after having worked elsewhere, you really realize how true that is.
Q
You’re passing on the knowledge and culture of the founders to the next generation. What are you learning from these younger family employees?
Danny
Their enthusiasm is infectious! Rosie The knowledge of technology they’re sharing. Mike
Rose They are just as passionate about the business as our generation is, but the way they approach it is different, as our approach differed from our fathers’.
I think they’re a good representation of our next customers, which are the Millennials. grocerybusiness.ca
Follow the values that have been instilled personally and at work, and stay humble.
Q
How would you describe the Longo’s hiring process?
Nick I work in the stores as a produce manager, so when I hire someone, I usually assign one of my more experienced guys to work with them all day. I choose my trainers carefully to be sure that new staff gets trained in the Longo’s way.
Thomas At Longo’s (during the training process), we try to instill the values of the company; we are very culture-driven. There’s a certain way of doing things versus just doing them.
January | February 2016
41
The Essential (HAVE-TO-BE-THERE)
Seminar and Expo
For Dairy, Deli and Bakery Professionals
NETWORKING • 9,000 Professionals • 700 Exhibitors • 1,900 Booths SHOW & SELL CENTER
CAKE DECORATING CHALLENGE
MERCHANDISING
NEW PRODUCT SHOWCASE
June 5 - 7 | Houston
INDUSTRY RESEARCH
WORLD-CLASS SPEAKERS
AND PRESENTATIONS SIMON SINEK
JJ WATT
HAROLD LLOYD
REGISTER TODAY!
MIKE EARDLEY
FOCUS ON ALLERGENS
CMYK Topical educational sessions and resources!
FOR MORE INFORMATION IDDBA.ORG
608.310.5000
2015 IDDBA 4/C • “The Essential” • 7” X 9.875” Grocery Business Ad
THE
LONGO WAYAT
Jesse
Q
Have you had experience working in other companies? What learnings have you brought to your position at Longo’s?
I spent three years at KPMG in auditing, and have my CPA designation. You don’t really understand what we have here as a culture until you work elsewhere. Mitch I started in customer service at a golf pro shop, and I learned a lot. I was able to use that experience to help me deal with vendors and customers.
Nick
I had experience working at a lumberyard, and you learn quickly that you have to be ready to work hard every day. It was good preparation for my job here.
Q
Jackie
I worked as a bank teller. You really have to be ready to serve customers and have a solid understanding of what their needs are.
Thomas
As a family, we decided it would be great for us to get other work experience before joining the company full time. It’s great because we bring a bit of a different dynamic now.
How does it feel to be involved in a 60-year-old company that your family has built from the ground up?
Jackie
It’s an honour to be a part of the family and to have founders that built such a great culture with strong values. Mitch
I feel very proud. Especially when we see our team members wearing the wristbands with our Nonno Tommy’s favourite quote: “Always do the right thing, especially when no one’s looking.” I thought only the family would wear them but when you go into the stores, everyone’s wearing them.
grocerybusiness.ca
Nick
Jackie and I both worked in the stores, and when people would find out that we were part of the Longo family, they would come up to us and say, “Oh, Tommy Longo, or Gus, or Joe, I have so much respect for your grandfather.” It’s heartwarming.
Thomas I worked at PepsiCo for about three years. I learned that vendor partners are very willing to enhance their relationships with retailers. They’re looking for those bigger ideas that benefit their business overall. As a smaller player, Longo’s can become an incubator for the innovation vendors want to bring to market.
Q
What do you think the future holds for both you and the company?
Thomas We’ll continue to be an innovative culture, probably branch out, maybe into other businesses, with new partnerships across Canada. Nick The Longo’s values have been passed down from generation to generation, and that’s what we’ll be doing, as well.
January | February 2016
43
O reg nline istr at s JAN tar ts ion UA RY 15!
LOOK DEEPER
Montreal The North American food innovation exhibition
APRIL 13TH TO 15TH, 2016 PALAIS DES CONGRĂˆS - MONTREAL
850 exhibitors from 50 countries 15,000 visitors from 60 countries More than 30 conferences and workshops an an event event by by
SIAL, a subsidiary of Comexposium Group
Visit sialcanada.com to discover our new branding and website.
