September/October 2017 by Grocery Business

September / October 2017 Vol 7 | No 5 $9.95

PM # 42211029

FARM BOY

FRESH JEAN-LOUIS BELLEMARE + JEFF YORK

+produce MANAGER

DCI Award Winners

Grocery Business September | October, 2017 Volume 7, Number 5

contents

Feast of fields, courtesy of BCfresh

DEPARTMENTS

PHOTO GALLERIES

73 Summer Fancy

Front End People & News

10 Open Mike Amazon and Whole Foodsâ&#x20AC;&#x2122; impact

Food Show

78 International Dairy Deli Bakery Show

14 Perspective Food-safety concerns cut across cultures

80 Launch It, List It

New & now discoveries

82 It Figures

Protein packs a punch

84 In Other Words

September | October 2017

GB_Cover_SeptOct2017cover.pdf

2017-09-12

12:38 PM

September / October 2017 Vol 7 | No 5 $9.95

ON THE COVER

15 Farm Boy Fresh

PM # 42211029

FARM BOY

FRESH JEAN-LOUIS BELLEMARE + JEFF YORK

+produce MANAGER

DCI Award Winners

8 27

FEATURES

INDEPENDENTS’ DAY

12 Leaders on Leadership Parmalat’s Cheryl Smith

60 2016 Financial Survey

74 Census Results Give

Grocers Food for Thought

76 Festive Trends 2017 79 Let’s Slow Down the

Minimum Wage Increase

69 Masstown Market

a growing concern

70 Distribution Canada Inc.

Recognizes Independent Grocers

71 Grocery Innovations Canada at a Glance

31 Produce Marketing Association Fresh Summit Preview

36 Canadian Produce

Marketing Association Show Photo Gallery

37 Why NAFTA is

Important to Canadian Food Retail

42 Produce by the Numbers

43 BCfresh Celebrates 25 Years

grocerybusiness.ca

COVER PHOTO: MARC FOWLER

September | October 2017

Front End

Transitions Rexall Drugstore has appointed Beth Newlands Campbell as president. Most recently, she served as president, Ontario & Atlantic, at Sobeys Inc. Grant Froese has joined Marquee Health Group Limited as CEO. Earlier this year, Froese retired from his role as chief operating officer at Loblaw Companies Limited. Joe Sbrocchi is the new general manager of the Ontario Greenhouse Vegetable Growers. Sbrocchi has held senior management roles with Walmart Canada, Sobeys and Mastronardi Produce Ltd. VersaCold Logistics Services has named Paul Merrick senior vice-president and general manager of the CPX Business Unit. Previously, Merrick was a senior manager with Purolator Inc.

In November, Irene Rosenfeld will step down from her role as CEO of Mondelez International, and on March 31, 2018 will retire as chairman of the board. Rosenfeld’s successor in both of these positions is Dirk Van de Put (right), former president and CEO of McCain Foods. Max Koeune (left) succeeds Van de Put in both of those positions at McCain Foods. The Canadian Agri-Food Policy Institute has named John F.T. Scott chair of its board of directors. Scott, a frequent contributor to Grocery Business, speaks, writes and consults on the food distribution sector, and is the former CEO of the Canadian Federation of Independent Grocers. Lorne Campbell, son of Thrifty Foods’ co-founder Alex Campbell Sr., and a veteran of grocery retail, has returned to the business with the purchase of The Old Farm Market in Duncan, B.C., a 29-year-old fresh produce market serving the Cowichan Valley area.

Tree of Life: Chris Powell promoted to SVP; Bill Ivany expands COO role Tree of Life Canada has promoted Chris Powell to senior vice-president of customer development, and has expanded Bill Ivany’s duties as chief operating officer.

Chris Powell

Powell has held several different sales and marketing roles since joining Tree of Life’s predecessor company, AshleyKoffman Foods, more than 26 years ago. Previously, Powell was vice-president, marketing, for E.D. Smith & Sons. “This promotion for Chris recognizes his continued excellent work on developing his team and the sales growth that they

September | October 2017

Former Sobeys CEO Marc Poulin has been named executive chairman of a new Canadian seafood company formed by the merger of Riverside Lobster International and Cheticamp Fisheries. Dan Magliocco has been appointed senior vice-president, marketing, strategy and insights, for DanoneWave’s portfolio of dairy brands in Canada. Previously, Magliocco was president of Mondelez Canada. Prior to that, Magliocco held senior roles with Kraft and Nabisco Canada. Mark Ayer has been appointed president and CEO of CROSSMARK Canada, five months after joining the company’s Canadian division as senior vice-president, customer development.

have executed over these past many years,” said Jamie Moody, president, Tree of Life Canada. The company also announced that Powell and the retail customer development team, which includes the sales and Bill Ivany marketing, operations, purchasing and I.T. teams, will now report to Bill Ivany, chief operating officer. Ivany now has full responsibility for the company’s retail route to market.

Front End

ON LOCATION

Pusateri’s launches new consumer awareness campaign Pusateri’s Fine Foods has undergone rapid growth in the past year, opening three new stores and reopening its flagship store in North Toronto. As the company looks to further its market expansion, the management team has implemented a new competitive strategy and hiring strategy, and has brought on creative agency Giants & Gentlemen to lead the campaign. “This is less of a rebranding and more about ensuring new customers in new markets understand who we are and what makes us special,” says Angus McOuat, vice-president of merchandising and marketing at Pusateri’s. “As we expand, we want to be sure that we have a clear brand message for those customers that may not know us.” McOuat says the marketing effort will be directed at two key segments: urban customers who either work or live near Pusateri’s downtown Toronto location; and suburban customers in Toronto’s west end where two new Pusateri’s stores are located. AD_9x5_375_ST_KitchenAid_GB.pdf 1 2017-09-06 10:59 AM

On holiday in Maui, Hawaii: Jim Slomka, The Clorox Company, with his copy of Grocery Business.

Front End

Longo’s opens its 31st store Longo’s has opened a 40,000-sq.-ft. store in Ajax, Ont., its 31st retail location. “We’re very excited to be opening in the Ajax community,” says Anthony Longo, president and CEO, Longo Brothers Fruit Markets. “For over 60 years, my family has had the pleasure of providing Ontarians with nothing but the best.” Longo (pictured far left), along with Rosanne Longo (centre), consumer spokesperson and chair of the Longo’s Family Charitable Foundation, and other family members, were on hand to celebrate the opening. Among the new store’s key elements are Longo’s trademark Loft Cooking School; a full-service deli with more than 300 local and international cheese and deli meats; and a fresh mozzarella station where customers can watch cheese being prepared. The Longo family and team at the Ajax, Ont., store opening.

Front End

United Fresh Award Winners

Larry Bonikowsky

Mary Scianna

The Grocery Business team is growing Grocery Business magazine is expanding its team to help manage growth. Larry Bonikowsky has joined as Director of Content and Market Development, and Mary Scianna is the new Editorial Director. Both have deep experience in the publishing industry, and will be taking on day-to-day business and editorial activities to assist Karen James, Kevin Smith and Dan Bordun in managing Grocery Business’s continuing growth.

In a statement, Karen James, Co-Publisher and Executive Editor, said, “With the amazing support of our industry, Grocery Business has grown rapidly since its launch in 2011. Now, with Mary and Larry joining the team, we’ll be powering-up our sales and content management investment to better serve our reader and advertiser base.” Please join us in welcoming Mary and Larry to the Grocery Business team: Marys@grocerybusiness.ca Larryb@grocerybusiness.ca

September | October 2017 Volume 7, Number 5

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 Director of Content and Market Development Larry Bonikowsky

At this year’s United Fresh Show in Chicago, Metro Inc.’s Carlo Scafati (middle left) and Sobeys’ Andrew Gass (middle right) were each recognized with a United Fresh Produce Manager Award for their commitment to fresh produce, innovative merchandising and community service. Also pictured: Stephen Cowan and Emily Murracas, of Mucci Farms, sponsor of the Awards dinner.

grocerybusiness.ca

Creative Agency Boomerang Art & Design Inc. boomart.net

Cheryl Smith, Parmalat Canada

Subscription changes & updates or general inquiries: info@grocerybusiness.ca

Cori Bonina, Stong’s Markets

David Wilkes, Retail Council of Canada Mary Dalimonte, Sobeys

Bill Ivany, Tree of Life Canada Denis Gendron, United Grocers Inc.

Grocery Business Advisory Council 2017 Editorial Director Mary Scianna Contributing Editors Angela Kryhul, Sally Praskey Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca

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Thomas A. Barlow, Canadian Federation of Independent Grocers Perry Caicco (retired, CIBC)

GST Registration No. 83032 6807 RT0001 Publications Mail Agreement No. PM42211029 ISSN 1927-243X Mailing Address Grocery Business Media 390 Queen’s Quay W., PO Box 40085 Toronto, ON M5V 3A6

Jim Slomka, The Clorox Company Mike Longo, Longo Brothers Fruit Markets

Contributors Ron Lemaire, Karl Littler, Michael Marinangeli, Dr. Doug Norris, John F.T. Scott,

@grocerybusiness

Michael Marinangeli, MIDEB Consulting Inc. Darrell Jones, Overwaitea Food Group

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September | October 2017

Open Mike

Amazon’s Whole Foods Purchase – What’s the Impact? By Michael Marinangeli

Amazon’s purchase of Whole Foods Market marks a historic and disruptive event in the grocery industry. Many say it will spawn the exponential growth of e-commerce in the grocery channel as well as a more rapid expansion of organics, natural foods and higher-end retail concepts with technological efficiencies and logistics. Based on history, mergers and acquisitions of this magnitude often set off a series of events that amplify the impact. In Canada, over the past two decades, we have experienced several major transactions that have influenced and shaped the grocery landscape.

Key disruptors • A&P’s acquisitions of Dominion in 1985 and Miracle Food Mart in 1990, and Metro’s purchase of A&P in 2005, which transformed Metro from a regional chain to a dominant player in two of Canada’s largest markets. • The merger of Price Club and Costco in 1993 to form one of the largest grocery retailers in Canada. • Walmart’s purchase of 144 Woolco stores in 1994, giving it a national base from which to launch food in 2002, and roll out the Supercentre concept in 2006. • Sobeys’ acquisition of The Oshawa Group in 1998, transforming it into the number two grocer in Canada and setting the stage for the purchase of Canada Safeway in 2013. • Shoppers Drug Mart’s introduction of its first large-store format, with emphasis on food, in 2002. Loblaw’s purchase of Shoppers Drug Mart in 2013, combining Canada’s largest grocery and drugstore chains.

September | October 2017

Open Mike

What does Amazon’s purchase of Whole Foods mean to the industry? Although Whole Foods has only 13 stores in Canada, the ultimate effect of the acquisition on the grocery retail landscape in this country could be far-reaching. Online grocery sales in Canada have lagged behind other retail segments. Most consumers surveyed are not interested in online grocery shopping, preferring to buy their fresh foods at bricks-and-mortar stores. Amazon has set the bar when it comes to online shopping, and yet, e-grocery continues to pose a challenge for the company. I think the purchase of Whole Foods is a testament to the importance of bricks-and-mortar stores, and how the two channels can co-exist to grow both segments of the market.

How will this acquisition disrupt the grocery channel? • Amazon became a national grocery chain overnight. It is now the fifth-largest grocery chain in the U.S., with 460 stores.

In summary, Amazon’s purchase of Whole Foods will have a tremendous impact on the grocery channel in the years ahead. Past mergers and acquisitions have demonstrated the ripple effect that a transaction of this scope and magnitude can have on the retail landscape. This is not good news for traditional retailers. Today’s CEOs already have plenty on their plates to worry about; this deal just adds to the stack. After the last round of industry consolidation, we have seen several years of solid growth and profitability. This could be the calm before the storm.

Major challenges today and on the horizon: • Price deflation • Margin compression • Carbon taxes, and cap and trade • Minimum-wage changes • Discount growth and expansion – will Aldi or Lidl launch in Canada?

• Whole Foods will gain more deal dollars from manufacturers, and can take advantage of Amazon’s tremendous buying power.

• Eroding tonnage in conventional store formats

• Amazon now has broader consumer reach, with great retail locations in major urban centres.

