GROCERY WARS – “THE RISE OF THE DISCOUNT RETAILER”!

As I grew up it was it was not uncommon for my Mom to go grocery shopping at our local Dominion, A&P or IGA. Oh, how times have changed. First, these 3 iconic grocery banners have been bought out by Metro or Sobeys (note: IGA franchisees exist in Quebec) and second most consumers are now grocery shopping at their local discount grocery retailer. Most consumers are familiar with the Big 6 that includes, No Frills, Food Basics, FreshCo, Walmart, Costco and Dollarama. Yet, there are 2 European discount retailers on their way to North America who are projected to fundamentally change the grocery landscape as we know it. We invite you to join us as we discuss and provide further insights into the rise of the discount retailer.

 

The Change in the Grocery Landscape

The economic downturn in 2008 was a global occurrence that was felt by all consumers. Many   in the private sector Grocery Coupons In A Glass Jarlost their jobs, had their salary frozen or in certain cases cut back. As such, consumers were forced to scrimp and save, with food being at the top of their list. During this period, consumers went into frugality. Though the economic news is much better, as noted by Mr. Carman Allison, Nielsen, “I think a lot of consumers during the recession found ways to cope, and consumers have stuck with those habits”. The consumer quest to save is defining retailer trends with:

  1. 73.0% of consumers trying to spend less on groceries.
  2. 42.0% of consumers shopping more at discount retailers.

Today, nationally, 42% of all food purchases are made through discount retailers. In Ontario that number is a staggering 50%.

 

Retail Price is King

“The Canadian economy is rough and tumble, and it’s not going to get better for a while, so consumers will be even more frugal in 2017” – Bruce Winder – Retail Expert in December 2016 interview with CTVNews,ca. A Nielsen study reveals grocery shoppers continuing to push to find the lowest price is like a migraine that won’t go away. As part of their study it shows:

  1. 63.0% of shoppers decide where to shop based on the lowest price.
  2. 41.2% of dollars spent with a promotion or price cut. (+0.5%).

Prior to the recession, 27% of all grocery items were sold with promotion or price cut.

As consumers look to save money, retailers are positioning themselves as the lowest price option. Consequently, retailers are looking to adopt an EDLP (Everyday Low Price) strategy in an effort to set themselves apart from their competitors. In fact, lower regular prices are shifting the growth mix within CPG as outlined in Table 1.

 

Table 1

Lower Regular Prices Shifting Growth Mix in CPG

Table 1 June 2017 Blog 

Consumers continue to seek ways to save a dollar. They include, stocking up on items when on sale (referred to as pantry loading) to studying flyers, promotions and discounts before their shopping trip. Table 2 outlines how each consumer segment goes about to save a dollar.

 

Table 2

How Consumers Save a Dollar When Grocery Shopping

Table 2 June 2017 Blog

The No Frills chain of grocery stores recently launched a major marketing campaign as part of their marketing strategy (No Frills for You) heralding the notion that shoppers don’t require “frills” such as fancy displays, product sampling or in-store entertainment. They only want low prices.

 

Canadians Preferred Choice for Grocery Retailer

This past year, Brand Spark International (consumer insights research firm) undertook a study to ascertain, Where Do Canadians Shop for Food and Beverage Products? Across all consumer segments 4 of the top 5 preferred banners as outlined in Table 3 were discount retailers.

 

Table 3

Where Do Consumers Shop for Food and Beverage Products

Table 3 June 2017 Blog

 

No Frills are forecasted to grow at more than a 5% compounded annual growth rate through to 2019.

 

Discount Banners Stealing Market Share

With the consumer shift from conventional grocery to discount, the discount banners continue to increase their market share at the expense of their counterparts as outlined in Charts 1. Table 4 breaks down discount market share by banner.

 

Chart 1

Grocery Channel Market Share

Period Ending April 1/ 2017

Chart 1 June 2017 Blog

Table 4

Discount Market Share by Banner

Period Ending April 1/ 2017

Table 4 June 2017 Blog

In the past 5 years dollar stores have made large gains in penetration, sales and shopping trips. They now represent $1.7B in CPG annual sales. They are also shopped by three-quarters of Canadian households. Of interest, dollar stores are gaining momentum among higher income families with 24.4% of their sales coming from households with incomes of $70,000 to $100,000.