Follow us on
THE
LONGO WAYAT
The Longo Way: Family members (pictured, l-r), Anthony, Joe, Gus, Joey and Tommy Longo; the Leaside Toronto store is housed in a former Canadian Northern Railway service station (top, left); the Longo family mantra “Always do the right thing, especially when no one’s looking”; Longo’s new Imperial Plaza store in Toronto (bottom), is located in an iconic mid-century office building that has been redeveloped for retail and residential use. grocerybusiness.ca
January | February 2016
45
EXIT INTERVIEW:
Marc Guay After a distinguished 35-year career in CPG, Marc Guay retired from PepsiCo Foods in August 2015. Guay recently took time from his travels and board of directors activities to speak with Grocery Business about his career and what may be next for the industry. WHY DID YOU DECIDE TO PURSUE A CAREER IN CPG?
WHAT WAS THE BEST CAREER ADVICE YOU RECEIVED?
When I graduated from university in 1980, CPG was the most exciting industry. It had a reputation for attracting the most talented people, offering great career opportunities and stimulating challenges. The thought of being in a highly visible industry that impacts people’s lives on a daily basis was very appealing to me.
“A career is a marathon, not a sprint.” One must take the time to learn and benefit from every assignment, and not rush into the next job.
WHAT WAS MOST REWARDING ABOUT YOUR YEARS LEADING PEPSICO CANADA? I was particularly fond of the time I spent at retail with our sales team. Learning from those closest to the customer was incredibly helpful, and I was able to take those learnings back to the office. Also, a tremendous source of inspiration for me was the opportunity to coach and mentor great leaders within the organization.
46
January | February 2016
I was also taught that a career is not built vertically, but horizontally, by seeking a variety of learning experiences that help lay a strong business knowledge foundation. This led me to accept a number of lateral moves early in my career that exposed me to different situations and challenges. WHAT WAS YOUR BEST CAREER MOVE? I had the good fortune of working at two of the best companies in business. Starting my career at Procter & Gamble set me up for success. It is a great training organization where I learned the fundamentals of management and leadership processes – concepts that stayed with me my entire career. When I moved to PepsiCo, it was a perfect fit. The environment was fast-paced, entrepreneurial and definitely a meritocracy. I loved it!
Exit Interview
WHY DO YOU THINK THE GROCERY INDUSTRY IS GOING THROUGH A PERIOD OF CONSOLIDATION NOW? From my perspective, this trend stems from the fairly anemic growth the grocery industry has been experiencing for some time. Growth allows for investment in infrastructure and in programs that sustain success. When organizations stop growing organically, they look to other strategies, such as mergers and acquisitions, to drive value for their shareholders. Unfortunately, this often leads to distraction and diluted cultures in the new entities being created. It is also, in many cases, a short-term fix. WHAT DO YOU THINK THE INDUSTRY MIGHT LOOK LIKE IN FIVE YEARS? There are a few mega-trends that will affect how retailers and manufacturers conduct business – growing ethnicity, the aging of the population and the continuing focus on healthier lifestyles, including better nutrition. There are also two other emerging trends. First, we are witnessing a re-urbanization of Canada as downtown cores are exploding. This will have profound implications for retailers and manufacturers, since, for decades, most of them have focused their efforts and investments on suburban families. Secondly, e-commerce has been a reality in other consumer goods sectors for years now, but has barely touched the grocery sector. Make no mistake: new generations of consumers who have grown up with the Internet will not shop for groceries the same way we did. They will want a faster, more convenient experience.
Bio Brief BACKGROUND » Born and raised in Montreal EDUCATION » Bachelor of Commerce, L’École des hautes études commerciales (affiliée à l’Université de Montréal) » Institute of Corporate Directors course, University of Toronto (Rotman School of Business) CAREER PATH » Spent a year in Switzerland after graduation, working in a family business » 1981-1986 – Procter & Gamble, sales team » 1986 – joined Frito-Lay Canada, serving in a variety of management roles across North America » 2001 – named president, Frito-Lay Canada » 2009 – named president, PepsiCo Foods (combined Frito-Lay and Quaker business units) » August 2015 – retired from PepsiCo Foods INDUSTRY AWARDS » 2014 Golden Pencil Award
WHAT’S NEXT FOR YOU?
