Canadian Retailers Share 6 Insights To Increase Sales

Loblaws producePhoto Courtesy of Loblaws

From promoting consumption with marketing to generating excitement in store, these 6 retailers share their success stories.

Ten buck’s worth of produce in the U.S. will currently cost Canadian shoppers the equivalent of $14. Currency devaluation, combined with longer-term logistical challenges, and the sheer need to import — since 40 percent of the Great White North’s landmass is in the untillable Arctic Circle — all contribute to steep food prices. This scenario certainly doesn’t sound like a recipe for robust produce sales. Yet, Canadians trump their American counterparts when it comes to fruit and vegetable consumption. Canadian retailers play a crucial role in this factor. How these grocers promote produce offers inspiring ideas for their U.S. neighbors.

Nearly 40 percent of Canadians reported eating fruit and vegetables five or more times a day in 2014, based on data from Statistics Canada, which is part of the government’s department and agency website based in Ottawa, Ontario. By comparison, only 24 percent of Americans ate 1 cup (2 servings) or more of fruit, and only 13 percent ate 1.5 cups (3 servings) or more of vegetables daily.

Metro Humber Bay Park, TOWhat’s more, while Canadians’ intake of produce has remained the same for the past several years, per capita fruit and vegetable consumption has declined 7 percent over the past five years in the U.S., according to the State of the Plate, 2015 Study on American’s Consumption of Fruit & Vegetables, published by the Hockessin, DE-headquartered Produce for Better Health Foundation.

The distinctions are worth noting. “It’s subtleties, nothing massively significantly different,” explains Ron Lemaire, president of the Ottawa, ON-based Canadian Produce Marketing Association (CPMA), which in January 2015 launched its Half Your Plate initiative.

The CPMA’s Half Your Plate marketing effort, which was developed in partnership with the Canadian Cancer Society, the Canadian Public Health Association and the Heart and Stroke Foundation, encourages consumers to fill half their plates with fruits and vegetables. The Half Your Plate message is advertised via social media, produce packaging and in supermarkets across Canada by the 91-year-old, nonprofit organization and its members. The organization will soon announce its plans to encourage a 20 percent increase in produce consumption, or 1 additional serving of fruits or vegetables daily by each Canadian, by 2020. CPMA members, which include everyone from growers to retailers, are responsible for 90 percent of all the fresh fruit and vegetable sales in Canada.

Canada, like the U.S., does have a number of tremendous food retailers, from major supermarket chains and key independents to small secondary and tertiary retailers. However, in the face of unique challenges, each Canadian retailer developed a way to creatively source, serve and ultimately cater to their patrons’ fresh produce needs. A good example is Colemans, a 12-store chain based in Corner Brook, Newfoundland.

“Twenty years ago, we were really fruit- and vegetable-challenged,” says Byron Bellows, produce buyer and merchandiser. “Fresh produce was hard to get, expensive and people obviously weren’t eating enough. I refused to throw up the white flag. Today, we have a streamlined sourcing system that provides us with three deliveries a week from the Ontario Terminal. We have a buyer on the market whose job is to find us the freshest and best quality produce. He has to, or it won’t make the trip. The trip is a two-day drive from Ontario and a 19.5-mile ferry ride to our distribution center. We are becoming so good at this [travel pattern] that we really can brag about our freshness and quality.”

Assortment, sourcing quality amidst price challenges, demand for locally-grown, unique shopping habits, educational needs and community involvement are subjects common to all retailers. It is these key areas where Canadian retailers developed ways to creatively use these opportunities to push fresh produce.

1. Diversity Means One Size Doesn’t Fit All

Canada’s ethnic diversity drives higher fruit and vegetable consumption. “Canada tends to be more of a mosaic versus melting pot society like the U.S.,” explains Joe Sbrocchi, vice president of business development and strategy for Mastronardi Produce Ltd, in Kingsville, Ontario. “For example, Canadians who move here from elsewhere such as East Asia and the Middle East are more likely to maintain their cultural produce-centric eating habits rather than assimilate.”

On the supply side, Jane Rhyno, director of sales and marketing for Highline Mushrooms, in Leamington, Ontario, noticed this trend. “Exotic mushroom varieties are exploding in demand as new populations come in,” says Rhyno.

Super-C-Rouyn,-QC_2On the retail side, Frank Pagliaro, vice president for produce buying at the Brampton, Ontario-headquartered Loblaw Companies Limited (Canada’s largest food retailer with more than 2,300 stores under 22 regional and market segment banners), sees a shift in customer preference for more multicultural food products. “This is true whether it’s because they remind a new Canadian of home or because of the increasing exploration of tastes and experiences,” says Pagliaro. “We provide a wide variety of products to suit the many different tastes of our customers. That said, we still find our best-selling items to be what you might consider staples such as bananas, grapes, apples and tomatoes.”

U.S. and Canadian retailers have similar promotional programs, such as seasonal in and out campaigns, according to Mastronardi’s Sbrocchi. “However, Canadians have more dedicated space to execute promotions.”