 

New Competition on The Horizon

Mass disruption from discount retailers in Europe could be on their way to Canada. Aldi and Lidl are two German discount supermarket chains with 20,000 locations. Between 2003 and 2013, Lidl and Aldi grew from 8,000 locations to their present number. In Germany, their combined market share of the grocery sector is 50%. In the UK, their same-store sales are growing at a staggering rate of 30%.

Senior grocery executives in the US have begun paying attention to the European discount threat as Aldi already has 1,500 locations and accounts for about 4% of the grocery market share. Lidl has plans to open as many as 600 stores in US. The first 20 will open this summer and they plan to add another 80 stores along the East Coast by mid-2018. They are promising prices that are in some cases half those at existing supermarkets.

Fred Thomas Dupuis, partner in retail at Oliver Wyman Canada predicts “They will come to Canada in due course”. Lidl the largest grocer in Europe, has opened stores in 28 different markets and they have proven they can operate well in very diverse markets. Catherine Saul, Toronto based retail strategy consultant feels “We are not a big enough market for Aldi and Lidl  to come to Canada right away”. “Probably the more immediate threat to Canadian grocers is Amazon”. This past year Amazon opened a small physical store that could be the future of grocery shopping (Amazon Go), in which one walks in, collects their purchases from the shelf and walk out – all without ever needing to line up to pay or check out.

 

Impact for Small Business

The rise of the discount banner is one small business must take into consideration recognizing:

  1. They must have a true understanding of their ideal consumer and understand what banners they shop at.
  2. They must come prepared to support their brand internally with promotions and price discounts.
  3. Does their brand identity support distribution with discount retailers? If no, they must be prepared to adjust their sales forecast and product inventory.
  4. They must have an e-commerce strategy. Though it only accounts for 0.8% market share in Canada, Walmart and Loblaws are emphasizing this channel as a way to combat Amazon.

For assistance in 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 – “MEAL KITS – THE NEW PHENOMENON”!

The evolution of dual careers has given rise to our ever-escalating “on-the-go” lifestyles. With both Husband and Wife enjoying full-time careers, this leaves them little time to plan for their evening dinner. This has given rise to the new phenomenon in the food sector – Meal Kits. So, what is a meal kit, what is this sector worth, which consumer segment is driving their growth and what has given rise to this new sector?

 

Meal Kit

A new comer to the Canadian food scene, a meal kit offers fresh, portioned and packaged food, all the ingredients destination-dinnersrequired to make a meal in one handy kit. The consumer follows the recipe provided and cooks it. In most cases, it is delivered to the subscribers’ door. The success of this service is drawing a small but noticeable bite of business away from traditional supermarkets.

Unlike frozen foods that also fundamentally changed how people cook at home, consumers equate fresh, not frozen meals to being healthier and better for you.

 

Meal Kit Market Growth

The meal kit trend commenced in the U.S. around 2012 and has expanded globally. In the UK, companies that deliver meal kits are gaining traction, growing by nearly 65% in the first half of 2016, compared with the same period in 2015. Globally, meal kit sales are forecast to top $10B dollars by 2020. In the US, meal kit sales topped $1.5B dollars in 2016.

 

Meal Kit Pricing

Though meal kits have become more popular over the years, they remain a relatively niche part of the food sector. They are not for the faint at heart. In the U.S, the majority of meal kits cost $60 to $75 a week for 3 meals for two people or $130 to $150 a week for four meals for four people. This compares to an average cost of $4 a meal when cooking at home and $10 a meal when ordering at a restaurant. In Canada, Rose Reisman’s Personal Gourmet service deliver meals     at about $14 a plate.

 

Consumer Sector Driving Meal Kit Sector

Though meal kit pricing would seem to align with well – educated households in which both parents hold senior level management roles and incomes well above the family norm, research reveals meal kits also appear to align strongly with Millennials between the ages of 18-35 and even consumers 70+.

