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INSIGHT

REDS ON A ROLL Toronto Football Club

September 2017

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TAL K I NG

TOP10

BIZ

CANADIAN MULTINATIONALS

WI T H

Yum Brands and the changing tastes

JACK COOPER HOLDINGS AVI-SPL

of Canada

Yum! Brands is making its mark on Canada with extensive expansion of its KFC, Pizza Hut, and Taco Bell chains.

Profits up in smoke

What legalised cannabis could mean for business

Cisco provides simplicity with end-to-end automation Cisco Network Services Orchestrator inserts speed into and takes cost out of managing your network.

Network operators can create and change services faster without lengthy custom coding or disruptions. They can automate multivendor devices across their physical and virtual environments, and continually refine network services to meet new customer needs.

To find out more about what Cisco Network Services Orchestrator enabled by Tail-f can do for your business, visit www.cisco.com/go/nso.

Š 2017 Cisco and/or its affiliates. All rights reserved.

FOREWORD HELLO AND WELCOME to September’s edition of Business Review Canada.

We kick off this month with our cover feature on Yum! Brands, custodians of quick service restaurant giants Pizza Hut, KFC and Taco Bell. Find out how each brand is being embraced by the Canadian market, and what lies ahead for both the businesses and consumers in terms of the exciting food and experiences on offer.

Also featured this month is Toronto Football Club, our interview charting how President Bill Manning has

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gone about his role of ensuring commercial and sporting success.

Another commercial enterprise, now legal, is the cannabis trade. Jess Shanahan explores the implications for the Canadian economy after Prime Minister Trudeau’s liberalisation of law regarding the recreational drug.

Looking further afield, our top 10 this month delves into Canada’s most prolific multinational businesses.

Finally, be sure to read our other exclusive company insights from Jack Cooper Holdings and AVI-SPL. Enjoy the read!

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CONTENTS

F E AT U R E S

Toronto FC:

Reds on a roll

INSIGHT

06 C A N N A B I S I N D U S T RY

18 Profits up in smoke – what legalised

cannabis could mean for business

TOP 10

28

TOP TEN

CANADIAN

MULTINATIONALS

36

YUM! Brands Canada

C O M PA N Y PROFILES FOOD & DRINK 36 YUM! Brands Canada

TECHNOLOGY 56 Jack Cooper Holdings 66 AVI-SPL

56

Jack Cooper Holdings

66 AVI-SPL

INSIGHT

Reds on a roll Writ ten by: JOHN O’HANLON

INSIGHT

Toronto Football Club (TFC) is experiencing a renaissance. We talk to its charismatic President, Bill Manning, about what it takes to lead and succeed in the fast-moving business of soccer A FOOTBALL CLUB needs to win – success on the field is what attracts the top players and creates scenes of euphoria in packed stadiums. It took Toronto FC 11 years to achieve 100 regular-season wins, but that seems to have changed. With six title wins from the past nine, Toronto have gone on to virtually dominate the Canadian Championship.

The club is looking hard to beat, not just within Canada but across North America. The Reds were undefeated at home this season with six wins and two draws, their latest victory at the time of writing being a 2-0 win against DC United on June 17, in which Sebastian Giovinco set up goals for Jozy Altidore and Jordan Hamilton in front of 28,627 ecstatic fans. That’s a sell-out at Toronto’s BMO Field, and another tick against Bill Manning’s to-do list.

Manning is a survivor in a notoriously ruthless environment.

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September 2017

A successful player at college and beyond who went on to become a US Soccer National “A” licensed coach, he went into sports management in 1993, graduating to the MLS in 2000 as President and General Manager of Tampa Bay Mutiny; named MLS Executive of the Year by the Washington Post.

Before coming to Toronto in 2015 Manning held leadership roles at Philadelphia Eagles, the National Basketball Association’s Houston Rockets and Real Salt Lake of Major League Soccer (MLS being the top tier of the sport across North America). But it’s a mistake to think running sport is just like running any other business, he warns: “I have seen a lot of very wealthy, smart people get into the sports business and try to run it like their other businesses – and fail miserably.”

Manning arrived at TFC at a time when the club was trying to

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INSIGHT

The key job I had was to bring CONSISTENCY,

STABILITY

and, of course,

LEADERSHIP - BILL MANNING, PRESIDENT 10

September 2017

recover from an extended visit to the doldrums. “When I came in my task was to provide some stability and consistency. Toronto FC had had nine coaches in 10 years, six general managers, and I was the fourth president in that time. Hundreds of players had gone through over that decade and continuity and stability were noticeably lacking.�

The foundations of recovery had been laid with the appointment of general manager Tim Bezbatchenko and chief coach Greg Vanney in 2013

and 2014 respectively. Manning joined this triumvirate with the task of ensuring a consensus in order to build the foundations of a successful franchise. “The key job I had was to bring consistency, stability and, of course, leadership.”

Consensus As the loudest voice among strong personalities, consensus building is at the core of Manning’s management style, which he otherwise characterises as democratic dictatorship. “I believe in people; giving them leeway to do their jobs, and frank and open communication.

If you give them the support they need they can do great things.”

Manning’s experience gives him authority, and that’s something that can only come with time. He says he wishes he’d known at 41 what he now knows at 51, but recognises the intangible nature of experiential learning, a big part of which he says is learning from one’s mistakes.

The unusual thing Manning’s colleagues notice about him, he believes, is his eye for detail. The first thing he latched on to when he joined was not the five-year

Bill Manning President

Bill Manning was named President of Toronto FC on October 12, 2015.

Manning, joins Toronto FC after spending the previous eight seasons as president of both Real Salt Lake (RSL) and Rio Tinto Stadium. During his time with RSL, Manning transformed the club into a winner, leading the organization to a 2009 MLS Cup championship, as well as a model franchise off the pitch where both season tickets and sponsorships more than tripled.

The club also won the Eastern Conference title (2009), Western Conference title (2013) and were MLS Cup runners-up (2013) and CONCACAF Champions League runners-up (2011). Manning was the recipient of the Major League Soccer Doug Hamilton Executive of the Year award in both 2012 and 2014. In addition, he helped establish, open and sold naming rights to Rio Tinto Stadium, home to Real Salt Lake.