» 2015 Food & Consumer Products of Canada Award of Distinction
I have enjoyed the first six months of this new phase. I’m travelling quite a bit and enjoying the chance to decompress after 35 years in the “grocery pressure cooker!”
PERSONAL INTERESTS » Enjoys family time with wife Karen, their four children, and granddaughter
I have also explored opportunities to stay involved in the grocery industry. For example, I’m deeply involved with Food Banks Canada and, after several years on the board, am now chair. I find great fulfillment in helping people who are less fortunate, and hope to be able to do this as long as they’ll let me!
grocerybusiness.ca
» Avid golfer and traveller » Devoted supporter of Montreal Canadiens
January | February 2016
47
6 S 1 0 2 D N N O I T E C A R R TWITH T TRENDS
A G ME
1 FOOD INFLATION: SOARING 5.0%
Grocery Average
4.0% 3.0%
CPI for food purchased from stores
2.0% 1.0% 0% -1.0%
Q1 F13
Q3 F13
Q1 F14
Q3 F14
Q1 F15
Q3 F15
SOURCE: Statistics Canada, company reports
2
Annual Food & Beverage Online Retail Sales (U.S.) $50
Online purchases of food and beverages are projected to almost quadruple between 2015 and 2020 to $49 billion, representing
$40 Billions of dollars
$30 $20
4.5% of all
$10 $0 2012
2013
2014
2015
2016
2017
2018
2019
2020
food retail sales
SOURCE: Kantar Retail, 2015
3 Consolidate or be Consolidated
Stagnant food sector growth is driving the boom in M&A activity
“The search for growth is lifting (food industry) deal-making to record highs, and executives are focusing on M&A to secure innovation, competitive advantage and market share for the foreseeable future.� Pip McCrostie, EY, global vice-chair, transaction advisory services
$80.2 B i n mergers & acquisitions (January-June, 2015)
+129.9%
(from same period in 2014) 48
January | February 2016
Source: MergerMarket
CONSUMERTRENDS
MILLENNIALS START FAMILIES By Joel Gregoire Millennials have traditionally been regarded as the young upstarts barely out of their teenage years, but the times they are a-changin’. According to Statistics Canada, between 2014 and 2019, the number of Canadians who will be 25 to 34 years old will grow by over four per cent, and those aged 35 to 44 by just over six per cent. With Millennials moving solidly into their child-rearing years, Canada is in the midst of a baby boomlet.
Joel Gregoire is Senior Research Analyst, Food & Drink, at Mintel
+5% +11% Increase in # of children, aged 4 and under, between 2014 and 2019
Increase in # of children, aged 5-9, between 2014 and 2019
WHY BRANDS ARE IMPORTANT Time-pressed and responsibility-laden, parents of young children place more importance on trusted brands than does the general population. Because this group is so rushed, to be successful, brands must communicate with clarity and simplicity. The more elaborate the message, the less likely it will resonate. Rather, to drive brand positioning, retailers and marketers need to tell simple but compelling stories that resonate with these families.
What Millennials Want to Know About Your Brands Ingredients 75% 72%
Freshness 73% 74%
Flavour 65% 66%
Nutrition content/labelling 62% 59%
THE STRAIGHT GOODS When asked about their goals over the next three years, “living a healthier lifestyle” ranks as number one for Millennial parents. However, in view of the financial pressures these parents often face, being debt-free or repairing their credit are also top concerns. Keeping in mind Millennials’ financial challenges, retailers and brands with straightforward messaging that is supportive of living a balanced and healthy lifestyle will stand to benefit most from this once-in-a-generation baby boomlet wave.
Where grown or made 34% 28%
The brand 33% 40% Consumers 18+ who use “free-from foods” Presence of children aged five and under in household Source: Mintel’s Free-From Food Trends – Canada, September 2015 Report
grocerybusiness.ca
What are your goals
and aspirations over the next 3 years?
49%
IVE A L HEALTHIER LIFESTYLE January | February 2016
49
6 S 1 0 2 D N N O I T E C A R R TWITH T RENDS
T D O O F
TAKING A
PULSE
Safe to say that one area of the grocery store that has gotten little attention over the years is the pulse department. But, as with much else in the grocery world, this is about to change. To offset the rising cost of meat, consumers are seeking alternative sources of protein, and with the United Nations declaring 2016 “The International Year of Pulses,” watch for a quickening of sales.