• Slow-growth economy

• Amazon gains an efficient distribution system and network for a better understanding of fresh-food handling, logistics, refrigeration, quality assurance, trucks and storage. • Amazon benefits from tremendous goodwill with Whole Foods’ reputation for fresh, organics and natural foods – a must for online grocery success. • A cheap acquisition for Amazon, at US$13.7 billion. It didn’t hurt the balance sheet, and Whole Foods is profitable.

• Growth of online grocery shopping – is it a profitable alternative?

• Ethnic store growth biting into traditional store formats Every action causes a reaction. The Amazon/Whole Foods deal will act as a catalyst for more changes in the industry. Today’s traditional grocers can’t be complacent; change will happen faster than most will anticipate. Hold on to your hats – it’s going to be one heck of a ride!

• Could cause a margin compression in organics and natural foods for its competitors. • Could spark interest for other grocers to expand their online capabilities. • Whole Foods could become more of a competitive threat, and impact the bottom line of current grocers by repositioning to a lower price point. • Sets the stage for future acquisitions.

grocerybusiness.ca

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.

September | October 2017

CHERYL SMITH GENERAL MANAGER, CHEESE & YOGOURT, PARMALAT CANADA By Karen James

BIO BRIEF Cheryl Smith oversees Parmalat Canada’s extensive line of dairy products for her division (including Balderson, President, Galbani, Black Diamond, Cheestrings, Astro, Lactantia and Beatrice). Parmalat Canada is a subsidiary of Parmalat S.p.A., controlled by the Lactalis Group – #1 dairy company in the world (75,000 employees, $25.4 billion annual revenue, 85 countries). Smith holds degrees MASc and BA (UW), as well as director designation ICD.D (Rotman) and Lactalis executive program CLIMBE (ESCP). She is the current chair of the Ontario Dairy Council, a Grocery Foundation board member, and former board member for both Kids Help Phone and the Oakville Community Foundation. In addition to membership in other industry groups, Smith serves on the Grocery Business Advisory Council.

September | October 2017

Cheryl Smith, general manager responsible for the cheese & tablespread, fine cheese and yogourt division at industry leader Parmalat Canada, has had a highly successful CPG career beginning at Unilever 27 years ago. Widely recognized for her extraordinary commitment to industry causes such as The Grocery Foundation and Kids Help Phone, Smith was named one of Canada’s Top 100 Most Powerful Women in 2012. At a time when food companies are experiencing an unprecedented rate of change, Smith’s leadership principles remain refreshingly timeless.

How would you define your leadership style? Empowering and encouraging. It is my job to support others in doing their job well and to help both the team and the individuals on it succeed. I get involved when help is required but get out of the way when it’s not. It is important to be there to accept accountability for issues, but even more important to allow others to take credit for success. People are capable of incredible things – sometimes they just need to be reminded of that. What are the essential qualities of leadership? Leadership requires strength, compassion, integrity, loyalty, focus and the ability to effectively communicate. Most importantly, it requires the development of leaders. It is extremely gratifying to see the success of

C-Suite

LEADERS ON LEADERSHIP

those I have worked with. For broader reach, I initiated and sponsor the Parmalat Canada Women’s Network, dedicated to improving company performance through supporting the advancement of women in leadership roles. The Network is open to all Parmalat Canada employees, and provides a mentorship program and access to networking events. Did you have a mentor who had a strong influence on your career? I’ve been very fortunate to work with many extremely generous coaches and mentors. I have great admiration and appreciation for my master’s thesis advisor, Professor Robert R. Kerton. He introduced me to consumer theory during my undergraduate work in economics, and gained me access to CPG companies’ information during graduate school. My management sciences master’s thesis was an empirical study in defensive marketing based on data from consumers of number one brands from three different companies. It was through this work and my study’s results that Unilever recruited me in 1990 (specifically, Thomas J Lipton at the time). What was the best career advice you received? Be yourself. You have amazing talents. If you are not appreciated in your current situation, change it or move on to another where you will be valued. grocerybusiness.ca

What career accomplishment are you most proud of? Being a member of the team that helped Parmalat Canada survive its financial crisis in 2004. Protecting the livelihoods of over 3,000 employees was a powerful motivator to finding a way to keep the business going. What qualities do you look for when hiring? Positive energy, willingness to develop, desire to seek possibilities, goodness of heart and, of course, enthusiastic passion for our brands and proven ability to take full ownership of initiatives. How do you define success? In many ways, but mainly success is about having a positive impact on business, people and community – particularly caring for the vulnerable among us. I look for tangible results and delivery of business objectives. Always, always strengthen. Nurture the business core/ foundation to maintain value. Invest in growth and develop people to build value. How do you keep up with the ever-changing dairy industry? Joining Parmalat 18 years ago, I thought I was prepared. But businesses like tea have dry, shelf-stable, long-life, warehouse products. There’s no question, dairy is different. The complexities can be immense (refrigeration,

short shelf life, direct store delivery, supply management, NAFTA, CETA, etc.). Experience and trade associations definitely help. As a board member and now chair of the Ontario Dairy Council, I am part of a forum through which milk processors and marketers discuss matters of mutual interest and concern with representatives of government, consumers and milk producers. Further, I love it. I remain a farm girl at heart. My grandparents and greatgrandparents were dairy farmers. Today, I feel great pride in being part of an organization that sees value in providing nutritionally rich Cheestrings to school breakfast programs in order to help children focus on learning instead of being preoccupied with the pain of hunger. What advice would you give to young people considering a career in the food industry? Be prepared to work, take advantage of opportunities for development, and enjoy and share all the rewards. Nourishing Canadians is an important role, and this industry is made up of amazing people, including manufacturers, customers and consumers. When the job seems overwhelming, remember what is most important: our businesses are vital to the community. Providing a secure food supply, employment opportunities and charitable contributions to those in need—clearly, our industry is special!

September | October 2017

Perspective

Food-safety concerns cut across cultures By John F.T. Scott

A couple of years ago, I had the pleasure of spending a few hours with two of Canada’s most prolific independent grocery retailers as I drove them to a retreat. I felt like a fly on the wall as they shared store processes and concepts, both successes and failures. Since they weren’t competitors, their open conversation was refreshing and insightful. At a break in their discussion, I asked, “what keeps you up at night?” The answer was immediate and identical – the possibility of a customer suffering food poisoning, particularly from the extensive and unique in-store prepared meals that are signatures in both instances. Neither had ever had an incident, but it was clear that they were going to extraordinary lengths to ensure it would never happen. Earlier this year, while on a business trip to Saudi Arabia, I had the opportunity to visit a vibrant independent grocery retailer in Al Majma’ah, a medium-sized community that was reasonably modern and culturally very traditional. One of the interesting things about Saudi business is that you must close your premises 10 minutes before prayer time and remain closed for 30 minutes during and after prayer (five times each day). If, as a non-Muslim customer, you find yourself in a store or restaurant at the time the call to prayer sounds, you can stay, but you cannot be served or perform a transaction of any kind. My group happened to be visiting the store at that time. Our interpreter described my background and interest to the owner, who agreed to give me the run of the premises during the period of closure.

September | October 2017

I took full advantage of this opportunity to observe, unimpeded by a formal tour, the operation of an independent grocer from a much different culture. What stood out for me was that the produce was exceptional – fresh and well presented. The meat cuts were notably different from Canada’s and the fish section featured unfamiliar species. There was a wide variety of packaged goods, both familiar and culturally specific. Saudis love their sweets, so the baked-goods department shone in every respect. The prepared-foods selection was limited but outstanding. However, the most impressive aspect of this well-merchandised store was its cleanliness: the floors, shelves, cases, front end and ancillary services were spotless. When the shop reopened, I complimented the owner on various aspects of his store, concluding with its cleanliness. Then I asked the same question that I had of those two amazing Canadian independents: “What keeps you up at night?” His response was immediate – food safety. If there was any incident of food poisoning in his store, he would be out of business very quickly; word would spread immediately. Three terrific independents from very different countries and cultures with the same fundamental response: diligence in food safety is a consumer expectation with huge consequences for failure. These retailers never take it for granted – do you?

John F.T. Scott speaks, writes and consults on the food distribution sector. The author of “Perspectives on the Retail Food Industry,” he is also Chair of the Canadian Agri-Food Policy Institute and Niagara College.

FARM BOY FRESH

Farm Boyâ&#x20AC;&#x2122;s winning strategy is built on ultra-fresh food and superior service. By Mary Scianna PHOTOS: MARC FOWLER

Co-CEOs Jeff York (left) and Jean-Louis Bellemare

At a time when many food retailers are scrambling to discover the next innovative concept, Farm Boy has stayed the course with a strategy based on a fresh market shopping experience and a best-in-class focus on customer service. That approach has helped the company grow from a 300-sq.-ft. one-store operation formed in 1981 in Cornwall, Ont., by Jean-Louis and Colette Bellemare, into a flourishing business boasting more than 23 stores and 3,200 employees across southwestern and eastern Ontario. Co-CEOs Jean-Louis Bellemare, company founder, and Jeff York, who came on board in 2009, are implementing an ambitious five-year growth plan. “We’re putting all of our emphasis on Ontario, and planning to triple our presence in the GTA in the next three years,” says York. Within five years, he predicts, Ontario could see 50 Farm Boy stores. “We want to be a $1-billion company in the next five years.”

THE FARM BOY WAY Farm Boy isn’t a grocery store, insists York. “It’s a fresh-food experience which is part of our DNA.” He isn’t exaggerating. Bellemare, whose father was a produce wholesaler, grew up in the business. “We expanded Farm Boy one department at a time, and we maintained the same philosophy in each department, with a focus on well-priced, extremely fresh food,” says Bellemare. Now Farm Boy has five produce buyers – two in Toronto, two in Ottawa and one in Montreal – and daily deliveries to each store across the chain.

September | October 2017

All photos taken at Farm Boy’s Ottawa-Westboro location

The original concept has evolved into a fresh-food business model that caters to a variety of time-starved customer needs. “We’re there when the customers need us, not when we need them,” says York. “So if they want fresh food to prep and cook at home, we have it. If they want it prepared and ready to cook, it’s there for them. And if they want hot foods they can take home, we have it.” Farm Boy’s flexible food offerings allow it to respond more quickly to changing customer demands. Prepared foods are one example. It’s a growing market for Farm Boy and a major focus for the company’s expanding roster of chefs, overseen by executive chef Josh Drache. Most of Farm Boy’s meals are created at the company’s Ottawa commissary. A group is dedicated to developing recipes for prepared meals and products for the company’s private label.

WALT DISNEY MEETS STEW LEONARD’S Bellemare’s and York’s hope is that when people enter a Farm Boy store, they’ll have the kind of great customer shopping experience that will turn them into loyal shoppers. “As some as retailers are taking animation out of the stores, we’re putting it into our stores,” says Bellemare, who cites Walt Disney as a key influencer for Farm Boy. “We were the first to introduce animatronics in our stores in Canada.” Beyond animation, Bellemare and York believe in making the shopping experience fun, and that’s something Bellemare picked up from yet another influencer: Stew Leonard’s. “Stew Leonard invented experiential food retailing,” he says. “He had a dairy farm and added a store, and then added more and more. The stores are now 150,000 sq. ft., and have food experiences throughout.”

grocerybusiness.ca

PARTNERING WITH FARM BOY Farm Boy’s criterion for products is simple: “It has to fit our concept,” says Bellemare. “When we’re creating our private-label products, we want clean ingredients. When we create our prepared meals, there are no preservatives because that’s what our customers expect from a Farm Boy shopping experience.” Farm Boy prefers to buy locally when it can. “In a perfect world, we would have a local producer who could produce at scale,” says York, but the company also purchases from U.S. suppliers or other global vendors when necessary. “We want companies that have invested in their business and have chosen to grow with us, versus a company that just wants to sell products at any price.”

EMPLOYEE POWER In preparation for expansion, Farm Boy is investing “quite a bit more money” into systems to help employees grow within the company, says Bellemare. York cites an example of an employee who started as a cashier and is now manager of one of the company’s newest concept stores in Ottawa. “We offer careers; we don’t offer jobs,” he says. “We want to see people move up in the company, and we like to promote from within. In this way, we’re able to grow the Farm Boy culture across our store base among all our employees.”

