GROCERY WARS: THE EMERGENCE OF THE ETHNIC SHOPPER

Canada is recognized as being the most cultural diverse society of any Western country. Yet, despite ethnic consumers being identified as a segment, brands must embrace to sustain growth in the CPG sector, a Nielsen study revealed “Most Canadian companies either don’t have (36%) or don’t know (27%) of any objectives or goals tied directly to any particular group”. So, what is the make-up of the new Canada, what impact will this segment have on CPG spending, where are they shopping and how best to engage with them?

 

The New Canada!

The old Canada (white, rural focus society) is giving way to the new Canada (urban-suburban, multicultural society). By the end of 2011, Canada had a foreign-born population of 20.6%, with 59% of Canada’s immigrants coming from AsiaSmiling couple shopping in grocery section including the Middle East. Europe was the second region of birth for immigrants coming into Canada, accounting for 16% of all immigrants. It is estimated by 2030, 30% of the Canadian population will be foreign born. Toronto and Vancouver represents Canada’s most multicultural cities:

  • Toronto – 50% of Toronto’s population foreign born.
  • Vancouver – 40% of Vancouver’s population foreign born

Over the next ten years Canada’s population is expected to grow by around 7-8 million consumers, with close to 60% of this increase attributed to immigration.

 

Ethnic Spending in the CPG Sector!

Immigrants have and will continue to be a vital source to Canada’s economy. This may be in direct correlation to a change in Canada’s immigrant entry classification. Since 1986, there       has being a change in the immigrant entry classification with a greater emphasis on economic immigrants. In 2013, 57% of all immigrants were classified as economic immigrants, as compared to 36% in 1986. Chart 1 outlines Canada’s 2013 immigrant entry classification.

 

Chart 1

Immigrant Entry Classification – 2013

MARCH 2017 CHART 1

From 2008 to 2013, visible ethnic groups far outpaced the average non-visible resident in consumer spending as outlined in Table 1. In fact, it is estimated over the next decade some $12B in additional grocery store sales will be attributed to immigrants.

 

Table 1

                 MARCH 2017 TABLE 1

 

Grocery Store Destination for Ethnic Shoppers!

In a study undertaken by Loyalty One, entitled The Modern Grocery Shopper: Attitudes and Opinions Survey, nearly 9 out of 10 ethnic Canadian grocery shoppers indicated the selection of ethnic food and ingredients is an important feature in choosing which grocery stores to shop at. Yet as part of the same study:

  • 63% of visible minority shoppers in Canada believe the big box store does not stock a sufficient selection of ethnic foods.
  • Independent grocers outperform, big box grocery stores in terms of customer satisfaction amongst visible-minority communities regarding ethnic food selection.
  • 69% of visible minority Canadians state they are satisfied with independent retailers compared to only 54% for large grocery chains.

In fact, most ethnic shoppers seek out local stores operated by their own ethnic group, rather than shop at a local supermarket. This gives rise to the increase in grocery sales through ethnic supermarkets. Though difficult to judge, Mr. P. Caicco of CIBC World Markets estimate sales at between $4B and $5B per year while Mr. B.K. Sethi of BK Sethi Marketing figures sales are between $2B and $3B annually. Whatever the actual number is, it represents substantial sales loss for conventional food stores.

 

Engaging with the Ethnic Consumer!

The million-dollar question marketers are asking themselves today is, how to reach out to the ethnic shopper as current marketing efforts including promotions and advertising do not work. Of particular interest is how to reach out to the Ethic millennial. The Millennial ethnic consumer wishes to fit in and the key is to be connected with them. They are savvy on social media:

  • 77% log into social media between 1-5 times per day.
  • 44% will follow a brand on Facebook.
  • The ethnic consumer will use YouTube to connect with the world around them.

Nielsen undertook a study entitled “Ethnic Consumers, How to Tap into Canada’s Unprecedented Growth Opportunity”. Their best practice tips for engaging multicultural consumers:

  1. Integrated marketing initiatives. Reach multicultural consumers where they learn and network in digital space and in languages that they speak.
  2. Identify cultural interests and behaviours. Understanding and activating multicultural consumers’ diverse eco-niches will pay dividends to savvy marketers.