McCORMICK’S FLAVOUR FORECAST:
TASTE TOUR 2016 The trend to spicy food is heating up. McCormick’s global team of chefs and food experts has revealed its 2016 Flavour Forecast, identifying even spicier and more complex flavours as having widespread palate appeal. This time around, spicy comes with a twist – citrus and rice vinegar are adding taste with a tang. HEAT + TANG
TROPICAL ASIAN
ANCESTRAL FLAVOURS
BLENDS WITH BENEFITS
Spicy finds a welcome contrast with tangy, citrus accents to elevate the eating experience.
The distinctive flavours of the Philippines are drawing the attention of consumers – and not just Canada’s growing Filipino population – seeking bold new tastes.
Modern dishes reconnect with ancient herbs such as thyme, peppermint and rosemary.
Good-for-you ingredients, for example, flax and chia seeds, turn more flavourful with the addition of herbs and spices such as ginger, chili and citrus.
CITRUS SPICY + TANGY
S
PULSES 101 Pulses are part of the legume family, but the term “pulse” refers only to the dried seed. Dried peas, edible beans, lentils and chickpeas are the most common varieties of pulses. They check a lot of boxes for consumers because they are very high in protein and fibre, but low in fat.
LEGUMES
10%
Soybeans Peanuts Fresh Peas Fresh Beans
Of Canadians are considering sources of protein other than meat
Pulses Dried Beans Dried Peas Chickpeas Lentils
“ Pulses are well positioned to deliver on three areas of interest: better nutrition, improvements in health, and foods with a lower environmental footprint. Very few foods or ingredients can score highly on all three of these important attributes.” GORDON BACON, CEO, PULSE CANADA
“ Pulses could be the foundation of a new food era.” SYLVAIN CHARLEBOIS, UNIVERSITY OF GUELPH
Dana McCauley’s
Take on Trends COOKING WITH SASS For many people, especially Millennials, cooking has changed from a daily duty to a hobby. Relying on partially or fully prepared foods to regularly fill in between home-cooked meals is not an embarrassment, but the norm. The concept of cooking as a hobby (think knitting, playing golf) that is tackled for fun on weekends or during the holidays is growing among both men and women. That means HMR and good-quality prepared foods are important in a grocery store, but so is a deep offering of specialty ingredients, so that when these weekend chefs get the urge to create a meal, they can find the harissa or bourbon barrel-aged maple syrup they need to express themselves.
CULINARY KIDS Interest in what we feed children has changed considerably. When I first started tracking trends 20 years ago, moms wanted their kids to accept what they made for them, and for the cost of that food to fit their budget. Today’s new parents are interested in sharing their own standards of food excellence with their kids, and that means serving meals with flavour diversity and that are made with better ingredients. Dana McCauley’s background includes senior marketing roles and several seasons as a Recipe to Riches judge. She is currently program manager for Food Starter, a new food business incubator and accelerator, located in Toronto.
January | February 2016
51
6 S 1 0 2 D N N O I T E C A R R TWITH T
The Store
of the Future With a view to enhancing the in-store experience for consumers, Grocery Business challenged the creative team at King Retail Solutions to offer up their best new store design ideas.
Because of technology, the consumer’s shopping journey no longer begins at the front door of the store. The most exciting design trends deliver a new take on what the grocery shopping experience can be for its customers. The retailers that are most effectively managing this revolution are finding ways to mix practical new offerings – for example, healthy, freshly prepared meals, as well as personalized smartphone apps – with unexpected touches of authenticity, such as locally handmade products and unique displays.
Food Cart Patios Designed by Jen Dean
TODD COLE, DESIGN DIRECTOR KING RETAIL SOLUTIONS
52
January | February 2016
Consumers are actively seeking locality, experiential shopping and farmers’ markets. Creating a designated area for food carts can provide this authenticity. Rotating local, ethnic and gourmet vendors would create a mutually supportive destination experience for your store, your shoppers, and these local small businesses. An exciting convenience for shoppers, drawing more foot traffic, and buzz, to the store.