September | October 2017

COMPETITIVE CONFIDENCE If you ask Bellemare and York about competition, they’ll tell you they welcome it. Indeed, when Whole Foods entered the Ottawa market, “it was the best thing for Farm Boy because we were no longer seen as expensive,” explains York. “Every one of our stores has seen sales increases since Whole Foods has been here.” Nor are the co-CEOs concerned about Whole Foods’ new parent company, Amazon, and the impact it may have on consumer shopping patterns. “Online grocery in Canada is two per cent, and the smartest people who live in the online world are predicting that will go up to 12 per cent in the next five to 10 years,” says York. “That’s still 88 per cent of people who are going to be shopping in stores. Farm Boy doesn’t carry products that are going to be sold online. Our focus is on fresh food, whether it’s produce or grab and go.”

CREATING STORE CONCEPTS If you were to visit every one of Farm Boy’s 23-plus stores, you would notice one thing: no two stores are exactly alike – and that’s by design. “Every store we open has to be better than the one we opened previously – that’s our rule,” explains York. “It’s a creative and learning process. If we don’t learn something from every store, then we’re moving backwards.” Farm Boy currently has three main store formats: • traditional 25,000-sq.-ft. stores in suburban areas with larger parking lots; • 18,000- to 20,000-sq.-ft. mixed building use stores, which may include underground parking; • and its newest concept, an 8,000-sq.-ft. urban store. Bellemare says this formula is not set in stone. “We’re playing with a lot of different formats.” A new urban store, set to open in October in downtown Ottawa’s Rideau Centre, will focus more on prepared foods, and will include an eat-in area. Bellemare and York say restaurant-style grab-and-go meals are the fastest-growing segment of the business. “We don’t want to be known as a grocery store,” says Bellemare. “We’re a market where people come for great food.”

September | October 2017

FARM BOY FAST FACTS

400+

# of private-label products

150

Average number of employees in a store

5,200+

# of SKUs per store

250+

# of cheese varieties

per store

Length of salad and feet per store hot food bar

# of salad-bar options

8.5

onsumed by 71% of Canadians(1) and most likely a part of your daily routine, coffee is a major category that generates more than $1 Billion in sales annually(2). Cited as one of the TOP categories consumers

are willing to pay a premium for, coffee(3) is still evolving, influenced by different trends and by the arrival of millennials who value different aspects than their parents when it comes to coffee. • In many grocery categories, shoppers are becoming increasingly knowledgeable about what they consume, and coffee is no exception. Even if some shoppers are looking for the best-priced products, others are evolving into more sophisticated coffee drinkers and are looking for new ways to experience a favourite beverage. This will continue to fuel interest in the premiumization of coffee across the ground, whole-bean or single-serve segments. Younger shoppers also prioritize experience over price, and their consumption of gourmet and specialty coffee beverages is on the rise.(1) • Over the next few pages, we will look at how you can use the coffee category to INCREASE BASKET VALUE of your shoppers and be successful in building a strong connection to this category.

Sources : (1) Canadian Association of Coffee, 2017 (2) Nielsen MarketTrack, Total Canada all channels, dollar sales, 52 weeks ending June 24 2017 (3) Nielsen Global Survey on Premiumization, 2016

BASKET VALUE

STRATEGIC LEADERSHIP COFFEE

$47 AVERAGE TOTAL GROCERY

$97 BASKET CONTAINING COFFEE

$107 KEURIG® COFFEE MAKER COMPATIBLE PODS

Sources: Nielsen Cross Outlet Facts, National all outlets, 52 weeks ending April 1st 2017

8.5

Sources : (1) Canadian Association of Coffee, 2017 (2) Nielsen MarketTrack, Total Canada all channels, dollar sales, 52 weeks ending June 24 2017 (3) Nielsen Global Survey on Premiumization, 2016

BASKET VALUE

STRATEGIC LEADERSHIP COFFEE

$47 AVERAGE TOTAL GROCERY

$97 BASKET CONTAINING COFFEE

$107 KEURIG® COFFEE MAKER COMPATIBLE PODS

Sources: Nielsen Cross Outlet Facts, National all outlets, 52 weeks ending April 1st 2017

8.5

Sources : (1) Canadian Association of Coffee, 2017 (2) Nielsen MarketTrack, Total Canada all channels, dollar sales, 52 weeks ending June 24 2017 (3) Nielsen Global Survey on Premiumization, 2016

BASKET VALUE

STRATEGIC LEADERSHIP COFFEE

$47 AVERAGE TOTAL GROCERY

$97 BASKET CONTAINING COFFEE

$107 KEURIG® COFFEE MAKER COMPATIBLE PODS

Sources: Nielsen Cross Outlet Facts, National all outlets, 52 weeks ending April 1st 2017

INCREASE BASKET VALUE WITH COFFEE

CATEGORY SNAPSHOT

PENETRATION OF COFFEE IN DIFFERENT TYPES OF BASKETS

TRADE UP YOUR SHOPPERS TO PREMIUM COFFEE

Coffee category sales are increasing at +2% vs. last year, driven by a strong growth in Keurig® coffee maker compatible pods. Traditional coffee is growing as fast as the category, but the premium products of that segment are growing at a faster pace, at +8%. Take advantage of these trends and make sure your store offers a good assortment of these products.

Shoppers are making more and more short trips to the grocery store. Their importance went from 39% of the total trips in 2016 to 47% in 2017(1). However, the coffee category is only in 14% of the quick trips (2). Increasing the presence of coffee products in these smaller baskets is a significant opportunity, more so if you think that out of categories most often found in small baskets, 4 are breakfast related: bread, milk, eggs and ready-to-eat cereals (3).

COFFEE SEGMENT SHARES & GROWTH

% OF COFFEE PURCHASES MADE DURING GROCERY TRIPS

+11%

+2%

49%

TRADITIONAL COFFEE

70%

KEURIG® COFFEE MAKER COMPATIBLE PODS

30%

IN QUICK TRIP (ESSENTIAL/ IMMEDIATE)

IN FILL-IN TRIP

Sources : (1) BrandSpark international, 2017 (2) TNS Canada coffee shopper study, 2017 (3) Nielsen Homescan, PE Jan 07 2017

11%

of shoppers are willing to spend more for better quality(1)

14%

16%

IN REGULAR GROCERY (STOCK-UP)

72%

INCREASE SALES WITH DUAL FEATURES

+2%

INSTANT COFFEE

-15%

Source: Nielsen MarketTrack, National Grocery_Drug+Mass Merch+General Merch+Warehouse Club, 24 weeks ending May 27 2017, traditional premium based on regular price.

INCREASE IMPULSE PURCHASES WITH DISPLAYS One of the obvious ways to increase basket value is to convince undecided shoppers to grab a product while they are shopping in your store. Making sure that you have secondary displays, especially if there is a promotion or a new offer, will help you convert more of these shoppers to buy coffee in your store.

269

290

CONSUMER SEGMENTATION

303

369

You know that each client is different. So is each coffee drinker. However, we can group them under 6 main segments based on their coffee-consuming attitudes. This allows us to observe that close to 30% of coffee drinkers would be more susceptible to buying premium products. Look at some of their attitudes to find out why.

Source: *Nielsen MarketTrack, Banner x example, weekly Lift in volume (servings), images as example only

LEVEL OF CATEGORY PURCHASE DECISION

Commitment & Content

10%

23%

Savour & Spend

% OF SHOPPERS WHO PURCHASED THEIR COFFEE FROM A DISPLAY

DECIDED IN-STORE (Undecided)

% 77 PRE-PLANNED

Satisfied with what they use, they love their coffee, and it’s hard to change their purchase habits

19%

Explore & Experiment

To be “in the know” of coffee and enjoy discovering new blends or brands

Coffee holds a special place; they want to learn about it and it’s part of their identity

27% Social but separated

(Decided)

8% PRE-PLANNED

13%

DECIDED IN-STORE

Sustainability is of rising importance to consumers, and could help you increase your profitability! Indeed, 66% of consumers say they are willing to pay more for brands with a commitment to sustainability; this number peaks at 73% amongst younger consumers (Millennials). On top of that, brands that demonstrate a commitment to sustainability grow faster (4% growth) compared to those that do not (less than 1% growth)*. Protecting the environment is a strong Canadian value, and recycling has become a part of our consumption behaviour, as facilities are now available

in 98% of Canadian communities.** At Keurig Canada, we are working to design, source and manufacture products that benefit the communities we touch while minimizing our environmental impact. We’ve made a commitment to transition all our pods to a recyclable format by the end of 2018. We’ve dedicated time and efforts to make sure that this solution was the right one to bring value to the recyclers and the same perfect taste and experience to our consumers. Source: *The Sustainability Imperative, Nielsen Report 2015

ATTRACT THE MOST VALUABLE SHOPPERS

TOTAL LIFT IN VOLUME*

This ad sold 2.69 times the regular volume

The ascendancy of premium coffee experiences at foodservice (i.e., Starbucks, Second Cup) has an impact on Canadians’ view on what coffee can offer. Provenance also continues to be an opportunity for consumers who are seeking flavours that reflect a specific origin(2).

Sources: (1)Beverage Usage and Attitudes Study, Hotspex, n=1483, 2016 (2) Mintel, 2016

Looking at this example in the same banner, when featured alone, the TOTAL LIFT of the two product groups comes up from 270 to 300; but when they are featured together, it increases to 369! It’s a way to address the need of more consumers for K-Cup® pods, traditional packaged coffee, or both!

COFFEE DISCS (TASSIMO®)

PREMIUMNESS

21% Indifferent Disengaged coffee shoppers, buying what’s on sale

Coffee is a necessary part of their day, to kick-start the day, as part of social experiences or at meal time

14% Rhythm & Routine Coffee is strongly related to the first cup in the morning

Segments that are more susceptible to buying premium coffee

CONSUMERS ATTITUDES TOWARD COFFEE Explore & Experiment I like to be in the know about new types of coffee that come out

INDEX

(overdeveloped vs total consumers)

157%

I love tasting new blends of coffee

135%

If a brand guided me to exploring coffees from around the world, I’d be interested in knowing more about the different types and flavours

136%

I am willing to spend more for better quality

131%

Serving good coffee really matters when I host

120%

Savour & Spend

INDEX

If a brand guided me to exploring coffees from around the world, I’d be interested in knowing more about the different types and flavours

WE WORKED WITH THE RECYCLING INDUSTRY TO ENSURE OUR K-CUP® PODS COULD REALLY BE RECYCLED.

They are made from #5 plastic, a material recycled in 94% of Canadian communities.

They help maintain our products’ freshness and taste.

All K-Cup® pods in Canada will be recyclable by the end of the year 2018.

135% 178%

I look forward to my next cup of coffee

133%

I like to be in the know about new types of coffee that come out

163%

Source: Beverage Usage and Attitudes Study, Hotspex, n=1483, 2029

LID AND DISPOSE.

CONTENTS OR COMPOST. FILTER CAN REMAIN.

142%

Coffee is a part of my identity, part of who I am

1. PEEL

2. EMPTY

(overdeveloped vs total consumers)

I am willing to spend more for better quality

They can be recycled in three easy steps:

3. RECYCLE

**In comparison, only 1% of Canadians have access to a composting program that accepts bioplastics/compostable plastics. If consumers are unable to send their compostable pods to an industrial composting facility, which are not common across Canada, they will not degrade properly in backyard composting or local facilities focused on household organics.

www.keurig.ca/recyclable

Source: TNS Canada coffee shopper study, 2017, last coffee purchased

STRATEGIC LEADERSHIP

Source: Beverage Usage and Attitudes Study, Hotspex, n=1483, 2029

STRATEGIC LEADERSHIP

INCREASE BASKET VALUE WITH COFFEE

CATEGORY SNAPSHOT

PENETRATION OF COFFEE IN DIFFERENT TYPES OF BASKETS

TRADE UP YOUR SHOPPERS TO PREMIUM COFFEE

COFFEE SEGMENT SHARES & GROWTH

% OF COFFEE PURCHASES MADE DURING GROCERY TRIPS

+11%

+2%

49%

TRADITIONAL COFFEE

70%

KEURIG® COFFEE MAKER COMPATIBLE PODS

30%

IN QUICK TRIP (ESSENTIAL/ IMMEDIATE)

IN FILL-IN TRIP

Sources : (1) BrandSpark international, 2017 (2) TNS Canada coffee shopper study, 2017 (3) Nielsen Homescan, PE Jan 07 2017

11%

of shoppers are willing to spend more for better quality(1)

14%

16%

IN REGULAR GROCERY (STOCK-UP)

72%

INCREASE SALES WITH DUAL FEATURES

+2%

INSTANT COFFEE

-15%

Source: Nielsen MarketTrack, National Grocery_Drug+Mass Merch+General Merch+Warehouse Club, 24 weeks ending May 27 2017, traditional premium based on regular price.