 

Popularity of Meal Kits

More and more Canadians are spending less time cooking meals from scratch at home and increasingly turning to the convenience of meal kits. The NPD Group suggests 75% of all meals are now typically prepared in 15 minutes or less as Canadians rely on more shortcuts in the kitchen. In the U.S., 1% of all food spending now goes to meal kits, with close to 20% of the U.S. population (50M consumers) having an interest in trying a meal kit. Of those who have tried the kits, 67% were either extremely or very satisfied with their purchase, per The NPD Group.

 

The Rise of Meal Kits

The meal kit has filled a major void in consumers lives. They offer an easy to prepare meal, which saves time and requires little meal planning and tastes homemade. Rightly or wrongly, many consumers also consider meal kits to be a way to eat healthier foods. Harris Insights & Analytics, is a market research firm, known for “The Harris Poll”. They recently concluded a study of the meal kit sector and identified the Top 5 reasons why consumers purchase meal kits as outlined in Chart 1.

 

Chart 1

Top 5 Reasons Why Consumers Purchase Meal Kits

Chart 1 May 2017 Blog

 

The immediate future for meal kits is divided. Whereas some analyst believes that high prices for meal kits will discourage consumers once the fad dies down, others see the segment as a lucrative business opportunity that will only broaden in the years ahead.

 

The Impact on Supermarkets

Canadian supermarket chains are in the midst of flat sales growth. For February 2017, food and beverage store sales in Canada increased .5% (J.C. Williams Group National Retail Bulletin). Though an extremely niche market, meal kits are another source of food for consumers, and this “share of stomach” battle is directly targeting grocery retailers and restaurants. Canadian supermarkets must embrace this new sector or be left behind. In a recent study cited by Technomic,

  1. 54% of consumers indicated that they would cut back on grocery purchases if they signed up for a meal kit delivery service.

In the UK, research also reveals:

  1. Consumers who utilize meal kit services spend 2.8% less at Supermarkets, and
  2. The same consumer also spends 2.2% leas on eating out at restaurants.

 

Grocery retailers can do well in this space. Today’s consumers want convenience more than ever, and picking up a retailer-branded meal kit at the end of a shopping trip is an easy way for them to quickly get dinner on the table.

 

Impact for Small Business

Small business should concentrate on the new niche markets and less on those well-established categories. Meal kits is a new niche market and an area in which they could offer an array of difference from the big CPG conglomerates. Even home goods guru Martha Stewart is getting on the bandwagon. This market is viewed by most as a trend, not a fad. Small business must think out-side the box to be different, and this sector represents out-side the box thinking.

 

For assistance in 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).

 

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GROCERY WARS – “THE EMERGENCE OF THE PLANT BASED FOOD SECTOR”!

Plants have been a staple household item for many years. Yet a different plant sector is emerging with consumers – Plant Based Foods, a sector that for the past two (2) years has been identified as a food trend to watch for. So, what is plant based food, what are category sales, what are the four (4) consumer trends driving the rapid rise of this sector and what are some associated health benefits to the consumer?

 

Plant Based Foods

Plant based foods are foods that are derived from plants including vegetables, whole grains, legumes and fruits. A plant based food diet consists of these items in addition to excluding or minimizing meat (including chicken and fish), dairy products, and eggs, as well as highly refined foods like bleached flour, refined sugar, and oil.

 

Plant Based Food Category Sales??????????????????

The plant based food category in the US exceeds $5B in sales annually. The Canadian category is estimated at between $450 – $600 million dollars. The US market grew 3.5% in 2016 and outpaced the total food and beverage industry by close to a 2:1 margin. Economic activity in the plant-based foods industry leads to sales of $13.7 billion a year throughout the U.S. economy.

The plant based market is driven by refrigerated and frozen non-dairy beverages, meat alternatives and tofu and cheese alternates, that collectively account for more than 90% of sales.

Chart 1 outlines plant based food sales.Cheese alternatives are the fastest growing sector in the category with 31.4% growth.