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INSIGHT

12

September 2017

REDS ON A ROLL

strategy, but the imagery on the club’s publicity photos; it focused too much on the star players, a keen eye he moved to team consciousness.

“For me the little details can be very important. I like to see that everything is aligned. If something is out of alignment I usually catch it!”

The day to day relationship between Bill Manning, Bezbatchenko and

Consistency The best players are expensive, but what happens on the pitch defines the club. Clubs that tend to have a consistent group of players over time appear to do better than clubs that experience significant churn. The approach to the team has changed now, and Manning is happy to have been able to replace the ‘complete

Our job is ultimately to win CHAMPIONSHIPS – we are all going to do whatever it takes to do that - BILL MANNING, PRESIDENT Vanney is absolutely vital – other clubs take note. They don’t always agree. If, however, one of the three passionately disagrees with a proposal, that path is not taken and another way found.

Much of the time, such is his faith in these colleagues that his role boils down to supporting what the General Manager and Chief Coach wish to do, and that’s how he likes it. “Being aligned is the main thing, and there’s no confusion that our job is ultimately to win championships – we are all going to do whatever it takes to do that,” Manning says.

squad overhaul’ that seemed to happen annually, with fine tuning.

There is a direct correlation between success on the field and off the field, he emphasises: “The greater the success on the field the more tickets you sell, and the more advertisers want to get involved and sponsor you, like KIA Motors, who sponsor our training field. TV ratings go up.

“The more people following your team the more merchandise you sell, and the greater the number of people who come to the stadium the more concessions we can 13

INSIGHT offload. Business success all goes back to success on the field.”

Back in 2014, TFC had lost its way on the field and fans were deserting the stadium. Manning credits much of the rebirth of the club to the former CEO of MLSE Tim Leiweke, who enabled the club to engage some top players like the British striker Jermain Defoe and current captain Michael Bradley.

“The fans responded by coming out to support us, and the teams started to do better. I had the opportunity after Tim left to continue to move forward and so far, it has gone well.”

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Partnership Maple Leaf Sports & Entertainment (MLSE), the parent organisation not only of TFC but also of Toronto’s hockey and basketball clubs, the Maple Leafs and Raptors, is the operator of the BMO Stadium. The Maple Leafs are the senior partner, going back a century, now led by Brendan Shanahan. Meanwhile, the Raptors have experienced huge success in recent years under Masai Ujiri. Manning has deep respect for his fellow presidents, and there’s no feeling of rivalry, he says, more a kind of corporate

team culture reflecting what each of these leaders expects on the field.

MLSE takes care of the back office, allowing each of its pillars to develop independently. If he had any fears that soccer would be sidelined by its older, more mature partners, these have been dispelled.

“TFC is a big beneficiary of the best practices across the other two teams,” Manning explains. “One of the great things about MLSE is that it’s putting so many resources behind TFC and we feel on an equal standing with the other teams.”

Potential Manning feels that TFC’s ceiling is now higher. Soccer is growing fast in both Canada and the USA. Now that it looks like CONCACAF will host the 2026 FIFA World Cup in a joint bid between Canada, the USA, Mexico and the Central American and Caribbean nations, with 10 games booked for Canada, the sport can expect to go into turbo drive.

“I was in the US in 1994 when they hosted the World Cup and saw how it boosted soccer there,” Manning recalls. “We can do that for Canada in 2026.”

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INSIGHT

There is so much potential for Canadian soccer in general, and for Toronto FC, in particular, to grow.

Last Saturday’s sell out is a pointer.

The average attendance is 26,000, but there’s still headroom. Season ticket holders number 21,000, and if Manning can achieve his target of 16

September 2017

raising that to 24,000, and the renewal rate from its current 91 to around 95%, every game would be a sell-out.

Then the club could look at its pricing: the average ticket price is a modest $39, and the Toronto market can definitely sustain a reasonable increase.

They also want the introduction of

REDS ON A ROLL

flexible pricing using the model adopted by the Raptors, where you pay more to see a match against a highly rated competitor. But that can only happen as long as the team keeps winning.

The next big challenge for Bill Manning, Tim Bezbatchenko and Greg Vanney will be to retain its hold on the

Canadian Championship, which it won last year. Later this year they, and the entire population of Toronto, will be rooting to overturn last year’s result in the MLS Cup, when TFC narrowly missed out to Seattle Sounders by 5–4 in a penalty shoot-out after a goalless 120 minutes (with overtime).

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C A N N A B I S I N D U S T RY

Profits up in smoke – what legalised

cannabis could mean for business Written by: JESS SHANAHAN

C A N N A B I S I N D U S T RY

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September 2017

PROFITS UP IN SMOKE

Canada has announced a bill to legalise cannabis by July 2018, paving the way for the country to become the first G7 member to fully legalise the drug. The industry is expected to yield billions for the Canadian economy NEW LEGISLATION BEING introduced in Canada for 1 July, 2018 will legalise, regulate and restrict access to cannabis, and allow Canadian provinces to decide how the drug will be distributed and sold, which presents huge business opportunities for growers, distributors and manufacturers.

Medical marijuana is already legal in Canada and business is booming with the industry bringing in CA$869mn in legal sales in 2016. Taking this into account, Deloitte estimates the current cannabis market has a base retail value between $4.8-$8.7bn, which would rival the size of the Canadian spirits market, which is $5bn. Vivien Azer of Cowen & Co. said in a recent report: “When you consider ancillaries such as growers, testing labs, security, etc., the economic impact could range from $12.7 to $22.6bn. These numbers do not include the impact of tourism,

business taxes, licensing fees and paraphernalia sales, which could drive the economic impact higher.”

It’s clear that there is a lot of opportunities for businesses in Canada that want to capitalise on this new legislation. This is being led by those already in the industry who are keen to see proper regulation of the drug for recreational purposes, but also understand that it will bring increased investment, innovation and new jobs too.

Just after the announcement of the legislation, stocks in publicly traded marijuana businesses spiked. Shares of Canopy Growth Corp. were up 11% in trading, Aurora Cannabis rose 10%, Aphria rose 7.9%, SupremePharma jumped 6% and OrganiGram holdings rose 10%. The rapid rise has dropped off since, but as we move towards July next year an overall upward trend is to be expected.