269

290

CONSUMER SEGMENTATION

303

369

Source: *Nielsen MarketTrack, Banner x example, weekly Lift in volume (servings), images as example only

LEVEL OF CATEGORY PURCHASE DECISION

Commitment & Content

10%

23%

Savour & Spend

% OF SHOPPERS WHO PURCHASED THEIR COFFEE FROM A DISPLAY

DECIDED IN-STORE (Undecided)

% 77 PRE-PLANNED

Satisfied with what they use, they love their coffee, and it’s hard to change their purchase habits

19%

Explore & Experiment

To be “in the know” of coffee and enjoy discovering new blends or brands

Coffee holds a special place; they want to learn about it and it’s part of their identity

27% Social but separated

(Decided)

8% PRE-PLANNED

13%

DECIDED IN-STORE

ATTRACT THE MOST VALUABLE SHOPPERS

TOTAL LIFT IN VOLUME*

This ad sold 2.69 times the regular volume

Sources: (1)Beverage Usage and Attitudes Study, Hotspex, n=1483, 2016 (2) Mintel, 2016

COFFEE DISCS (TASSIMO®)

PREMIUMNESS

21% Indifferent Disengaged coffee shoppers, buying what’s on sale

Coffee is a necessary part of their day, to kick-start the day, as part of social experiences or at meal time

14% Rhythm & Routine Coffee is strongly related to the first cup in the morning

Segments that are more susceptible to buying premium coffee

CONSUMERS ATTITUDES TOWARD COFFEE Explore & Experiment I like to be in the know about new types of coffee that come out

INDEX

(overdeveloped vs total consumers)

157%

I love tasting new blends of coffee

135%

If a brand guided me to exploring coffees from around the world, I’d be interested in knowing more about the different types and flavours

136%

I am willing to spend more for better quality

131%

Serving good coffee really matters when I host

120%

Savour & Spend

INDEX

If a brand guided me to exploring coffees from around the world, I’d be interested in knowing more about the different types and flavours

WE WORKED WITH THE RECYCLING INDUSTRY TO ENSURE OUR K-CUP® PODS COULD REALLY BE RECYCLED.

They are made from #5 plastic, a material recycled in 94% of Canadian communities.

They help maintain our products’ freshness and taste.

All K-Cup® pods in Canada will be recyclable by the end of the year 2018.

135% 178%

I look forward to my next cup of coffee

133%

I like to be in the know about new types of coffee that come out

163%

Source: Beverage Usage and Attitudes Study, Hotspex, n=1483, 2029

LID AND DISPOSE.

CONTENTS OR COMPOST. FILTER CAN REMAIN.

142%

Coffee is a part of my identity, part of who I am

1. PEEL

2. EMPTY

(overdeveloped vs total consumers)

I am willing to spend more for better quality

They can be recycled in three easy steps:

3. RECYCLE

www.keurig.ca/recyclable

Source: TNS Canada coffee shopper study, 2017, last coffee purchased

STRATEGIC LEADERSHIP

Source: Beverage Usage and Attitudes Study, Hotspex, n=1483, 2029

STRATEGIC LEADERSHIP

INCREASE BASKET VALUE WITH COFFEE

CATEGORY SNAPSHOT

PENETRATION OF COFFEE IN DIFFERENT TYPES OF BASKETS

TRADE UP YOUR SHOPPERS TO PREMIUM COFFEE

COFFEE SEGMENT SHARES & GROWTH

% OF COFFEE PURCHASES MADE DURING GROCERY TRIPS

+11%

+2%

49%

TRADITIONAL COFFEE

70%

KEURIG® COFFEE MAKER COMPATIBLE PODS

30%

IN QUICK TRIP (ESSENTIAL/ IMMEDIATE)

IN FILL-IN TRIP

Sources : (1) BrandSpark international, 2017 (2) TNS Canada coffee shopper study, 2017 (3) Nielsen Homescan, PE Jan 07 2017

11%

of shoppers are willing to spend more for better quality(1)

14%

16%

IN REGULAR GROCERY (STOCK-UP)

72%

INCREASE SALES WITH DUAL FEATURES

+2%

INSTANT COFFEE

-15%

Source: Nielsen MarketTrack, National Grocery_Drug+Mass Merch+General Merch+Warehouse Club, 24 weeks ending May 27 2017, traditional premium based on regular price.

269

290

CONSUMER SEGMENTATION

303

369

Source: *Nielsen MarketTrack, Banner x example, weekly Lift in volume (servings), images as example only

LEVEL OF CATEGORY PURCHASE DECISION

Commitment & Content

10%

23%

Savour & Spend

% OF SHOPPERS WHO PURCHASED THEIR COFFEE FROM A DISPLAY

DECIDED IN-STORE (Undecided)

% 77 PRE-PLANNED

Satisfied with what they use, they love their coffee, and it’s hard to change their purchase habits

19%

Explore & Experiment

To be “in the know” of coffee and enjoy discovering new blends or brands

Coffee holds a special place; they want to learn about it and it’s part of their identity

27% Social but separated

(Decided)

8% PRE-PLANNED

13%

DECIDED IN-STORE

ATTRACT THE MOST VALUABLE SHOPPERS

TOTAL LIFT IN VOLUME*

This ad sold 2.69 times the regular volume

Sources: (1)Beverage Usage and Attitudes Study, Hotspex, n=1483, 2016 (2) Mintel, 2016

COFFEE DISCS (TASSIMO®)

PREMIUMNESS

21% Indifferent Disengaged coffee shoppers, buying what’s on sale

Coffee is a necessary part of their day, to kick-start the day, as part of social experiences or at meal time

14% Rhythm & Routine Coffee is strongly related to the first cup in the morning

Segments that are more susceptible to buying premium coffee

CONSUMERS ATTITUDES TOWARD COFFEE Explore & Experiment I like to be in the know about new types of coffee that come out

INDEX

(overdeveloped vs total consumers)

157%

I love tasting new blends of coffee

135%

If a brand guided me to exploring coffees from around the world, I’d be interested in knowing more about the different types and flavours

136%

I am willing to spend more for better quality

131%

Serving good coffee really matters when I host

120%

Savour & Spend

INDEX

If a brand guided me to exploring coffees from around the world, I’d be interested in knowing more about the different types and flavours

WE WORKED WITH THE RECYCLING INDUSTRY TO ENSURE OUR K-CUP® PODS COULD REALLY BE RECYCLED.

They are made from #5 plastic, a material recycled in 94% of Canadian communities.

They help maintain our products’ freshness and taste.

All K-Cup® pods in Canada will be recyclable by the end of the year 2018.

135% 178%

I look forward to my next cup of coffee

133%

I like to be in the know about new types of coffee that come out

163%

Source: Beverage Usage and Attitudes Study, Hotspex, n=1483, 2029

LID AND DISPOSE.

CONTENTS OR COMPOST. FILTER CAN REMAIN.

142%

Coffee is a part of my identity, part of who I am

1. PEEL

2. EMPTY

(overdeveloped vs total consumers)

I am willing to spend more for better quality

They can be recycled in three easy steps:

3. RECYCLE

www.keurig.ca/recyclable

Source: TNS Canada coffee shopper study, 2017, last coffee purchased

STRATEGIC LEADERSHIP

Source: Beverage Usage and Attitudes Study, Hotspex, n=1483, 2029

STRATEGIC LEADERSHIP

INCREASE BASKET VALUE WITH COFFEE

CATEGORY SNAPSHOT

PENETRATION OF COFFEE IN DIFFERENT TYPES OF BASKETS

TRADE UP YOUR SHOPPERS TO PREMIUM COFFEE

COFFEE SEGMENT SHARES & GROWTH

% OF COFFEE PURCHASES MADE DURING GROCERY TRIPS

+11%

+2%

49%

TRADITIONAL COFFEE

70%

KEURIG® COFFEE MAKER COMPATIBLE PODS

30%

IN QUICK TRIP (ESSENTIAL/ IMMEDIATE)

IN FILL-IN TRIP

Sources : (1) BrandSpark international, 2017 (2) TNS Canada coffee shopper study, 2017 (3) Nielsen Homescan, PE Jan 07 2017

11%

of shoppers are willing to spend more for better quality(1)

14%

16%

IN REGULAR GROCERY (STOCK-UP)

72%

INCREASE SALES WITH DUAL FEATURES

+2%

INSTANT COFFEE

-15%

Source: Nielsen MarketTrack, National Grocery_Drug+Mass Merch+General Merch+Warehouse Club, 24 weeks ending May 27 2017, traditional premium based on regular price.

269

290

CONSUMER SEGMENTATION

303

369

Source: *Nielsen MarketTrack, Banner x example, weekly Lift in volume (servings), images as example only

LEVEL OF CATEGORY PURCHASE DECISION

Commitment & Content

10%

23%

Savour & Spend

% OF SHOPPERS WHO PURCHASED THEIR COFFEE FROM A DISPLAY

DECIDED IN-STORE (Undecided)

% 77 PRE-PLANNED

Satisfied with what they use, they love their coffee, and it’s hard to change their purchase habits

19%

Explore & Experiment

To be “in the know” of coffee and enjoy discovering new blends or brands

Coffee holds a special place; they want to learn about it and it’s part of their identity

27% Social but separated

(Decided)

8% PRE-PLANNED

13%

DECIDED IN-STORE

ATTRACT THE MOST VALUABLE SHOPPERS

TOTAL LIFT IN VOLUME*

This ad sold 2.69 times the regular volume

Sources: (1)Beverage Usage and Attitudes Study, Hotspex, n=1483, 2016 (2) Mintel, 2016

COFFEE DISCS (TASSIMO®)

PREMIUMNESS

21% Indifferent Disengaged coffee shoppers, buying what’s on sale

Coffee is a necessary part of their day, to kick-start the day, as part of social experiences or at meal time

14% Rhythm & Routine Coffee is strongly related to the first cup in the morning

Segments that are more susceptible to buying premium coffee

CONSUMERS ATTITUDES TOWARD COFFEE Explore & Experiment I like to be in the know about new types of coffee that come out

INDEX

(overdeveloped vs total consumers)

157%

I love tasting new blends of coffee

135%

If a brand guided me to exploring coffees from around the world, I’d be interested in knowing more about the different types and flavours

136%

I am willing to spend more for better quality

131%

Serving good coffee really matters when I host

120%

Savour & Spend

INDEX

If a brand guided me to exploring coffees from around the world, I’d be interested in knowing more about the different types and flavours

WE WORKED WITH THE RECYCLING INDUSTRY TO ENSURE OUR K-CUP® PODS COULD REALLY BE RECYCLED.

They are made from #5 plastic, a material recycled in 94% of Canadian communities.

They help maintain our products’ freshness and taste.

All K-Cup® pods in Canada will be recyclable by the end of the year 2018.

135% 178%

I look forward to my next cup of coffee

133%

I like to be in the know about new types of coffee that come out

163%

Source: Beverage Usage and Attitudes Study, Hotspex, n=1483, 2029

LID AND DISPOSE.

CONTENTS OR COMPOST. FILTER CAN REMAIN.