 

Chart 1

Plant Based Category Sales – US, 2016

April 2017 Blog Image Chart 1

Smaller categories contributing to growth include: meat alternative dishes, yogurts, meatless jerky and snacks, other dairy alternatives and vegan mayonnaise and similar products. In the US, introductions of new products with plant based proteins grew 14.7% in 2014.

Though traditional retailers account for the bulk of the sales volume, specialty and natural channels in the US are posting the fastest growth for plant based foods, up 6.8% and 11.6% respectively over the last year.

According to Mintel, 36% of consumers in the US buy plant-based meats. In Canada, a 2015 survey conducted by the Vancouver Humane Society and administered by polling company Environics “revealed that 33 percent of Canadians are either already vegetarian or are eating less meat. Seeking to capitalize on this new sector, Maple Leaf Foods recently signed a definitive agreement to acquire plant-based protein brand Lightlife Foods, Inc

 

Four Consumer Trends Driving Growth of Plant Based Foods

The steady growth of the plant based food sector is a reflection of more consumers shifting away from animal products towards plant based options. Consumers have become wary of red meat varieties because of environmental or animal rights concerns and view plant based alternatives as cleaner, more nutritious than red meat and dairy products.

Here are the four (4) consumer trends that are fueling plant based sales:

  1. Drop in Meat Consumption: Concerns about animal cruelty and the use of hormones and antibiotics has resulted in a decline in meat consumption. Since 1999 and ending September of 2015, Canadians consumption per person of pork and beef has declined 31% and 19% respectively.
  1. Drop in Dairy Consumption: Fueled by evidence of animal cruelty, Canada’s changing demographic profile and consumers’ perception of dairy’s nutritional value, per-capita consumption of milk in Canada has declined 18% to 74 litres a year between 1995 and 2014.
  1. Values Based Shopping: Consumers seek to purchase brands that have an authentic mission and a positive social and environmental impact. According to Nielsen for the 12-month period ending September 2015, sales of consumer goods from brands with a demonstrated commitment to sustainability grew more than 4% globally, while those without grew less than 1%.
  1. Power of Millennials: Millennials are one of the most powerful consumer groups in Canada. In 2014, they accounted for 37% of the work force. As a group, they recognize their food choices have a real impact on society and the environment. One in 10 is a vegetarian or vegan and they are at the forefront for the increased demand in plant based food options.

 

Perceived Health Benefits Associated with Plant Based Foods

The thought of life without steak or barbecued chicken may not sound appealing. Fortunately, consumers don’t have to make an either / or choice, A strong body of research suggests just making a shift to more plant based foods can offer significant health benefits. Some of the perceived benefits includes:

  1. Reduced blood pressure.
  2. Reduce the risk of heart disease and Type 2 diabetes.
  3. Help maintain a healthier weight.
  4. May lengthen lifespan.

It is never too early or late to embrace a healthier lifestyle. The benefits come quickly and continue to accrue with age.

 

The Impact for Small Business

Plant based category sales are outpacing the total food and beverage industry. This sales data provides evidence that plant based proteins may be here to stay. In today’s market innovation is critical and a key aspect as to why sales for smaller brands in the US are outpacing the growth of larger brands. Given most larger brands do not offer plant based food as part of their portfolio, business seeking to get into the food sector may wish to embark on a journey into this category. In fact, in the US the Plant Based Foods Association (www.plantbasedfoods.org) was established last year to advocate for better policies to meet the growing consumer demand for plant based foods.

 

For assistance in 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 – “DOLLAR STORES – THE EMERGING FOOD RETAILER FOR CONSUMERS”!

The popularity and growth of Dollar Stores in this country is a story for the ages. First introduced into the Canadian market more than 30 years ago, selling discount greeting cards and gift wrap, today they have become Canada’s fastest growing grocery channel. So, who are Canada’s leading Dollar Store chains, why have consumers turned to Dollar Stores, who is their typical shopper, and what growth have they achieved in the food sector?

Canadian Dollar Store ChainsShopping

Canada’s leading Dollar Store chain is Dollarama. September 2014, they operated over 900 stores. Their expansion plans include 70-80 new stores per year with a goal to operate over 1,200 retail outlets. Their main competitor is Dollar Tree, a US based firm with over 13,000 retail outlets. Presently operating 200 stores in Canada, their expansion plans are to operate 1,000 stores. Dollarama currently controls 60% of the Dollar Store market share.

