GROCERY WARS – NAVIGATING THE ROAD TO SUCCESS; FOOD AND BEVERAGE ONTARIO AGM CONFERENCE

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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).