Specialty Diet Food Preparation Areas Designed by Sarah Luker For clients with special dietary needs, shopping in the prepared foods area of most grocery stores is a challenging experience. With a small, exclusive preparation area – equipped with devoted cookware and utensils for gluten-free, Kosher or Halal foods – you can tap into this market of hungry customers and ensure a safe and enjoyable shopping experience.
Green/Living Wall Designed by Shaminy Selva Living walls are an emerging trend that can immediately provide high visual impact and a strong natural connection. A great message for a grocery store to send!
Modular, Personalized Shopping Tools Designed by Nick Gaskill A modular cart system, with built-in technology to recognize the shopper, could accommodate trips both big and small and work hand-in-hand with your in-store technology to personalize each trip. Using their membership card and a scanner built into the cart, shoppers would be able to access relevant coupons, promotions, personal grocery lists and more, from their smartphone or via in-store kiosks. grocerybusiness.ca
Unexpected Repurposed Displays Designed by Marco Ingracio and Joel McCombs Repurpose a vintage vehicle as a produce dry table. Consider your area’s culture and play into that. For us in Eugene, Oregon, a very hippie atmosphere, turning a VW bus into a produce display would resonate with locals and bring a sense of whimsy to the grocery shopping experience.
January | February 2016
53
FR EE AD MI SS IO N!
TO T AN RAD DR ES ET HO AI W L P FO RO R FE FOO SS D IO SE NA RV LS * IC E
Grow stronger in 2016! Join us in Calgary for Canada’s largest event dedicated to the fruit and vegetable industry. The Canadian Produce Marketing Association’s 91st Annual Convention and Trade Show provides a unique and effective forum for industry professionals to develop and leverage business opportunities in Canada and globally.
Tuesday, April 12 to Thursday, April 14, 2016 BMO Centre, Stampede Park Calgary, Alberta
@CPMA_ACDFL
#CPMA2016
*conditions apply, visit convention.cpma.ca for details
Remembrance
Omer Moncion I REMEMBER... By John F.T. Scott
Many of us use the term “integrity” when referring to character, but I have never seen anyone who personified it more than Omer Moncion. In the early 1950s, he and his beloved Reine opened a very small store in Pembroke, Ont. Their sales the first week were $19.95. Reine wanted to say they had sales of $20, but Omer demurred until he searched his pockets, found a nickel and put it in the till. When I recently reflected on the life of this exceptional man, that little story kept surfacing. That characteristic was pervasive in all that Omer did. Those in the industry are aware of the legal issues over his franchise agreement with LOEB, and that the high-handed way in which he had been treated paved the way to his success in court and proved to be one of the key formative arguments for franchise legislation in Ontario. But there were two important parts of that three-year period that are known to few: Omer was successful because he followed his franchise agreement to the letter. Even today, very few franchisees can admit to the same behaviour. Second, during that tumultuous time, Omer abstained from alcohol and exercised incessantly. He said he needed a clear mind at all times, and I can assure you, he was always sharp!
government agency. He told me the paper trail was there to ensure that everyone would be treated equally in his estate. In the early ’80s, Reine and Omer built a beautiful home on the Ottawa River. It was large for empty nesters, but the governing philosophy was that the children could come home with their families and have their own apartment. It kept the family equal, comfortable and close. I have two favourite illustrations of Omer’s character. In 1989, when Omer was CFIG chair, he hosted the Summer Meeting in Pembroke. Breaking with tradition, he invited every civic leader available to a grand banquet, which he presided over with pride, presenting his family and a national board to his community. The response was amazing. Later, I was with him when he received a call that made him quite agitated. He had donated a property to the community for a family shelter, but insisted that his generosity be anonymous. The organization had called wanting to acknowledge his gift, but there was no question that Omer’s reaction carried the day. I don’t know how many similar acts of generosity he made in Pembroke, but I would bet that they were numerous and that most were made in that same quiet fashion. All this from a man who characterized himself as a “simple grocer.” Well done, Mr. Grocer, well done.
