november/december 2013

The Ultimate Disrupter

To be earth’s most customer-centric company where people can find and discover anything they want to buy online.

Leaderson Leadership:Dino Bianco

+Marketingto Millennials

NovemberDecember 2013Vol 3 | No 6$9.95

PM

# 4

22

11

02

9

WHY GROCERY IS

AMAZON’SNEW TROJAN HORSE

Co-Publisher and Executive Editor Karen James [email protected]

Co-Publisher and Content DirectorKevin Smith [email protected]

Executive Vice-PresidentContent and Market DevelopmentDan Bordun [email protected]

Contributing Editors Angela Kryhul, Sally Praskey

Contributing WritersPeter Diekmeyer, Treena HeinMarjo Johne, Noelle Stapinsky

Contributers Susan Abel, Perry Caicco, Tony Chapman Joanna Gibbons, Ken Kwong, Michael Marinangeli

Creative AgencyBoomerang Art & Design Inc.boomart.net

Subscription changes & updates or general inquiries: [email protected]

November/December 2013Volume 3, Number 6grocerybusiness.ca

Grocery Business Advisory Council

Phil Donne, Campbell Company of Canada

Tom Barlow, Canadian Federation of Independent Grocers

Perry Caicco, CIBC World Markets

Chris Terrio, CROSSMARK Canada Inc.

Nancy Croitoru, Food and Consumer Products of Canada

Tim Berman, Kraft Foods Canada

Michael Marinangeli, MIDEB Consulting Inc.

Cheryl Smith, Parmalat Canada

Mark Ayer, Procter & Gamble Inc.

David Wilkes, Retail Council of Canada

Cori Bonina, Stong’s Market

© Copyright 2013. All rights reserved. No part of this magazine may be reproduced without written permission of the publisher. GST Registration No. 83032 6807 RT0001

Publications Mail Agreement No. PM42211029 ISSN 1927-243X

Mailing AddressGrocery Business Media 390 Queen’s Quay W., PO Box 40085 Toronto, ON M5V 3A6

Karen James and Kevin Smith, Co-Publishers

[email protected] [email protected]

grocerybusiness.caFollow us on Twitter @grocerybusiness

Sign up for our weekly eNewsletterat grocerybusiness.ca

On October 31, Amazon.ca began selling groceries online and in one broad stroke cemented grocery products’ new role as a “category,” and a loss-leader one at that. It was a direction grocery was already heading toward, as big-box retailers such as Walmart and Target beefed up their grocery offerings.

But this is different. Amazon is unlike any previous competitor. Launching with 15,000 grocery items, Amazon.ca will undoubtedly steal market share as online shopping continues to grow in popularity. And, because it tracks online activity, Amazon will instantly know more about customers’ preferences and spending habits than traditional supermarkets could ever dream of. Without bricks-and-mortar overhead, Amazon is nimble enough to react to consumers’ changing needs.

Here’s a sobering thought: Amazon doesn’t consider itself to be in the grocery business, anymore than it’s in

the bookselling or electronics business. Rather, Amazon is in the business of helping people buy stuff, according to Tom Furphy, who once ran AmazonFresh in the U.S.

Groceries, as a high-frequency purchase, is really a Trojan Horse strategy for Amazon to increase its presence in consumers' homes. It’s also a great way to sell more online advertising; collect third-party fulfillment and listing fees; gather more online behaviour data… the list goes on.

As Tony Chapman notes in his column on page 21, the chink in Amazon’s armour could very well be that, as an online retailer, it’s unable to offer the same level of authentic, face-to-face, highly- personalized service that consumers crave and at which their neighbourhood grocers excel.

Whether this proves to be Amazon’s Achilles heel remains to be seen. In the meantime, welcome to the wild new frontier of grocery retailing.

contentsDEPARTMENTS

5 Publishers’ Message Why grocery is Amazon’s new Trojan Horse

8 Front End People & News

11 Open Mike Don’t be an invisible boss

51 Shelf Life: Cereal Thinking outside the bowl

54 Shelf Life: Good in Bread Bread is your next destination category

60 Launch it, List it New and Now Products

64 It Figures Focus on inflation

66 Perry’s Point of View The new independent grocers

Grocery BusinessNovember | December, 2013

Volume 3, Number 6

39

McEwan's Own Photographed in Chef Mark McEwan's Toronto store

6 November | December 2013

ON THE COVER

The Mighty AmazonThe e-commerce giant’s relentless quest to disrupt and dominate the grocery landscape

17

FEATURES13 Focus on Food Safety

14 Dino Bianco - Kraft Foods Canada 2013 Golden Pencil recipient

21 Tony Chapman Amazon: The world's biggest vending machine

23 Changing Channels Omni-channel retailing gains momentum 27 What Millennials Want The future of retail

44 Acquiring Dominance Retailers turn to M&As for growth

45 On the Road Natural Products Expo East

46 Advantage Mirror Report Turning the tables

48 Exit Interview Parmalat's Nash Lakha

56 United Grocers Inc. Awards Dinner 2013

59 Toonies for Tummies Goal: $1 million for child hunger

63 Grocery Innovations Canada 2013

33 McEwan's fine dining comes home

36 Ann Daw, Specialty Food Association, talks trends

39 Making It: Lesley Stowe, Raincoast Crisps

41 Gascogne of Montreal

332736

T A S T EM A K E R

November | December 2013 7grocerybusiness.ca

Front End

The White Cashmere Collection celebrated its 10th anniversary in September with a runway show at the Art Gallery of Ontario. Twenty fashion designers showcased garments and accessories crafted in Cashmere Bathroom Tissue. The show supports the Canadian Breast Cancer Foundation with 25 cents from every package sold in October going directly to the cause.

Marc Poulin succeeds Paul D. Sobey as president and CEO of Empire Co. Ltd. on Dec. 12, while retaining his current position as president and CEO of

Sobeys Inc. Sobey retires as president and CEO on Dec. 11, 2013, and continues as a director of the company.

Nestlé Waters Canada has appointed Debbie Moore as president. Previously, Moore was global head of customer facing supply chain/customer service,

corporate supply chain for Nestlé S.A.

Mary Kelly has joined Rexall Pharma Plus as executive vice-president and chief merchandising officer. Kelly previously worked at Shoppers Drug Mart as executive vice-president of merchandising and category management.

Mario Grauso has joined Joe Fresh, Loblaw’s apparel division, as chief operating officer. Grauso most recently was the president of the Vera Wang Group.

Bill Dunne has joined the board of directors of C.B. Powell Limited. Dunne was president of Acosta Canada from 2006 to December 2012.

Loblaw Companies Ltd. has announced executive changes. Grant Froese was named chief adminis-trative officer; Mark Butler was appointed executive vice-president, integration; Garry Senecal now leads the Conventional division; and Andrew Iacobucci leads the Discount divisions.

Nicolas Trentesaux is the new head of the SIAL

Group international food exhibition network. Trentesaux held several international positions with packaged goods companies.

Cori Bonina, president of Stong’s Market Inc. and Cori’s Kitchen Inc., has received a Lifetime Achievement award from the Kitsilano Chamber of Commerce. The first female chair of the Canadian Federation of Independent Grocers, Bonina is an industry innovator who uses her retail outlet as a testing ground and launch pad for new products. Bonina received the recognition at the 2013 Westside Business Awards Gala.

Appointments

Grant FroeseMarc Poulin Mark Butler

Garry Senecal

Andrew Iacobucci

Stay informed with Grocery Business eNews

Don’t miss out on all the latest grocery industry news. Delivered to your inbox weekly, Grocery Business newsletters include the latest industry news and announcements. Sign-up at grocerybusinessmedia.ca/newsletter

November | December 20138

49%46%

38%40%

19%22%

20%

27%

18%16%

13%14%

Close to where I live

Source:

Offers the lowest everyday prices

Provides circulars/flyers that

highlight current sale-priced items

They price match to competitors

advertised prices

Offers sales on brand name items

The Millennial Consumer: How they Shop

Offers in-store coupons

All Millennials

Millennial Moms

SEPARATINGYOURNEWPOLYMER

NOTES

LEARN MORE:BANKOFCANADA.CA/BANKNOTES

Congratulations to Battistelli’s Independent Grocer. The Lively, Ont. store reopened on July 26 after a major renovation and now features an entire aisle dedicated to organic and natural foods, a new antipasto/olive bar and a fresh seafood counter, improved fresh and meat departments, and a complete redesign of the bakery department. Pictured: Brent Battistelli, president, Battistelli’s Independent Grocer, Loblaw district manager Doug Stickle, and the store team.

9grocerybusiness.ca November | December 2013

Front End

Nia Vardalos

Get your fresh ideas rolling.The Canadian Produce Marketing Association invites you to Live Healthy and Eat Fresh at the 2014 Convention and Trade Show in Vancouver.

APRIL 2-4, 2014

cpma.ca

September 10, 2013METRO RECOGNIZES TOP QUEBEC MANAGERS

Metro Inc. has recognized six of its 210 Metro and Metro Plus store managers across Quebec as Managers of the Year for 2012-2013. The six managers were evaluated on a number of criteria including customer service excellence, showcasing of products, in-store execution and optimal layout.

Congratulations! Winners of the 2012-2013 Metro Inc. Managers of the Year:

Peter Fogarty Metro Fogarty, Terrebonne

Marcel Laroche Metro Laroche, Laurier-Station

Groupe Messier Metro Plus André-Grasset, Montreal

Philippe Birdjandi Metro Plus Beaconsfield, Montreal

Sylvain Bissonnette Metro Marieville, Marieville

Steve Dumont Metro Ste-Anne-des-Monts, Ste-Anne-des-Monts

From left to right: Richard Frenkcuec, vice-president, retail operations, Metro Banner, West; Guillaume Cantin, co-owner of Metro Laroche in Laurier-Station; Régis Bergeron, store director of Metro Laroche in Laurier-Station; Bertrand Laroche, from Metro Laroche in Laurier-Station; Philippe Birdjandi, franchised owner of Metro Plus Beaconsfield; Denis Brisebois, vice-president, retail operations, Metro Banner, East; Steve Dumont franchise owner of Metro Sainte-Annedes-Monts; Richard Lamothe, store director of Metro Plus André-Grasset in Montréal; Peter Fogarty, owner of Metro Fogarty in Terrebonne; Sylvain Bissonnette, franchise owner of Metro Marieville; Christian Bourbonnière, senior vice-president, Quebec Division, Metro.

Yopa! enters Greek yogurt categoryNia Vardalos, the Oscar-nominated writer and star of My Big Fat Greek Wedding, is the new spokesperson for General Mills’ new Yopa! yogurt brand. Yopa! is a play on the Greek word “opa,” and is made with stirred-in ingredients in the following flavours: Mango Tango, Very Berry, Ooh La La Strawberry Cheesecake, Va-Va Vanilla Bean and Lotta Piña Colada. Vardalos is promoting Yopa! via social media and media interviews.


Don’t be an invisible boss! By Michael Marinangeli

Retail is detail. It is imperative that senior executives stay in touch with reality. The money is made in the stores, not in the office. The most effective leaders I have worked with were those who spent a lot of time visiting stores. Head office is there to support the stores, not the other way around. Store visits should be part of the responsibilities of senior management.

There were times in my career when I did not spend adequate time visiting stores. I got bogged down with too many projects and too many fires to put out. But those were excuses. I should have scheduled store visits the same way I scheduled all the other important tasks I was required to perform.

However, there were also periods when I never missed a week visiting stores. At Miracle Food Mart, we had a company van just for that purpose. Every Thursday, the senior manage-ment team would jump in the van at 6:00 a.m. and spend the day visiting stores. When we travelled out of town, we didn’t get home until late at night. These were not surprise visits. The

10 KEY BENEFITS OF STORE VISITS

1. Understanding the store from the customers’ perspective.

2. Good for employee morale – somebody cares.

3. Understanding the challenges that employees face.

4. Watching and learning how tasks are performed.

5. Finding solutions to problems by asking employees their opinions.

6. Getting a good grasp on what your competitors are doing in each market.

7. Feeling the pain and understanding the issues.

8. Determining what is not working and stopping it immediately.

9. Gathering great ideas by talking to employees and customers.

10. Evaluating and getting to know your talent base in the stores, to identify future leaders.

staff knew we were coming, and were proud and delighted to show us their departments and gather our feedback. The added bonus of having the senior team travelling together all day was the opportunity to exchange informa-tion with one another. Also, we were right on top of what our competition was doing, and devised plans on the go as to how we could improve our position in each market we visited.

Attracting, retaining and providing value to shoppers is a full-time effort. All of us are extremely busy. However, if you are not a visible manager, you will be out of touch with what is happening in the marketplace.

Visiting your stores on a regular basis is the best way to connect with your stores, customers and employees. Make it part of your work week!

Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. [email protected]

Do you hold a senior management position at a head office of a supermarket chain or a small group of grocery stores? Do your decisions and directives have a direct impact on sales, profits and the future viability of your organization? Do you truly understand how consumers perceive your stores? When was the last time you spent a full day visiting your stores? These are important questions to answer. Here’s why.

Open Mike


7.5%

3.4%

10.4%

6.7%

96%

reduction1 in energy consumption (7.1% reduction1 since 2009)

reduction1 in GHG emissions2 (19.4% reduction1 since 2009)

of fi bre third-party certifi ed

improvement in logistics effi ciency3

(7.5% improvement since 2009)

increase in FSC®-certifi ed fi bre utilized(FSC fi bre represents 53% of total fi bre)

Became Offi cial Earth Day Canada Partner

In 2010, we launched Sustainability 2015 and set to work on various initiatives to meet our nine targets. At themidway point ofour journey weare proud to share our progress.

We have experienced challenges along the way, but they have helped us tackle situations in different ways and develop solutions in an ever-evolving industry.

This has truly been a company-wide effort. Employees from every department and each of our sites—manufacturing and head offi ce—have contributed to projects and initiatives that are helping us achieve our targets.

We are committed to sustainable growth and innovation. I encourage you to visit sustainability2015.ca to keep up with our progress and learn more about how we’re building a sustainable future.

Mario GosselinChief Executive Offi cer

KRUGER PRODUCTS :SUSTAINABILITY 2015 IN ACTION

©20

13 ®

and

™ t

rade

mar

ks o

f Kru

ger

Prod

ucts

, L.P

. ®’ r

egis

tere

d tr

adem

ark

of K

imbe

rly-

Cla

rk W

orld

wid

e us

ed u

nder

lice

nse.

EA

RTH

DAY

®

and

the

Leaf

& S

wir

l Des

ign™

are

tra

dem

arks

of E

arth

Day

Can

ada

(199

1) In

c., u

sed

with

the

per

mis

sion

of E

arth

Day

Can

ada

(199

1) In

c.M

tra

dem

ark

of T

erra

Cho

ice

used

und

er li

cens

e. ®

FSC

—Fo

rest

Ste

war

dshi

p C

ounc

il, A

.C 1 A

bsol

ute

base

d. 2 S

cope

1. 3

Cub

e ut

iliza

tion.