 

Decline in Consumer Spending Leads Consumers to Dollar Stores

Canadian families are increasingly becoming cash strapped as they have seen their personal finance situations deteriorate the last couple of years. A new study suggests nearly one-quarter of Canadians are worried about how to pay for groceries, with more than 50 percent shifting their shopping habits amid fluctuating food prices.

Nielsen’s study entitled “What Makes the Consumer Tick”, identified consumers top 3 concerns as:

  1. Economy: Canada has become a part-time job creation nation with stagnant wages.
  2. Food prices: Food prices have increased steadily over the last couple of years.
  3. Utilities: Electricity prices, specifically in Ontario are among the highest across North America.

As part of the same study, Nielsen segmented the consumer into 3 different shopper categories. Their research revealed “Canadian Spending Power in Decline”. Table 1 breaks down the shopper segments and the decline in their shopping power over the past 5 years.

 

Table 1

Canadian Shopper Segments

dec-16-blog-pic-1

The consumers quest to save is defining retail trends.

dec-16-blog-pic-2

Seeking ways to reduce their food bills, consumers have turned to Dollar Stores. Today Dollar Stores household penetration level is 76.3%. Their household penetration level in 2011 was 72.3%.

 

Dollar Stores Shopper Profile

Though Dollar Stores continue to skew to lower income households, they are starting to gain greater prominence with higher income households. In the US, +40% of Dollar Store business comes from households with incomes of more than $70,000. Table 2 breaks down the Canadian Dollar Stores shopper profile.

 

Table 2

Dollar Stores Shopper Profile

dec-16-blog-table-2

Dollar Stores Growth in Food

Dollar Stores CPG sales growth is 10%, tops in the grocery sector. Today food now accounts for over half of Dollar Store CPG sales. Table 3 outlines Dollar Stores product mix.

 

Table 3

Dollar Store Product Mix

dec-16-blog-table-3

Though Dollar Stores sell products at various price point, those units priced between $1.00 – $1.99 still account for over half of all units sold. Table 4 breaks down their sales by price point.

 

Table 4

Unit Sales by Price Point (Average price per unit)

dec-16-blog-table-4

 With consumers purchasing more food from Dollar Stores, their forecasted market share of the CPG sector is anticipated to reach 1.9% by 2020. Chart 1 outlines Dollar Stores CPG market share growth since 2011.

 

Chart 1

Dollar Stores CPG Market Share

dec-16-blog-chart-1

Dollar Stores – The Opportunity for Food Brands

Dollar Stores as a potential distribution channel for food brands can no longer be dismissed. They have arrived and overtaken the destination place for many CPG consumers. Those brands who embrace this channel will come out ahead in the long run as today’s economy continues to sputter along. Do not dismiss them just to shelf stable foods. Though not available now, milk and cheese may become the next food categories to enter this channel as they have in US. Skeptical! Who ever thought Drug Stores would sell milk, cheese and frozen foods?

 

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 KOSHER CERTIFIED MARKET!

Like a stealth plane that can fly virtually undetected, the Kosher food market has carved a significant niche for itself with little or no fanfare. So exactly, what is Kosher, how big is the market and what are the implications for food brands? This week I had the pleasure to interview Mr. Kalman Emanuel – MK to answer these questions and to understand the importance of it to society as a whole.

 

What is Kosher?Delicious kosher food, 3D rendering, blue street sign

Kosher is much more than responsible food preparation. “Kosher refers to a set of intricate biblicals that detail the
types of food that a Jewish person may eat and the way in which it may lawbe prepared”. Mr. Kalman Emanuel.

For the product to be certified Kosher, all ingredients in every product and the process of preparing the product must be certified for Kosher compliance. Health and cleanliness are hallmarks of Kosher food.