As his eight children grew to adults, some needed support with various ventures. Omer was always ready to help, assuming the contemplated business had, in his mind, a true opportunity. Each time, the supporting documentation replicated that of any bank or
grocerybusiness.ca
January | February 2016
55
The
GOLDEN PENCIL AWARDS
Jean Gattuso (left), and Peter Mattson, Lassonde; Paul Higgins (centre), Mother Parkers
Stacey Kravitz, Ali Davies, Kraft Heinz
Gus Longo (left) and Anthony Longo, Longo’s; Paul Higgins (centre), Mother Parkers
Eric La Flèche, Metro Inc.; and Marc Poulin, Sobeys
Diane Brisebois, Retail Council of Canada; Eileen MacDonald, GS1
Dave Iacobelli, Clorox Canada Ralph Younes, Unico; Mike Ljubicic, Nielsen
56
January | February 2016
Rod Sturtridge, Carlton Cards; Paul Del Duca, Walmart
Andy Colatosti, Clearwater Seafoods
NOVEMBER 23, 2015
JEAN GATTUSO, GUS LONGO AND ART SMITH WERE HONOURED FOR OUTSTANDING SERVICE BY THE FOOD INDUSTRY ASSOCIATION OF CANADA
Art Smith (left), Eileen MacDonald, GS1; and Paul Higgins (centre), Mother Parkers
Cheryl Smith, Parmalat; and Jamie Moody, Tree of Life
Colin Glaysher (left), Bill Dunne (centre) and Chuck Corrigan, C.B. Powell
Sylvie Cloutier, CTAC; and Kevin Smith, Grocery Business
Bob Noble (left) and John Scott, past Golden Pencil recipients, with Nancy Croitoru, Food & Consumer Products of Canada
Al Tyreman, ATW and Assoc.; Belinda Junkin, Canadian Pallet Council Mike Marinangeli, past Golden Pencil recipient; Brian Parker, DCI grocerybusiness.ca
Pierre Charron, Metro Ontario; Dale MacDonald, Sobeys
PHOTOS: BRIAN SUMMERS
January | February 2016
57
ONTARIO PRODUCE MARKETING ASSOCIATION
AWARDS GALA
1 2 The Ontario Produce Marketing Association (OPMA) held its gala dinner and awards presentation on November 13, 2015 at the Liberty Grand in Toronto. Outstanding industry contributions were recognized and a special lifetime achievement award was given to Ian MacKenzie, whose service extends from 1994 and who retired as OPMA’s president in December 2015.
3 1. Fred Webber of the Fruit and Vegetable Dispute Resolution Association presents the Lifetime Achievement Award to Ian MacKenzie, (retired) president, OPMA
4 58
January | February 2016
2. OPMA Fresh Award: Julian Sarraino, Fresh Taste Produce Limited 3. OPMA Outstanding Achievement Award: Wonderful sales team 4. OPMA Cory Clack-Streef Produce Person of the Year: Presented to Mike Venton (left), No Frills and Produce Procurement, presented by Kevin Silver, Dole
Making It
ThreeWorks Snacks
A NEW TAKE ON SNACKING By Mary Del Ciancio
Michael Petcherski wants consumers to have healthy choices when it comes to snacking. And he’s out to prove that healthy doesn’t have to be boring. That’s why the Toronto entrepreneur and self-proclaimed “brand builder” launched ThreeWorks Snacks in 2012 with its signature apple chips, a product he calls “a very innovative take on snacking.” Yes, they’re healthy. The chips are made from 100 per cent Fuji apples, and have a very clean ingredient index – just one or two ingredients. They are fat free, nut free, cholesterol free, GMO free, dairy free and gluten free. They have no sugar added, no artificial colours or flavours, and they’re never fried. But they are not boring. The company has put great effort into marketing the snack in a fun way, with a catchy jingle on its website, unique packaging, fun flavours and a playful approach to social media. In 2010, Petcherski, who has worked in the food industry since 1997, noticed a big shift in the way consumers were eating. They wanted healthy choices, but they also wanted convenience. That’s when the idea for the apple chips was born – a healthy snack packaged in a convenient, on-the-go canister – and he worked with a manufacturing partner to bring that idea to life. “When we launched ThreeWorks Apple Chips, it really was about the fact that it was a healthier, guilt-free offering,” he explains. “We really want moms and kids to have a healthy
grocerybusiness.ca
Michael Petcherski
snack that they can take to school or to the office, and not feel like they’re being deprived of anything.” Today, ThreeWorks Apple Chips are available in six varieties, each given playful names to describe the flavour, and the only ingredient in the original flavour is Fuji apples. All five SKUs have just two ingredients – the natural flavour and the Fuji apples. No additional ingredients are needed, thanks to the company’s proprietary production process, which allows the chips to retain the fruit’s natural flavour. During this process, the apples are sliced and gradually dehydrated, which also gives them their crunch. Building a business has not been easy. Petcherski admits he’s hit many hurdles along the way. It can be a challenge to convince people that your business will succeed, he says, but he never gave up. The company’s strategy from day one has been to focus on marketing. “From the very first day when we launched the brand in 2012, we were very focused on the way the brand looked and felt,” explains Petcherski. “We really wanted to have everything match – our cans, our cases, our jingle, our trade shows. Everything was on-strategy to be fun, playful, interactive with the consumer... We wanted them to have a good feeling when they thought of our brand.”