10.4%Mario GosselinChief Executive Offi cer

©20

13 ®

and

™ t

rade

mar

ks o

f Kru

ger

Prod

ucts

, L.P

. a

nd ™

tra

dem

arks

of K

ruge

r Pr

oduc

ts, L

.P.

and

the

Leaf

& S

wir

l Des

ign™

are

tra

dem

arks

of E

arth

Day

Can

ada

(199

1) In

c., u

sed

with

the

per

mis

sion

of E

arth

Day

Can

ada

(199

1) In

c.an

d th

e Le

af &

Sw

irl D

esig

n™ a

re t

rade

mar

ks o

f Ear

th D

ay C

anad

a (1

991)

Inc.

, use

d w

ith t

he p

erm

issi

on o

f Ear

th D

ay C

anad

a (1

991)

Inc.

M t

rade

mar

k of

Ter

raC

hoic

e us

ed u

nder

lice

nse.

M

tra

dem

ark

of T

erra

Cho

ice

used

und

er li

cens

e.

sustainability2015.ca

CLIENT Kruger Products BLEED SIZE 9.5” x 11.375” PUBLICATION COLOUR INFORMATION

DOCKET # 10088 TRIM SIZE 9.0” x 10.875” Grocery Business Fall 2013

PROJECT Sustainability LIVE AREA

APPLICATION InDesign LANGUAGE English

PROOF STAGE 1 SCALE 100%

DATE October 8, 2013

1384 Cornwall RoadOakville ON L6J 7W5

T 905.339.3500F 905.339.3556

Account Manager Heidi Avery X 256Art Director Scott Raven X 227

CMYK

10088_Kruger_Sustainability Program Ad_Fall 2013_GROCBUS_p9.indd 1 13-10-15 4:51 PM

SUSAN ABEL is FCPC’s vice-president of Scientific & Regulatory Affairs. She spent close to 25 years in the food industry developing new products, including a decade of overseeing food-safety and regulatory requirements for Canada, the U.S., and the U.K. while working in the dairy and grains processing industries.

A STREAMLINEDFOOD-SAFETY SYSTEM

BY SUSAN ABEL

Canada has one of the best food-safety systems in the world.And now we’re on the cusp of making it even better.

The Canadian Food Inspection Agency (CFIA) is deep into a major review of its procedures that will take Canada’s already world-class system to another level. The initiative – called the Safe Foods for Canadians Action Plan – promises to dramatically streamline our inspection regime.

Food & Consumer Products of Canada (FCPC) – as the industry association representing and supporting Canada’s food, beverage and consumer products manufacturers – has been at the table, taking a leadership role.

Industry is excited for the possibilities that lie ahead. These include an easier-to-navigate system and inspectors who are all trained the same way, so that an inspector in Newfound-land is delivering the same message as one in British Columbia. It’s the possibility of removing much of the duplication that has developed over the past 25 years, and becoming more efficient by focussing resources where they are most needed.

How did we get here? The CFIA has recognized that, over the last 25 years, it has amassed an incredible number of rules and regulations. The existing system is a

In the future, they will have to use more discretion or judgement instead of a simple checklist to verify that a food meets the regulations. This will allow the adoption of new technology more quickly, but it means that inspectors will need much more training and experience to make different kinds of decisions.

I am meeting with the CFIA once or twice a month on this initiative – it’s a priority. The goal is to have the new system in place by 2015.

It’s ambitious, but I believe we can get there and continue making our food-safety system the envy of the world.

bit like a whack-a-mole game; whenever something new comes up – such as the use of technology, a food ingredient, or a food-safety procedure – the CFIA bolts on a new rule to address the change.

All these activities inevitably lead to unnecessary overlap, duplication and frustration. Currently, the CFIA manages 44,000 pages of documentation, including regulations, guidance and policy. The organi-zation recognizes it needs to review and refresh those pages to maximize their impact on food safety while reducing the sheer volume to a more manageable set of documents.

This is not to say our present system is weak. Far from it. This is about levelling the playing field and ensuring consistency. It is an opportunity to make sure that anyone operating in the food world in Canada is playing by the same rules.

The passage of the Safe Foods for Canadians Act (SFCA) has helped move this file along. The SFCA gives the CFIA the power and tools it needs to make the necessary changes.

Currently, inspectors have a highly defined checklist that is used during an inspection.


Dino Bianco

LEADERSON LEADERSHIP

2013 GOLDEN PENCIL

RECIPIENT

On the eve of his Golden Pencil award, the industry’s highest honour, Karen James of Grocery Business spoke with Dino Bianco, executive vice-president and president, Beverages and Canada, Kraft Foods Group.


LEADERSON LEADERSHIP

Karen James: How do you define your leadership style?

Dino Bianco: I’ve been told I’m very competitive, driven and passionate, but in a way that I like to think is engaging, empowering, and inspirational for my staff.

KJ: Did you have a mentor in your career?

DB: I really did not. I’ve worked with many people in my career and learned something from everyone. My career was influenced by all the people I’ve worked with over the years – taking the positive from some, and avoiding the negatives from others.

KJ: How did you begin your career at Kraft?

DB: In the early 1980s, I had a summer job as a sales rep for Christie Brown, and that was my first taste – no pun intended – of the food industry. I loved it. They offered me a full-time job when I graduated from university, but I was determined to get my Chartered Accountant designation first.

Then, in 1990, lo and behold, Kraft Foods called me for a job in the finance area. Interestingly enough, 10 years later, Kraft ended up buying Christie Brown. Eventually, I became president of Kraft, which included Christie’s, the place where I started my career almost 20 years earlier.

KJ: Is the business different now?

DB: Obviously, the world has changed since the early ’80s. Technology has given us a more global perspective on business. But the things that excited me back then are still true today. This is a dynamic business. It interacts with consumers every single day, and is a total end-to-end business, from farm right through to technology. Feeding people is honourable work and I’m proud to be part of it.

KJ: What does it mean to you to receive the Golden Pencil award?

DB: It’s an incredible honour. When I heard I was awarded the Golden Pencil… you always look at your peer group and you question whether you are worthy. It’s very special for me because I spend a lot of my time now working in Chicago. To be recognized in my home country is a great honour.

KJ: What advice would you have for people entering the CPG industry?

DB: I would encourage young people to let their curiosity take them wherever it can in the business, because great leadership transcends any particular role. I started my career in finance and ended up working in marketing and sales strategy, and learned a lot along the way.

And I would tell them not to be so rushed to get to the next job, the next title, the next promotion. Build the skills. Learn from others and teach others. And if you do all that, you will have a fulfilling career and lot of fun too.

KJ: On the personal side, we understand that you enjoy playing hockey.

DB: I started playing hockey at age five, and at 51 I’m still playing twice a week. I always say this will be the year I retire, but I’ve been saying that for about 10 years!

I enjoy going to the gym and I golf when-ever I can. I love listening to all genres of music and spending time with my family.

KJ: Is there anything you would like to add, Dino?

DB: As I reflect back, I think I was fortunate to be born, educated, married and able to raise my family, all in one city. I have friends that I met when I was five years old – we still hang around today. I was very blessed to have those advantages and to ascend to a very senior job in a great company in a great city. I think this grounding and pride in being raised as a Canadian and Torontonian, helped shaped me.

EducationBachelor of Commerce,

University of Toronto; Chartered

Accountant designation

Career path » PriceWaterhouseCoopers

» Several positions within

Kraft, in finance, sales

strategy and marketing

» President of Kraft Canada,

2005-2012

» Most recently, was president

of Kraft’s International

and Foodservice business,

as well as the Marketing

Services and Innovation

organizations

» Appointed to his current

position in January, 2013

PersonalMarried, with two daughters,

ages 23 and 17, and a son,

age 20

Giving backPast chair of Food and

Consumer Products of Canada;

previously served on the board

of The Grocery Foundation

and the Board of Trustees of

the United Way Toronto.

SNAPSHOT


ALSO TRY THE

NEW DEL MONTE WORLD

Brighten your day with

Del Monte !

It could be the industry’s biggest-ever game changer. While Canadian retailers were preoccupied with the launch of Target and Walmart’s expansion in grocery, Amazon.ca stealthily swooped in and, in October, dropped a bomb: The online behemoth added 15,000 grocery items to its online offering, sending chills down the spines of many grocers.

“The grocery category is important to us because it is important to our

customers,” says Alexandre Gagnon, country manager for Amazon.ca, explaining the rationale behind the move into online grocery retailing. “We know our customers want to buy online – they tell us that every time they search for grocery items on our site. They are looking for a large, high-quality assortment, which includes everything from healthy snacks to dry packaged goods, and we want to provide that to them.”

E-commerce giant Amazon.com (and its offspring Amazon.ca) is on a relentless quest to disrupt and dominate the grocery landscape By Sally Praskey

The Mighty


Around the same time that Amazon launched its grocery store, came word that the company had signed a lease for a 91,000-sq.ft. office space in a high-tech building in Vancouver. Due to open in 2015, the space will reportedly accommodate 1,000 employees. The company, which already has an office in Vancouver, is hiring as many as 90 software developers, and program and product manag-ers, as well as filling additional positions at its fulfillment centre in Delta, B.C. Another fulfillment centre in Mississauga, Ont., reflects the company’s strategy of placing its warehouses in dense urban areas where it can deploy a variety of delivery models.

As it continues to add categories to its online arsenal, Amazon is growing in, well, Amazonian proportions. Over the past five years, it has acquired such sites as shoe seller Zappos.com, and Quidsi Inc., the parent of Diaper.com, Soap.com, Wag.com and BeautyBar.com.

Book stores, electronics retailers, video outlets and others have paid the price of Amazon’s take-no-prisoners growth strategy. Are grocery retailers next?

According to a 2012 report from Kantar Retail, titled The Future of Online Grocery Shopping in the United States . . . is Here, Amazon already dominates south of the

While Amazon delivers fresh groceries in the U.S., and recently launched an online grocery and gourmet food store at Amazon.ca (selling packaged goods only), former Amazon vice-president Tom Furphy told an audience at the recent Grocery Innovations Canada conference that Amazon “could care less if it makes money on the goods it brings in for resale,” and that includes groceries.

The reason is that Amazon makes most of its money from as many as 12 “ridiculously large income streams” ranging from third-party fulfillment and listing fees, to advertising fees on its network and cloud computing services, Furphy explained.

Bezos is willing to lose money on shipping and services in exchange for loyalty. The average Prime [Amazon’s $79-per-year delivery program] member spends an astounding $1,224 a year on Amazon, which is $700 more than a regular user. Fast Company magazine, September 2013

2012 AMAZON PERFORMANCE

$61.1 billionrevenue (+27%)

-$39 million net income

“The bottom line was weaker as the company continues to spend on fulfillment centres,” according to Kerry Rice, an analyst with Needham & Co.

Any grocery retailers who think they can go toe-to-toe with Amazon in the online grocery retail arena, are kidding themselves, according to the man who once headed AmazonFresh in the United States.

Online is the new

Jeff Bezos, CEO

Source: Nasdaq


AMAZON PRIME

» Annual membership fee of $79

» Free two-day shipping when customers order more than $35 worth of eligible products

» Access to thousands of streamed Instant Video programs and free e-books in the Kindle Own-ers’ Lending Library

SUBSCRIBE & SAVE

» Automatic scheduled delivery of subscribed items

» Discount off each order, and free standard shipping

AMAZONFRESH (SEATTLE AND LOS ANGELES ONLY)

» Overnight delivery of fresh groceries, including produce, dairy, meat, seafood, and even full-course meals (as well as other Amazon.com items)

» Delivery: Doorstep (three-hour window) in temperature-controlled tote bags; or attended (one-hour window)

» $10 charge; free delivery on qualifying order amounts

PRIME FRESH (LOS ANGELES ONLY)

» Upgraded version of Amazon Prime, providing free shipping of products and free delivery of grocery orders over $35

» Annual fee of $299

AMAZON LOCKER

» Large metal cabinets installed at convenience and other chain stores in selected cities

» Amazon is also working with the U.S. Postal Service to deliver packages on Sundays to its Prime members in certain U.S. cities.

DIVERSE DELIVERY MODELS

border with more than half of online grocery shoppers indicating they shop for groceries at Amazon.com.

To the dismay of U.S. food retailers, Amazon is using grocery as a loss leader to get in more customers’ doors, more often. That allows the company to not only forge lasting relation-ships, but also to bundle groceries – which people buy regularly – with higher-margin products like electronics. In other words, Amazon doesn’t really care if it makes money selling groceries – and that’s a frightening prospect to grocers.

The company’s ace in the hole in this strategy is Amazon Prime, its $79-a-year two-day

It’s enough to send a chill down one’s spine, according to Peter Larkin, president and CEO, National Grocers Associa-tion, who said AmazonFresh has delivered a wake-up call to American grocery chains that have been slow to offer online grocery and home delivery services.

There is a silver lining to Amazon’s grocery strategy, according to Stephen Tallevi, co-founder and general manager of Grocery Gateway. “Amazon might take some share, but independents can hold their own and may actually find incremental revenue [by getting into online retailing and home delivery],” he says. “I think it comes down to trust. Where you do your shopping today is where you will place your trust online. Customers already have a comfort level with you… and that trust will carry through online.”– Angela Kryhul

grocery frontier


delivery service. CEO Jeff Bezos freely admits, in media reports, that he is willing to lose money on shipping in exchange for loyalty. After all, Prime users, having paid their yearly fee, are inclined to order more to leverage their $79 as much as possible. Meanwhile, the company’s “Subscribe and Save” feature lets customers schedule regular replenishments of essentials like toilet paper and cereal – a kind of standing order for household basics.

While Amazon.ca is not selling fresh foods, it may only be a matter of time as the parent company is already testing its AmazonFresh concept in two U.S. cities in a bid to convert monthly customers into weekly or even more frequent purchasers. But Canada is not in the plans – yet. “We’re thrilled to launch the grocery category and provide Canadians with a wide variety of dry grocery products. We have nothing else to announce at this time, but will keep you posted as we increase selection, “ Gagnon told Grocery Business.

Meanwhile, Walmart Canada isn’t about to let Amazon.ca walk away with its centre store business and recently announced the addition of 2,000 grocery items to its online offering. Walmart is also piloting a program with Canada Post called Delivered Tonight that will offer free same-day delivery of products, including non-perishable foods, in the Greater Toronto Area.

In the U.S., Walmart will be ramping up its game by going head-to-head with Amazon Fresh by launching Walmart to Go, a same day grocery service in select U.S. cities.