 

Kosher Food Sector

The demand for Kosher-certified products has increased dramatically and is currently one of the hottest food trends globally. The global Kosher market was projected to top $300B by 2013, fostered by an annual growth rate of 15%. In Canada, Kalman Emanuel estimates the Kosher market is an over $2.8B sector, which represents an increase of up to 12% over two year period. Within North America supermarkets (Canada / US), Kosher products are becoming increasingly available and currently represent up to one-third of all products offered by supermarket chains.

 

Market Appeal for Kosher Products

There is strong market appeal for Kosher products. The top reason why Kosher is being purchased is due to the perceived quality of the product and for health reasons, and not for Kosher dietary restrictions. Chart 1 outlines the Top 5 reasons consumers purchase Kosher products.

 

Chart 1

Reasons For Buying Kosher

chart-1-kosher-article

 

Research suggests consumers not of the Jewish or Muslim faith are fuelling the demand for Kosher products. A new report by a leading “consumer intelligence” firm has found that as many as 28% of Americans buy Kosher food products because they are Kosher. Chart 2 outlines the Kosher consumer and reveals the theory that Kosher products are only consumed by the Jewish / Muslim community are misguided.

 

Chart 2

Kosher Consumer

chart-2-kosher-article

 

The demand for Kosher products is solidified by Kosher Fest, the world’s largest and most attended Kosher-certified products trade show in which more than 6,000 industry professionals are expected to attend, and more than 325 exhibitors will feature Kosher-certified products and services for the Kosher market.

 

Kosher Certification Process

The business of becoming Kosher remains tightly regulated by certification agencies. MK (www.mk.ca) has established themselves in Canada as the leading player responsible for the certification of Kosher food products. As per Kalman Emanuel, “Certifying a product Kosher tells the consumer that the owners of the product or establishment take their customers very seriously. The bottom line is that the company’s growth is upgraded and enhanced, with everyone – owners and purchaser’s benefiting”. Those firms that receive MK’s certification are allowed to feature the MK logo on their packaging.

 

Implications for Food Brandskosher

The Kosher food market has yet to become mainstream, and remains a niche category. The limited supply of Kosher products in retail outlets also provides notable opportunity for ingredient suppliers and manufacturers of Kosher products. Kosher products appear to be a lucrative market opportunity; particularly as Kosher consumers spend significantly more (50%) than average consumers.

 

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 – MARKETING TO THE MILLENNIAL MOM!

The Millennial Mom has arrived and manufacturers and grocers should take note. Entering their third decade and commencing their own families, these moms are reshaping the way brands reach out to them. So who is this mom, and how do they shop?

 

The Millennial Mom

The Millennial Mom is defined as being between the ages of 18 to 32 years old. Often burdened by student debt and high mortgages, they are forsaking the downtown core for the suburbs where housing is more affordable. In 2014, the Millennials became the largest generation in the Canadian work force.

Millenial mom - image 1

 

A few quick facts about them:

  • On average 77% of babies born in Canada are to Millennials
  • 28.5 is the average age for first time moms with 85% of them having 1-2 children
  • They are extremely well educated. 88% are university or college educated

Millenial mom - image 2

 

Where and How Does Millennial Mom Shop?

Grocery Business and Parents Life Network recently undertook a research study on this influential segment. Despite a wide variety of grocery formats in Canada, only 18% of Millennial Moms feel that grocery stores are geared towards people like them. So where then do they shop? Fifty two percent (52%) of Millennial Moms indicated they discount shop more often since having children and seventy one percent (71%) shop at stores with consistently low prices. Overall, they spend $100 Million monthly with discount shoppers, with Walmart being there preferred destination the past month.

Millenial mom - image 3

 

They are also more likely to engage in nearly every online shopping activity, with 33% of females saying they would buy everything online if they could. Despite their money saving strategies, Millennial Moms still outspend the average Canadian family by $30 / month.

Millenial mom - image 4

 

What Millennial Moms Seek When Shopping

Like most Canadians, Millennial Moms wish to eat healthy and are purchasing quality ingredients at the lowest possible price. In fact, 80% of their food budget is spent on fresh foods for prepared meals at home. So what do they seek when they go shopping? The top 5 items include:

 

  1. Competitive prices
  2. Fresh produce
  3. Product selection
  4. Convenient location
  5. Customer service

These items correspond to how their shopping priorities have changed since having children.