142%

Coffee is a part of my identity, part of who I am

1. PEEL

2. EMPTY

(overdeveloped vs total consumers)

I am willing to spend more for better quality

They can be recycled in three easy steps:

3. RECYCLE

www.keurig.ca/recyclable

Source: TNS Canada coffee shopper study, 2017, last coffee purchased

STRATEGIC LEADERSHIP

Source: Beverage Usage and Attitudes Study, Hotspex, n=1483, 2029

STRATEGIC LEADERSHIP

8.5

Sources : (1) Canadian Association of Coffee, 2017 (2) Nielsen MarketTrack, Total Canada all channels, dollar sales, 52 weeks ending June 24 2017 (3) Nielsen Global Survey on Premiumization, 2016

BASKET VALUE

STRATEGIC LEADERSHIP COFFEE

$47 AVERAGE TOTAL GROCERY

$97 BASKET CONTAINING COFFEE

$107 KEURIG® COFFEE MAKER COMPATIBLE PODS

Sources: Nielsen Cross Outlet Facts, National all outlets, 52 weeks ending April 1st 2017

September / October 2017

PMA FRESH SUMMIT PREVIEW

BCfresh CELEBRATES 25 YEARS

CONCERTINO

5539

NON GMO

#WINDSETFARMS

VERI

Project FI E D

let’s grow together

GREAT IDEAS ARE ALWAYS IN SEASON. Thousands of your peers. Countless connections. All under one roof. Fresh Summit brings together industry leaders from every segment of the global supply chain. Connect with experts, exchange ideas and discover innovations reshaping the produce and floral landscape.

October 19-21, 2017 New Orleans, Louisiana USA Convention: Thursday – Saturday • Exposition: Friday – Saturday

F R E S H S U M M I T. C O M #FRESHSUMMIT

A Global Affair With fresh produce and floral exhibitors from nearly 30 countries, and visitors from over 60, the Produce Marketing Association’s Fresh Summit is truly a global event and a must-attend event for Canadian produce buyers. Check out what’s new and noteworthy at this year’s Fresh Summit.

FRESH IDEAS SHOWCASE 200 trendsetting products in the categories of on-the-go, kid-friendly, organic, floral and general. Sensory Experience Contest: An exclusive event where key buyers and industry experts select recipes based on an overall food experience.

A LEARNING EXPERIENCE 15 Educational Workshops: Experts in the fields of global connections, industry talent, floral, and science and technology. Networking events such as the Global Connections reception.

OCTOBER 19-21, 2017 NEW ORLEANS, LOUISIANA

AWARDS NEW! The Bryan E. Silbermann Collaboration Award The Floral Marketer of the Year Award The Robert L. Carey Leadership Award

1,000+ exhibitors

70+

first-time exhibitors

@ 2016’s Fresh Summit Keynotes include PMA CEO Cathy Burns’ annual State of the Industry address, and futurist Brian David Johnson.

grocerybusiness.ca

September | October 2017

© 2015 POM Wonderful LLC. All Rights Reserved. POM, POM WONDERFUL, POM POMS WONDERFUL, the Bottle Design and the accompanying logos are registered trademarks of Canada Bread Company, Limited, and used by POM Wonderful LLC under license. PF13865

It’s P∂M Time! At P∂M, we believe fall is the most W∑nderful time of the year. Especially if your produce department is fully stocked with P∂M P∂MS, P∂M Wonderful 100% Pomegranate Juice and P∂M Wonderful fresh pomegranates. All three will be supported with a national marketing campaign, including in-store POS, promotional support and public relations! To help sweeten your season, our tasty trio will be supported by the biggest merchandising team in produce. Get ready. It’s gonna be P∂M time all the time. Order your P∂M display bins now at CustomerService.POM@Wonderful.com or contact your local W∑nderful Sales representative at 877.328.7667.

CE U D PRO

R O D VEN

R O S ADVI

ANIC ORG

of Canadians buy organic

groceries every week*

Connecting organic growers with people who are passionate about eating real food! ESTABLISHED: 2004 LOCATION: Vaughan, Ont. SOURCE: Directly from certifiedorganic produce growers in Ontario, Quebec and B.C., as well as carefully selected sources in the United States and internationally. DISTRIBUTION: Independent health and natural food retailers including Fiesta Farms, Nature’s Emporium and Goodness Me!, as well as chains such

Delivering on quality, selection and personalized service Mike & Mike’s Organics is unique in the Ontario market for offering retailers hundreds of fresh, certified-organic fruits and vegetables, including multiple varieties of produce. Got something in mind? Just ask! Our sales team is in daily contact with retail customers who trust M&MO to fill their customized orders, fresh and fast. M&MO delivers directly to stores across the Greater Toronto Area and beyond, six days a week.

as Longo’s. STAFF: More than 50 team members.

mikeandmikesorganics.com

COME FOR A VISIT! Contact Marco to book a tour of our amazing facility and to receive a Mike & Mike’s Organics ball cap!

mcapizzo@mikeandmikes.com

Canadian

households spend

$27.45

per week

on organic food*

M&MO offers the largest selection

M&MO:

300+

different items All other suppliers combined: 100 items

Conventional supermarkets and grocery stores are still the most popular destinations for buying organic foods* MEET THREE OF OUR LOCAL GROWERS Mike Lanigan and his sons, Miles and Rowan, of Farmhouse Garden Organics, a certified biodynamic/ organic farm in Uxbridge, Ont.

CERTIFIED ORGANIC

It’s all we do!

• Dedicated team operating 6 days a week • Largest and widest variety of organic produce available • Long-standing relationships with our growers • A 43,000 sq.-ft., certified-organic refrigerated facility • Responsible environmental policies practiced in our facility • Less than perfect food is delivered to Second Harvest

FRUITS & VEGETABLES

are the most commonly purchased organic food, followed by meat, poultry and dairy*

mikeandmikesorganics.com * Statistics courtesy of the Canada Organic Trade Association (COTA). For more information, visit ota-canada.ca

WAS THERE!

CANADIAN PRODUCE MARKETING ASSOCIATION 2017 Convention and Trade Show May 9-11, 2017, Toronto Todd Watson, A.G. Bro

s and Lisa Vegso

PECO Pallet’s Spero Mouka

ra Berryessa

Castle Rock Vineyards’ Lau and Steven Shearer

Rick Alcocer, Duda Farm Fresh Foods, CPMA Chair

ful Company

Chris Cockle, The Wonder

Kevin Hayes, United Grocers Inc.

Denis Gendron, United Grocers Inc.

racas with and Emily Mur Steve Cowan new Cherto Tomatoes Mucci Farms’

Wendel Clark, former Toronto Maple Leaf, with Maria Proulx, Grocery Business

Ron Lemaire, CPMA, with Michele McMillanand Sam Silvestro , Sobeys Inc. Alison George, Peanu t Bureau of Canada; Stephanie Gru American Peanut Coun nenfelder, cil

Brad Brownsey, Florid

a Tomatoes

Dave Powell and Brad Walsh, Atlantic Grocery Distributors Michael with ManSousa and Ben A Nourish n’s Award Winn lviano Bowls ing

d Olsen, Lori Burns, Jim Waites, kBra Cook, Michael Reisig and Ric Overwaitea Food Group

September | October 2017

with Sunkist’s Joan Wickham erines ng Ojai Pixie Ta

ilia OPMA’s Dee Klemann, Em DeSousa, Fallon Streef and Virginia Zimm

Produce Manager

STRAWBERRIES

IN JANUARY Why NAFTA renegotiations are critical to Canada’s food retail industry.

Ron Lemaire, President, Canadian Produce Marketing Association

By Ron Lemaire

Canadians are known for enjoying a wide variety of fresh fruits and vegetables, and since the implementation of NAFTA in 1994, they’ve been able to purchase fresh produce year round. In the years since the agreement was ratified, the relationship has continued to deepen, to the benefit of all NAFTA signatories. The trade agreement’s success is evident in the numbers: • Canadian fresh fruit and vegetable exports to Mexico and the U.S. have increased close to 400 per cent to more than $2 billion. • Canadian fresh fruits and vegetable imports from the U.S. reached $4.2 billion in 2016. • U.S. agricultural imports to Canada have resulted in an increase in U.S. jobs estimated to be 273,530. • Canada is the second-largest trading partner for the U.S. • The volume of agricultural trade has increased six-fold among Canada, the U.S. and Mexico.

grocerybusiness.ca

Clearly, barrier-free North American trade is a win–win for everyone, and all parties at the negotiating table must ensure they “do no harm” to a system that works and benefits economies on both sides of the border. CPMA has been actively involved in meetings with government officials through the Agricultural Trade Negotiations Consultation Group and with key produce stakeholder associations within NAFTA countries to help strengthen trading relationships. There are many ways for Canada and the U.S. to strengthen trading ties: • shrink the border by implementing a perimeter approach to trade, and establish a single-access window at one point of border entry; • standardize Maximum Residue Limits (MRLs); • create a joint registration system for pest-control products and pesticides; • align regulatory structures around the approval and importation of biotech crops;

•e stablish a North American food safety authority to ensure a common scientific foundation for assessing and preventing emerging foodborne threats and for recommending food safety risk thresholds for pathogens, residues and allergens. The current agri-food system works well. We export $25 billion in food and agri-food products to the U.S., and import $25 billion. The reality is NAFTA works. The original goal was to remove tariffs and seasonal duties, and allow for this economic engine to grow on both sides of the border. The Free Trade model is important for the food and agri-food sector. Indeed, the Barton Report, a set of recommendations from the federal government’s Advisory Council on Economic Growth that looks at Canada’s economic prosperity, sets out a target to diversify and grow Canada’s agri-food exports from $55 billion in 2015 to at least $75 billion by 2025. An important part of this is to ensure that we don’t minimize U.S. opportunities by removing a trade deal that is vital to Canada and to the U.S.

September | October 2017

To squeeze the most out of citrus sales opportunities, contact Sunkist sales: sales@sunkistgrowers.com. Sunkist is a registered trademark of Sunkist Growers Inc., USA. ÂŠ2016

CE U D PRO

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Celery is a very good source of vitamins A, C & K, folate, potassium and manganese.

R O S ADVI ERY

CEL

SPONSORED BY:

Trade.USAPears.org

CANADIAN PEAR CONSUMERS(2)

PEARS FROM THE NORTHWEST USA

• Age – 35; nearly 50% between 35-54

The United States is the third largest pear-producing country in the world, and Washington and Oregon’s Pacific Northwest is the largest pear growing region with nearly 900 grower families producing an average of 56 percent of all fresh pears imported into Canada.(1) When local Canadian pears are out of season, USA Pears are available to satisfy pear lovers. Ask for more information about our 10 varieties.

• Household – 37% with children

Leading USA Pears varieties

ANJOU

BARTLETT

BOSC

sweet & juicy with hint of citrus

classic pear aroma, sweet & juicy

crisp & woodsy with a honey sweetness

• Income – over 50% earn more than $70K • Care about eating fruits and vegetables • Interested in varieties and expanded uses

TR ADE.USAPEARS .OR G • T HE BU SIN E SS OF PE A R S, TOOLS O F TH E TR AD E

SNACK ON PEARS

alf of all eating occasions are now snack driven.

According to a recent report,

Display conditioned pears.

substitute a snack for break-

• Pear consumers want to eat pears in 1-2 days not in a week.(3) • Pear consumers want ‘sweetness’ and ‘flavour’ in their pears and only ripe pears deliver. • Increase sales by 19.5% with conditioned pears.(4)

fast or lunch.(2) Millennials are leading the way, and are more likely than any other demographic to snack the day. Pears are a very good source of fiber (26% RDI) and a good source of vitamin C (15% RDI)

TIPS

45 percent of Canadians

multiple times throughout

MERCHANDISING

72%

of Canadians substitute a snack in place of meals.

Position pears at the front of the produce department.

for only 133 calories per medium sized pear. Sweet and juicy with no fat,

• Over 1/2 of pear purchases are unplanned.

no sodium, and no cholesterol, pears are a perfect choice for a snack as well as for any meal of the day.

Visit USAPears.org for more pear facts and recipes.

Carry multiple pear varieties throughout the season. • Consumers are interested in trying a fresh variety of pears. • Colour and shape form a naturally eye-catching pear-centric display. • Offering a second size or bagged pears will meet consumer demand and generate additional sales.

PEAR MARKETING AND MERCHANDISING TRAINING

Trade.USAPears.org • USA Pears University

online training program • 20 minutes to complete

and receive a free hat and certificate

Trade.USAPears.org The Business of Pears

USAPears.org The world’s largest website dedicated to pears

(1) Export Marketing Development Report: Pears in Canada, Jan. 2016. (2) Canada Nielsen, 2014 (3) Pear Usage and Attitude Study: Fusion Marketing, Nov. 2014 (4) Perishable Group Study, 2012

3 4

Display pears in secondary locations with items like yogurt, cheese, and bagged salads. • Time starved shoppers want meal ideas and insPEARation.