Regardless of Amazon’s potential threat to grocers, bricks-and-mortar retailing isn’t going to go away anytime soon. Some traditional

retailers, such as Walmart and Macy’s, are using their stores as fulfillment centres as well as places to shop, while the “click and collect” model is showing great promise for several grocery chains in the U.S., mirroring its success in Europe.

The Kantar report says that, although the balance will shift more heavily to online, bricks-and-mortar will still dominate, at least for the short term.

Online shopping in Canada

36%

37%

40%

of households are currently shopping online – up 25% from previous year

of households shopping online are purchasing food

of households shopping online are purchasing health & beauty products

Source: Nielsen Homescan, 52 weeks ending June 29, 2013

$332 1.3% of CPG sales in Canada

“In the new digital world, you can’t convince people you have the low price; you actually have to have the low price.”Jeff Bezos, Fast Company magazine, September 2013

The question is, how much erosion of their crucial centre store sales can grocers sustain without having to ramp up an online business or to completely re-oriented their business model to a predominantly fresh one.

While retailers have been focusing their energies bulking up to fend off Walmart and Target, Amazon.ca, with its focus on conve-nience and low prices, may just have quietly taken the inside track with the consumer.

Common ground with suppliersIn what may be a major disrupter to the traditional vendor/retailer relationship, Amazon has set up shop inside the warehouses of Procter & Gamble (P&G), according to the Wall Street Journal.

The program, called Vendor Flex, allows Amazon to reduce the costs of moving and storing goods by piggybacking on

P&G’s warehouse and distribution networks. P&G loads the products onto pallets, and passes them to Amazon in a designated area. Amazon employees then package, label and ship them.

The article says Amazon has similar arrangements, or is in discussions with, a number of other key suppliers.

average householdspending online, per year


Clicks, Bricks, Big Box, Specialty, Premium, Value, Discount, High Street, Shopping Mall, Full Service, Self Service… Marketers have a name to describe every type of offering. And analysts have their descriptors for the overall marketplace: saturated, hyper-competitive, price-driven and confusing.

However, the only thing that truly matters is how consumers value their shopping experiences; and in almost every occasion their value proposition will change. What combination of convenience, price, or shopping simply as a social interaction, matters most? Is this a solo expedition, or are they shopping for friends or family? Are they shopping for a gift, or something for themselves?

With the New York Times calling Amazon’s go-to-market strategy “scorched earth capitalism,” marketing guru Tony Chapman says retailers can survive by giving shoppers something they can’t get from a dot-com: Real people and face-to-face interaction.

AMAZON: THE WORLD’S

BIGGEST VENDING MACHINE

Tony Chapman


This is what makes driving traffic and basket so difficult. If you don’t know what the con-sumer values on that shopping occasion, how can you put your best foot forward? How can you ever manage inventory, labour, marketing and location for true operational efficiency?

There is one retailer that has made an art form out of knowing what each consumer values. Amazon.com not only puts its best foot forward, it is smashing its footprint across every retail category. What started as an online bookstore 20 years ago, has become a runaway snowball with few, if any, indiscernible limits to growth. It is picking up new customers, new categories and new markets at an unprecedented rate:

Amazon’s traffic and basket strategy is simple: Use competitive intelligence and data to create the world’s biggest, most efficient and price-competitive “vending machine.” Do it all online where there is a significant cost advantage,

and where they can bring each consumer a personalized snapshot of what they covet. Offer significant discounts to other online or high street retailers, and reward your top customers with free content, hardware and shipping.

Amazon also deploys mobile price-compar-ison apps that reward the shopper for kicking tires at other retailers, as long as they end up buying the product at Amazon.

Rather than being one of many that sells Apple tablets, Amazon created its own tablet: the Kindle Fire. A phone and desktop TV box is on the way.

Amazon has acquired dozens of online retailers, and its goal of having a warehouse without people has motivated the company to buy productivity firms like Kiva Systems, which manufactures robots that move items around the warehouse.

In the last fiscal quarter, Amazon launched in India, expanded its grocery business in Canada, opened a website to sell high-end art, and announced the creation of two television series. In addition, Amazon’s Web services division handles the computer infrastructure of thousands of technology companies, universities and government agencies, and it generates 17 per cent of its revenue selling advertising on its website.

If you are in Amazon’s path, can you survive? Let’s do a reality check.

hWill Amazon’s insatiable appetite to cut costs and pass those savings on to consumers remain its obsession? Yes.

hWill Amazon’s ability to drink data from a firehose to customize and shape today and tomorrow’s offering continue? Yes.

hWill Amazon’s footprint continue to smash categories, marketplaces and competitors? Yes – without exception.

Your key to survival is to strike at Amazon’s underbelly. You have to give the shopper something they can’t get from a dot-com: Real people and face-to-face interaction.

You have to steep your offering in person-alization and differentiation, with unique products, services and experiences. You have to offer each consumer a compelling reason to visit your store and, more importantly, buy from you at a price you can still profit from.

Then, and only then, can you unplug the vending machine.

Tony Chapman is founder and CEO of advertising agency Capital C, and co-founder of online research agency Fresh Intelligence, and social media agency Lola.

What Amazon’s got » 160 million customers

» 20% growth

» 10% of North America’s e-commerce sales

» Engagement & value metrics that shatter eBay, Google, and Facebook


Changing channelsWhile still in its infancy in Canada, omni-channel retailing is breaking down the barriers between bricks and clicks to enhance the shopping experience By Sally Praskey

Omni-channel retailing: With the brand as a hub, omni-channel (or multi-channel) retailing strives to deliver a seamless experience at every customer touchpoint – in-store, online, mobile, digital kiosk, television, radio, direct mail, catalogue, or any other available shopping channel.

Rapidly evolving technology and an increas-ingly demanding consumer are fuelling a growing trend to omni-channel retailing. Shoppers want to be able to purchase their groceries in many different ways, whether it be on-the-go, at home, in the store, or through a combination of bricks and clicks – for example, buying online and picking up at the store or elsewhere, known as “click and collect.” Grocers are scrambling to meet the needs of this new customer, making the transition from selling through separate and distinct channels to multiple, seamless channels.

The U.K. is ground zero for omni-channel

retailing, as the Big Five traditional grocers – Sainsbury’s, Tesco, Morrisons, Asda and Waitrose – battle it out for digital supremacy. Although most of these retailers have offered online grocery shopping for several years, it has only been in the past few years that they’ve ramped up their infrastructure to accommodate multi-channel retailing.

For example, Walmart-owned Asda confirmed in a quarterly report issued in August that its multi-channel formats “remain central to its ‘clicks and bricks’ strategy, accelerating investment in technology and infrastructure to make shopping more convenient; allowing customers to shop for what they want, when they want it.” Asda expects that 75 per cent of its customers will shop through multiple channels this Christmas.

Perhaps the most advanced in omni-channel grocery retailing is British behemoth Tesco PLC, which delivers food to more than half-a-million homes a week and boasts some 200 click-and-collect stores – and counting. It also operates six

“The aim has to be a seamless blend between

the stores and the digital business”

Matt AtkinsonChief marketing officer, Tesco

“dark stores,” or dot-com stores, that fulfill grocery orders but have no customers. Recently, Tesco piloted a service allowing consumers to pick up their groceries from convenient locations in their communities, such as schools, libraries and sports centres. It has also introduced “Scan as you Shop” in several of its larger stores.


Canada’s Best Selling Throat Lozenges*The number 1 Brand in the Canadian Throat Lozenge Market*

The number 2 Brand in the Cough Drop + Fisherman’s Friend and Excel Lozenge market!**

with

NATIONAL TV ADVERTISING THROUGHOUT THE 2013-2014 COUGH & COLD SEASON

® Registered trademark of Lo� house of Fleetwood Ltd.* AC Nielsen � roat Lozenge Market 52 wks to April 6, 2013.

** A.C. Nielsen Cough Drop + Fisherman’s Friend and Excel Lozenge Market, 52 wks. to April 6, 2013

Featuring the 2 Best Selling Items in the Canadian Throat Lozenge Market.#1: Fisherman’s Friend Cherry Sucrose Free*#2: Fisherman’s Friend Original Extra Strong*

In Eye-Popping Peggable Twin-Packs for Higher $ Sales (and Pro� t) per Package

Now with 2 “Resealable” packages inside each Hanging Bag Twin-Pack!

TFB Associates Ad:Grocery Business Canada Full Page, 2013Contact KISIN STUDIOS, Bob Kisin at (905) 787-8877

Distributed by TFB & Associates LimitedMarkham, ON L3R 9Z6

NEWNEWNEWIMPROV

EDIMPROV

EDIMPROV

ED

PEGGABLE

BAG

PEGGABLE

BAG

PEGGABLE

BAG

Although the country’s largest grocer has struggled of late with flat sales and a costly retreat from its Fresh & Easy chain in the U.S. market, Tesco is investing heavily in digital. In its latest interim results, CEO Philip Clarke noted that establishing multi-channel leadership in all of the retailer’s markets is one of its top three strategic priorities. “We have continued to invest in improving the integration of our customer offer across all of our store formats and chan-nels,” he said.

The first to introduce grocery home shopping and supermarket drive-throughs (click and collect) in the U.K., as well as a virtual store in South Korea, Tesco recently introduced a specially designed, affordable seven-inch tablet that offers instant access to its full range of digital services, all in one place. “The move is part of Tesco’s multi-channel strategy, ensuring that customers can shop whenever, however, and

wherever they want,” says the press release about the Hudl tablet.

Tesco is not turning away from its bricks-and-mortar stores, but rather, is turning them into “leisure destinations.” Earlier this year, for example, it acquired the restaurant group Giraffe to incorporate casual dining into some of its larger stores. It is downsizing some stores’ trading areas to incorporate gyms and soft play areas, while others offer economical beauty treatments. “What stores are best for are the things you can’t replicate online,” said chief marketing officer Matt Atkinson in a speech to the British Retail Consortium earlier this year. “Our stores should be the hubs of the communities they serve.”

In other words, entertain customers when they choose to go to the store, but offer the convenience of alternative shopping channels when they don’t.

Can Canadian retailers deliver the goods? Grocery Gateway

Canadian grocery retailers have lagged behind their European counterparts when it comes to omni-channel retailing. But Grocery Gateway, owned by Longo Brothers Fruit Markets, is one of the few players of note in the online arena, however, it has remained a regional entity.

Walmart.ca

Walmart Canada, without fanfare, has begun selling grocery items, including non-perishable foods online, as part of its strategy to deliver an omni-channel shopping experience.

It’s going head-to-head with the formidable Amazon.ca site which recently launched a grocery store with more than 15,000 non-refrigerated dry grocery products.

While neither delivers fresh food in Canada, yet, they both do in the U.S.

Walmart is also testing same-day delivery in the Greater Toronto Area in a pilot project with Canada Post called Delivered Tonight.

E-commerce on the radarDwight Konings, vice-president, program innovation and commercialization, Advantage International, says that, based on interviews the company conducted for its Advantage Report annual survey of major grocery/mass/club/drug retailers, e-commerce is “definitely on the radar for some,” although other Canadian retailers just don’t see it.”

Konings recently returned from a conference in London, Eng., where he talked to people who rarely visit grocery stores anymore because they are fulfilling most of their shopping needs via e-commerce. With Canada’s large urban population, he believes a similar business model will work here, as well.

Tesco is turning its bricks-and-mortar stores into “leisure

destinations”

Canada’s Best Selling Throat Lozenges*The number 1 Brand in the Canadian Throat Lozenge Market*

The number 2 Brand in the Cough Drop + Fisherman’s Friend and Excel Lozenge market!**

with

NATIONAL TV ADVERTISING THROUGHOUT THE 2013-2014 COUGH & COLD SEASON

® Registered trademark of Lo� house of Fleetwood Ltd.* AC Nielsen � roat Lozenge Market 52 wks to April 6, 2013.

** A.C. Nielsen Cough Drop + Fisherman’s Friend and Excel Lozenge Market, 52 wks. to April 6, 2013

Featuring the 2 Best Selling Items in the Canadian Throat Lozenge Market.#1: Fisherman’s Friend Cherry Sucrose Free*#2: Fisherman’s Friend Original Extra Strong*

In Eye-Popping Peggable Twin-Packs for Higher $ Sales (and Pro� t) per Package

Now with 2 “Resealable” packages inside each Hanging Bag Twin-Pack!

TFB Associates Ad:Grocery Business Canada Full Page, 2013Contact KISIN STUDIOS, Bob Kisin at (905) 787-8877

Distributed by TFB & Associates LimitedMarkham, ON L3R 9Z6

NEWNEWNEWIMPROV

EDIMPROV

EDIMPROV

ED

PEGGABLE

BAG

PEGGABLE

BAG

PEGGABLE

BAG


Canada’s top home coffee brands1 are now available in a new single serve format compatible withKeurig® K-Cup® Brewing Systems!2

1 Nielsen – Dollar Sales – All Sales – GB DR MM – Total Coffee – 52 Weeks ending June 02, 2013.2 NOT COMPATIBLE WITH KEURIG VUE® COFFEE MAKERS. KEURIG®, KEURIG VUE®, AND K-CUP® ARE REGISTERED TRADEMARKS OF KEURIG, INCORPORATED. KEURIG, INCORPORATED IS NOT AFFILIATED WITH KRAFT CANADA INC.3 Nielsen – Dollar Sales – All Sales – GB DR MM – On Demand – 52 Weeks ending June 02, 2013.4 International Taste and Quality Institute – Superior Taste Award, 2012 – www.itqi.com5 Nielsen – Dollar Sales – All Sales – GB DR MM – R&G Coffee – 52 Weeks ending June 02, 2013.

START SHIP:FEBRUARY 3, 2014

MAXWELL HOUSE is the #1 home coffee brand in Canada1

Available in three varieties:

• House Blend – #2 SKU in On-Demand3

• Decaf – #1 On-Demand decaffeinated SKU3

• Dark Roast – #3 R&G SKU in mainstream segment5

NABOB is the #2 home coffeebrand in Canada (#1 brand in On-Demand3) with a 23% shareof the premium segment1

Available in three varieties:

• 100% Colombian – #1 SKU in On-Demand3

• Breakfast Blend – #3 SKU in On-Demand3

• Midnight Eclipse – award winning variety4

GEVALIA, originally from Sweden, is a premium brand currently only available in On-DemandAvailable in two varieties:

• Signature Blend – full of body and perfectly balanced• Dark House Blend – savoury, woody flavour profile

C

M

Y

CM

MY

CY

CMY

K

KRAFT-13023 Grocery Business Ad.ai 1 2013-11-13 2:07 PM

MWhat Millennials WantThe Future of RetailGrocery Business magazine and

TEN81 Lifestyle Inc. invited a group of Millennial consumers as well as some of the industry’s leading retail and consumer packaged goods executives, to discuss shopping attitudes and preferences. Learn how this health-conscious, information-hungry and community-minded generation is impacting the future of grocery retail

Meals to goEthnic Foods Shopping HabitsMarketing to MillennialsPrice vs. Assortment


MJana Masiewich, Director, lifestyle marketing, TEN81 Lifestyle Inc.