 

The Impact for Small Business!

Visible ethnic groups are impacting grocery sales in Canada. Over the next 10 years, period ending 2023, about 70% of the growth in Canadian consumer spending will come from visible minorities.The choice is simple. Ignore this segment at your own risk or embrace them to reap unprecedented growth opportunities. The key is to research this segment, understand what motivates them and engage with them in dialogue. Do not rely on traditional marketing efforts. Embrace social media and identify the influencers for this segment. A recent study undertaken by influencer marketing platform MuseFind revealed 92% of consumers trust an influencer more than an advertisement.The power of influencers does not necessarily lie in their follower count, but in their ability to actually influence through authenticity and curation.

GROCERY WARS – “CONNECTNG WITH CONSUMERS ON AN EMOTIONAL LEVEL IS THE KEY TO SUCCESS”!

When CPG brands connect with consumers on an emotional level, there is in most cases a strong anticipated ROI. For instance, “Within a year of launching products and messaging to maximize emotional connection, a leading household cleaner turned market share losses into double-digit growth”. (The New Science of Customer Emotions, Scott Magids, Alan Zorfas, Daniel Leemon). Yet, despite success stories and today’s consumer having so much choice, many CPG companies are leaving money on the table by failing to connect with their customers on an emotional level. So, what is an emotional connection, what are the four steps to connecting emotionally, and what is the value of an emotional connection?

 

What is an Emotional Connection?Consumer Behavior

“Consumers Shop Rationally, They Purchase on Emotion”. These were the words of my branding mentor and instructor Mr. John Torella – Senior Partner with JC Williams Group. From my perspective, this sentiment is the first commandment of Branding.

An emotional connection is a bundle of subjective feelings that come together to create a bond between a consumer and a brand. An example of an emotional connection is that of a watch. Rationally, all watches tell time. Yet on an emotional level many consumers would not buy a watch from the Dollar Stores. The emotional connection is not as strong in a discount store as a watch purchased from a jewelry store.

 

Four Steps to Being Emotionally Connected

Companies that create and sustain an emotional connection with customers will reap strong financial benefits as consumers exhibit a strong brand loyalty. CPG companies that gain this advantage via emotional connection typically follow the following four (4) steps:

  1. They understand and comprehend the value of building their brand’s emotional connection.
  2. They identify the precise emotions that drive the most profitable customer and prospect behaviours. Brand investments are focused directly on these critical emotional drivers.
  3. They test and implement change to these critical emotion detectors.
  4. Monitor these emotional connections over time to ensure they are generating the highest return from their investments.

 

What is the Value of an Emotional Connection?

Emotional motivators vary across customer segments. What motivates one purchase from another is hard to distinguish because customers themselves may not even be aware of them.

Although brands may be liked or trusted, most fail to align themselves with the emotions that drive their customers’ most profitable behaviours. Brands that deliver a seamless customer experience at every touch point, whether in-person or online, and have little to no barriers to purchase are the ones that maintain repeat sales and loyalty. In a study undertaken by Mr. A. Zorfas and Mr. D. Leemon, they found customers whom they term “Emotionally Connected” generate anywhere from 30 to 100 percent greater annual value to the brand, than those customers who merely perceive the brands functional benefit.

 

Apple is a strong example of a brand that has an emotional connection with their consumer. In 2015, Apple’s new worth was $733B dollars. Seventy percent (70%) of their net worth ($513B) was attributed to unaided awareness, service satisfaction, loyalty, and advocacy purchase intent from their customers.

 

THE WORTH OF THE BRAND

 Feb 2017 Blog image


What is the Impact for Small Business?

With the CPG market as competitive as it is, brands – small or big can no longer stay relevant relying on products functional benefits and price promotions to connect with consumers. In the past, that would have proven difficult for small business. But yet, due to social media, this new technology has leveled the playing field for small business to compete with Brand icons. Those small brands that embrace social media, engage with their customers and connect on an emotional level with them will be the big winners. Those who don’t will be looking from the outside in and will keep asking themselves the same question, “Could I Have Become the Next Apple”?