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C A N N A B I S I N D U S T RY

In order to meet the low end of the estimates for the adult-use market, Canada would have to produce over 600,000kg of cannabis a year, representing a significant increase over current levels that has sparked a rush to build new grow facilities.

Alberta-based medical marijuana producer Aurora Cannabis has been lobbying for these new rules and isn’t surprised by the new legislation.

In fact, it’s confident it can meet demand. In a statement, CEO Terry Booth said: “The legislation and anticipated timeline for legalisation validates Aurora’s business strategy

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September 2017

‘There’s likely to be a boom in the amount of ecommerce websites being set up to sell seeds, cannabis, equipment, paraphernalia and more’

PROFITS UP IN SMOKE

of building and acquiring the capacity to produce high quality cannabis on a massive scale, with low per-gram cost of production; establishing what we believe is the industry’s leading ecommerce and customer care platform.

“With our existing purposebuilt production facility in Alberta, and construction well underway at our new 800,000 sq ft facility at Edmonton International Airport as well as the recent acquisition of a third production facility in Pointe-Claire, Quebec, we anticipate being one of the largest suppliers to both the

rapidly-growing medical cannabis sector and the much larger newlylegalised consumer market.”

Existing cannabis producers have been looking ahead to this kind of legislation change and have made plans to scale up their operations.

Health Canada is also helping by speeding up the licensing process for the production of legal medical marijuana, in an attempt to ramp up cultivation ahead of July.

The winners are most certainly going to be those who can produce the most grams to be sold onto consumers, as the demand is going

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C A N N A B I S I N D U S T RY

‘Under the new legislation, it’ll be legal for cannabis users to grow up to four plants per household’

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September 2017

to surge when July 2018 rolls around.

If producers can meet demand, there’s a chance that recreational cannabis use could hurt sales of alcohol. You only have to look to the US to see signs of this. Recent reports show domestic beer sales fell in Colorado, Washington and Oregon after cannabis was legalised, with sales of Coors Light and Bud Light dipping as much as 4.4%. The beer market, which is worth about $9.2bn, is anticipated to take a $70mn hit from in the

PROFITS UP IN SMOKE

first year of marijuana legalisation, the Anderson Economic Group says.

It’s not just producers who are set to benefit from the legalisation of cannabis.

Plenty of investors have done well investing directly in the cannabis industry, but there are other opportunities out there too.

It’s likely that Amsterdam-style coffee shops will start to appear in Canada, offering recreational marijuana to locals and tourists alike. The boom is tourism is likely to come from the US, where only a handful of states have legalised cannabis.

Not only that, but under the new legislation, it’ll be legal for cannabis

25

C A N N A B I S I N D U S T RY

$12.7 $22.6 TO

BN – POTENTIAL VALUE OF CANNABIS TO

THE CANADIAN

ECONOMY 26

September 2017

users to grow up to four plants per household. This means there will be increased demand for seeds, growing equipment and hydroponics.

The makers of paraphernalia are also set to benefit as there will be the increased need for the practical products surrounding the smoking and cooking of cannabis.

Finally, there’s likely to be a boom in the amount of ecommerce websites being set up to sell seeds, cannabis, equipment, paraphernalia and

PROFITS UP IN SMOKE

more. To sell cannabis legally, these websites will need to be federally licensed, but would mean users can get the drug and any other equipment delivered directly to their door. This could also be a potential expansion route for already established websites that want to expand their offering.

At this stage, the legalisation bill doesn’t say how those involved in the cannabis industry will be taxed.

It’s likely that in the early stage tax will be kept low in the hope that legal

manufacturers will soon elbow out anyone still dealing the drug illegally.

A balance needs to be found that allows Canada to benefit from a newlylegalised industry, while ensuring the retail price of cannabis isn’t pushed so high that people still look to acquire it cheaply and illegally.

There’s no doubt that this new legislation is going to benefit both new and existing businesses, but a lot of that rides on meeting demand when the new regulations come into effect.

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TOP 10

TOP 10

CANADIAN MULTINATIONALS Who are the biggest Canadian firms on the global stage right now? Business Review Canada takes a look at the top 10 Canadian multinationals… Edited by: ANDREW WOODS

TOP 10

10

9

THE DESCARTES SYSTEMS GROUP INC.

D+H

2016 Revenue: CA$265mn Coming in at number 10, this Canadian multinational supplies logistics software, supply chain management software and software-as-a-service to businesses around the globe. In 2000, the company could have folded when the dot-com bubble burst, but keen management skills and shifts in offerings kept it alive. Now, Descartes employees 1,000 people and accrued more revenue in fiscal year 2017 than the previous accounting period.

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September 2017

2016 Revenue: CA$1.68bn A Canadian institution since 1875, D+H started in the bookbinding and printing industry, but far from its humble roots, the company recently joined forces with Misys to become the third largest fintech company in the world. The company provides payment services and lending technology to thousands of financial institutions around the globe. Headquartered in Toronto, its offices employ over 5,000 people in 15 different countries. Annual revenues topped $1.68bn in 2016, an 11.5% increase over the $1.51bn in revenues from the previous year. The growth was primarily related to increases in integrated core solutions, offset by decreases in lending solutions.

C A N A D I A N M U LT I N AT I O N A L S

8

7

MACDONALD, BLACKBERRY DETTWILER AND LIMITED ASSOCIATES LTD 2016 Revenue: CA$2.2bn 2016 Revenue: CA$2.1bn In 2016, MacDonald, Dettwiler And Associates Ltd collected $2.1bn in revenue, the same amount from the previous year. In that time period, the company posted $211mn in operating revenue or the equivalent of $5.78 per share. The company provides operational solutions from robotic surgery research to commercial satellites throughout the United States and Canada, and most notably, it maintains contracts with the United States Department of Defense and the National Aeronautics and Space Administration (NASA). The company was founded in 1969 in Canada, and in February 2017, it announced a definitive merger with the satellite imagery provider DigitalGlobe for US$2.4bn (CA$2bn).