Cheryl Smith Executive vice-president, sales & merchandising Parmalat Canada

MODERATOR

Peter Neal Co-owner Neal Brothers Foods

Paul Del Duca Former general manager, Ontario Sobeys Canada

Jesse Jones President & chief innovation officer TEN81 Lifestyle Inc.

Shopping HabitsHow do you typically shop for groceries?

Kate: I try to plan meals and shop with a list. I do one big grocery shop on the weekends, and go back to the store twice more during the week for small items.

James: I might go to the grocery store six times in a week on my way home from work, depending on what I want to eat that day. I do try to buy the essentials every one or two weeks.

Michelle: I like to plan my grocery shopping, but if I have cravings I will stop somewhere on the way home and buy more things. I could drive out to a big box store, but I’d rather shop somewhere close my home, downtown.

Where do you prefer to grocery shop?

Kate: Fortino’s is within walking and driving distance from our new house. It’s beautiful and has really good quality breads, locally sourced meats, and a really large organic section.

James: I recently moved into a new area of the city, so I’m still discovering the standard grocery stores plus the delis and fresh bakeries. But I still sway towards Loblaws because I’m a President’s Choice fan. I also like to go there to do a bulk shop, and because they have a deli and fresh bread.

Michelle: I go to various places to get various things. I live downtown, so I will go to the express-sized Loblaws or Metro stores to buy basic stuff. I also head to Pusateri’s or Whole Foods at some time during the week for organic and healthier meals. I also like the Healthy Butcher for organic meat.

Kate: For me, bread has become almost an indulgence. It’s something that I look forward to but I want it to be good, so I don’t buy the sliced whole wheat bread anymore; I buy more expensive fresh baked bread.

Millennials Defined: Members of the Millennial generation (also known as Generation Y, or Echo Boomers) were born between 1980 and 2000, and represent about 30 per cent of the Canadian workforce.

Lisa Zdunich Director business development Tree of Life

Jesse Jones: Consumers want to hear directly from the brands they’re spending their money with, and the digital space has helped to break down some of the walls between brands and consumers.

I think there’s a real opportunity for brands to understand that, in order to connect to this generation, you really have to humanize your approach.

INSIGHT

THE MARKETERS


ilDoes price influence your decision on whether to pay more for organics or premium products?

James: I’m just starting to learn more about organics, but I’m wary about paying triple the price for something I don’t know that much about.

Michelle: I usually will pay a premium price for organic products. I’m slowly educating myself towards a healthier lifestyle, so you will see me in a store with my smartphone comparing brands and if someone recommends the more expensive one, I would probably buy it.

Kate: When it comes to toilet paper, toothpaste, laundry detergent and other basics, I shop the sales.

Paul Del Duca: It sounds like this group is a little more inclined to look at food less as a commodity purchase, versus an older generation that is buying for price and planning the meal around what’s on sale.

Cheryl Smith: What I’m hearing is that the assortment is critical, which is why maybe some of the discount channels don’t appeal as much because there’s a lack of assortment there.

Lisa Zdunich: Many of the premium brands don’t necessarily need to discount. There is loyalty amongst people who want a certain brand. They will purchase it if it’s a higher quality product, a trusted brand.

Price vs. Assortment What types of food do prepare at home?

Michelle: I cook a bit of everything. I like Mexican food, and I do a lot of Asian stir-fries because they’re fast. My background is West Indian/Caribbean, so I do some things in that genre. But it can take a lot of prep work – like making roti or curries. I shop the ethnic aisles of mainstream stores because it’s more convenient than going to an ethnic food store.

James: The deli sections at grocery stores could be improved with the types of meats and cheeses you’d find at a Polish deli or at local markets.

Are traditional grocery stores beginning to offer more authentic ethnic food choices?

Lisa Zdunich: I think retailers are starting to understand their ethnic sections because they’re getting bigger and better. But what was once considered ethnic, Indian and Thai, for example – really aren’t today.

Peter Neal: When we were at the SIAL show in Paris last year, people were talking about ethnic foods, but taking more of a western approach to it by having ethnic products made locally using local manufacturers.

Ethnic Foods

James SavageAge: 24Profession: Financial Services Residence: Downtown TorontoLifestyle: Works long hours; likes discovering new restaurants, exploring city neighbourhoods, escaping to cottage country on weekends, running and skiing.Favourite Retailer: Apple.

Kate RobichaudAge: 32Profession: Real Estate Agent Residence: Burlington, Ont.Lifestyle: Married; busy mom to a toddler while she juggling work with family responsibilities such as cooking healthy family mealsFavourite Retailer: Loblaws and Real Canadian Superstore.

Michelle ThansinghAge: 26Profession: MarketerResidence: Downtown TorontoLifestyle: Works long hours; likes discovering new restaurants, attending city festivals and working out at the gym.Favourite Retailer: Shoppers Drug Mart.

THE MILLENNIALS


Paul Del Duca: Grocers are going down the path of offering prepared meals. Are you interested in home meal replacement options?

Kate: Yes, but it goes back to the information… do I know what’s in it and how it was prepared. I want to make sure that it’s healthy. I’m pleasantly surprised to find that Fortinos is offering me more than chicken wings and fries.

James: I will occasionally buy a whole chicken at the prepared food counter, but I will usually get take-out from some sort of quick restaurant where you can drop in and buy prepared food. I would definitely be more inclined to buy a fresh sandwich [at a grocery store] if it was put together for me right on the spot, like they do at a sandwich shop.

Meals to go

Willing to splurge on a nice meal even when feeling pinched

Cheryl Smith: It’s a huge challenge. You’re giving up real estate for some niche products for assortment. But they may take shelf space from much higher turning products with broader appeal.

You could be reducing your dollar sales per square foot by increasing the assortment. Manufacturers aren’t happy, and retailers aren’t happy with that. But if you don’t offer assortment, consumers will quickly move on to shop somewhere that does.

About TEN81 LifestyleTEN81 Lifestyle Inc. helps brands create an authentic connection with Millennials by understanding this demographic’s activities, interests, opinions and passions.

The company begins with meaningful insights to create strategies using digital, social and mobile media. Public relations helps build awareness among key influencer groups, and sponsorship opportunities allow brands to speak to

audiences and to drive business across multiple platforms.

“TEN81 helps brands integrate themselves with more authenticity on multiple levels within the lives of consumers,” explains president and founder Jesse Jones. “If you value and care for the consumer, you will have that value and care reciprocated.”

ten81.com

INSIGHT

lsAdventurous Eaters

88% interested in trying new foods

The most diverse generation has the most diverse tastes

87%

Jesse Jones

Photography by Rodney Daw


alDecoding the Millennial MomWhat does it all mean?

Marketing to Millennials

Business Opportunities

Desire Variety and AuthenticityAccording to the Center for Culinary Development, Millennials “hanker for authentic diversity” and global cuisines (but also love mashups). They enjoy intense, extreme, and unusual flavors and textures.

Living in the MomentCompared to earlier generations, Millennials tend to make more spur-of-the-moment food choices. They are “always-on” and rely on their networks for advice on where and what to eat.

Declining LoyaltiesMillennials have been described as being driven by “cravings, cost, and convenience.”

Eat Anything AnywhereJust as Millennials do not distinguish working at home from working “at work,” they believe that all foods are appropriate for all settings.

Information-HungryMillennials love knowing the story of where their food comes from and how it was produced. They use their phones to help them shop in the aisles.

Pressed for TimeTime is a major factor for Millennials who often choose food away from home.

1 2 3Offer Social Dining

ExperiencesMore Handheld

FoodsEmpower Millennials

as Influencers

In her role as director of marketing for the Frozen Business Unit at Sofina Foods, Linda Fox has come to the know Millennial Mom well. Canada is undergoing a mini-baby boom and Millennial Moms (MM) are looking for guidance navigating this new life stage, says Fox, who shares her insights with Grocery Business:

» MMs are interested in cooking even though she may not know how. Because she is time-stressed, retailers and brands can help her by providing easy and convenient meal planning suggestions.

» Despite the trend to online shopping, MMs en-joy shopping – a great opportunity for retailers to engage her in ways she can share with her online community.

» While her kids are literally growing up in an on-line world, they enjoy the hands-on experiences stores provide. Retailers will need to keep kids engaged with fun and colourful displays and try-before-you-buy opportunities, however.

» MMs spend a lot of “me time” online, read-ing product reviews and seeking input from friends and family. She’s very visual and looks to websites such as Instagram and Pinterest as valuable sources of information.

» Brands can help her by providing curating tools for the overwhelming amount of information she finds online. For example, Top 10 lists and templates for storing household tips and recipes.

» She values family time and wants to put more than just food on the table. The MM is willing to invest in creating an interesting meal if that’s what it takes to bring her family together.

» MMs expect brands to listen to her, as a trusted friend would. It’s important to know that her experiences, good or bad, will be shared with her online community through social media.

Grocery Business and TEN 81 Lifestyle are rolling out a series of videos recapping the key insights from the Millennials Forum. Watch them at grocerybusiness.ca

Innovaro: Millennials and Food

Linda Fox

30% 55% 41%

Regularly consume certified organic foods

Like communal dining experiences

Purchase from traditional grocers


A TRADITION OF INNOVATION.

Bizerba has been focused on weighing technology since 1866. We provide state-of-

the-art PC Based Scale Hardware and Software solutions for full-service and pre-pack

departments with a primary focus on increasing your sales and pro� ts. Closer to your

business, � exible for your needs, ready for the challenges of a global economy.

www.bizerba.com

Retail Portfolio:High performance with a wide range of different models and equipment variants.

CONVENTIONAL, STYLISH, MODERNApplesque design counter scale with the cutting edge Bizerba K scale App designed to inform your operator so the customer feels like they are talking to a foodie or a chef. Not to mention industry leading application integration and power savings backed by Bizerba workmanship.

KH 100

TYPE TYPE

MODULAR COMPACTFLEXIBLE, ADAPTABLE, UNIQUEWith K-class � ex, screens, load cell, printers, etc.can be freely combined resulting in space-saving integrated solutions for your merchandising cases with all the technology features of the KH100.

K-FLEX

A customer recently walked into the McEwan store in Toronto and asked for fresh mulligatawny, a curry-flavoured soup he’d enjoyed in England but couldn’t find at any of the city’s supermarkets.

McEwan didn’t stock it either; however, the store general manager called upstairs to the second floor to see whether the team of professional chefs – who daily prepare hundreds of restaurant-quality takeaway foods – could do a special order. Twenty-four hours later, a fresh supply of the classic soup was ready to be picked up by the customer.

This is the restaurant-style “fine dining comes home” vision that has guided the McEwan store through growing pains and market challenges since renowned Canadian chef Mark McEwan opened it in 2009.

A successful restaurateur, cookbook author and television personality, McEwan decided four years ago to add grocery retailer to his long list of entrepreneurial accomplishments. One of the first things he did was to turn the traditional concept of grocery store design on its head by showcasing dozens of restaurant-quality, prepared gourmet foods right at

the front of the store where traditional grocery stores typically locate their produce departments.

The store made a huge media splash when it debuted and was hailed by foodies, professional chefs, tourists, and a clientele that doesn’t blink at spending $500 for a bottle of aged balsamic vinegar. However, grocery retailing turned out to be a steep learning curve for McEwan, who very quickly realized how challenging and extremely competitive a business it is.

“It was much more difficult than I had imagined it to be. It’s a very complicated world, and there are a lot of balls in the air,” McEwan says. “Bringing the store along the way I want it to evolve has taken constant effort. And not everything has been as successful as you would want, so you change it and morph it . . . and just keep moving on every single front.”

Three years ago, McEwan recruited George Bachoumis to be his store general manager. A specialty store veteran with several years of

Despite the increasingcommoditization and online availability of groceries, specialty food retailers are resonating with customers through a combination of highly personalized service and unique offerings

FIne Diningcomes homeBY ANGELA KRYHUL

Mark McEwan

T A S T EM A K E R


experience working for Toronto-based Bruno’s Fine Foods and Pusateri’s Fine Food, Bachoumis saw immediately that the McEwan store needed to broaden its customer base if it was going to be viable for the long term. “The image of this place was that it was so expensive. So I went through a price restructuring, just to make sure we were competitive.”

Bachoumis placed a suggestion book at the front of the store so that customers have an easy and immediate way to give feedback, and he broadened the offering so that selection and price points are more accessible. The store stays on-trend – most recently by tripling its organic produce selection, and integrating vegan and gluten-free options throughout the store. Bachoumis has also introduced an olive oil and balsamic vinegar tasting bar, as well as a fruit station that lets customers select their preferred pre-cut fruits.

The star of the show remains the prepared-foods area or, more accurately, the “restaurant meal replacement” department. Everything is made fresh, in small batches, throughout the day. Whenever any of the dozens of dishes runs low, a call goes upstairs and the kitchen starts prepping a fresh batch, just as any restaurant would.

According to Bachoumis, customers who’ve eaten at a McEwan

restaurant or have seen him on television come to the store to “experience Mark.” There’s no shortage of opportunities to sample the McEwan brand in the store.

Customers can cook at home the same gourmet burger famously served in McEwan’s Bymark restaurant, or the same pizzas that are served at Fabbrica restaurant. “I have a full team of people who do nothing but cook all day long, so if you buy our stock, for example, or our soup, our Bolognese sauce, or sausages from the butcher shop, it’s the same quality and the same recipes that we use in the restaurants,” McEwan says.

Bachoumis is starting to see a shift in store clientele. There are more young mothers perusing the aisles, and busy professionals regularly drop in to grab ready-made breakfasts. Families sometimes come in and push together the café tables so they can share hot meals from the curry bar and selections from the salad station. Time-pressed customers are picking up prepared items, such as marinated whole chickens, that can simply be popped in the oven when they get home. And the store has downsized many of its prepared dishes to medium and single-portion sizes, while offering more dishes that appeal to families with young children. For example, the store offers its famous truffled mac ‘n’ cheese alongside a plain, kid-pleasing version.

“We don’t want people to only come in for special occasions or at holiday times. We want them to be able to come here 365 days of the year and find everything they need,” Bachoumis explains. “People see the words ‘fine food’ and think that means high prices. I think we’re more mid- to high-end now.”

McEwan says he’s managed to maintain a high-end restaurant level of quality without the sticker shock: “I think you would find a softer edge to the store today, but you wouldn’t find any less

Customers can buy McEwan-branded cooking

utensils in the store, as well as chef McEwan’s

latest cookbook and a McEwan-branded

five-year-old barrel-aged balsamic vinegar

imported from Italy. People are taking home fresh

McEwan-branded packaged foods – such as

pasta, lasagna, soup, and various rubs and spices.