 

 

GROCERY WARS – “FOOD WASTE IN CANADA – AN EPIDEMIC!”

With families feeling the pinch in their grocery bills, many are doing everything they can to save on foods; this includes, switching grocery stores to coupon shopping or opting for cheaper brands. Yet, many continue to overlook the one area that can have the biggest impact on their wallet, cutting waste. Food waste in Canada and around the world has become an epidemic. So, how much food do Canadians waste each year, what can families do to cut their food waste and how could better communications with respect to expiration dates be critical to success?

 

Food Waste is a Global Epidemic!

Globally, roughly one third of the food produced in the world for human consumption each year – approximately 1.3B tones is wasted annually. Food waste amounts to US$680B in industrialized and US$310B in developing countries. Globally North American and Oceania (Islands of the tropical Pacific Ocean) regions waste the most amount of food at consumption and pre-consumption stages as outlined in Chart 1.

 

Chart 1

Per Capita Food Waste, at Consumption and Pre-Consumption Stages (kg / year)jan-2017-blog-chart-1

How Much Food Do Canadians Waste?compost de restes

In Canada, $31B worth of foods ends up in landfills or composters each year. The average Canadian household waste $31 a week, that translates into $1,600 per year. A tragedy any way you look at it especially given close to 900,000 Canadians and 37% of those being children or youth rely on the assistance of food banks each month. Asked why so much food is wasted, the typical responses included:

  1. Food goes bad too quickly (57%).
  2. It’s past its expiration date (44%).
  3. Cooked too much (19%).
  4. Do not finish their meals (11%)

Chart 2 outlines how often families throw away food.

 

Chart 2

How Often Do You Throw Out Food?

jan-2017-blog-chart-2

What Foods are Most Likely to Get Tossed?

Fresh fruits and vegetables are the most commonly wasted food item in households. Surprising, as nearly three-quarters of consumers claim they have trouble affording produce. Chart 3 outlines the most commonly wasted food.

 

Chart 3

Most Commonly Wasted Food Items

jan-2017-blog-chart-3

What Can Consumers do to Reduce Food Waste?

Planning, prepping, and storing food can help households waste less food.

  • Planning: Simply making a list with weekly meals in mind can help households save money and time. Conduct an inventory of the refrigerator and cupboards to avoid buying food you already have.
  • Prepping: Prepare perishable foods soon after shopping. Freeze food such as bread, sliced fruit, or meat that you know you won’t be able to eat in time.
  • Storing: Research how to store fruits and vegetables so they stay fresh longer.

 

Communications with Expiry Dates is Critical to Success!

All parties involved in the food chain process play a role in reducing food waste. Better communications among all participants is critical, especially when it comes to expiration dates. Regardless of terminology utilized: “Best by”, “Enjoy by”, “Use by”, most consumers do not understand these are not expiration dates but suggestions as to when the product is at its freshest. Most food is often safe to eat days, weeks, even months after these printed dates.

A recent report from the U.S. Department of Agriculture suggests switching the phrase to “Best If Used By” would help reduce food waste.

 

Canadian Government Intervention – Beware!

Government intervention in private sector business usually translates into additional taxes for business and higher retail prices for consumers. Parties in the food chain process, beware. You have been put on notice. Though Canada won’t be serving up any food waste solutions for at least a year, “Food waste is part of the food policy that we’re going to deal with in the next year or two”. Agriculture Minister Lawrence MacAulay in conversation with CBC News, October 2016.

We all play a role in reducing food waste. Either we can act on our own initiatives or wait for Government intervention. The choice is ours to make.

 

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).

GROCERY WARS – “WINNING CUSTOMER LOYALTY IN THE AGE OF PRODUCT TRANSPARENCY”!

Higher product transparency is increasingly becoming a global business requirement for companies across multiple markets and industries. So what is the definition of product transparency with respect to the food sector, which consumer segment is driving this initiative and what does it mean for the brand?