In the four quarters ending in August 2016, BlackBerry Limited posted revenues of US$1.75bn or CA$2.2bn.

The fourth quarter of that period represented 89% growth over the same quarter in the previous year, and the company enjoyed a gross profit margin of 29% based on Generally Accepted Accounting Principles (GAAP). Most famous to consumers for its phones, the company specialises in enterprise software and the Internet of things. The multinational telecom company was founded in 1984 in Waterloo, Ontario under the name of Research in Motion Limited by an engineering student who was still in college at the time, and it was the first wireless data technology developer in North America.

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TOP 10

6

5

LULULEMON ATHLETICA INC

FOUR SEASONS HOTELS LTD

2016 Revenue: CA$2.3bn This multinational clothing company had revenues of $2.3bn for the fiscal year ending January 29, 2017. That represented a 14% increase from the previous year’s revenue of $2.1bn; the first time the company broke the $2bn mark. Gross profits increased 20% over the same period, and the largest increases in sales were in the direct-to-consumer division of the multinational company. Founded and headquartered in Vancouver, the company focuses on clothing for yoga and other workouts, and it researches on how its designs work by checking in with local athletes around the world.

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September 2017

2016 Revenue: CA$5.53bn Founded in the 1960s in Canada, this multinational company of luxury resorts started with a single hotel in a run-down area of Toronto. By the end of the decade, the company had expanded to four locations, and currently, the company employees well over 30,000 people in upscale locations around the world. Founded

by Isadore Sharp, the current chairmen, the company is majority owned by Bill Gates and Prince AlWaleed bin Talal.

C A N A D I A N M U LT I N AT I O N A L S

4

3

CELESTICA INC

BOMBARDIER

2016 Revenue: CA$7.54bn

2016 Revenue: CA$20bn

Based in Toronto, this multinational Canadian company is a global leader in end-to-end product lifecycle solutions.

It employs over 25,000 people in 20 locations in 11 different countries.

The company originally started as a manufacturing division of IBM, but in 1994, the company was spun off into a separate entity, able to provide similar services for other companies as it once did for IBM. When it went public in 1998, it had the largest IPO in the field of electronics manufacturing services. In the first quarter of 2017, it boasted revenues of US$1.47bn, a 9% increase over the same quarter the previous year.

In 1942, this company was founded in Quebec to make snowmobiles and snow machines. Nearly 75 years later in 2017, it’s a multinational company employing 66,000 people and focused on aerospace and transportation.

Although its 2016 revenues of CA$20bn earn it the third spot on this list, its revenues were actually lower than the previous year. The company boasted US$981mn or CA$1.2bn in profits that same year.

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TOP 10

2

BCE INC 2016 Revenue: CA$21bn BCE’s revenues for 2016 are up just 1% from the previous year, but the company’s net income was up 14.6% over the same time period to $2.89bn.

Headquartered in Montreal, Quebec, BCE Inc was founded in 1983 under the name of Bell Canada Enterprises.

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September 2017

The company took over ownership of telecom giants Bell Canada, Northern Telecom and others when it was founded. It focuses on fixed line and mobile phone services, digital television, radio broadcasting.

1

MAGNA INTERNATIONAL 2016 Revenue: US$45.77bn

Founded in 1957 and headquartered in Aurora, Ontario, this company is a global automotive supplier.

It researches, designs, tests and manufactures parts, and is one of the largest automobile parts

manufacturers in North America, employing over 159,000 people in 29 countries around the world in 321 manufacturing operations and 103 product development centres.

35

and the

Brands

CHANGING TASTES OF

CANADA

Written by: Nell Walker Produced by: Aquarius Rougely

Yum! Brands is making its mark on

Canada with extensive expansion of its KFC, Pizza Hut and Taco Bell chains. In three exclusive interviews with these brands, we find out how this enormous success has been achieved

T

he US-based fast food powerhouse that is Yum! Brands is taking the industry by storm as it aggressively expands across the globe.

A Fortune 500 company, Yum! owns KFC, Pizza Hut, and Taco Bell, currently operating 43,500 restaurants in 135 nations. The business opens an astonishing six new restaurants per day worldwide; the growth Yum! enjoys is extraordinary, with 50% of its profits earned from outside the US as of 2016, ensuring that the three food brands and their umbrella company are establishing a firm global footprint in every location.

One nation Yum! has its sights set firmly on is Canada, where the fast food industry is booming and millennials are demanding more and more choice. Yum! strives towards a culture of not only swift expansion but a fun and energetic environment for workers and customers alike, knowing that its reputation as a vast and dynamic business is a large element of what allows it to grow at its current rate.

We spoke exclusively to members of the Canadian KFC, Pizza Hut, and Taco Bell teams to find out how and why these brands are penetrating Canada so successfully.

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Yum! Brands Restaurant Support Center

FOOD AND DRINK

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YUM! BRANDS

FOOD AND DRINK

KFC

KFC fits into Yum! Brands’ global vision by focusing extensively on growth and expansion. Nazia Millwala, Director of Development for KFC Canada, has been with the business for 11 years in various roles, many of them in the Middle East and North Africa. She joined the Canadian arm of the business three years ago, and is in charge of franchising, restaurant design, and spearheads the ambitious expansion plans KFC has.

“My team has been focused on three core areas,” Millwala explains. “One is franchising. We’ve put a lot of high value on having great franchisees, and it’s

Nazia Millwala Director of Development, KFC Canada

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41

FOOD AND DRINK

critical for us to have some very committed and energized partners to join us on this journey. So as we move to revitalize our brand, we have injected new franchise partners who share our vision.

“The second area is our revitalization and bold restaurant growth agenda. Like any business in Canada, we’ve spent a lot of time analyzing and understanding our current estate to the point where we have great success stories and know where more work is needed. We have a very ambitious goal to grow to 800 stores, and we truly believe we can do it because there’s enough demand for our brand – so how do we find the right opportunities

to make sure that happens?

“The third area is design. As we upgrade, relocate, and bring in new stores, it’s critical we have design that does a good job of representing our brand. Our recently launched design package includes signature elements like the red and white candy stripe, as well as wooden accents to represent our hand-crafted values – these show what the brand stands for.”