In fact, the McEwan’s Own private-label program

is about four times the size it was in 2009.

McEwan presents a truly integrated brand strategy

Above: The McEwan's Own private-label; McEwan's "restaurant meal replacement" department


complexity in terms of the offer. We’ve struck a very nice balance between high-end, everyday food, grab and go, prepared food and special occasion, so that people can relate to us at a high frequency. And that’s what we hoped for.”

The formula appears to be working. McEwan says store sales are up 15 per cent compared to a year ago.

Ever the entrepreneur, McEwan is talking to other specialty retailers across the country that would like to

TheMcEwangroup McEwan StoreEstablished: 2009Size: 22,000 sq.ft.Store staff: 150Store brand: McEwan’s Own

Services: Personal shopper; home delivery; catering; floral; personal and corporate gifts.

Restaurants: North 44BymarkONE RestaurantFabbricaNobel Burger BarFetta Panini Bar

Catering:North 44 Caters

Books:Great Food at HomeFabbrica

Cookware Line: Mark McEwan by Fresco

Television:Top Chef CanadaThe HeatSuperstar Chef Challenge

carry McEwan-branded foods. He’s also scouting out potential locations in mid-town Toronto where he can open a second, 15,000-sq. ft. McEwan store.

Meanwhile, McEwan is watching with interest as the major grocery chains beef up their home meal replacements and position them as a high-quality alternative to home-cooked meals. According to McEwan, the majors will find it challenging to live up to that promise while responding almost instantly to market trends and customer demands.

“I think the Achilles heel of the grocery business is that they’re not very good at that. It’s a big chal-lenge for them to change the concept of how they operate,

because it’s a whole different world when you get into the production of really high-quality prepared foods, made in small batches and available fresh every day,” McEwan says.

“Every single day, we’re adding new elements to the store. We’re about genuine production of food on a chef level, and having that very tight relation-ship with the customer. And having a product that actually lives up to what you say it is.”

One of the reasons why urban farmers’ markets have been so popular recently is that people love to discover new and unique products. The McEwan store regularly presents its own version of the farmers’ market where local artisans have the opportunity to demonstrate and tell the stories behind their products.

Stasis Preserves, Whitestone Cinnamon buns, De L’Aubier sap water and Grateful Bread are among the brands that have tested product successfully enough to make it onto McEwan store shelves.

A notable success story is Toronto-based Laura Slack Chocolates. Slack demonstrated her fresh, handmade luxury chocolates in-store last December. Customers loved the product so much that McEwan switched chocolate suppliers and handed Slack a prominent, front-of-store display space.

“It’s a win-win to have artisans such as Laura in our store,” McEwan explains. “It’s a great incubator for new lines, it’s very entertaining for the client, and creates a wonderful buzz in the store.”

McEwan’s in-storeFarmers’ Market

George Bachoumis, store general manager

McEwan presents a truly integrated brand strategy


Karen James: What’s driving the double-digit growth of the specialty food category?

Ann Daw: One of the main growth drivers is the younger consumer who is very informed about food trends and eager to embark on what we call taste adventures. This consumer is looking for stories about the people behind the products, and for foods that have a healthy halo.

The Millennials are the most exposed generation in terms of food from other cultures. Plus, they are interested in knowing where their food comes from and consciously seek out locally-produced products with top-quality ingredients.

They enjoy talking about their food discoveries and are eager to share their finds with friends through social media.

Another driver for all age groups is that, in times of economic downturn or slow recovery, consumers pull back on big-ticket purchases, but will indulge in small ways like with a premium cheese, choco-late or cooking sauce.

Ann Daw, PresidentSpecialty Food Association

Those who are dining out less often look to specialty food to add panache to their dining and entertaining at home, or to use as affordable gifts.

KJ: We noticed at the New York Fancy Food show this summer, that traditional specialty food items and health-focused foods are beginning to merge.

AD: Yes, vegetables are showing up in traditional snack foods, not only in snack chips but also in sweet items such as cookies.

Recently, we’ve seen spinach-nutmeg-shortbread cookies and ice pops made with kale. Alternative grains are a growing trend and, like vegetables, they are turning up in sweets. For instance, quinoa in chocolate bars, and chia and hemp in cookies.

KJ: Are retailers doing enough to capitalize on the growth of the specialty food market?

AD: It depends on the type of retailer and the needs/tastes of their customer base. A small grocer is often

SPECIALIZINGIN GROWTH There’s lots of action in the specialty food category these days. Savvy grocers know that offering consumers unique products can build loyalty and margins. Ann Daw, the president of the Specialty Food Association shares her insights on trends and growth drivers.

T A S T EM A K E R


Specialty Food Association specializes in bringing buyers and sellers together We have several key programs to bring buyers and sellers together at our Fancy Food Shows, and throughout the year. We have numerous local initiatives where all aspects of the trade – producers, distributors, brokers and retailers – have the opportunity to meet.

One of our most popular Fancy Food Show programs is Business Builders, a form of speed-dating for the specialty food industry.

Our team pre-arranges one-on-one meetings with buyers and exhibitors the day before the exhibit halls open.

We also facilitate private meetings throughout the show.

To help navigate the complex and competitive marketplace for specialty foods, we present one-day workshops on how to develop successful go-to-market strategies. The events bring together industry experts and specialty food practitioners to share insights on how to prepare for a buyer meeting, what specialty stores and supermarkets are looking for, and how to work with a distributor.

Looking for new and unique products? Attending the Fancy Food shows is a great place to start.

The Winter Fancy Food Show, San Francisco, January 19-21, 2014

The Summer Fancy Food Show, New York City, June 29-July 1, 2014

+22%+26% +15%SPECIALITY FOOD GROWTH 2010-2012

PROJECTED GROWTH-ALL CHANNELS FOR 2013

of consumers buy speciality foods in supermarkets

74%in a position to take a chance with a new product or line and see how it does, whereas large supermarket chains have more limitations and rules around shelf space.

In either case, consumer demand drives a lot of decisions. Consumers want to buy local products and stores should be encouraged to support their local vendors, no matter the size of the retailer.

Retailers should make sure they have active social media platforms and ways for their customers to share photos and information about favourite food finds and recipes.

Also, “Meet the producer” sampling events are a great way to boost interest and sales by introducing shoppers to the person behind the products who can share their passion and the craft and joy they bring to their food.

GROCERY CHANNEL SPECIALITY FOOD GROWTH 2010-2012

83%of specialty

food consumers use social media

FANCY FOOD SHOWS

Source: Mintel

Source: Mintel


Raincoast Crisps aren’t just crackers; they’re a specialty item, conversation starter and category game changer By Noelle Stapinsky

Lesley Stowe

TOASTING TASTEWhen Lesley Stowe pulled her first batch of Raincoast Crisps out of the oven in 2000, it was a recipe she’d developed for her catering business – something she thought would go nicely with a smoked salmon appetizer. But little did she know just how big her double-baked ultra-thin gourmet breads, packed with dried fruits and nuts, would become… or that she had just invented a new segment of the cracker category.

Stowe admits that she’s always loved food and experimenting in the kitchen, but it was La Varenne, a Parisian cooking school that really drew her into the industry. And after studying there for a year, Stowe returned to Vancouver to start up a small cooking school.

“I wanted to do something more and Vancouver was lacking in specialty food stores,” says Stowe. That’s when she opened Lesley Stowe Fine Foods, a 2,000-sq.ft. kitchen and storefront from which she ran her catering business and offered prepared meals, specialty foods, cooking classes and tasting sessions. This is where she also started retailing the Original Raincoast Crisps. “But as fast as we could make them, they were flying out of the store,” says Stowe. “Then we thought we’d try selling them to independent grocery stores in Vancouver.”

It didn’t take long for the local grocers to catch on – and for Stowe to fold her catering business so that she could focus solely on crisps. Stowe realized that to gain an even bigger reach with her products, she needed a distributor.

Enter Neal Brothers Foods, an Ontario-based distribution company owned by Peter and Chris Neal.

Today Neal Brothers distributes Raincoast Crisps throughout Ontario, Quebec and the Maritimes. “Now there are a number of copycat products, but Lesley’s are the original,” says Peter Neal. “She’s truly an inspiration, an innovator. Her product is the one to be measured against.”

Raincoast Crisps got its big North American debut when Whole Foods opened in Vancouver.

The crisps were such a hit in Whole Foods’ B.C. and Ontario locations that the retailer decided to list her product across North America.

For Stowe, staying on top of trends – she recently launched a wheat-free Oat Crisp that plays into the gluten-free trend – and sourcing quality ingredients for her products is key, but main-taining the “handmade” process of making the artisan-style crisps is imperative. Now housed in a 27,000-sq.ft. facility in Richmond, B.C, Stowe manages a staff of 80 that produces and hand-packs the finished product.

Stowe is eyeing the European market, and WestJet recently selected the company’s Raincoast Crisps and StartWell Cookies as part of its complimentary inflight snack program.

What new tasty creations does Stowe have in store? “We’re looking at other things in the cracker category. I can’t tell you… I need to keep up the suspense.”

Salty Date and Almond Raincoast Crisps – which Stowe’s team calls “the man cracker” – won a prestigious sofi Gold Award from the Specialty Food Association for Outstanding Cracker at the 2013 Summer Fancy Food Show.

Raincoast Crisps have made Oprah’s O List and were recently featured in Martha Stewart’s Whole Living magazine.

T A S T EM A K E R


FMI Connect is the new FMI Show, redesigned to connect the industry and inspire the future of food retail. From consumer goods to capital goods, fresh produce to fresh ideas, 900 of the world’s leading suppliers will be here with the latest innovations for you – plus a full educational program and plenty of networking opportunities. If it has to do with food retail, you’ll � nd it here. Register today at FMIConnect.net.

If it,s out there, it,s in here.

M A Y Y O U R C A R T

RUNNETHOVER

CONNECTIONS,PRODUCTS,TRENDS.

NEW

R e g i s t e r T o d a y !

9691 FMI_CONNECT ad_GROCERY BUSINESS_r2.indd 1 11/12/13 12:54 PM

Jean-Michel Cabanes, president of Gascogne, is a typical Quebec baby boomer: Healthy, nattily-dressed and well-spoken, this 62-year-old specialty food retailer has built the company his father founded more than 50 years ago, into one of the province’s most recognizable brands by catering to people much like himself.

There’s no better indication of Gascogne’s influence on Quebec food retailing than the fact that, in recent years, all of the province’s major grocers have intro-duced the type of specialty products and services that Jean-Michel’s father, Francis, started providing decades ago. These range from premium pastries to artisanal breads, cheeses, meats, quiches, fine chocolates and food-service offerings.

With high consumer expectations, Cabanes is constantly being pushed to stay ahead of the curve. “We are a destination store,” says Cabanes. “We need to give customers a good reason to come here. So we stock a variety of specialty products that bigger

players cannot efficiently market.” These range from low volume SKUs such as foie gras, to custom-prepared dishes made using premium ingredients (such as butter as opposed to margarine).

The company also has fresh bakery capabilities in all of its outlets. That means bread is not only baked fresh daily, but the dough is also hand-made each day.

The good news is that higher quality offerings command premium prices. For example, Gascogne’s house lasagne (which feeds two) contains a significant quantity of premium meat. However, the retail price of $20 is far higher than the tomato sauce version selling for just $4.95 at a nearby major grocery chain outlet.

Judging from the line-ups at the Ville-Saint Laurent outlet, customers appear to be willing to fork over the dough. “The economy here is a bit rough right now,” admits Cabanes. Health, too, is a major concern for both Quebec baby boomers and their adult children, whom Gascogne is increasingly targeting, says marketing director Chantal Laforest.

Gascogne is broadening the specialty offerings at its five high-end retail stores to better target the post-boomer generationBy Peter Diekmeyer

CATERING TO THE NEW BOURGEOISIE

“People realize that occasionally spoiling themselves with good food at home is far cheaper than alternatives such as going to a restaurant.”— Jean-Michel Cabanes

Jean-Michel Cabanes

T A S T EM A K E R


GSW2014

APRIL 6 & 7, 2014 VANCOUVER CONVENTION CENTRE

GROCERY SHOWCASE WEST

GWS

APRIL 6 AND 7, 2014, AT THE VANCOUVER CONVENTION CENTRE

GSW 2014.indd 1 13/11/2013 9:36:36 AM

Marketing director Chantal Laforest has been paying close attention to in-store experiences, which are a key part of Gascogne’s marketing strategy:

“We are selling pleasure. That means customer service has to be top-notch. This starts with employees, who, as the primary point of contact with customers, need to ensure that they feel they are getting some-thing special.”

The visual experience is also key. “Food is consumed with all of your senses,” says Laforest. “That means it not only has to taste good, it has to smell good and look good.”

Special attention is paid to everything from store displays to designs, layout and colouring used in pastries and other products made on-site so that there is a cohesive brand experience for the consumer.

Improving the in-store experience

“Today’s boomers are getting older,” says Cabanes, a native of France, and who operates outlets in five affluent Montreal-area neighbourhoods: Westmount, Plateau Mont-Royal, Pointe Claire, Ville Saint-Laurent and Laval. “As a result, they don’t want to spend a half-hour walking around a big-box store to just pick up a baguette on their way home from the office. They want quality, service and a wide variety of premium choices.”

“Recent news about the dangers of sugar has hurt dessert sales,” says Laforest, who joined the Gascogne team two years ago. “As a result, we have been rebalancing our product line to focus more on savoury items.”

This rebalancing is playing out in Gascogne’s marketing efforts, which include a gradual rebranding of its corporate identity and brand name. Since March, Gascogne has been gradually shedding its old “Patisserie de Gascogne” banner, a process that should be complete by early 2014.

Laforest has also paid close attention to social media such as Facebook, in a bid to get closer to younger Quebecers – a move that has yielded surprising results. “I am amazed at the quality of feedback we are getting about all aspects of our offerings,” says Laforest. “But it is not just young people. All age groups have been participating.”

Cabanes says that, despite Quebecers’ increased focus on healthy eating, many are ready to check those feelings at the door when they come to Gascogne. “The public clearly recognizes the need to

exercise more and cut down on junk food,” says Cabanes. “So when they do indulge in desserts, they want the best.”

To meet that demand, Gascogne is investing a considerable sum to design its own premium dark chocolate recipe. This 75-per-cent cocoa mix (costing as much as $50 per kilo, compared to $15 for ordinary chocolate) will be manufactured in France, and end up as a key ingredient in Gascogne’s candy and pastries. Cabanes also intends to market the product separately as a premium private-label chocolate bar.

Cabanes got a good look at the Quebec bourgeoisie’s well-known ambivalence towards overdoing the health issue recently when Gascogne introduced a “diet” mille-feuilles pastry alongside its regular offering.