 

What is Product Transparency?blog-pick-rb

Consumers are demanding value transparency when it comes to the packaged goods sector. Though the definition of
transparency has not been widely understood, a consumer survey defines a transparent brand as “One that provides all information about a food or personal care product to allow shoppers to determine for themselves if the product is a fit”. Chart 1 outlines the Top 5 factors that consumers use to determine whether a food manufacturer is being transparent.

 

Chart 1

Factors That Determine if Food Manufacturer is Being Transparent

chart-1-nov-2016-blog

 

 

What Consumer Segment is Driving Product Transparency?

Though most consumers today seek full product transparency, in particular it is the Millennial Mom who is leading this charge. Specifically, when it comes to food products, they want access to detailed product information in order to determine for themselves what food is healthy for them. In a recent study, Millennials Moms revealed it is 4x more important they understand the product ingredients of the product they wish to purchase than the brand they have chosen. Food safety, nutritional information and environmental impact are their greatest concerns. Chart 2 outlines the Top 3 ways consumers determine if a product is healthy.

 

 

Chart 2

How Consumers Determine if Product Is Healthy

chart-2-nov-2016-blog

 

The Demand for Product Transparency!

The demand for product transparency evolves around:

1. Consumers trust in brands and

2. Consumers’ dietary needs.

 

A recent study revealed 35% say they are sometimes confused by what the labels on the food are actually saying and in the process is losing faith in brands. In the same study, the majority of consumers (81%) revealed they had consumed a packaged product with an ingredient they did not recognize in the past month. In addition, 53% of the respondents revealed they shop according to a specific diet.

 

Evolution in the United States!

In the United States DigiMarc has created a technology driven mobile engagement barcode for food manufacturers. By scanning this code, consumer can access all relevant information with respect to a products ingredient. For example, Unilever, a strong supporter of this new technology now allows consumers who purchase Hellman’s mayonnaise to learn what US state provides the soybean for this product.

 

Product Transparency, The Opportunity For Food Brands!

Woman Buying Sandwich From Supermarket

Brands that understand these evolving behaviours and successfully address the need for greater product transparency and increased consumer access to information will be poised to increase their market share. According to acomprehensive new survey from Label Insight, they revealed,

  1. 94% of shoppers will be loyal to a brand that offers complete transparency.
  2. 73% would be willing to pay more for a product that offers complete transparency.
  3. 39% more likely to switch to a brand if it offered full product transparency.

Brands that embrace this initiative will reap the rewards. Those who don’t will continue to look from the outside in – trying to get listed in the grocery sector.

 

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).

 

GROCERY WARS – EMBRACE CANADA BRAND IDENTITY

Much has been written about how patriotic Canadians are. I feel most Canadians would agree our friends to the south are extremely more patriotic, especially when it comes to Thanksgiving and July 4th. To that, an Ipsos Reid pole conducted for the Historica-Dominion Institute in the days leading up to the Canada Day long weekend a couple of years ago suggest the Canadian sense of national pride is becoming an in-your-face swagger. What isn’t up for debate though is Canadians love for our national flag that is viewed as our most popular national icon. So how patriotic are Canadians when it comes to the food sector and the impact for small business?

Canadian ConsumerMade in Canada barcode. Vector illustration

Though we may not be as patriotic as our friends to the south, research reveals the majority of Canadians (92%) make it a point of buying Canadian brands and products. The top product that Canadians are most likely to purchase from Canadian producers is food (87%). Consumers purchase Brand Canada to support the economy and help keep jobs in Canada. Despite consumers desire to purchase Brand Canada, there is a strong perception most small business do not embrace this identity, may be similar in nature as to why they don’t have a website (41%).

Agriculture Canada’s Canada Brand Program

In 2010, Agriculture Canada introduced their Canada Brand program. The objective was to provide food manufacturers and the Canadian food and agriculture industry with a competitive advantage, internationally and at home. The branded program consists of a Canadian flag with the following tag line: “Quality Is In Our Nature”. Oh I forget to mention, there is not cost to becoming a member. Research reveals that consumers associate the Canada Brand with safe, high-quality products. For more information visit: http://www.marquecanadabrand.agr.gc.ca.

Impact for Small Business!