INTERNATIONAL GROWTH Petcherski brought ThreeWorks Apple Chips to CBC’s Dragon’s Den in 2013 and accepted a deal with Jim Treliving. However, that deal never went through because the two parties couldn’t agree on the direction of the company. Treliving wanted to focus on developing the Canadian market, while Petcherski wanted to expand into the U.S. Today, the company is doing both. By working with distributors, it has expanded its retail cover in Canada and the U.S., allowing ThreeWorks to focus on launching new products and connecting with consumers through its social media strategy.
January | February 2016
59
LIST IT
NEW & NOW DISCOVERIES
Oasis Hydrafruit = 100% refreshing! Oasis introduces Hydrafruit, the first refreshing fruit juice beverage with 60 per cent fewer calories than regular juice. Combining natural spring water with real fruit juice, Hydrafruit has no sweetener or sugar added. lassonde.ca
Introducing Vlasic Spears Vlasic Spears, the top-selling pickle cut in the U.S., are now available in Canada. Made from only North American produce, these pickles are hand-packed and fresh-packed for maximum flavour. vlasic.ca
60
January | February 2016
Spilling the beans on vintage varieties Bob’s Red Mill Orca Beans are a small and tasty heirloom variety grown in Moses Lake, Washington. These black and white dappled beans are an excellent source of plant-based protein and fibre, and make a delicious addition to salads, soups and side dishes. bobsredmill.com
Spread the word St. Dalfour introduces a unique chestnut flavour into the growing sweet spread category. A versatile accent flavour to meats, cheese and even yogurt, this deluxe spread is a rich source of dietary fibre and other essential nutrients. nationalimporters.com
Gluten-free me Garofalo combines rice, corn and quinoa flour to produce a new line of gluten-free pasta available in six assorted cuts such as spaghetti and linguine. martellifoods.com
Warm up to Lemonade Freezies Get ready for summer 2016 with Welch’s Lemonade freezies. These frozen treats are produced in giant 150ml tubes and are offered in three flavours: Original Lemonade, Pink Watermelon Lemonade and Blue Raspberry Lemonade. kiskofreezies.com
grocerybusiness.ca
January | February 2016
61
it figures
MARKETING
TO MILLENNIALS Millennials represent a potential
83%
vs.
of smartphone ownership
60% overall smartphone ownership
76%
Takeaway 8 out of the 10 consumers driving CPG sales in the next five years will be making decisions based on information found online.
of Millennials shop at stores with lower prices
81%
can be easily persuaded to buy a different brand
Takeaway While Millennials demand low prices, they also want value and authenticity, so brand loyalty can become an issue. 62
January | February 2016
39
%
of Millennials say social media sites are the preferred source for getting up-to-date news, versus 15% of Boomers
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. A L L S TAT S C O U RT E S Y: NIELSEN
Takeaway Social media is really “word of mouth,” but with faster and farther reach. If you’re trying to engage Millennials, ensure your brand has a strong social media presence and that you truly participate in the conversation.
Millennial consumers back up their sentiments with their wallets
% 27
are willing to pay more for organics
Takeaway Time and money may be a concern, but Millennials say they’d pay more for organics. Let your Millennial consumers know you’ve got what they’re in the market for.