A contest was held to see whether clients preferred the healthy option or the rich regular one, for which the topping alone contains 600 calories. “Reaction on our Facebook page was surprisingly strong in favour of both,” says Cabanes. “We eventually decided to keep selling the two options. It’s not for us to tell clients what they ought to eat.”

GSW2014

APRIL 6 & 7, 2014 VANCOUVER CONVENTION CENTRE

GROCERY SHOWCASE WEST

GWS

APRIL 6 AND 7, 2014, AT THE VANCOUVER CONVENTION CENTRE

GSW 2014.indd 1 13/11/2013 9:36:36 AM


The Canadian grocery sector has experienced robust activity in recent years, with mega- mergers, rapid square footage expansion and the arrival of new entrants.

This year, two large deals were announced – the Sobeys acquisition of Safeway and Loblaw’s purchase of Shoppers Drug Mart – which is continuing to put pressure on other grocers to increase market share through acquisition.

This mergers and acquisitions (M&A) activity is a strong indicator that Canadian retailing is

RETAILERS ARE TURNING TO MERGERS & ACQUISITIONS IN THEIR QUEST FOR GROWTHBy Joanna Gibbons

As the chart shows, the Canadian retail grocery landscape was once dominated by a handful of key market players. However, with growth in the number of smaller and diverse retailers, the once untouchable giants have been losing market share, which has driven them to look for strategic acquisitions to grow their businesses.

Sources: Macquarie Research, Canadian Grocery Retailing; CIBC World Markets Inc.

Loblaw Sobeys Metro Canada Safeway

Costco Canada

Walmart Canada

Jim Pattison Group

Other

37%

33%

18%

12%

8% 8%6%

3%

12%

8%6%

5%3%

8%

19%

14%

2009 2012Total Market Sales $82.4 Total Market Sales $89.8

CANADIAN FOOD RETAIL MARKET

ACQUIRING DOMINANCE

Despite the changing retail landscape, one thing remains clear: brands matter. Whether retailers are seeking growth through acquisitions or by partnering with established consumer brands at the opera-tional level, brands will become a valuable tool in increasing their market dominance.

Joanna Gibbons is a Vice-President and Director at Deloitte Corporate Finance Inc.,

and leads Deloitte’s Food & Beverage business for Corporate Finance in Canada.

RECENT M&A ACTIONLoblaw acquires T&T Supermarket for $225 million

Loblaw acquires Shoppers Drug Mart for $12.4 billion*

Sobeys acquires Canada Safeway Inc. for $5.8 billion

Metro acquires 55% stake in Adonis and its distributor, Phoenicia Products Inc.

undergoing a massive shift not only in response to local competition but also because of the impact of American competitors Target, Walmart and now Amazon.

Organic growth is difficult to come by. As we’ve seen with the recent mega-mergers, M&A is critical in order to grow retailers’ market share.

The need to access new consumer segments, particularly ethnic consumers, is driving much of this growth.

The rising prominence of the ethnic consumer has been top of mind for grocers, with an

estimated 70 per cent of Canadian consumers’ spending growth expected to come from visible minorities. Acquisition is the quickest and perhaps only way to extend a retailer’s ethnic offering and to secure access to key suppliers so they can better service Canada’s fastest-grow-ing consumer segment.

Loblaw’s pending acquisition of Shoppers Drug Mart, and Metro’s recent announcement that it will operate 18 Target pharmacies in Quebec, is driven by the need to be the retailer of choice for Canada’s aging population.

Giant Tiger is reported to have retained Goldman Sachs Group Inc. to explore the possibility of a sale. Potential value: $800 million

*Pending Competition Bureau approval

The Canadian grocery industry has experienced significant disruption in the past decade and this is expected to continue as market conditions test retailers, who will look to M&A and financing activity in gain dominance in an increasingly competitive environment.

BRANDS MATTER MOST


KEN KWONG is the Vice-President of Sales and Marketing at New Age Marketing & Brand Management. The opinions expressed in this column are solely his [email protected], Twitter (@kenkwong) or LinkedIn.

Natural Products Expo East – Hit or Miss?

Over my 23-year career attending trade shows in North America and Europe, I’ve learned how important it is to narrow down the winning shows from the also-rans. So, when I’d heard that Natural Products Expo East was a show in decline, I decided to attend with an open mind and to check for myself.

Natural Products Expo East, held every autumn in Baltimore, Md., hosts more than 1,200 exhibitors covering categories ranging from organic, natural, functional and specialty foods, beverages, supple-ments, beauty, household and pet, and boasts more than 22,000 international visitors. Still, it has half the number of exhibitors and one-third the number of attendees as its sister show, Natural Products Expo West, held in Anaheim, Calif., each spring.

What I discovered is that if you’re a buyer, the Expo East show is not to be missed, and here’s why:

• The ratio of attendees to exhibitors favours the attendee. If you’re a buyer, you have 66 per cent less competitive traffic to deal with;

• The show is easy to navigate with new trends and products easy to identify;

• Baltimore’s convenient proximity to Canada, the U.S. and Europe means the quality and variety of the exhibitors was exceptional. All major categories are covered, plus new and emerging ones.

The natural product category continues to generate interesting new products, and some notable trends from Expo East stand out:

• GMO-free certifications• New plant-based sweeteners and proteins• Ancient grains-based products • Gourmet natural foods • Increasing variety of healthy snacks

While not generating all the excitement of Natural Products Expo West, if you are a serious buyer interested in natural products, I can recommend Expo East as a must-attend gathering.

On the Road

Psyche up your sences.1,300 exhibitors are ready to

wow you in San Francisco

Discover the craft, care and joy behind80,000 specialty foods and beverages.

Meet 1,300 exhibitors from all over the world. Enjoy the most delicious business trip of your life.

Be there January 19-21Register now at fancyfoodshows.com

Enter priority code WAD7

By Sally Praskey

Manufacturers are, for the most part, getting along just fine with their retailer customers. In fact, the majority of manufacturers think that relationships with retailers are improving, according to the latest Advantage Mirror Report, an annual survey of manufacturers conducted by Toronto-based Advantage. “From our qualitative research, we can see that a large number believe that relationships are strengthening,” says Paul Cussons, director, client

services – Canada, Advantage. “More than double of those polled feel this way versus the relationship weakening.”

But whether respondents thought relationships were stronger or weaker, the rationale behind their response was increased competition, be it from new retailer entrants into the market or pricing battles in key markets.

Interestingly, relationships in the grocery channel

THE MIRROR REPORT: TURNING THE TABLESIt’s the manufacturers’ turn to rate the retailers in The Mirror Report,

the flip side of The Advantage Report.

We asked suppliers:

When you reflect on these relationships, what are the key drivers of a strong

relationship between customer and supplier?

DR

IVIN

G E

AC

H O

THER’S BUSINESS

TR

US

T A

ND

INTEGRITY

CO

M

MUNICATION

JOIN

T S

TR

ATE

GIZING

INFOR

MA

TIO

N SHARING

CO

MM

ITMENT

UNDERSTANDSOUR

BUSINESS


Priorities For Account Support

…ON DRIVING EACH OTHER’S BUSINESS

“It is important that both parties benefit from the relationship. Some banners are more aggressive and do not care whether we gain from the relationship.”

“There should be a mutually beneficial relationship. With some banners we deal with now, there is almost no working relation-ship. We need some interaction to help drive mutual business, and trust is important.”

…ON TRUST AND INTEGRITY

“First and foremost is integrity; they should do what they say and execute plans based on what they promise.”

“Collaboration, a sense of partnership, a mutual business-building admiration for one another, and an honest and open relationship.”

“Transparency and trust are key drivers; when creating a new relationship, both parties should be open and do their best to align strategies.”

…ON COMMUNICATION

“Communication and face time are key drivers; we can make business plans but without face time, nothing happens.”

“It comes down to having access to people and communicating with them as often as possible.”

…ON JOINTLY STRATEGIZING

“The key is understanding each other’s businesses. Each party should be willing to go out of their way to help the other even if it is not necessarily in their best interest.”

“The key is aligned goals, clear strategies, good understanding of what both parties want to achieve, and some collaborative thinking on how to achieve this.”

“They must be working to solve problems and capitalize on opportunities. Also, we must share as much information with each other about our strategies as we can.”

improved dramatically in Ontario over the past year, while remaining relatively consistent in the West, Quebec, and the Atlantic provinces. Remark-ing on the improved score manufacturers gave retailers in Ontario, Cussons says that this marked improvement can be traced to a stronger link in both communication and retail execution. “The retailers are putting more focus on joint planning. The vendors are then able to execute against those plans,” he says, “and this reflects positively in the scores.”

Respondents also perceived relationships as improving significantly in the club/mass and drug channels, but declining in the convenience and gas channel.

The top priority for manufacturers is still “implements agreed-upon business plans,” unchanged from 2012. “Manufacturers are looking for further stability in the relationship with their customers,” says Cussons.

GROCERY

Net Favourable Scores By Channel

Net F

avou

rabl

e (N

F) S

core

Atlantic/Quebec

2013 20132012 2012

Ontario West

5

10

15

20

25

30

35

Mass/Club/Value Convenience/Gas Drug

MANUFACTURERS SPEAK OUT . . .

1 1 Implements agreed-upon business plans

3 2

1 3

Stores execute promotional and retail marketing plans in accordance with commitments

Works productively with us to build profitable business for both parties

2012 2013 PRACTICEIMPORTANCE

RATING

Founded in Canada in 1988, Advantage™ operates in more than 30 countries. Its jointly sponsored programs provide an ongoing industry benchmark for retailers and manufacturers to measure and track their relationships with key business partners.

For more information or to participate, contact Paul Cussons at 416-863-0685, ext. 170; [email protected]

12

1516

23

32

26

20

12

20

12

9

4

83

82

79

CO

MM

ITMENT


Alnashir (Nash) Lakha, president and CEO of Parmalat Canada, retires on February 28, 2014. His career with Parmalat and its predecessor companies, Ault Foods and Silverwood Industries/Dairies, spans 33 years. Previously, he was chief financial officer for Parmalat North America. Lakha is a Fellow member of the Chartered Institute of Management Accountants of the U.K., Chartered Global Management Accountant, Certified Management Accountant, and a Chartered Director.

PARMALAT’S

NASH LAKHA

Why did you choose to work in the grocery industry?I moved to Canada from England to better my life, and would have worked for whatever company in whatever industry would hire me! Silverwood Industries gave me my first opportunity. Thirty-three years later, and having survived three takeovers, here I am. I love the business. It is very dynamic – truly never a dull moment. And dairy is particularly challenging. It has hundreds of points of contacts on a daily basis, each with its own opportunities and challenges. The supply-managed system adds another dimension to running the business.

How would you rate your performance during your tenure as president and CEO of Parmalat?Parmalat Canada was historically a poor performer. It lacked focus, was organization-ally bloated, and the business drivers were not fully understood. Innovation was slow and investments were not strategically allocated. In order to transform the business and mindset of the organization, I put in practice what I had been emphasizing as CFO for years.

First, I reduced the executive team and changed some of the functional leaders. Next was to give the new executive team the courage to develop an ambitious new strategic plan and execute with a single-minded focus, while continually analyzing and understanding the drivers of success in the running of their various support functions, including the business channels (Retail, Food Service, Exports/Imports and Ingredients). Investing in our factories and brands was crucial.

Since I took over as CEO, Parmalat Canada

has progressively had the best results in its history. Today, we are one of the largest CPG companies in Canada, with recognizable brands that have the best-selling nationally ranked item in each of the key dairy case categories. Within Parmalat worldwide, Parmalat Canada represents over one-third of the total group.

What was your greatest challenge?Giving Parmalat Canada a new life. As you may recall, in 2004, Parmalat Canada’s parent company was embroiled in one of the largest crises/frauds in European business history. At the time, I was the CFO guiding the organizations in Canada and the U.S. through unchartered waters. It was a real challenge to ensure there was enough liquidity to keep the business operations in Canada and the U.S. going while trying to recapitalize the Canadian business, and divesting non-core assets in both Canada and the U.S.

How did you succeed?The Italian government-appointed adminis-trator who was put in charge of Parmalat global was extremely supportive, which gave me the authority to implement survival action plans without local interference. And, of course, the employees were instrumental; without their support, we would not have survived. They were used to my management style, having seen me operate as both a CFO and an unofficial COO, and that made for expedient execution of certain key decisions. The justice system was also helpful in unwinding a major inter-company transaction, which I considered was under-taken fraudulently by the parent company.

What is something not many know about you?I was born on the shores of Lake Victoria in Tanzania, East Africa, and I speak Swahili, Hindi and Gujerati.

From East Africa but educated in the U.K.?Tanzania was going through turbulent political times during my high school years, so my parents parceled me off to England, via Trinidad (spent a year there—what wonderful carnivals they have!), to complete my education. It was in England that I completed my formal finance education.

Why retire early, and what’s in your future?I’d like to say REST, but that is not likely to happen.

It’s been a long journey, starting from a very early age. I do want to keep active, but not be a slave to business. I can now enjoy life a little bit, and be present and participate in the experiences of my two sons’ futures. I intend to be active with a charity I support, Bracelet of Hope, which supports orphans and fights AIDS in Lesotho.

I have been invited to remain on Parmalat Canada’s Board, and hope I will have an opportunity to be of service to other boards in the industry. And if nothing worthwhile pans out, I will go roam the Serengeti with the lions and elephants!

What will you miss most?The people. I have been privileged to lead and work with a highly motivated executive and leadership team, as well as the full employee base, and a valued and respected external stakeholder group.

EXIT INTERVIEW


1700 Lionel-Bertrand Boisbriand (Quebec) Canada

Tel: (450) 434-5919 www.av2000.ca

Made with first quality Fairtrade ingredients, NuTerra Granola is more than

just a delicious way to start your day. It helps build a better world focused on

sustainable development. Small scale farmers are paid a fair price for their

goods. This provides them with greater self-respect and autonomy, as well as better

access to education and health care. When you choose NuTerra Granola you participate

in restoring hope and self-sufficiency to families in several countries.

For more information on Nuterra scan this code

NOW AVAILABLEA delicious new

cereal with Fairtrade ingredients that is

High in Fiber and Low in Sodium

Introducing...

The PREMIER Cereal with FAIRTRADE Ingredients

Exclusively Imported and Distributed by

The breakfast cereal category in Canada has faced many sales challenges over the past few years. Consumers are more likely to grab something quick at a coffee shop or fast-food restaurant, or bring some-thing along to eat while they commute, rather than sit down with an old-fash-ioned bowl of cereal. But grocers who highlight the new super-nutritious offerings – and uses of cereal outside the bowl – can still grow their sales of this breakfast staple.