In the Canadian food sector, very few small Canadian food icon businesses remain. The last of the remaining few maySilvana Comugnero Kanadese dollar   Kanadan dollari Dlar canadiense have being Renee’s Gourmet Salad Dressings. What commenced as a family business with bottles of their homemade dressing given away as Christmas and Hanukkah gifts to friends and family came to an end when purchased by Heinz Canada. Today, multi national food giants control most of the brands in their categories. That is not to say small food brands cannot be as successful as Renee’s. As noted by Shawn O”Neil – Vice President, Global Marketing and Analytics, Unilever:

“I am not losing market share to P&G and other CPG companies. I am losing it to small players who are finding niche products”.

It is already tough enough competing with global food giants in the Canadian food sector. This program was designed to provide small business with a distinct advantage over these global food giants. A Win Win solution for small food manufacturers!

So, are you a Canadian food based business unwilling to take advantage of this program? If you are, I have one question for you, Why?

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).

GROCERY WARS – EMERGENCE OF THE MILLENNIAL CONSUMER

Much has been said about the emerging millennial consumer and the impact they will have on food sales. Were you aware this generation makes up the bulk of Canada’s work force today? In fact, this is the same group that is known to have played a major role behind the resounding Liberal Party’s victory in Canada’s 2015 Federal election. So who is this consumer, why are they so important and how best to engage with them at the point of interaction?

The Millennial Consumer!

Millennials are the demographic cohort following Generation X. Most researchers and commentators use birth years March 3 '16 blogranging from the early 1980’s to the early 2000’s to define them. Today, they are typically between the ages of 18 to 35 years old, and in 2013 they represented 27% of the Canadian population. Though they have traditionally been regarded as young upstarts barely out of their teenage years, they are rapidly moving solidly into their child rearing years. According to Statistics Canada, there will be a 5% increase in the number of children aged 4 and under and an 11% increase in the number of children between 5-9 between 2014 and 2019. Don’t be fooled. This particular consumer sector is well educated. According to a study from the Princeton, N.J based educational testing service in 2014; Canada had the world’s third-highest level of educational attainment after South Korea and Japan. In fact some 56% of the millennial population that year had a post high school education level.

Millennials – Their Buying Power

In the United States, the estimated buying power of the millennial is approximately $200B of direct and $500B of indirect spending. Utilizing the 10% rule for Canada, their estimated buying power is $70B dollars. By 2020, it is estimated their food at home spending will increase $5B annually. With food inflation rates soaring in Canada, millennials seek out grocery stores that offer them the greatest value for their dollar. In fact, some 76% of millennials claim to shop at stores that can offer them the lowest price. A recent report by BMO Economics suggests that young Canadians between the ages of 25 to 34 years old are on average richer than their parents at that age. In 2012, the net worth of households headed by someone aged 25 to 34 was $52,000.

Millennials – Their Life Style

The millennial consumers embrace healthier lifestyles. In fact, 49% of them claim living a healthier lifestyle to be one of their key goals and aspirations over the next 3 years. From a food manufacturers perspective, the top 4 aspects of the brand that drives there purchase choice includes:

1. Ingredients -75%

2. Freshness -73%

3. Flavour – 65%

4. Nutrition content / labeling – 62%

Millennials – Points of Engagement!

Brands that speak to millennials cultivate an authentic feel in their brand messaging. As they are at the leading March 3 '16 blog 2edge of mobile and social media, traditional advertising does not influence them. The top 3 most influential brands for them include: Google, YouTube and Face Book. Millennials wish to fit in and the key is to be connected. They wish to engage with brands on social networks and expect brands to give back to society. To gain their attention and loyalty, the key is for manufacturers to show they appreciate them and their business as:

1. 41% like brands that ask for their opinion

2. 50% buy products from companies that understand them and what they require

3. 47% buy products from companies who care what they think.

This is an emerging consumer sector business must embrace yet struggle to connect with. Branding is now a dialogue, not a monologue. Embrace this notion and engage in a conversation with them.

So, is your brand targeting this emerging sector and do you have a strategy to engage with them?
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)