WASHINGTON’S

FINEST FRUIT for over 100 years.

By combining ideal growing conditions with industry-leading growing practices and processing technology, Chelan Fresh produces the most luscious and ﬂavorful apples, pears, and cherries nature has to offer. We couldn’t produce the ﬁnest conventional and organic fruits without the best growers, and Chelan Fresh growers are recognized for bringing unmatched experience and knowledge to every crop. Our Canadian apple growers win top industry awards year after year in recognition of consistent quality of fruit, variety integrity, and innovative farming practices.

INNOVATIVE, RELIABLE & ABUNDANT We have invested in building state-of-the-art processing lines, chilling fruit from the moment it is picked and greatly reducing the impact of human touch. The result of this unmatched investment in innovation is consistent, reliable availability of premium fruit varieties.

MAKE AN APPOINTMENT WITH FRESHNESS Our innovative Appointment Loading Service for outbound shipments dramatically reduces waiting times and expedites shipments direct to you. In fact, we are meeting our goal loading scheduled shipments in 20 minutes or much less.

BORTON FRUIT AND THE APPLE TREE LABEL ARE NOW PROUDLY DISTRIBUTED BY CHELAN FRESH. When two families with over 100 years of farming experience come together, you know you will continue to receive the freshest fruit nature has to offer. Our mountain elevation and fertile valleys provide a longer growing season, and the cool air grows crisp, tasty, high-color fruit. With our state-of-the-art processing facilities and innovative growing practices, we continue to pack the best fruit for your customers.

POPULAR VARIETIES OF APPLES DELIVERED YEAR-ROUND Farm fresh Canadian apples are a favorite with consumers for their consistent quality and taste as well as our ingenious point-of-sale and packaging. Along with uniquely engaging features like a “Taste Meter” and clear packaging to better show color and quality, our unique packaging supports the health and lifestyle attributes of our many varieties, including the popular Ambrosia and Gala, that consumers expect from Chelan Fresh.

These are only a few of the many reasons to choose Washington’s ﬁnest grown fruit from Chelan Fresh. chelanfresh.com • 509.682.4252

Get a taste of many more at PMA Booth 2261.

Independents’ Day

FMS and Canadian Federation of Independent Grocers

2016 Financial Survey Now in its third year, the FMS and Canadian Federation of Independent Grocers Financial Survey has become an important benchmarking tool for independent retailers, allowing them to assess their performance against their competitors and peers.

“While unemployment remained steady, the pace of inflation in 2016 declined sharply by more than three per cent,” said Bob Graybill, president and CEO of FMS Financial Management Systems Ltd., whose company conducts the survey in partnership with the Canadian Federation of Independent Grocers. “Canadian consumers were reeling from two years of high inflation because of currency changes, but now they’re better positioned to absorb those price hikes, since hourly wages increased by an average of 68 cents in 2015 and another 54 cents in 2016.

“For retailers, an improved economy and slower inflation helped improve 2016 net profits before taxes to nearly twice the level of the previous year with little changes to margins,” Graybill added.

September | October 2017

KEY AREAS OF CONCERN

Traditionally, operational efficiency has been the main focus of independent grocers, but 2016 saw growing emphasis on customers’ changing demographic makeup and how that is affecting product preferences and shopping behaviours.

Independentsâ&#x20AC;&#x2122; Day

FINANCIAL BENCHMARKS Same-store Sales Gains

2016

2015

2014

+1.19% +4.82% +3.08%

42.8%

Sales Distribution Across the Store Total Grocery

59.78%

Total Produce

12.42%

Total Meat

25.40%

Total Pharmacy and Other

2.40%

Employee Turnover Part-time

11.4% Employee Turnover Full-time

OPERATIONAL BENCHMARKS Overall Employee Turnover

2016

0.97% grocerybusiness.ca

2015

2.40% September | October 2017

Independentsâ&#x20AC;&#x2122; Day

19 42

Average cashier scans and cases stocked per active minute

Average number of cases stocked per hour during the day

TOTAL STORE

Inventory Turns

Shrink

14.9%

2.8%

Dry Grocery

12.4%

1.5%

Dairy

32.7%

2.0%

Average number of cases stocked per hour at night

TOTAL STORE GROSS MARGINS

2016

25.78 2015

Produce

42.6%

5.6%

25.90

Meat

28.7%

3.1%

2014

N/A

4.0%

Fresh Prepared

27.20

2016 EXPENSE ALLOCATION

13.15% Labour and Benefits

11.33% Other Expenses

NET PROFIT 2016

1.52% 62

2015

0.88%

September | October 2017

2014

2.7%

Since 1974, FMS Solutions Holdings LLC has supported independent grocers in their decision-making process by providing them with financial tools that are timely and accurate. FMS is a proud member of the Canadian Federation of Independent Grocers, and Distribution Canada Inc.

C A T E G O RY C A P T A I N

RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERSH STRATEGIC LEADERSHIP YOGOURT 2017 â&#x20AC;¢

NATURAL IS POISED FOR GROWTH

anadians love yogourt. It is the sweet spot between nutritious,

the key consumer trends in food,

including yogourt.1

2006

2016

great-tasting, and satiating. Currently, yogourt is consumed for breakfast

and snacks, but as consumers snack more, the growth will be phenomenal.

Other segments come and go, but

The category has been projected to hit $2.1B in 2021!

the natural and organic segments continue to hold their ground.

Total yogourt category is 304M Kg. Spoonable yogourt still makes up more than 80% of the category.

Natural claims such as

91.3%

and “all natural yogourt” are the

$108.10

16.7 X

1.9

Natural segment is also outpacing the category. Drinkable yogourt is now 14% of the category and growing at +5%, supported by strong growth from Kefir.

with consumers.2 Household Penetration

Spend per year on Yogourt ($6.40 per trip)

Trips per year

Units per trip Source: 1 Mintel Yogourt 2016. 2016 TNS MaxDiff Positioning Research 2 https://www.new-nutrition.com/report/showReport/1528

TOTAL YOGOURT CATEGORY, BY SEGMENTS $1.7 BILLION $Shr (Chg) 27.9 (+4%)

Greek Functional

19.6 (-5%)

10.8 (+2%)

Natural

9.0 (-17%)

Weight Management

Kids Organic

STRATEGIC LEADERSHIP • 2017

4 am

GREEK YOGOURT CONTINUES TO LEAD

8.9 (-3%) 5.7 (+5%)

• C onsumers are motivated by the high protein claim and

10 am

1 pm

3 pm

5 pm

9 pm

YOGOURT - % OF OCCASIONS

• Greek is the #1 segment in the category, and continues to outpace yogourt growth

7 am

Source: Nielsen Company, Consumption Diary National, 2015

13.9 (+5%)

Drinkable

Taste Source: Nielsen MarketTrack National Grocery+Drug+Mass, L52 weeks PE June 29 2017.

For more information, please visit the new Astro website www.astro.ca

top claims that resonate most

Source: Nielsen Homescan Panel Data, L52 weeks PE March 24, 2017

Greek segment is around 1/3 of the total category, growing at +4%

“100% natural ingredients”

nacking is the #1 eating occasion for yogourt, at 43%. With Canadians snacking more frequently throughout the day, yogourt is the perfect snack for them, as it is nutritious, satiating and portable. Currently, most of the yogourt consumption is in the morning. Yogourt is well positioned to grow in the afternoon and evening occasions, with more premium ingredients, interesting textures and exciting seasonal flavours.

% of Meal Hour

MARKET FACTS

THE YOGOURT CONSUMER

YOGOURT IS THE GO-TO SNACK

+52%

Natural Ingredients are one of

STRATEGIC LEADERSHIP – CATEGORY SNAPSHOT

NATURAL’S $SHARE OF TOTAL YOGURT

DINNER

LUNCH

17%

BREAKFAST

27%

SNACKS

43%

thick and creamy texture1

2.9 (-3%) Source: 1 Google Survey, June 2017

STRATEGIC LEADERSHIP • 2017

NATURAL IS POISED FOR GROWTH

anadians love yogourt. It is the sweet spot between nutritious,

the key consumer trends in food,

including yogourt.1

2006

2016

great-tasting, and satiating. Currently, yogourt is consumed for breakfast

and snacks, but as consumers snack more, the growth will be phenomenal.

Other segments come and go, but

The category has been projected to hit $2.1B in 2021!

the natural and organic segments continue to hold their ground.

Total yogourt category is 304M Kg. Spoonable yogourt still makes up more than 80% of the category.

Natural claims such as

91.3%

and “all natural yogourt” are the

$108.10

16.7 X

1.9

Natural segment is also outpacing the category. Drinkable yogourt is now 14% of the category and growing at +5%, supported by strong growth from Kefir.

with consumers.2 Household Penetration

Spend per year on Yogourt ($6.40 per trip)

Trips per year

Units per trip Source: 1 Mintel Yogourt 2016. 2016 TNS MaxDiff Positioning Research 2 https://www.new-nutrition.com/report/showReport/1528

TOTAL YOGOURT CATEGORY, BY SEGMENTS $1.7 BILLION $Shr (Chg) 27.9 (+4%)

Greek Functional

19.6 (-5%)

10.8 (+2%)

Natural

9.0 (-17%)

Weight Management

Kids Organic

STRATEGIC LEADERSHIP • 2017

4 am

GREEK YOGOURT CONTINUES TO LEAD

8.9 (-3%) 5.7 (+5%)

• C onsumers are motivated by the high protein claim and

10 am

1 pm

3 pm

5 pm

9 pm

YOGOURT - % OF OCCASIONS

• Greek is the #1 segment in the category, and continues to outpace yogourt growth

7 am

Source: Nielsen Company, Consumption Diary National, 2015

13.9 (+5%)

Drinkable

Taste Source: Nielsen MarketTrack National Grocery+Drug+Mass, L52 weeks PE June 29 2017.

For more information, please visit the new Astro website www.astro.ca

top claims that resonate most

Source: Nielsen Homescan Panel Data, L52 weeks PE March 24, 2017

Greek segment is around 1/3 of the total category, growing at +4%

“100% natural ingredients”

% of Meal Hour

MARKET FACTS

THE YOGOURT CONSUMER

YOGOURT IS THE GO-TO SNACK

+52%

Natural Ingredients are one of

STRATEGIC LEADERSHIP – CATEGORY SNAPSHOT

NATURAL’S $SHARE OF TOTAL YOGURT

DINNER

LUNCH

17%

BREAKFAST

27%

SNACKS

43%

thick and creamy texture1

2.9 (-3%) Source: 1 Google Survey, June 2017

STRATEGIC LEADERSHIP • 2017

NATURAL IS POISED FOR GROWTH

anadians love yogourt. It is the sweet spot between nutritious,

the key consumer trends in food,

including yogourt.1

2006

2016

great-tasting, and satiating. Currently, yogourt is consumed for breakfast

and snacks, but as consumers snack more, the growth will be phenomenal.

Other segments come and go, but

The category has been projected to hit $2.1B in 2021!

the natural and organic segments continue to hold their ground.

Total yogourt category is 304M Kg. Spoonable yogourt still makes up more than 80% of the category.

Natural claims such as

91.3%

and “all natural yogourt” are the

$108.10

16.7 X

1.9

Natural segment is also outpacing the category. Drinkable yogourt is now 14% of the category and growing at +5%, supported by strong growth from Kefir.

with consumers.2 Household Penetration

Spend per year on Yogourt ($6.40 per trip)

Trips per year

Units per trip Source: 1 Mintel Yogourt 2016. 2016 TNS MaxDiff Positioning Research 2 https://www.new-nutrition.com/report/showReport/1528

TOTAL YOGOURT CATEGORY, BY SEGMENTS $1.7 BILLION $Shr (Chg) 27.9 (+4%)

Greek Functional

19.6 (-5%)

10.8 (+2%)

Natural

9.0 (-17%)

Weight Management

Kids Organic

STRATEGIC LEADERSHIP • 2017

4 am

GREEK YOGOURT CONTINUES TO LEAD

8.9 (-3%) 5.7 (+5%)

• C onsumers are motivated by the high protein claim and

10 am

1 pm

3 pm

5 pm

9 pm

YOGOURT - % OF OCCASIONS

• Greek is the #1 segment in the category, and continues to outpace yogourt growth

7 am

Source: Nielsen Company, Consumption Diary National, 2015

13.9 (+5%)

Drinkable

Taste Source: Nielsen MarketTrack National Grocery+Drug+Mass, L52 weeks PE June 29 2017.