These key focus areas were the result of looking hard at the 650 restaurants KFC already has in Canada. Using that data, competitor and industry information and leveraging sophisticated tools, the business devised the best

“Canadians have the appetite for our fingerlicking good chicken, so it’s about how we grow aggressively and expand in the right places” – Nazia Millwala, Director of Development, KFC Canada

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YUM! BRANDS

strategies and began the process of implementing the findings.

“We thought, ‘how do we inject freshness back into the brand and bring it alive?’,” explains Millwala. “Nothing was lacking, but we needed to take things to the next level; upgrade stores, improve locations, and ultimately deliver a better experience to the guests. We truly believe we can achieve 800 restaurants in Canada, but the question is

how quickly can we do this?”

Guest experience is vital to KFC, as it is the customer that dictates the brand’s direction. The brand is using its connection to consumers to decide where it opens new restaurants, how the seating is arranged to be optimally social, and expanding sales channels such as delivery that enable Canadians to enjoy KFC in their own homes.

“Our customers are asking, and we’re making sure we find

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FOOD AND DRINK

Inside KFC

opportunities to deliver the best experience in any way we can,” says Millwala. “The responses we’re getting have been very encouraging, and of course that is reflected in our growing sales numbers. Our employees and franchisees are energized and responding positively as well, which gives us confidence that we’re on the right track.”

KFC’s expansion goals align perfectly with those of Yum! Brands, with its ambitious plans to grow and expand the footprint, “and

that’s very exciting for our brand in and out of Canada,” says Millwala.

“Canadians have the appetite for our finger-licking good chicken, so it’s about how we grow aggressively and expand in the right places. If we could grow to 800 stores tomorrow, we would find a way to do it.”

Follow us!

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YUM! BRANDS

Pizza Hut

Pizza Hut truly owns the world’s fast food pizza market, but has experienced particular buzz in Canada in recent years, having reached over 400 locations already.

Tatiana Carrascal, General Manager of Pizza Hut Canada, has two decades of marketing experience behind her and is on the front line of the incredible demand the brand is currently enjoying.

Carrascal attributes part of the accelerated growth to Pizza

Hut’s delco model – the delivery/ carry-out restaurant footprint – which proves very cost-effective because as well as having a smaller restaurant footprint, franchisees are offered a lower bill and a higher return on investment.

“It makes us very attractive partners,” she explains. “The delco model allows us to build in convenient locations and in more places around the country, so that we can serve our customers better. We have high growth

FOOD AND DRINK

Tatiana Carrascal General Manager, Pizza Hut Canada

expectations and growth incentives for this model, and we expect to build between 100 and 200 in the next three to five years.”

Pizza Hut seeks out strategic mergers and acquisitions in order to expand too, which is a swift way of acquiring real estate that already exists and morphing it into a new restaurant, but it is the products themselves which are driving innovation in order to fuel Pizza

“Canadians are looking for affordable dining options, and we know that offering good value for money is driving growth in this market” – Tatiana Carrascal, General Manager, Pizza Hut Canada

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YUM! BRANDS Supreme Lover

Hut’s increasing footprint.

“All the products we offer are based on consumer research,” says Carrascal, highlighting the brand’s reliance on the customer to grow in the right direction. “Our philosophy is that we listen to them first. Special items like WingStreet wings and Stuffed Crust pizza drive significant sales for us, and we pride ourselves on defining the pizza industry especially through our unique pan pizza.

We like to be the original creators of different food offerings.

We’re known for and have a legacy of product innovation.”

In order to acquire this information, Pizza Hut works hard to communicate with its consumers via feedback acquired through customer surveys, and it analysis that data every single week: “There are incentives for them to fill out the surveys,

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FOOD AND DRINK

Follow us!

PizzaHut TripleTreat Box

and they know we are actually utilizing their feedback. Then we use those extensive answers to fill our pipeline of innovation and strategy.”

Pizza Hut keeps its appeal relevant and exciting in Canada by maintaining the legacy it has already worked to achieve alongside adjusting it to meet the evolving industry needs and consumer market. Pizza is everevolving and becoming more digitally-driven, so Pizza Hut is focused on value-driven initiatives to cements its appeal.

“Canadians are looking for affordable and convenient eating options, and we know that offering good value for money is driving growth in this market,” says Carrascal. “We pay close attention to our online platform, as more and more consumers are accessing it, and this provides new growth opportunities for us.”

Canada is particularly special to Pizza Hut with good reason: “They

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YUM! BRANDS

Canadian

Chicken Caesar

Veggie Lovers

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love our unique food offerings,” Carrascal explains, “and we’re very appreciative of the response we continue to get from our customers.

In Canada we do see tremendous opportunity to accelerate the growth we’ve already seen, we’re just making it bigger and faster through mergers and acquisitions alongside organic franchisee growth.”

In these ways, Pizza Hut’s vision aligns perfectly with Yum!’s desire to expand aggressively in Canada, and Carrascal is thrilled to be a part of the tight-knit umbrella brand: “We’re very excited to be part of this family of brands with leveraged opportunities,” she states. “It definitely provides us a bigger spectrum to grow. The role that we as Pizza Hut play in the broader spectrum is primarily driving growth and restaurant openings in new markets, and we have a larger opportunity alongside KFC and Taco Bell.”

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YUM! BRANDS

Taco Bell

Taco Bell, which has the smallest footprint of Yum!’s brands, is growing at a rapid level and holds a firm belief in a big dream: to make Taco Bell a 700-strong restaurant brand in Canada. Veronica Castillo, Director of Marketing and R&D for Taco Bell Canada, has been with the company for four years. Her role is focused on strategy within Canada, working on food innovation, communication strategies, development, and design to bring Taco Bell’s best concepts to life. She explains how Taco Bell is able to hold such high hopes for its own expansion.

“The Taco Bell brand is on fire today. It’s been growing for the past six years both in sales and transactions. In 2017, we have achieved record sales with double digit growth. It’s amazing, and part of that success is attributed to our innovation that highly resonates with our target.”