It’s a rush these days in the morning for most Canadians. Whether it’s parents getting their kids out the door or baby boomers heading off to the local curling rink, everyone is looking for quick and nutritious breakfast options. Portable items like yogurt, cheese strings and breakfast bars have been pushing cereals

THINKING OUTSIDE THE BOWL

to the sidelines over the past few years. Changing ethnic demographics and not always having milk on hand, are also contributing factors to slipping cereal sales, says Ipsos vice-president Kathy Perrotta.But cereal makers, who represent some of the strongest brands in the food and beverage industry, are fighting back and producing just what consumers want. Shoppers are taking notice of today’s cereals, with extra antioxi-dants in the form of berries and dark chocolate, more fibre and protein, organic or all-natural ingredients, and exciting new flavours and formulations.

These days, Canadians expect their foods to multi-task and go beyond supplying basic nutri-tional needs, and cereal is no exception. Perrotta says Kellogg, for example, just got Health Canada approval for Vitamin D fortification and launched Special K Protein with soy protein.

Boost your business by highlighting the new healthier choices in the cereal aisle By Treena Hein

77min

84min

62min

78%Of parents say they try to take steps in the evening to make their mornings go more smoothly.

The average amount of time It takes parents from the time they wake in the morning, to get everyone out the door.

British Columbians spend the most time in the mornings getting ready.

Quebecers spend the least amount of time getting ready for the day.

AND THEY'RE OFF!Breakfast Cereals Canada polled more than 800 parents with at least two young children in the family, to find out what it’s like on a typical Canadian morning:

SHELF LIFE


Natural Delights Medjool Dates

offer a caramel-like taste and

chewy texture, amazing versatility

and lots of antioxidants. The

biggest and sweetest of the

date family, they are grown in

the Bard Valley in the south-

western U.S. and are available

in 40 different skus. �

Visit naturaldelights.ca

Natural Delights Medjool DatesMedjool dates have a lot to offer: a melt-in-your-mouth

caramel taste and a chewy texture; amazing versatility; lots

of antioxidants; a lovely amber colour and easy portability.

Yes, even though these Medjools are a fresh—not dried—date,

they can be enjoyed anywhere, anytime. Medjools are grown

today in the Bard Valley straddling California and Arizona,

and these dates flourish there because they need a hot, dry

climate with plentiful groundwater.

DatepacDatepac, LLC is the largest Medjool date

packing and marketing facility in the

US. The Natural Delights Medjool Date

industry is based in Yuma, AZ in the heart

of the Bard Valley. Benefitting from an

ideal climate and the nearby Colorado

River, this area produces the finest

Medjool dates year after year. Datepac

was established in 2002 to consolidate

the packing of Medjool dates for the

Bard Valley Medjool Date growers.

This consolidation enhances the

quality of dates produced and

distributed throughout the world.

SPONSORED BY:

FAMILY IS EVERYTHINGMore SKUs = more customer trial more often

Research proves that a sale’s lift occurs—even when

sold at a higher price point—when carrying a larger

family of Natural Delights SKUs, and merchandising

and promoting them. Natural Delights Medjool

Dates are available in a wide variety of grades,

packages, sizes—including 11 lb. bulk boxes,

1 lb. tubs, 12 oz pitted dates and date rolls,

organic product and Snack Packs—designed

to appeal to different customer segments.

40 PRODUCT

SKUs

2007-2008 2011-2012

$3 Million

$6.7 Million

HUGE SALES GROWTH IN CANADANatural Delights Medjool Date Sales to Canada

GROWTH OVER THE LAST 5 YEARS

123%

NATURAL DELIGHTS IN CANADA

17.5% ANNUALIZED

34.7%VOLUME GROWTH IN 2012 *

* IRI/Nielsen

PRODUCE

VENDOR ADVISOR

DATES

“�We’ve�been�advertising��in�the�magazine�and�using��the�Grocery�Business��e-mail�program�for�less��than�a�year,�but�the�results�have�been�stellar.��Each�time�one�of�our�ads��or�e-mail�announcements�comes�out,�I’m�contacted�by�retailers�and�wholesalers��interested�in�learning�about�our�newest�products.”

Advertising�in�GROCERY BUSINESS MAGAZINE was�the��natural�choice.�Ken�Berger�Canadian�Sales�Manager,�Natural�Delights�Medjool�Dates

�

$ Sales Market Share % Change

Hot Cereals 100.0 3

Convenience oat based hot cereals excl. oat bran

75,824,679.00 48.3 -1

Convenience wheat based hot cereals

1,978,835.00 1.3 11

Standard oat based hot cereals excl. oat

65,481,522.00 41.7 7

Standard wheat based hot cereals

10,698,582.00 6.8 4

Other 775,570.00 0.5 28

Source: Nielsen MarketTrack National All Channels

Health and convenience drive purchase behaviourThe Healthy StarterConsumers want to start the day in a healthy way and set a high priority on health in the morning. However, "Hurry," "Hunger" and "Habit" are also key drivers for cereal consumption. The Fibre FanaticsFibre and whole grain are critical to boomers who eat cereal at breakfast. Though most boomers do not report dietary restric-tions, the healthy aging trend is likely driving boomers to consider the functional benefits of foods they consume, particularly at breakfast.

On the Go Though the majority of breakfasts are still consumed at home, hectic schedules and long commutes see more boomers spending time in-transit than ever before, necessitating portable carried-from-home breakfast solutions.Source: IPSOS

Starting your day by helping others Nuterra is the first Fairtrade cereal to hit the North American market and is distributed by A & V 2000 of Boisbriand, Que. Currently available in two flavours, Granola Nuts & Raisins and Dark Chocolate & Hazelnuts, the products offer North Americans a responsibly-sourced cereal.

MERCHANDISING IDEASMost consumers, but women in particular, are looking for higher protein products to keep them feeling full and avoid temptation between meals.

With the manufacturers stepping up new healthy options, Breakfast Cereals Canada suggests:

• Creating secondary displays near the dairy aisle or in the fresh fruit section to help shoppers recognize cereal as a healthy snack, not just a breakfast food.

• Build cereal products into recipe ideas at all consumer touch points

For more ideas check out: breakfastcereals.ca

Datamonitor research shows that boomers account for more than half of all consumer spending and 20 per cent of food spending, the highest percentage among all age groups

Baby boomers, who represent 20 per cent of the population, are very concerned about their health, particularly in the morning, says Kathy Perrotta of Ipsos. That makes high-nutrient cereal a great breakfast choice.

For a variety of reasons, seniors have increased nutrition requirements. Health Canada says foods that provide higher levels of protein, vitamins, mineral nutrients and calories in smaller volumes can help them meet their needs.

HEALTHY CEREAL IS

BOOMING

11% sales of convenience

wheat-based hot cereals

Powered by:

52 weeks to September 21, 2013


Some days, customers fight to get a parking spot at Monastery Plaza, a neighbourhood shopping centre in Oakville, just west of Toronto. The delicious scent in the air explains the constant influx of people: they're here for the bread, baked fresh daily by Monastery Bakery & Delicatessen.

“By late afternoon they’ve already run out of most things,” says Michael Marinangeli, president and owner of MIDEB Consulting Inc., an Oakville-based grocery retail consulting firm. “This place has become a destination for bread, even for people outside Oakville.”

As he watches customers crowd into the bakery, Marinangeli wonders: What if grocers could turn their bakery departments into a bread destination where consumers come to shop even if it’s out of their way?

In a market that’s seen bread volume sales go almost as flat as focaccia, it’s a notion worth considering because while Canadians may not be putting more bread in their shopping baskets, they have been upselling themselves to healthier and artisanal varieties. And this is in spite of the trend to low carb, low glycemic and gluten-free.

But can bread really become a destination category? Well, how many categories can boast that consumers are willing to spend more, rather than less, on its products?

Because of this trend to quality, “Bread is gaining back its letters of nobility,” says Isabelle Marquis, marketing director, retail and foodservice at Première Moisson, a bread producer and bakery retailer headquartered in

Can bread really become a destination category?By Marjo Johne

Bread is one of those rare products that has a 100 per cent household penetration,” says Svetlana Uduslivaia, senior research analyst at Euromonitor International. Bread accounts for about 12 per cent of total food and beverage sales through grocery stores, according to Euromonitor.

Paul Hetherington, president and CEO of the Baking Association of Canada, says disinforma-tion about bread – primarily that it’s a culprit for weight gain – continues to be a threat to this category, as is the broader shift in how some people view food today: as a problem, instead of a solution to their health problems.

Connie Morrison, senior vice-president, marketing, fresh bakery at Canada Bread Company, in Toronto, points to three key factors that are influencing the bread category:

• Changing demographics as boomers age, with rising instances of diabetes and heart disease;

• A rapidly growing immigrant population that considers bread to be a staple;

• Greater awareness, in all age brackets, of the importance of managing weight and leading a healthy lifestyle.

“People are looking to improve their diet without radically changing the way they eat,” says Morrison.

KNEAD TO KNOW

BREAKING BREAD

TRENDING

GOODIN BREAD

SHELF LIFE


tomatoes and flavoured with herbs such as thyme and oregano. They're also taking more time to study product labels, says Andrews. “The less ingredients that are listed, the better the product is,” he says. “Keeping things simple, natural and pronounceable is definitely on the rise as consumers become more label aware.”

For bread producers and food retailers, these trends translate into more opportunities to continue to move consumers towards higher-value breads.

“In fresh bakery today, consumers are looking for quality, freshness, taste and price. Some of the biggest trends are artisan breads, smaller serving sizes, trans-fat-free, ancient grains, gluten-free, low-sodium, omega-3s and chia. But customers are also looking for an affordable indulgence. Don’t be afraid to make a great all-butter product, or a great real cream dessert, and charge for it, because the customer will pay for a great product.”

Vaudreuil-Dorion, Que. “In restaurants, we’re seeing chefs paying more attention to the bread they're using, making sure they've got the right texture and taste. People are picking up on this trend and are becoming more selective about the bread they're using at home.”

Bread with ancient grains such as spelt, kamut, teff, red fife and purple wheat continue to be popular among consumers, says Marquis.

Lee Andrews, president of Toronto-based Ace Bakery, says consumers are increasingly reaching for breads with ingredients and shapes from different cultures – think flatbreads studded with premium olives and

Serve Up ExcitementGet on the P.A. system and let your customers know your in-store bakery is about to put fresh-from-the-oven products on the shelves.

Serve Up SafetyThe way bread is handled can make all the difference to consumers. Pay close attention to producers’ instructions and ensure all bakery workers are trained properly.

Serve Up MerchandisingCreate an attractive display area for bread. Metro Inc., for example, piles wooden tables with artisan

breads topped by a descriptive card. At Sobeys, it’s hard to miss the big “freshly baked artisan bread” sign planted right beside bread bins.

Serve Up Meal IdeasInspire your customers by displaying recipes featuring bread right in the bakery department, along with all the key ingredients they’ll need.

Serve Up SamplingLaunch a sampling program highlighting a “Bread of the Week” or a small selection of breads. Create cross-selling opportunities by pairing samples with dips or deli products.

BE A BREAD BOOSTER

— John Klecker, consultant, Klecker Bakery Solutions

BREAD TYPE $ SALES $ SHARE $ VOL % CHGCommercial 1,678,547,084 100.0 -0

White 423,686,831 25.2 -3

Whole wheat 295,400,285 17.6 -5

Multi grain 182,920,427 10.9 2

Italian 156,370,368 9.3 7

Specialty rye/pumpernickle bread 124,384,049 7.4 0

Baguette 83,656,491 5.0 -5

Raisin 52,668,923 3.1 3

Garlic 32,970,823 2.0 3

French 22,120,246 1.3 -10

Sourdough 5,290,454 0.3 9

Milk bread 2,068,752 0.1 -11

Egg bread 1,168,275 0.1 5

Other bread types 295,841,160 17.6 5

Source: Nielsen MarketTrack National All Channels

ACE Bakery and Food Network Canada went looking for the best sandwich in Canada and found it in a recipe created by Jean Émond: North African Lamb Sandwich with Harissa and Figs on ACE Bakery Ciabatta. Émond triumphed over hundreds of recipes that were submitted from across Canada as part of a contest celebrating ACE's 20th anniversary.

BEST SANDWICH CONTEST

Powered by:

52 weeks to September 21, 2013


Denis Gendron, president, United Grocers Inc.

Partnership/Most Valuable Performance: Kruger Products L.P. Pictured (l-r): Pierre Charron (Metro Inc.), Matt Blixt, Steeve Lamontagne, Michel Manseau, Mario Gosselin (Kruger), Ron Welke (Federated Co-op)

Best New Supplier-Grocery: Boulder Brands. Pictured (l-r): Brenda Kirk (Overwaitea Food Group), Robert Mortensen (Boulder Brands), Pat Pessotto (Longo’s)

Best Private Labels Supplier: A. Lassonde Inc. Pictured (l-r): Brian Heppell (Overwaitea Food Group), Lyne Jetté (Metro), Josianne Légaré and Peter Mattson (A. Lassonde)

Innovation Award – Grocery Suppliers: Kraft Canada Inc. Pictured (l-r): Albert Lum (Buy-Low Foods), Bill Strang (Overwaitea Food Group), Sofia Thompson, Jo-Ann Cole, Tim Berman, Craig Vendramin (Kraft)

OCTOBER 24, 2013 – TORONTO

UNITED GROCERS INC. AWARDS DINNERDenis Gendron, the president of United Grocers Inc., and his staff, welcomed vendors and guests to an entertaining evening featuring entertainer André-Philippe Gagnon.

Congratulations to the vendors who were recognized for professional excellence.


Special Recognition UGI Important Partner/Supplier: Old Dutch Foods Ltd. Pictured (l-r): Kevin Power (Colemans), Steve Maddeaux (Old Dutch Foods),John MacNichol (H.Y. Louie)

Best New Supplier – Services and Equipment: TD Merchant Services. Pictured (l-r): Tom Mainville (Co-op Atlantic), David Chatyrbok (The North West Company), Vivian Farrugia, Andrew Hagen (TD Merchant Services)

Special Recognition: UGI Important Member Contribution – Co-op Atlantic. Pictured (l-r): Anthony Longo (Longo Brothers), Sandy MacPherson (Co-op Atlantic), Denis Gendron (United Grocers Inc.)

UNITED GROCERS INC. AWARDS DINNER


Three popular whole muscle products now offer more value. Janes Cracked Black Pepper Chicken Strips, Janes Chicken Breast Fillets, and Janes Garlic & Pepper Fillets now include our specially developed Signature Sauce, created especially to enhance the flavour of Janes products. Now in a 1-kg pack.

A proud Canadian brand, Janes makes high quality fish and

chicken products for families looking for nutritious yet convenient meals.

Janes’ fish products are all wild-caught, MSC-certified, whole fillets, never

minced. And our chicken burgers, strips and nuggets are 100% all-white

meat. Other benefits include being trans-fat, preservative and artificial

flavour free, while being low in saturated fat.