For more information, please visit the new Astro website www.astro.ca

top claims that resonate most

Source: Nielsen Homescan Panel Data, L52 weeks PE March 24, 2017

Greek segment is around 1/3 of the total category, growing at +4%

“100% natural ingredients”

% of Meal Hour

MARKET FACTS

THE YOGOURT CONSUMER

YOGOURT IS THE GO-TO SNACK

+52%

Natural Ingredients are one of

STRATEGIC LEADERSHIP – CATEGORY SNAPSHOT

NATURAL’S $SHARE OF TOTAL YOGURT

DINNER

LUNCH

17%

BREAKFAST

27%

SNACKS

43%

thick and creamy texture1

2.9 (-3%) Source: 1 Google Survey, June 2017

STRATEGIC LEADERSHIP • 2017

C A T E G O RY C A P T A I N

RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERSH STRATEGIC LEADERSHIP YOGOURT 2017 â&#x20AC;¢

C A T E G O RY C A P T A I N

RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERSH STRATEGIC LEADERSHIP YOGOURT 2017 â&#x20AC;¢

Independents’ Day

A Local Phenomenon Masstown Market is doubling down on its commitment to local sourcing by building its own dairy and butcher shop. A work in progress: Laurie Jennings and Masstown’s new creamery building

By Sally Praskey

“I always thought there had to be a plateau,” said Laurie Jennings, co-owner of Masstown Market, when Grocery Business spoke with him five years ago. “But I don’t think there is anymore. I think there is always growth.” This is clearly the case for Masstown Market, which has grown from a farm gate operation started by Jennings’ father, Eric, back in 1969, to a sprawling, multimillion-dollar enterprise. Situated in a small farming community in central Nova Scotia near the bountiful Bay of Fundy, Masstown Market is a destination for both tourists and locals who enjoy the unique shopping experience born of Jennings’ mantra that “food is fun.” Jennings’ love of tradition is the inspiration for his latest venture – a dairy and butcher shop now under construction across the street from his market. “We want to offer old-fashioned, authentic, handmade, artisanal products,” he explains. The 15,000-sq.-ft. dairy – tentatively called Masstown Creamery in a nod to the bygone days when many small towns had their own creamery – will pasteurize and bottle milk, as well as make butter and cheese, for sale at retail. There will be no wholesaling, says Jennings, maintaining that “there is enough volume in little Masstown to justify the investment and the time and the energy” in the operation.

grocerybusiness.ca

While raw milk must be purchased through the Dairy Farmers of Nova Scotia, Jennings believes he will be able to obtain it from a local farmer. “I think it’s important to be able to tell customers, ‘this milk comes from these cows on that farm, and you should go and see them,’” he says. In a similar vein, he plans to have a “room full of cheese” in the process of aging for years at a time. “I want people to be able to see that,” says Jennings. Meanwhile, his eldest son Tristan, who has studied butchery and charcuterie management, will oversee the butcher shop. “We’re going to have a regular old butcher shop,” Jennings enthuses. “We have local farmers who are actually raising animals for us,” he says, and the butcher shop will buy sides of beef and pork from a local abattoir. “I think customers are really interested in the provenance of their products, whether it’s local broccoli or pasture-raised chickens, or whatever it might be. There’s an educational, experiential part to that.” The new facility is expected to open by the end of this year, and will employ 25 to 30 people in addition to the approximately 170 who work at the market complex: a local phenomenon by any measure.

September | October 2017

Independents’ Day

DISTRIBUTION CANADA INC. RECOGNIZES INDEPENDENT GROCER EXCELLENCE In June, Distribution Canada Inc. (DCI) held its first Annual Business Summit, which was described by president Marc Fortin as an opportunity to build value for DCI’s independent grocer shareholders and their vendor partners. In addition to the new Annual Business Summit and Gala Awards dinner, DCI, in conjunction with the Canadian Federation of Independent Grocers, organized a charity golf tournament, creating a new two-day event to add to the industry’s spring calendar.

In conversation with Grocery Business, Fortin said: “We are looking forward to building on this year’s success and creating better and stronger relationships for all in our industry. We will be back in early June next year with two amazing days filled with networking, learning and business opportunities.” As part of the gala dinner event, several industry leaders were recognized for their contribution to DCI’s success:

Your Partner in Selling

AWARDS GALLERY RETAILER OF THE YEAR LIFETIME ACHIEVEMENT

Country Grocer, Victoria, B.C. (represented by Peter Cavin)

PARTNER OF THE YEAR

Parmalat Canada: Brent Stevens, Mike Turcotte and Sean Mateer

September | October 2017

Ben Pino, Pino’s Get Fresh, Sault Ste. Marie, Ont.

INNOVATION

Summerhill Market, Toronto (represented by Rick Knapp)

LEADER OF THE YEAR

Mike Turcotte, Parmalat Canada

SOCIAL RESPONSIBILITY

Sun Valley Market, Toronto (represented by Jim and Vicki Bexis)

October 22-24, 2017 Toronto Congress Centre

2017 AGENDA AT A GLANCE Sunday, October 22

Tuesday, October 24

5:30 - 7:30 p.m. Opening Reception (All Attendees & Exhibitors Welcome) North Building VIP Room 1020

7:15 – 8:00 a.m. Breakfast – North Building Ballrooms A & B

Monday, October 23 7:15 – 8:00 a.m. Breakfast North Building A & B 8:00 – 8:15 a.m. CFIG President & CEO Message Thomas A. Barlow North Building – Ballroom A & B

8:00 – 8:45 a.m. Keynote Speaker – North Building Ballrooms A & B 8:45 – 9:30 a.m. Presentation – North Building Ballrooms A & B 9:30 – 9:45 a.m. Coffee Break – North Building “Get Connected” Corridor

Visit Grocery Business at booth #1227 THE ONLY CANADIAN-OWNED NATIONAL GROCERY PUBLICATION

9:45 – 10:30 a.m. Super Session – North Building Ballrooms A & B

A Better Reach

A Better Value

9:15 – 9:30 a.m. Coffee Break North Building - Adams Lobby

11:00 a.m. – 4:00 p.m. Trade Show Exhibition – North Building Halls H & I

9:30 – 10:15 a.m. Grocery Panel: Michael Graydon, Diane Brisebois, Thomas A. Barlow North Building – Ballrooms A & B

5:30 – 6:15 p.m. Awards Reception: Canadian Independent Grocer of the Year North Building – Ballrooms A & B

10:15 – 11:00 a.m. Concurrent Workshops: Meeting Rooms 1-6

6:30 – 7:30 p.m. Gala Dinner & Awards Canadian Independent Grocer of the Year North Building – Ballrooms A & B

8:15 – 9:15 a.m. Keynote Speaker – Michael Hyatt The Internet of Things – Are you Ready? North Building – Ballrooms A & B

11:00 – 11:45 a.m. Workshops Repeated – Meeting Rooms 1-6 11:00 a.m. – 4:30 p.m. Trade Show Exhibition – North Building Halls H & I

A Better Read

Better Results

CANADA’S PREMIUM GROCERY PUBLICATION

GB_Cover_May

January / r.pdf February 2016 Vol 6 | No 1 $9.95

June2017cove

2017-04-28

4:18 PM

May / June 2017 Vol 7 | No 3 $9.95

7:30 – 9:15 p.m. Canadian Independent Grocer of the Year Award Presentation North Building – Ballrooms A & B

PUSATERI’S PLUS

6:30 – 10:30 p.m. The Art of Food at Sketch – Event & Entertainment

NEW DESIGN + PRODUCT IDEAS

THE

FINE FOODS

WAY AT 60 PM # 42211029

PM # 42211029

4:15 – 5:00 p.m. Trade Show Mix ’n Mingle Interac Insights 7 Innovations Stage

Ida Pusateri & Frank Luchetta

AN EXTRAORD INAR

Y EXPERIENCE

A.S. May Powell

celebrates100 years

@grocerybusiness.ca grocerybusiness.ca

WAS THERE!

SUMMER FANCY FOOD SHOW JUNE 25-27, 2017 NEW YORK CITY Robert Cappola and Rory Lesperance, Nustef Baking Ltd.

Arthur and Patrick Pelliccione, Colombo Importing

Ron Sadler and Darren Larvin, Coombe Castle

Alfredo and Fiore Napolitano, O’Sole Mio

Martin Cloutier and Jean-Philippe Boutin, Balactis

Patrick Gilbert, Dare Foods Limited Mary Dalimonte, Sobeys Mahdi Hachana, Fontaine Santé Foods

Jillian Pyper and John Ghislain, Kii Naturals

Helen Dallimore and Jim Kavanagh, Coombe Castle

Diana Hecht, Pelmen Foods

Leanne Sears, Made Good

James Walker and Lisa Zdunich, Walkers Shortbread Ltd. Jack Berkovits and Michael Kachani, Tutti Gourmet

Myra Sable, with award-winning products from Sable & Rosenfeld

Chris and Peter Neal, Neal Brothers

Nustef Baking’s John Flanagan

Leeola Zanetti and Jamie Moody, Tree of Life Canada

Mark Eisner and Phil Fisher, Atlantic Beef Products

Chef Luigi Napolitano, O’Sole Mio

grocerybusiness.ca

September | October 2017

Census Results Give By Dr. Doug Norris

The early results of the 2016 Census indicate that the population is continuing to increase and to become more urbanized. Most of the recent growth has occurred in the large urban markets in Western Canada. At the same time, many small towns and parts of rural Canada have declined in population. These different growth patterns point to areas of possible expansion or consolidation for grocers. Not only is Canada growing, but it is also growing older. Between 2011 and 2016, the population aged 60 and over increased by 17.6 per cent, while the rest of the population grew by only 1.7 per cent. As Boomers retire, they will have more flexibility as to when and how they shop. Older consumers will look for smaller packaging and larger print on labels. And when mobility becomes a problem, these shoppers may turn to grocery delivery services, a potential growth area for grocers. Over the next decade, the population of young adults between 20 and 29 years old – an important source of labour for grocers – is expected to decline. Grocers may need to expand their hiring efforts to target workers of different ages and backgrounds. In 2016, over half of all Canadian households had no children at home, and 28 per cent were one-person households. The future is likely to see little change in the number of families with children at home, but we can expect an increase in empty-nest couples and older women living on their own. Grocers should consider the

changing population mix of their communities, and stock their shelves accordingly. Over the next decade, the large group of young Millennials (born in the 1980s and 1990s) will be starting families. Members of this cohort tend to be well educated, with many already juggling family and careers. These busy, health-conscious shoppers will be looking for ways to minimize their time spent in the grocery store, and they’ll continue to be avid consumers of prepared foods, salad bars and healthy, ready-to-eat offerings. These young Millennials have been raised with smartphones, and this may mean more on-the-spot price comparisons and more online shopping. Census data to be released later this year are expected to show that approximately 22 per cent of Canadians are immigrants – a percentage that is likely to continue to increase in the future. In culturally diverse urban areas, grocers should be expanding their “international” aisles and offering more items that cater to regional cuisines and home-country tastes. In summary, the increasingly diverse portrait of Canada means that grocers need to keep up with changing local demographics. The good news is that census and other marketplace information is available to help grocers better understand the changing shopper profile and meet consumers’ needs. Doug Norris, Ph.D., is Senior Vice-president and Chief Demographer at Environics Analytics.