Castillo continues: “The innovation we bring to Canada is unique. For example, we have the Double Layer taco, the Naked Chicken Chalupa,

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and most recently the Cheetos Crunchwrap Sliders – unique innovation that help set us apart from our competitors. We select the best innovation for Canada based on in-depth consumer insights, so we make sure that when we launch new products, we create campaigns that truly resonate with our fans.”

Exploration is in Taco Bell’s DNA; it isn’t afraid to take risks with its innovation and campaigns. To insert itself into the cultural conversations that consumers value, it uses some

FOOD AND DRINK

Follow us! extraordinary methods, such as offering an Airbnb ‘SteakCation’ in Ontario last year to celebrate the launch of the Steak Doubledilla – a campaign which generated 422mn impressions.

“We’ve found fans truly understand the brand which help us validate new concepts, ideas, strategies, and products,” says Castillo.

“We launched Mas Nation, an advisory board comprised of Taco Bell Fans, and it acts as a great forum to gauge anything we bring to life, with fans

Veronica Castillo

Director of Marketing and R&D, Taco Bell Canada

“Mexican food is trending in Canada, because millennials love it, and this is adding to our ability to strongly drive growth” – Veronica Castillo, Director of Marketing and R&D, Taco Bell Canada

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YUM! BRANDS

truly championing and supporting our brand. We’re also reaching a lot to social channels, and we really engage in conversations with fans to understand what they want.”

Consumers are rewarded not only with the innovative meal options they request, but a focus on the social aspect of food. “We want to bring people together,” Castillo says. “We want to create assets that are really inviting, to drive conversations and

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make people happy to stay longer in our restaurants. We’re truly evolving.”

It is this wealth of offerings that has given Taco Bell Canada the confidence to aspire to such massive expansion across the country. With a solid foundation, Taco Bell already boasts nearly 200 locations. By 2022, the goal is that Canada will house 100 new stores.

“We have pretty much reset the business focusing on building

FOOD AND DRINK

strong foundation over the past five years,” explains Castillo. “It’s a growing business with a strong financial model, strong menu, improved operations, and amazing restaurant concepts, and a driving force now is expanding the Taco Bell standalones across Canada.

We just recently opened our first standalone in 2017 in Saskatoon, so we feel we have the foundation to continue growing. We have a brand that our fans love, and a lifestyle brand that no-one else can offer.”

Taco Bell is now in 29 countries, recently launching in China, India, and Brazil. These nations are now priorities alongside Canada, and Canada is considered to currently be at a critical stage of rapid expansion.

“In the last six years, we’ve grown the brand 40%, so that tells you the potential we have,” says Castillo. “Everything that we’ve done resonates so well with our target, and we track that against Yum!’s goals. Mexican food is trending in Canada, because millennials love it, and this is adding to our ability

to strongly drive growth. We have what it takes, and we are at this point engaging investors to really help us with our growth strategy.”

A world with more Yum!

Yum!’s slogan – a world with more Yum! – is more appropriate than ever as the business spreads across the globe. It enhances its attractiveness to millennials by focusing on corporate responsibility alongside allowing its consumers to be a part of the business by listening to them and adjusting accordingly. All three of Yum!’s brands fit naturally into its vision and work hard not only to maintain it but develop it, and Canada is set to benefit from the care and passion KFC, Pizza Hut, and Taco Bell have for pleasing their audience.

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Jack Cooper and the road to

SUCCESS Written by: John O’Hanlon Produced by: David Kulowitch

JACK COOPER HOLDINGS

The most important keyword at Jack Cooper, one of North America’s oldest and most trusted logistics companies, is integrity: a core company value that it’s determined to retain into the digital age

T

here isn’t, surely, a single large and growing enterprise that has not been transformed by technology – a transformation that is never complete, since technology never stops evolving. This has presented challenges, as it’s easy to lose sight of the importance of human relationships in a world of automation: Jack Cooper, the largest over-theroad transporter of light vehicles in both the US and Canada, is one company that has met this challenge.

Jack Cooper is a household name throughout the North American car industry fulfilling since its foundation in 1924 the key task of delivering finished automobiles from plants to dealers. Today it has a network of 51 strategically located terminals, across the United States, Canada and Mexico: its largest customers

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being General Motors (the OEM it started with, as a carrier from GM’s Leeds Assembly Plant in Kansas City, Missouri), Ford Motor Company and Toyota. As well as taking cars from North American plants, its fleet of specialised transporters moves shipments of imported vehicles, and its logistics arm has a major presence in the rental and lease markets. If you buy a new or used car in North America, chances are Jack Cooper had a hand in delivering it to you.

When Kirk Hay the company’s Chief Information Officer (CIO), started his career in IT over 30 years ago, computer enabled systems and technology were very much a back office function, a service to make easier the work of departmental managers – who largely dictated what the IT guys

TECHNOLOGY

“IT leadership needs to spend 60 percent of its time outside the organisation but it’s rare for that to happen” – Kirk Hay, CIO

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spent their time doing. “It was all about being a service provider. IT was viewed as a utility keeping the lights on and the power going.”

Of course the lights do still have to be kept on, and his IT team at Jack Cooper will never lose sight of their service imperative, “IT must continue to digitise and innovate, but if you fail as a service provider you won’t be successful as an innovation provider,” he emphasises.

Today his role is a strategic one and he is part of the executive team

reporting directly to the CEO: no major investment or expansion is considered without considering the IT implications. “IT has evolved into a partnership and much more, a strategic relationship with those we serve” he says. At Jack Cooper, ‘those we serve’ is code not just for the customers but for every one of the company’s employees, an attitude that underlines another change that has taken place throughout the IT world, the ‘flattening’ of the entire organisation.

TECHNOLOGY

“What has changed is that even my more junior staff work directly with people in the field.” In fact IT staff are required to visit the company’s terminals regularly, where they spend a couple of days interacting with the staff on the ground.

They invariably return with ideas and suggestions that no amount of central office brainstorming would have picked up says Hay. Maximising the utilisation of fleets and facilities can make the difference between operating

Kirk Hay

at a profit or a loss. This is where IT makes a huge difference. “One of the biggest things we are doing is pushing forward the availability of data alongside its quality – making it a highly valued commodity just like the vehicles we move.” Hay believes the data revolution means putting information into the hands of team members and customers alike. Gathering information about vehicles through telematics is something the freight industry has been doing for decades.