70% grocerybusiness.ca
of Millennial meals happen at home, and over 40% prefer fast, easy-to-prepare meals
Takeaway 30% of the time, Millennials are either grabbing convenient on-the-go meals, or eating out because they want quick and convenient meal solutions. Retailers: are you listening?
January | February 2016
63
Ever wonder where California cling peaches come from? It’s from small family farms in the sunny and fertile Central Valley. California cling peaches are always picked when fully ripe and canned within about 24 hours to preserve all the flavour, beauty and nutrition they’re known for. Our farmers wouldn’t have it any other way.
calclingpeach.ca
Perry’s Point of View
Everyday
Low Behaviour Back in my days as a grocery buyer, we decided to invite all our suppliers to an evening at the racetrack. Over the previous 12 months, we had hit them up for more and more trade money, inventing new programs when the old ones were exhausted. It was time to say thank you. All evening, as vendors drank, dined and gambled, they kept asking us what time the presentation was. When were we going to hit them up for the big cheque to support another program? But we just kept telling them that the night was simply to say thanks. Around midnight, watching the last vendor straggle out, the head merchant looked at us and said, “Damn, we should have asked for a cheque.” This story comes to mind as a couple of major grocers have announced changes to their methods of dealing with suppliers. They have pledged to overhaul their cost and pricing practices, abolishing numerous discounts, penalties, charges and programs. The goal is to develop a simplified (potentially single) cost calculation and use that single net cost to drive all promotional and pricing decisions. Theoretically, this “everyday low cost” environment will result in more stable pricing practices, perhaps even divorced from rises and falls in costs. Ideally, these streamlined processes will promote
grocerybusiness.ca
transparency, reduce complexity, and preserve resources for more important efforts such as business planning and pricing analysis. Indeed, a serious amount of resources are expended managing the vast paper trail of deductions, discounts and fines. The centre of the problem is simple: Grocers want the lowest possible cost without pledging to specific performance criteria. They want the freedom to make their own pricing and promotional decisions, build volume in the most profitable way, and not be bound by any agreements regarding volume, listings, or performance of any kind. Suppliers want to sell products profitably (at the highest net cost) while getting the most volume they can and giving their brands maximum market presence. Although collaborative planning is an effective process, when it comes to supplier–buyer negotiations, it’s clout against clout, market share against market share, brand against banner. Grocers always suspect that there’s a lower cost there somewhere, and they are often right. Suppliers always hold back a little support money, waiting for the next “ask,” or the best opportunity. The notion that there is ever pure transparency is naïve.
The bigger problem is that, for both sides, embedding all trade money in the cost of goods takes away all tactical weapons, and vastly reduces creativity. Used correctly, trade money is highly strategic for both sides. Suppliers use the discretional portion of trade money to drive specific products or accounts; respond to market opportunities; deliver creative offerings to retailers; and invest in various trade programs. For retailers, knowing that there is unallocated trade money available drives creativity. Retailers need access to discretional supplier funds to design promotions or events, rebuild categories, and create new programs. And most of all, nobody wants to leave the racetrack empty-handed.
Perry Caicco is the managing director for CIBC World Markets. His experience includes 15 years in the supermarket, general merchandise, and packaged goods industries. Perry is a founding member of the Grocery Business Advisory Board.
January | February 2016
65
showcasing innovation inspiring retailers
chfa.ca conference: may 12 & 13 trade show: may 14 & 15 vancouver convention centre, west building
TM
TM
this is not your average grocery show!
gluten-free | ethnic | hemp | herbs | juices kosher / halal | organic | protein | snack food soy products | teas | vegan | vegetarian
If you are looking for the next big trend, look no further!
non-gmo certified | natural health products sports nutrition…and so much more!
CHFA West is the only trade show you need to attend this spring.
Retailers attend the trade show for free using your Grocery Business Promo Code W16D5
Note: CHFA West is a trade-only event that is not open to the public. Proof oof of industry status will be required in order to attend. Please refer efer to our show policies posted on our website for complete details. Complimentary registration egistration is extended to Retailers only.
Mark Your Calendar for CHFA East September 17 & 18, 2016, at the Metro Toronto Convention Centre, South Building.
TM
Luscious, full-coverage colour you’ll love. 8-hour moisture that loves your lips in return. 100% natural ingredients
smooth satin finish
14 vibrant shades
burtsbees.ca