52.5

% Projected Population Growth 2016-2026, Canada

36.1 20.1

9.5

9.4

10.3

ALL AGES

0-9

10-19

September | October 2017

-6.8

7.4

10.0

20-29

30-39

40-49

AGE BRACKETS

-10.5

50-59

60-69

70-79

Source: Statistics Canada

80+

Grocers Food for Thought % of Young Adults Living with Their Parents Continues to Increase

2016 TOTAL # OF CANADIAN HOUSEHOLDS

% Ages 20-24

14,072,080

% Ages 25-29

DIVERSITY OF HOUSEHOLD TYPES IN CANADA

49 42

Source: Statistics Canada

25.8

COUPLES WITHOUT CHILDREN

1981

26.5

1986

1991

1996

2001

2006

2011

2016

Source: Statistics Canada, consensus of population, 1981 to 2016

COUPLES WITH CHILDREN

28.2%

INCREASING PROPORTION OF ONE-PERSON HOUSEHOLDS

8.9%

PEOPLE LIVING ALONE

LONEPARENT

3.6%

4.1%

NON-FAMILY 2 OR MORE PERSONS grocerybusiness.ca

OTHER

2.9%

MULTIGENERATIONAL HOUSEHOLD

1971

1976

1981

1986

1991

1996

2001 2006

2011

2016

Source: Statistics Canada 2016 Census

September | October 2017

FESTIVE TRENDS 2017 Smoky flavours, full-fat flavoured cheeses and super premium desserts are just some of the products consumers will be shopping for in grocery stores this festive season.

Every Product Tells a Storyâ&#x20AC;Ś DIPS KEY TREND: Spicy and smoky flavours

LIBATIONS KEY TREND: Novelty and Discovery - Wines from undiscovered areas - Mocktails are having a moment - More cider varieties: pineapple, cherry and melon are popular - Beer with smoky flavours

DELI 76

September | October 2017

- Easy entertaining with premium deli meats

ON TREND: SUPER PREMIUMIZATION

BAKERY

By Mary Scianna

KEY TREND: “Gourmetization” - Authentic, artisanal breads - Richer, deeper flavours, smoky, liquor-infused - Higher-quality ingredients - Sweet balanced with savoury

DESSERTS KEY TREND: Indulgence - Artisanal chocolate - Liquor-infused desserts - Smoky and savoury desserts

Hummingbird Chocolate: designed for the “super premium” market

There’s chocolate and then there’s Hummingbird Chocolate, recognized as among the best in the world. The company is the winner of the 2016 Golden Bean award from the Academy of Chocolate, an international organization based in the United Kingdom. Hummingbird Chocolate is a Canadian company founded by former international aid workers Erica and Drew Gilmour, a husband and wife team who spent years working with farmers overseas. When they returned to Canada, Erica Gilmour says it seemed natural to start up an artisan chocolate company, allowing them to stay connected to the farming community they had worked with so closely. Today, the Gilmours run Hummingbird Chocolate from a 2,500-sq.-ft. workshop (soon to add another 2,000 sq. ft.) in the Ottawa Valley, crafting unique single-origin chocolate offerings with organic cocoa beans sourced from Central and South America and the Caribbean. Gilmour says the artisan chocolate is designed for the “super premium” market. The chocolate bars are currently sold in Farm Boy stores in Ontario, but Gilmour says winning the prestigious Golden Bean Award in 2016 has opened more doors, including placement in upscale Pusateri’s Fine Foods stores.

CHEESE KEY TRENDS Flavoured Cheeses are on Fire - Coffee, beer and wine flavours - Hot and spicy Full-fat Indulgence - Burrata - Cheddar grocerybusiness.ca

Full-Service Personalization - Cheesemongers - Pairing ideas - Cheese-board advice - Tastings

Hummingbird Chocolate’s offerings: • Bean-to-bar chocolate that is organic, pure and ethically traded • Single-origin chocolate made with cacao from countries in Central and South America

September | October 2017

WAS THERE!

INTERNATIONAL DAIRY DELI BAKERY ASSOCIATION SHOW ANAHEIM, CALIF. June 13-15, 2017

Sylvia and Peter Day with Dimpflmeier Bakery’s new Carb Smart Bread

Dobla’s Gary Morris with new chocolate innovations Aline Olsen and Mahdi Hachana, Fountaine Santé Ace Bakery’s Sophia Rouleau and Ed Metzger with the new Ace Bakery Baguette Bagels

Jacques Bissonnette and Michel Paradis Jr., Olymel

Tom and Deborah Payne, US Highbush Blueberry Council

Jennifer Ford, Snowdonia Cheese, with Ron Sadler and Adrian Hurrell, Coombe Castle

Fancy Pokket’s Mike Timani and Joelle LeBlanc

Weston Foods’ Jason Toledano and Ed Holik

Melanie Brunet and Gio Calarco, La Petite Bretonne Chef Denis Fortin and Jacques Pascal, Première Moisson

La Rocca Cakes’ Mariano Aguilar, Kristen Boehm, Philippe Gaudet and Mark Williamson

Zakir Mashadi and Danish Kizilbash, Crispy Just Baked Julie Otero, Jaime Galaviz and Erin Raine, Expresco Foods

September | October 2017

Nustef Baking’s Rory Lesperance, John Flanagan and Robert Cappola

Retail Council of Canada

Retailers call for

more-gradual increase

in minimum wages By Karl Littler

This summer, political discussion in Ontario has been dominated by a topic that is very much on the minds of people in the grocery business: the provincial government’s plan to raise the minimum wage to $15 an hour. This change – and particularly the timeline for its implementation – is a source of concern to Ontario’s retail industry, which is already facing significant pressure from rising costs and market disruption.

Simply put, businesses need predictability and time to adjust to major changes to their cost structures. A 32-per-cent increase in the minimum wage is the greatest-ever single hike in our costs. This will have an impact on retailers’ entire labour cost structure, as workers who already earn more than minimum wage will expect to maintain the gap between the wages they earn and the new minimum.

The Retail Council of Canada represents merchants of all sizes – including mass merchandise, grocery, pharmacy, fashion and specialized merchants – in bricks-and-mortar stores and online. Our industry employs two million Canadians, the largest private employment sector both nationally and in the province of Ontario.

Other input costs are fixed or rising, including occupancy like rent or ownership, municipal taxes and utilities. Payroll tax costs like Employment Insurance, CPP and the Employer Health Tax will actually increase as a result of this measure, because they are largely based on wages paid.

To be clear, our concern with the minimumwage change is not its absolute level, whether that be $14 or $15. Our biggest concern is the extreme pace of change needed to reach those levels, with most of the impact being felt on January 1, 2018, just a few months from now.

grocerybusiness.ca

Grocers also face rising costs in the supply chain, being major purchasers of Ontario agri-foods and packaged foods, whose producers will also be facing these minimumwage hikes. Employers have few levers with which to adapt to rising costs, other than to raise prices or cut labour cost by reducing the

number of positions and hours available. There is little room for price increases in an industry that is already fiercely competitive, so that leaves labour as the only viable option for cost reduction. Retail is Canada’s biggest provider of first jobs for youth and students, as well as for many new Canadians who may be establishing their Canadian work experience. It is these employees who are most likely to be adversely affected by any reduction in opportunities or hours that may arise from minimum-wage changes. Though Ontario is not the only government in North America implementing a $15 minimum wage, it is moving much faster than other jurisdictions. In order for business to properly adapt to these changes, there should be a reasonable, predictable and gradual ramp-up to $14, then $15. At a bare minimum, the government should work with our industry to develop a program to offset the negative impact of these changes.

Karl Littler is Vice-president, Public Affairs, Retail Council of Canada.

September | October 2017

LIST IT

NEW & NOW DISCOVERIES

Janes frozen fish sales are making a splash! Fast-growing Janes has added eight new SKUs to its MSC-certified frozen fish lineup. With the highest sales velocity in the category, Janes has responded to consumer demand for increased variety in the value-added “Breaded and Battered” category, with delicious whole fillet and minced items.

SunRype’s refreshing new tea lineup SunRype’s new Real Brewed Sparkling Teas are made with real cane sugar, are available in a sleek 355ml tall can, and come in four refreshing flavours: Twist of Lemon Black Tea; Mango Peach Black Tea; Honey Lemon Green Tea; and Raspberry Rooibos Tea.

sunrype.ca

September | October 2017

Reinventing the Potato Chip ThreeWorks Snacks introduces Crinkle Crunch Chips, the first fruit chips with ridges that crunch like potato chips. Available this fall in six flavours, as well as the all-new 2GO Pak for mobile snacking, and our Snacky Pak for Kids.

threeworks.ca

Carlton Cards’ Spec-tacular Wishes! Carlton Cards’ new Spec-tacular Wishes! birthday collection is the ultimate card and gift combo for kids. Each of these innovative new cards features a fun, fresh, positive message, and doubles as a gift, with bold, bright lettering designs surrounding a pair of wearable, light-up party glasses.

carltoncards.ca

Véa: A New Way to Snack Mondelez introduces Véa, a wholesome snack combining ingredients like sweet potato, butternut squash and quinoa in inspired global recipes. Véa is available in three formats – Véa Seed Crackers, Véa World Crisps and Véa Mini Crunch Bars. The entire Véa portfolio contains no artificial colours or flavours, and is non-GMO Project Verified.

mondelezinternational.com

grocerybusiness.ca

September | October 2017

it figures

PROTEIN PACKS A

PUNCH

62%

51%

of consumers have protein at every meal, and one in five monitor the amount of protein they consume Takeaway Taking a hands-on approach to supporting health will pay off. Train staff to provide guidance on food selection, and post nutritional information on items such as meat, fish and produce, even though displaying nutrition labels is not required.

of Canadians agree that unprocessed meat is good for their health

53% agree that white meat is healthier than red meat

Takeaway Consider offering virtual store

tours and online nutrition classes to help consumers choose healthier foods.

18% of households choose

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

to limit their animal-based product consumption

for CPG manufacturers and retailers.

A L L S TAT S C O U RT E S Y: NIELSEN

Takeaway Vegetarian and vegan items should be easy to find in the store. Ensure that meat and dairy alternatives are highlighted in your campaign efforts.

43% are actively trying

to increase their consumption of plant-based foods Takeaway When personal chefs arenâ&#x20AC;&#x2122;t an option, the grocery store can be a source of support for those planning to change their eating habits.

TOP 5 PROTEIN SOURCES FOR CANADIANS

% of respondents

Meat

Fish/Seafood

Dairy

Eggs

Legumes/Nuts/Seeds 20

grocerybusiness.ca

41%

of consumers are willing to pay more for locally sourced meat

BUY

LOCA L

35% opt for ethically raised meat Takeaway Factor in that 68% read package labels and 73% say buying Canadian items is important, and retailers have a powerful way to get consumer attention.

September | October 2017

Postscript The Canadian Payroll Association recently surveyed Canadians about their fiscal health, and the results were sobering. As Canadians begin to feel the effects of higher interest rates, grocers can expect to see a increasingly cash-strapped consumer looking for ways to cut food costs.

Feel overwhelmed 35% % by debt 47 Percentage of employed Canadians living pay cheque to pay cheque

1 in 4 could not come up with $2,000 within a month in an emergency

Spending levels have risen

41%

Spend all, or more than, their net pay Source: The Canadian Payroll Association

September | October 2017

â&#x20AC;&#x153;FCC has been right by our side to help us grow the business.â&#x20AC;? Tom Hughes, President EarthFresh Foods Food Producer and Processor

Agribusiness and Agri-Food

The food business is unique Your financing should be too Grow with a lender who understands Canadian food. With over 100,000 customers, big and small, and a portfolio that tops $30 billion, Farm Credit Canada can help build your business success story.

fccfinancing.ca

Superior taste, quality, safety and sustainability. You've got to hand it to us. A Flavour to Savour.

Stringent Safety Practices.

Committed to Quality.

A Leader in Sustainability.

The U.S. peanut industryâ&#x20AC;&#x2122;s technology and research in breeding, seeding, cultivation and harvesting combine to deliver the most flavourful, wholesome peanut. The U.S. peanut industry invests heavily in plant modernization and the latest equipment to ensure that all buyers receive the best possible product.

peanutsusa.com

To learn more, contact: American Peanut Council 1500 King Street, Suite 301, Alexandria, VA 22314 USA, +1-703-838-9500 info@peanutsusa.com For consumer information and recipes visit peanutbureau.ca

U.S. peanut processors follow stringent food safety practices to ensure that consistency, safety and quality are present in every aspect of USA peanut production. Peanuts are naturally sustainable. They replenish soil with the essential nitrogen depleted by other crops, resulting in less greenhouse emissions.