Check out some new and some improved products from Janes:

Janes Natural Goodness Chicken Strips and Nuggets Two options for consumers looking for convenient, back-to-basics foods. Minimum ingredients. Maximum taste!

Both of these favourites have been

improved with updated coatings.

Fillet of Sole features a light panko

breading, with a hint of lemon;

Multigrain Haddock has a delicious

breading that includes ancient

grains, quinoa, and millet.

Janes Battered Fish Bites and English Style Fish Value-priced products that are a

source of DHA Omega-3. Battered Fish

Bites are bite-sized pieces of fish, ideal

for dipping or in fish tacos. English

Style Fish are large, battered fillets.

Janes Ultimate Chicken Burger Ready for the grill, this burger is now juicier, with an improved taste and texture.

Introducing Janes Ultimates Battered Chicken Breast Fillets with Signature Sauce – Our newest addition to the Janes family of whole muscle chicken, these tender chicken fillets are wrapped in a light, crispy batter.There is nothing else like it!

Disney Cars Chicken Nuggets 100% all-white meat, these fun-shaped chicken nuggets will appeal to children.

Janes Panko Breaded Fillet of Sole and Janes Multigrain Haddock

Brings you Quality & Convenience

Sofina Foods, Inc.

NEW

NEW

NEW

Grocery Business: How is the relaunched Toonies program different from previous years?

Michelle Scott: The program no longer uses coupons on shelf. Instead, we will offer shelf-talkers to sponsor brands that will highlight participating products. Sponsor companies can also work with participating retailers outside of the Toonies program to negotiate promotions.

GB: When will the program run?

MS: The 2014 program runs from Feb. 6 to Feb. 16 in participating markets; Ontario and Atlantic Canada.

GB: Who are some of your retail partners?

MS: The Toonies program will be supported by Colemans, Co-op Atlantic, Food Basics, Foodland, Freshco, Galati Market Fresh, Highland Farms, Longo’s, Metro, Michael Angelo’s, Price Chopper, Rabba Fine Foods, Sobeys and more than 100 independent stores across Ontario and Atlantic Canada. We are also actively exploring the possibility of expanding the Toonies campaign.

GB: Can you give us more detail on the program?

MS: The Grocery Foundation aims to have 60 companies join the 2014 campaign. The cost of sponsorship for a single product is $20,000 ($15,000 for Ontario and $5,000 for Atlantic Canada). Companies also have the option to sponsor four products for $65,000.

GB: How can companies (brands) participate in the campaign?

MS: Participating companies will have use of the Toonies for Tummies logo in advertise-ments and on packaging for one full year through to December 31, 2014. Sponsor brands will have the opportunity to manage promo-tions tied to the Toonies program, outside of campaign sponsorship.

GB: How will The program be promoted?

MS: Participating brands will be showcased in branded Toonies for Tummies flyers. We’re planning: » A creative campaign (public relations, social

media outreach and paid media) that emphasizes the positive impact that a Toonie can have on improving school nutrition programs;

» A microsite where consumers can see how their Toonie donations are being used by breakfast programs in their communities;

» Working with our partners and social media influencers to help bring the message to consumers;

» Providing tools to our industry to help them rally behind the Toonies program and become more aware of the issue so we can play a role in helping change the current reality for many children.

GB: What happens to the money raised?

MS: One hundred per cent of the consumer funds collected through the Toonies for Tummies initiative will be donated to school nutrition programs.

“I can think of no better focus for our industry than helping children who are in need of nutritious meals. In February, 2014, we have the opportunity to come together and take a visible role rallying consumers behind a program that is meaningful to all of us.”

Andre Gagne, chairman & president, The Grocery Foundation, and vice-president, fresh merchandising, Metro Ontario Inc.

“The Grocery Foundation’s efforts to help children at risk – including their work with Kids Help Phone, Breakfast Clubs of Canada and Breakfast for Learning – are important initiatives for us to continue to support, and be active ambassadors with consumers at retail and within our own companies.”

Cheryl Smith, executive vice-president, sales and marketing, Parmalat Canada

The Grocery Foundation has revamped and relaunched its Toonies for Tummies initiative with the goal of raising $1 million in 2014 for school nutrition programs. Michelle Scott, executive director of The Grocery Foundation, heads the campaign.

Michelle Scott

Toonies for Tummies aims to raise $1 million to feed kids


LIST IT New and now products

The lowest calorie yogourt in CanadaAstro ZerO% yogourt is a great choice for the yogourt lover who understands the benefits of maintaining a healthy body weight. Now with only 30 calories per 100 g serving, Astro ZerO% is naturally flavoured and Health Check endorsed. With ZerO fat, ZerO aspartame and ZerO sugar added, there is ZerO need to compromise!Astro.ca

Première Moisson debuts 189 HarwoodPremière Moisson, a Québec bakery chain specializ-ing in high-end gourmet products, recently launched the 189 Harwood line: a new label developed specifically for grocery and superstore consumers. The first products debuting under this new label are

bake-at-home mini-pastries. All go directly from freezer to oven and are ready in 30 minutes or less. They are made from top quality ingredients for exceptional taste and texture. premieremoisson.com/en


Two new flavoursfrom Green & Black'sGreen & Black's introduces two new flavours: Burnt Toffee and Sea Salt. One combines Yorkshire toffee pieces with 60 per cent smooth dark chocolate. Milk chocolate lovers will enjoy the new Sea Salt flavour, with Anglesey Sea Salt crystals.

Contact your local Tree of Life Canada representative for more information. treeoflife.ca

Warm up with Starbucks – At homeFlavours inspired by Starbucks customer favourites, these gourmet, hot cocoa mixes are available in Double Chocolate, Salted Caramel, Marshmallow and Peppermint. All SKUs are made with high quality ingredients including ethically sourced and sustainable cocoa powder, natural marshmallows, ethically sourced chocolate pieces, natural caramel and peppermint pieces, and real vanilla powder.

Contact your local Tree of Life Canada representative for more information. treeoflife.ca

Feeling bloo?Made in Canada, the taste of bloo juice is a result of high quality ingredients, a proprietary process and innovative packaging coming together to create the ultimate fresh juice experience. Drive your chilled juice category sales with these three premium bloo family members: Blueberry, Blueberry/Strawberry and Blueberry/Citrus.bloojuice.com

November | December 2013 61grocerybusiness.ca

General Mills introduces ground breaking innova-tion with these 2 new tasty protein bars from Nature Valley and Fibre 1.

Nature Valley Protein bars offer the protein you need, with the taste you crave. With two tasty flavour options, it’s a delicious chewy bar loaded with real nuts and 11 grams of protein per bar. Fibre 1 Protein is a deliciously magical combination of fibre and protein. It’s a chewy snack bar with the feel-good benefits of both fibre and protein, loaded with caramel and peanuts, or creamy peanut butter, all covered in an indulgent chocolatey coating. It offers 6-7g protein per 33 gram bar, and 20% of your daily fibre.

Honey Nut Cheerios Hearty Oat CrunchThe #1 brand in cereal is expanding with a new variety! Honey Nut Cheerios Hearty Oat* Crunch provides the fun of Honey Nut Cheerios, combined with oat flakes, and oat & nut clusters. Your customer’s already enjoy Honey Nut Cheerios, put this great new cereal on

the shelf and add some crunch to their day!

Fibre 1 Almond ClusterYou won’t believe fibre can taste this good! From the Fibre 1 brand, comes a perfect cereal that’s crunchy, with just the right sweetness, and just the right amount of almonds. Consumers are nuts about the taste!

Cereal is by far the #1 food eaten by Canadians at breakfast, enjoying a household penetration rate of over 92%. Households buying cereal spend 33% more total Grocery dollars in a year than non-cereal households – and when cereal is in the basket on a trip, the basket spend doubles.

With only 50 calories/100g serving, Source Greek offers 2x the protein of regular Source, has no sugar added, and is a stirred yogurt with a thick texture. Offer it today and driveyour yogurt profits!

With a variety of tasty new flavours,Yopa! offers all the goodness there isto love about Greek yogurt with only80 calories/serving. It’s made withreal fruit, has no artificial flavours orcolours, and no gelatin. It has 2x theprotein of a regular yogurt, is fat free,and cholesterol free

LIST ITBe sure to grow your basket ring sales with these 2 new fabulous cereals from General Mills


GROCERY INNOVATIONS CANADA 2013 CONFERENCE AND TRADE SHOWSeptember 30 - October 1, 2013 Toronto, Ontario

PHOTOS: RODNEY DAW AND CFIG


it figures>

Focus onInflation

Takeaway With less money to spend and hungry mouths to feed, consumers continually look for ways to stretch their budgets and find the best value for their money.

Takeaway The price must be right and marketing must be effective for private-label brands to become successful. Packaging impacts trust and quality perceptions, especially when private label extends beyond commodity or low-risk product categories.

Takeaway Only 8% of Canadians say they have free spending ability (compared to the global average of 14%), despite having among the world's highest household incomes.

Canadians love promotions

50% will stock up on regular use items when they're on sale

44% will only purchase sale items if prices are trend-ing upward

35% will purchase large economy sizes when inflation hits

When food prices rise:

37% will buy more private-label brands

51%Only 51% of Canadians say they're living comfortably

increasing trips to the store

increasing dollars per trip

3% 9% Only Only


Takeaway Consumers make trade-offs, determining which categories have staying power and which ones are more vulnerable to tough in-store decisions.

Takeaway More people are searching the Internet for money-saving deals. Innovation is vital to sustaining profitability and building a strong platform for growth.

Retail channels showing resilience to inflation: » Discount/dollar stores » Restocking/clearance stores » Warehouse/club stores

Fresh or frozen fruits

74% would buy the same

Loose, unpackaged, unbranded cereals


Vegetables, canned fruits and vegetables


Categories showing resilience to inflation

Carman Allison is director of consumer insights for The Nielsen Company in Canada and is responsible for creating thought leadership reports and insights for CPG manufacturers and retailers.

ALL STATS COURTESY: NIELSENCarman Allison

look to the Internet to find deals

11% will do more

online shopping if prices rise

overall

24%


THE NEWINDEPENDENT GROCERS

There have been few times in Canadian supermarket history when someone has not predicted the demise of the independent grocer. In a consolidating world where the Big Three grocers will soon control more than 60 per cent of Canadian grocery sales through all channels, the sheer buying power of the behemoths is almost impossible to overcome. Most grocery stores in Canada source product, in one way or another, through various distribution arms of Loblaw, Sobeys or Metro.

But a new class of independent grocer has risen in Canada – the ethnic grocery store. Most are owned and operated by Asian families or concerns, but many are popping up with eastern European or Middle Eastern themes. Some, such as T&T and Adonis, have already partnered with one of the Big Three grocers. Others are parts of small chains or family affiliations. We have counted more than 70 large-scale ethnic grocery stores in the Greater Toronto Area, and would not be surprised if an equal or greater number are spread across the rest of Canada. These are generally clean, bright, well-stocked, low-priced, high-service stores with 40,000 - 60,000 SKUs, usually including excellent produce, and strong and separate seafood departments.

Some individual stores can be classed among the best new supermarkets in the country. Initially, they serve the fast-growing visible minority and immigrant populations of the country, most of whom actually cook from scratch and are extremely value conscious. But increasingly, non-ethnic clientele are discover-ing these stores and valuing the cleanliness, low prices and excellent produce. In fact, some of these stores have reported non-ethnic customers at close to one-third of their traffic base.

For all of their market power and growth, these stores can be difficult for competitors and suppliers to understand. They are generally characterized by: confusing joint or cross-owner-ship; a variety of supply channels; unique pricing strategies; unusual buying practices; unclear planograms; and high-speed decision-making.

A few ethnic grocery stores have already closed their doors, leading some to believe that they’re a passing fad. That assumption would be a mistake. For the most part, these are excellent stores. No grocer should be without a strategy to either partner or compete with these new players; no supplier

should be without a strategy to serve them. Take the time to walk these stores, speak to

their distributors, check the pricing and understand the challenges. Just like earlier waves of independent grocers in Canada, they will become stronger, create alliances, generate sophisticated distributors and participate in consolidation.

Do not ignore or dismiss them.

Perry Caicco is the managing director for CIBC World Markets. He has worked for 15 years in the supermarket, general merchandise and packaged goods industries with Loblaw Companies, Coca-Cola and Consumers Distributing.

Perry’s Point of View

If you add up the sales volumes, we believe these stores are, in aggregate, selling at least as many groceries as Walmart Canada, and are growing at least as fast.


From Your Friends at Kraft Canada

2013 GOLDEN PENCIL Outstanding Service Award Recipients

Congratulations

dino & eric

Dino Bianco

Executive Vice President & President Beverages and Canada

Kraft Foods Group

Eric R. La Flèche

President & CEOMetro Richelieu Inc.

Kraft Shredded Cheese with a Touch of Philadelphia

CANADA’S #1 NATURAL SHREDDED CHEESE1 JUST GOT CREAMIER!

Leverage the success of two power brands, Kraft Shredded Cheese and Philadelphia, to drive growth in 2014! We have specially blended our Kraft natural shredded cheese with a hint of Philadelphia to deliver a softer, creamier melt. Launching three delicious flavours: Creamy Mozza, Creamy Herb & Garlic and Creamy Mexicana.

1. Nielsen MarketTrack: NAT XNFLD GB + DR + MM, L52 weeks ending 24Aug13 2. Nielsen MarketTrack: NAT XNFLD GB + DR + MM, L52 weeks ending 24Aug133. Nielsen MarketTrack: NAT XNFLD GB + DR +MM, L52 weeks ending 28Sept13, Refrigerated Non-Mediterranean Dairy Category, Branded Share Leader

DRIVE GROWTH IN THE DAIRY AISLE IN 2014

WITH LEADING INNOVATION FROM

KRAFT CHEESE!

Start ship for all products is January 20, 2014.

Cracker Barrel Mozzarella Natural Cheese Slices

Cracker Barrel is the branded leader and #1 choice for consumers in Slices! Leverage

Cracker Barrel Mozzarella to optimize and extend the impressive growth of the Cracker Barrel Slices portfolio, up 83% YTD and driving 28% market expansion.2

Philadelphia French Onion Dip

Leverage Philadelphia’s branded share leadership3 to drive sales and win with consumers in the leading French Onion flavour! Philadelphia French Onion is

the ONLY French Onion dip that starts with the dairy goodness of Philadelphia.

Cracker Barrel Herb & Garlic Cheddar

Capitalize on the incredible success of Cracker Barrel Jalapeño Cheddar with

new Cracker Barrel Herb & Garlic Cheddar – a smooth, creamy cheddar seasoned with the perfect balance of parsley, onion and garlic.

Exceeding product indicator benchmarks of overall flavour, liking and purchase intent,

it’s clear consumers love it!

CONTACT YOUR KRAFT SALES REPRESENTATIVE TODAY!

november/december 2013

Documents