 

% Millennial Moms Who Are Shifting Shopping Priorities

Now That They Have Children

Millenial mom - image 5

 

Millenial mom - image 6

 

How to Engage With Millennial Moms

The Millennial Mom is digital savvy as they reshaped the way brands reach out to them. For those brands that seek tohappy woman with basket and smartphone in market talk with them, according to a study by web and mobile platform Baby Center, mobile is the place to find them. Not only do they spend 47% more time on their smartphone than Generation X moms, over the past two years, their time spent on a smartphone doubled, whereas time spent on their PC / lap top has declined.

They rely on their phones when looking to make a purchase. Seven in 10 use their smartphone while shopping in-store, allowing them to search for recipes (48%), text photos or videos to friends and family, to ask their opinions (48%) and read product reviews (46%). Fifty eight percent (58%) also say that they pay attention to ads that are relevant to either their life stage or that of their child. Millennial Moms are also strong users of Facebook, Instagram and Pinterest.

 

Implications for Food Brands

Brands must engage in conversation with Millennial Moms. The key for marketers is to clearly illustrate how their brand’s core values correspond with their own and acknowledge their input and influence. The reward is there for marketers. Not only are seventy percent (70%) of Millennial Moms more likely than the general population to endorse a brand to friends and family, sixty eight percent (68%) of moms say posts from another mom are more influential than brand posts.

 

Final Thoughts

The shift in the Canadian work force has occurred. It is now time for brands to shift their grocery marketing to better align with this important generation of Moms. For those brands that do, there is a reward at the end of the rainbow.

 

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 – 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:fbo-logo

  1. Mr. C. Haney – Director of Corporate Innovation – Communitech
  2. Mr. D. Bricker – CEO – IPSOS Public Affairs
  3. Mr. J. Scott – Past President of CFIG

Outlined below is a synopsis of the topic each gentlemen discussed.

 

  1. 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.

 

  1. Mr. D. Bricker:

Innovation and The New Canadian Food Consumer

 

  • The forces of change are creating a new Canada

 

  • The old Canada:3D Canada Flag
    • 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”

 

  1. 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:
    • Twitter
    • Facebook
    • Instagram
  • 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).

GROCERY WARS – EMERGENCE OF THE MALE GROCERY SHOPPER

For years, the primary family grocery shopper has usually been the female head of the household. No surprise,
especially in the 60’s and 70’s, when most women were stay at home moms. Yet, as women have forged their own careers, to the surprise of many, there hasn’t been more emphasis placed on the male grocery shopper. Should marketers not seek out this shopper?  They do represent 50% of the Canadian population. So why has the male shopper become so prominent in the grocery store and what are their shopping habits?

 

Emergence of the Male Grocery Shopper

The male grocery shopper is out of hibernation. Mintel Global Research estimates approximately 40% of household men have taken over the responsibility for grocery shopping. When you factor in the 20% of households in which it is a shared duty, 60% of the Canadian households in Canada have men who either have a primary or shared responsibility for grocery shopping in the household. So why are men playing such a predominant role in grocery shopping? Outlined below are a couple of theories:

  1. Growing number of single person households in Canada due to later marrying ages and high divorce rates.
  2. Men are taking a larger role in the management of the household. Today 12% of the households have a stay at home dad.
  3. Baby boomer males – 45% claim to have primary responsibility for grocery shopping.

 

How Frequent Does the Male Visit a Grocery Store and Where Do They Shop?

Men and women both love to go grocery shopping. Both genders average close to 15 visits a month. To many people’s surprise, the male shopper goes grocery shopping 2x / week – 65% of the time as compared to 58% of the time for women. They are also more inclined to shop the club, convenience and online channels in part because these channels allow them to quickly purchase what they require.

 

Grocery Shopping Frequency

June 1 '16 blog image

Insights into the Male Shopper!

Though men and women tend to shop as often on a weekly basis, research studies over the years have identified there are a few differences between how men and women shop.