CIO

Kirk Hay is the Company’s Chief Information Officer and is responsible for Jack Cooper’s Information Technology function. Hay has over three decades of experience leading IT departments of public companies in a variety of industries. His industry experience includes technology services, financial services, quick service restaurant, transportation logistics and insurance.

During his career he has led both small, startup and large, established IT shops determining and fulfilling strategy in support of corporate objectives, regulatory compliance and aggressive M&A activities.

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JACK COOPER HOLDINGS

Hay points out that in this respect the industry has a head start on the internet of things (IoT) with its ability to pull data on engine performance, truck safety, fuel usage (one of the company’s largest operational costs), location through GPS and the like. “I think the challenge in our industry is making the very large amount of data that is available to us more actionable. To present it to our team members in the field so they can use it to work smarter.

Then beyond that to make it predictive. When you talk about business intelligence there are three aspects, what happened before, what is happening now and what is going to happen in the future.”

One example of applying business

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intelligence is the ability to do preventive maintenance when it is needed, rather than when the book says it should be done. Another example is analysing production data, so that it’s known how many vehicles are coming off the line in a given period and where they are destined for right from the start of the assembly line. Hay says: “The further ahead we can look the better job we can do in optimising the mix of freight that we put on a truck with as many cars going to the same place or the same city, and filling them on the return as well as the outward journey. It all helps us hold down our costs.” Apart from the environmental spin-off, optimising the trucks has the effect of increasing capacity.

TECHNOLOGY

Jack Cooper truck, loaded

“THE FURTHER AHEAD WE CAN LOOK

the better job we can do in optimising the mix of freight that we put on a truck”

– Kirk Hay, CIO Jack Cooper has an increasingly mobile workforce, whose time is saved and job satisfaction improved if they can pull up information on a mobile device rather than having to go into an office to look it up.

Jack Cooper has adopted a hybrid cloud approach to this challenge, using a combination of private cloud hosted within the business, and public cloud provided by a third party, in this case Microsoft.

Jack Cooper has always been innovative in its thinking. It was an early adopter, for example, of

electronic proof of delivery from the cab, something that is today commonplace among delivery companies. “All our drivers have their back office in their back pocket!” says Hay. “They can go out and find their next load, locate where those vehicles are loaded at the yard, and look at complete information all the way out to the delivery point where they can collect information, signatures and photographs as required.” In this way information is made available to employees and customers alike, in real time

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JACK COOPER HOLDINGS

Jack Cooper archive photograph

and across all platforms, using a laptop, a tablet or a smartphone As we saw earlier, the IT team is hands-on where serving the business is concerned. Nevertheless Hay encourages an outward-looking approach to problem solving.

“IT leadership needs to spend 60 percent of its time outside the organisation but it’s rare for that to happen. This is something we are working on – keeping regular interaction with executives and key leaders in Jack Cooper while maintain contact with groups

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of people outside of the firm, or even the industry, in order to learn how to do things better.”

The IT team uses a bimodal approach, focusing on both the known and the uncertain. When it comes to innovation projects, he tends to call in the help of a limited number of trusted third parties (“I call them arrows in my quiver!”) to get projects set up quickly, so they can be tested and if necessary adapted. “When innovating, you need to determine the likelihood of success early on. If you are

TECHNOLOGY

going to fail, you want to fail fast!”

Examples that did not fail include a new application for the large volume of vehicle inspection work the company does and a mobile app to identify vehicles in the field.

These were developed and are being trialed using third party ‘boutique’ firms that have worked with Jack Cooper for a number of years.

Hay is leading many efficiency projects which are delivered by the digital transformation. For

example, over the years, Jack Cooper’s footprint had grown through acquisition, accruing multiple telecoms, voice and data as well as hardware vendors.

With over 80 locations to manage, communications is a very major cost factor to the business. By consolidating this supply chain and, he and his team reduced the overall cost of communications by 40 percent while actually increasing bandwidth and redundancy.

Jack Cooper Truck

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Transforming the workplace in Canada and around the world Written by: Leila Hawkins Produced by: David Kulowitch

AVI-SPL

AVI-SPL IS THE TOP END-TOEND PROVIDER OF AV AND COLLABORATION SOLUTIONS FOR ORGANISATIONS OF ALL TYPES IN CANADA AND THROUGHOUT THE WORLD

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F

ounded in 1979, as technology has evolved over the last 40 years naturally, so too has AVISPL and the needs of its customers.

John Zettel, the organisation’s CEO, explains: “There are many companies undergoing workplace transformation and our constant goal is to provide innovative technologies and solutions that enhance the collaboration and improved business outcomes that come with it. While technology has certainly been the catalyst for workplace transformation, what’s really driving it is the workforce itself, the millennial and digital natives that are currently in, or

TECHNOLOGY

entering the workforce. By 2020, they’ll make up half of the workforce and their demand is for different experiences in the workplace compared to earlier generations.

“We moved deeper in terms of collaboration and seeing somebody’s face,” he says, “not only how you see content but how you work on it and how you get work groups in disparate locations to come together. Not just talking about a worksheet but physically working on it at the same time. Without the resources that make these things possible, vital

functions like talent acquisition and retention, project management, and company culture begin to suffer.”

Meeting customers’ workplace needs

In recent years, the company has made several big acquisitions enabling it to expand its capabilities to meet the needs of the changing workplace and workforce. In 2012 it acquired managed services provider Iformata and, most recently, bought VideoLink LLC to offer broadcast quality video and production as the enterprise video

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ARE YOU

LOCKED IN TO ONLY ONE UC PLATFORM? Only Crestron Mercury™ supports your collaboration applications.

visit crestron.com/mercury All brand names, product names, and trademarks are the property of their respective owners. Certain trademarks, registered trademarks, and trade names may be used in this document to refer to either the entities claiming the marks and names or their products. Crestron disclaims any proprietary interest in the marks and names of others.

Crestron is not responsible for errors in typography or photography. Š2017 Crestron Electronics, Inc.

TECHNOLOGY

market continues its rapid growth.

