GROCERY WARS – NAVIGATING THE ROAD TO SUCCESS; FOOD AND BEVERAGE ONTARIO AGM CONFERENCE
This past week I had the pleasure of attending Food and Beverage Ontario AGM and Conference. Food and Beverage Ontario is a not-for-profit organization dedicated to advancing the interests of Ontario’s food and beverage processors. The conferences title:
Navigating the Road to Success – Innovation, Consumer Trends and the Future of Ontario Food.
Their 3 guest speakers included:
- Mr. C. Haney – Director of Corporate Innovation – Communitech
- Mr. D. Bricker – CEO – IPSOS Public Affairs
- Mr. J. Scott – Past President of CFIG
Outlined below is a synopsis of the topic each gentlemen discussed.
- Mr. C. Haney:
Innovation, Why It Really Matters in the Food and Beverage Processing Industry
4 Key Facts with respect to Food and Beverage Industry
- Speed is key to the industry. Adapt to the new trends or be left behind.
- Disruption is coming, like it or not. Customers control the train, not the manufacturer
- Healthy growth requires an environment open to new and unexpected direction
- Innovate or die
How To Innovate
- Innovation fails because of a lack of discipline, not a lack of ideas
- Work with urgency – fail and learn from it
- If you’re not experimenting, you are guessing. Do not guess
- Talk to your customers’ every day. No surveys or focus groups. They will provide you with insights. You will see trends before they become trends
- Innovation without value is just play
- Innovate at the speed of a start up
- Innovation happens beyond the surface
Collaborative Innovation Supports
- Learn what you don’t know
- Leveraging startups can help drive innovation
- Collaborate with adjacent industries
- Attract new types of employees
- Experiment outside the corporate walls
- Doing customer validation, early and often
How To Do it Better Than Anyone Else
- Be Ambidextrous
- Be cheap. Be fast. Be Purposeful
- Be open to opportunities. Think differently
- Think different. Embrace open innovation
- Walk and chew gum at the same time
- You must be able to do business today while simultaneously, looking into the future.
- Mr. D. Bricker:
Innovation and The New Canadian Food Consumer
- The forces of change are creating a new Canada
- The old Canada:
- English and French—very white
- More Rural—focus on natural resources
- Big families, big households
- Values Of Elite Accommodation— driven by white men in Toronto, Montreal and Ottawa
- Eyes on the Atlantic, fear of the US.
- We are living longer. Average life span of a Canadian will be 87 by 2036. 6 years longer than today
- Today there are 7,900 people over 100 years old. By 2061, 78,000 are expected to be over 100 years old
- Canada’s generation today:
- Pre baby-boom: 14%
- Baby boomers: 29%
- Generation X: 8%
- Millennials: 27%
- Generation Z: 22%
- Today most families are only having 1.61 children per household. In the past it was 3.9 children per household.
- By 2020, Canada will be short 1M trade skilled jobs
- Today there are 4.2 persons working for each senior. By 2036, the ratio will be down to 2:1
- Canada’s work force, 2014
- Baby boomers 31%
- Gen X 34%
- Millennials 37%
- Median net worth of families:
- All families: $243,800
- 65+ : $460,700
- 55-65: $533,600
- 45-54: $378,300
- 35-44: $182,500
- <35: $25,300
- Today Canada has the fastest growing population of all G8 countries due to immigration
- 1986: 36% economic immigrants, 42% family class, 19% refugees
- 2013: 57% economic immigrants, 31% family class, 9% refugees
- 9/10 immigrants live in Urban Canada
- 49.7% of Toronto’s population are foreign born. Ontario average is 28.5%
- In 2017, 300,000 immigrants expected immigrate to Canada
- The new Canada:
- More Urban-Suburban, Multi-Cultural
- Older, More Female
- Smaller families, households
- Increasing generational Divide
- Eyes on the Pacific
- Tolerant, Opinionated, Demanding, Difficult
- Less Engaged with traditional institutions
- “We The North”
- Mr. J. Scott:
How to Maximize Opportunities in the Changing Food Retail Landscape
- 44% of consumers have shifted to discount
- Baby boomers seeking deals @ grocery
- How to attract baby boomer: Loblaws purchasing SDM
- Millennials – smart phone – global transformation. What is in the food? Natural ingredients?
- World population – different ethnic foods
- Urbanization: purchase hard goods through internet
- Longo’s same store to store sales is 3.3%. Best in Ontario
- Costco: sales exceed Metro
- Loblaws:
- Premium locations – Toronto
- Traditional
- RCSS / No Frill
- SDM / T&T
- Sobeys: eye off the ball in Ontario and Quebec (5% reduction in prices in Quebec)
- Fresh Co introduced into Ontario
- Sobeys have wrote down approximately $2.5B dollar of their Canada Safeway purchase
- Walmart wishes to increase their fresh offering in 2016
- Want to market to millennial mothers
- Interested in local suppliers
- Click and collect sales to peak @ $800M by 2020
As part of Mr. Scott’s presentation he held a question and answer session on “How to Get In and Stay In: in Canada’s grocery sector with:
Mr. D. McGillivray – President of McGillivray Consulting Group
Mr. C. Powell: – VP Customer Development
- Retailers seek innovative products with a focused marketing plan that bring value to the category
- Does product increase sales for the category? If it is a duplicate, you are in trouble.
- Retailers to small business:
- On trend. Be unique
- Hype local background
- Go to retail store and view what consumers are buying
- Gain ground well support through independent retailers
- Small business will not make their money back through Big 3 due to excessive listing fees:
- Loblaws: $50,000 – $100,000 / sku for listing fees
- Longo’s: $2,500 / sku for listing fees
- Be prepared to provide on-going in-store retailer support: 20% of total listing fees
- Cross demo product with another partner
- Retailers probationary period for small business is 6-12 months
- If they do delist you, they will request a credit at full price of remaining inventory
- Jump on social media platforms to promote brand:
- Social license question’s retailers seek answers to:
o Animal welfare: What harm if any was brought to animals during manufacturing?
o Sustainability: What is your manufacturing facilities industry recognized credentials?
o Health: What health attributes does your product contain? (i.e. Organic, Gluten-free, No artificial flavours, No artificial colours)
o Who’s behind it? Where was your product manufactured?
o Fair trade: Does your brand support fair trade in any capacity?
For more help Getting and Staying Listed in Canada’s Grocery Sector, connect with us through our website: www.fooddistributionguy.com or give us a call toll free: 1-844-206-FOOD (3662).