  • Men are less inclined to prepare a shopping list.
  • Men grocery shoppers prefer a grab-n-go approach. 60% of men wish to get in and out of the store as quickly as possible.
  • Men are less inclined to make impulse purchases.
  • Men are less price sensitive; consequently, they are less likely to be motivated by discounts and promotions.
  • 50% of men prefer a one-stop-shop more than the lowest price.
  • Men are more interested in quality food, artisan products and ethnic flavours.

 

Implications For Small Business 

Business can no longer only gear their marketing strategies to attract the female shopper. The male shopper has arrived. As they are less price sensitive, business will be forced to concentrate on their brands point of difference as opposed to just relying on price reductions and promotions to drive volume. In today’s grocery economy, a brands point of differential is key.

So, does your business have an understanding of the male shopper? Do not ignore them as    this could mean the difference between success and failure for your brand.

 

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 DISCOUNT SHOPPER

In 2009, Canada and the global markets encountered a recession that resembled the great depression of the 1940’s. Though jobs were lost and many private sector employees had their salaries frozen or cut back, out of all G7 countries, Canada weathered the storm the best due to our strong banking system. During this same period, the traditional grocery sector encountered turbulent times. In fact, over the past 5 years, their market share has declined by 7% as club, mass and discount banners continue to make in-roads into the traditional grocery sector. Through this period, the “Discount Shopper” has emerged. Who are these consumers and why the shift in their purchasing habits and what is the implication for small business?

Emergence of the Discount Banner

Through Brand Spark’s 2015 Canadian Shopper Study, they found 1) consumers were seeking the greatest value for coins-1015125_640their dollar, especially when it comes to household food consumption and 2) discount banners are rapidly picking up market share. Why the emergence of the discount banner? Outlined below are a few thoughts as to why.

  • Increased competition from Walmart, Costco
  • Surge in grocery prices. In 2016 Canadian families will be spending on average $700 more for household groceries than they did in 2014
  • The overall state of the Canadian economy – GDP growth less than 2% annually
  • Rising electricity prices in Ontario. Among the highest across North America

The chart below highlights, which channel the store shopper, has shopped the most for their food and beverage purchases.

Store Shoppers Shop Most Often For Food & Beverage, 2011 – 2014

Discount Shopper Chart 1

 

During the 3-year period ending 2014, discount banners have increased their market share at the expense of traditional grocery.

 

The Discount Shopper and What Do They Seek

As part of a separate study, Brand Spark identified the discount shopper as

  1. 50+ years old – 49%
  2. Married – 54%
  3. Empty nesters – 55%
  4. Have one of more children at home – 42%

Though they seek the lowest everyday prices, they also seek a retailer with close proximity to home.

 

What is the Discount Shopper Looking For?

Discount Shopper Chart 2

How Does The Discount Shopper Shop?                                                        

The Discount Shopper keeps a tight budget on household purchases, especially food. To help them cut costs, manyshopping-879498_640 make lists or turn to flyers. A study by research group ledger reveals a few other common shopping behaviours:

  1. Before buying groceries, I always make a list of items to purchase – 83% strongly or somewhat agreed
  2. I always plan my purchases based on specials in grocery store flyers – 69% strongly or somewhat agreed
  3. I always set a budget for food purchases that should not be exceeded – 49% strongly or somewhat agreed
  4. I always plan my weekday meals before making my purchases – 46% strongly or somewhat agreed

Implications For Small Business

This consumer sector cannot be ignored by small business. Though research reveals close to half of the discount shopper is the “Baby Boomer”, do not fool yourself. Though technically they may be senior citizens, they lead active, vibrant lives with a love for life. This group has deep pockets to impact food purchases. In fact, they control 35% of our population’s discretionary income and 20% of all food purchases are made by this demographic sector. They seek healthy food options that speak to ailments they may have or are afraid of getting.

So, does your product target audience include the discount shopper? If you were to answer No, you may be losing out on a lucrative consumer sector.

For more help Getting and Staying Listed in Canada’s Grocery Sector, connect with us through our website: www.fooddistributionguy.com or call: 1-844-206-FOOD (3662).