The acquisition of Iformata signified the future of AV and its convergence with IT, including the emergence of Unify ME Symphony Platform, the cornerstone of AVISPL’s its award winning managed services, according to market researcher Frost & Sullivan. The present and future of workplace collaboration, Symphony is a vendor agnostic platform that monitors and manages an organisation’s new and existing AV systems to improve the quality of experience during meetings. Symphony runs diagnostics on those systems, troubleshoots and creates custom alerts, schedules and launches video calls, among other critical processes

to enhance the company’s collaboration and productivity.

The platform makes meeting management efficient, and as Frank Mehr, Senior Vice President of research and development explains, it is a valuable extension of a company’s IT department.

“If you go to a meeting and the first ten minutes are people trying to use the technology, you’re just wasting corporate resources and frustration builds up. Problems occur, but you must be proactive to prevent them, or reactive if an unforeseen event happens in the middle of a call.

“With Symphony, our

We felt there was a clear need in Canada for a LOCAL PROVIDER WITH GLOBAL CAPABILITIES. – Boris Koechlin, Managing Director, Canada businessreviewcanada.ca

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AVI-SPL

customers have support behind them that quickly explains exactly what to do, before or as it’s happening. It saves organisations a tremendous amount of time and increases their employee’s and customer’s satisfaction,” he adds.

A local force around the globe

In 2013, AVI-SPL exploded onto the global scene, becoming the first multinational AV systems integrator and collaboration solutions provider when the company expanded into the UK and Canada, and into Germany three years later.

“We saw this as an opportunity to be global providers and differentiators compared to our competitors,” Zettel says. “Our customers responded well to that, and then of course market expansion has done very well for us. All of these solutions are connected, and our service platforms that monitor everything are all connected. The global presence

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is clearly important to be able to ride a consistent and timely response to our customers on a global platform.”

Although it has a global reach, AVI-SPL still operates on a local level. “We felt there was a clear need in Canada for a local provider with global capabilities,” explains Boris Koechlin, Managing Director in Canada. “We can go to our Canadian customers, many of whom are multinational organisations, and talk about how the local AVISPL in the UK or Germany, for example, can implement and standardise their workplace transformation throughout Europe.

If not there, then the US or the Middle East, or Asia. Wherever in the world they need to go.”

The company has achieved a lot since it’s been in the Canadian market, and is currently doing business with nearly half of the Canadian Fortune 50 companies.

“We’ve done campuses for Imperial Oil where we built 11 buildings for them, including its global headquarters in Calgary,” Koechlin says. “We’ve carried

TECHNOLOGY

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AVI-SPL

out work for Deloitte in Toronto, and it’s won awards for creating a transformational workspace.”

Koechlin explains what a transformational workspace is: “Most of us can picture the classic miles and miles of cubicles, and everybody has a desk or an office assigned to them. [At Deloitte] you have 19 floors of downtown real estate, and there’s not one office, boardroom or workstation assigned to anybody. Every day thousands of people arrive for work, scan the open space, decide what kind of work they’re trying to do that day, what kind of mood they’re in, and select a place to go to work. It’s the new way of thinking about how you arrange an office to enhance collaboration and productivity.”

Mehr cites a leading pharmaceutical company with a presence in over 50 countries as a particularly successful project. AVISPL was asked to manage its video and AV devices, as well as transform all the back and front end systems. It was done in a seamless, transparent

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2,000

Number of employees at AVI-SPL way to the point where nobody noticed.

“As the AV devices were removed, there was nothing for managing and monitoring these devices that became unknown,” Mehr explains. “The interface, the front end, everything remained exactly the same - the only difference was the vendor’s name on a device, like Crestron, for example.”

TECHNOLOGY

The Canadian market today

The Canadian market is hugely competitive. “The industry is very saturated,” Koechlin says.

“The economy is doing fairly well right now, and there’s a lot of opportunity out there.

“We are increasingly useful in helping Canadian companies expand their global footprint, both directly in the traditional work we do, but also as leaders in the industry.

One of the things we talk about regularly are interesting applications that we‘ve identified as potentially interesting to our customers around the world. That commitment to a global community, and the extent

to which we execute that, means everybody wins because it’s a bigger audience.”

Partnering up with today’s tech leaders

Mehr says that one of the company’s key elements is having strong partnerships with major manufacturers. “We have to be flexible to provide an environment that is comfortable and works for everybody.

“We have partnerships with Crestron, Microsoft, Cisco, Polycom and many other top brands. And what happens a lot of the time is we go in as the trusted advisor to a

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AVI-SPL

lot of our customers, because they want to invest in the technology, and want to know what research we have done, and what we recommend, and they appreciate us being well-versed in all of these important aspects,” he adds.

Each year AVI-SPL holds their signature TechX, a customer event that Zettel explains is very important to the company. “We select different cities where we have a local presence and invite technology decision makers to get a chance to interact with not only our team, but with select technology providers, and the latest products on the market. It gives them a chance to get

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really cutting edge information on topics that are pertinent to them, and an opportunity to see, touch, and play with today’s innovations that could benefit their organisations.”

Training, certifications lead differentiation

According to Zettel, another key differentiator is the organisation’s training, which has been a significant factor in creating a highly-qualified workforce with the most industry certifications in the space.

With AVI-SPL’s advanced training, along with strategic direction, the company’s accomplishments have been recognised numerous times

TECHNOLOGY

in recent years. Among the ones Zettel is most proud of is Frost and Sullivan’s North American Managed Services Company of the Year, multiple Vendor Partner of the Year awards, and being ranked number one by Systems Contractor News the past 11 years.

“Those really mean a lot to us,” he says. “Ultimately, the whole of our company is the sum of its parts, and it takes a lot of people moving together to get to where we’ve come. The quote I like to use is that being the biggest hasn’t made us the best, being the best has made us the biggest.

“It really speaks to every employee

in AVI-SPL about the dedication to progress, to being forwardthinkers and pioneers in our industry, and not letting complacency sink in. Technology will continue to advance, the workforce will continue to change, and we take great pride in our ability to evolve to meet the present and future needs of our customers and their transforming global workforce.”

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Logistics Conference 2017 Canada’s annual thought leadership conference for all supply chain logistics professionals

Montreal, QC • October 25-27, 2017