At Longo Brothers Fruit Markets, Inc., a chain based in Vaughan, Ontario with about 30 locations, produce penetration is higher than for any other departments in the store, and it shows in terms of space dedicated to fruits and vegetables.

“Our stores range from 35,000- to 50,000-square feet and produce is about a third of this or 10,000- to 15,000-square feet,” says Mimmo Franzone, director of produce and floral. “It’s the largest department in the store. The linear square feet have pretty much stayed the same over the past 60 years, but vertical space increased with the use of multi-decks.”

More space translates into more SKUs. “On average, we carry 350 conventional and 120 organic SKUs, and the organics is private labelled with our ‘Organic Select’ brand and is displayed in a mini produce store within the department,” says Geoff Lander, distribution centre and produce manager for Pete’s Fine Foods, a two-store chain based in Halifax, NS. “Organics represent 12 percent of produce sales, so it’s definitely an important and growing segment for us.”

A resounding refrain from Canadian retailers is the practice of catering to ethnic diversity among shoppers by customizing offerings at store level. For example, Lander says he stocks a greater volume of Asian vegetables and fruits such as pummelos at the chain’s downtown Halifax location, while at the Bedford store on the outskirts of town, items like Lebanese zucchini and purple, egg-size ‘Violetto’ artichokes cater to shoppers with a Mediterranean/European ancestry.

“The Quebec market is different from Ontario market,” explains Bernadette Hamel, vice president, national procurement, produce, at Metro Richelieu Inc., a 600-plus store chain headquartered in Montreal, Quebec. “As well, many communities are found in both provinces. We adapt our offerings to the communities’ needs in each of our supermarkets, including when it comes to selling the right produce. This translates into increased sales, because we meet our customers’ needs.” CPMA’s Lemaire sums this concept up perfectly: “The right offering at the right store at the regional level will bring repeat shopping trips, purchases and ultimately greater produce consumption.”

2. A Spoonful of Flavor Makes High Price Easier to Swallow

The sheer number of U.S. retailers can mean widespread channel distribution, which can be a challenge for suppliers. In addition, produce suppliers say with so many U.S. retailers dealing with internal reorganization or consolidations it can sometimes create challenging multiple levels of communication and decision-making. These hurdles aren’t the same in Canada. Here, there are five major retailers with greater ability to run coast-to-coast programs.NFF-Retail_Presentation-3-25Feb2016

Plus, according to the Canadian trade representative for the Maitland, FL-based Florida Tomato Committee, Brad Brownsey: despite the size of the country, 75 percent of all Canadians live within 100 miles of the Canadian/U.S. border, and the vast majority of all Canadians reside in 33 major metropolitan cities across the country making distribution within the country easier. However, importation is the mainstay of produce procurement.

“Challenges, like climate change, definitely redefined how we work. It gave us the opportunity to diversify our supply sources, when our regular suppliers couldn’t help us meet our customers’ demand,” says Metro’s Hamel.

The other big challenge, especially recently, is the dramatic decrease in the Canadian dollar, which led to higher prices for produce, and therefore, lower demand from consumers.

“Canadian retailers are often challenged to offer a competitive market basket to their shoppers without causing sticker shock,” says Jim DiMenna, president and chief executive of Red Sun Farms, in Kingsville, Ontario.

Loblaws’ Pagliaro says customers tell him that price can be a major barrier to living a healthier lifestyle. “We’re hoping to mitigate that barrier through the No Name Naturally Imperfect brand. It’s fresh, delicious produce at a great value — up to 30 percent less than traditional produce. We launched the brand last year with limited distribution and have received tremendous feedback and results. Given the early success, we are expanding the program both in number of stores and in products available.”

Private label programs are more prevalent among Canadian retailers and retailers will choose specific varieties and levels of quality to differentiate themselves, according to suppliers who sell in both the U.S. and Canada. A good example of this is the marketing program recently launched by Loblaws around its President’s Choice-brand produce.

“We work closely with our vendors to ensure these products have an enhanced flavor profile. Once a customer tries it, we know they’ll love it. Each month we are focusing on a new product to highlight and share with Canadians,” says Loblaws’ Pagliaro. Flavor is something that is easier for Canadian retailers to assure in some products due to sourcing options not available to their U.S. counterparts.

“Mangos don’t need to hold up under a hot water treatment as they do before entering the U.S., so the fruit can hang on the tree longer and is more flavorful,” says Michael Mockler, produce director at Thrifty Foods, a 26-store chain headquartered in Victoria, BC, that was purchased in 2015 by Sobey’s Inc, Canada’s second largest retailer with more than 1,500 stores under a dozen-plus banners.

“We ran a display contest for Ataulfo mangos last year under the theme ‘the fruit is so juicy you need to eat it in the bathtub.’ One of our produce managers integrated a full scale tub with mannequin into the display. It really drew attention and sales,” says Mockler.

Yet in other products, such as grapes, retailers on both sides of the border can follow in Longo’s steps.

“We work with our grower partners to help introduce and test proprietary varieties. They provide us with a small volume to test, we give them feedback as to how customers react, and in turn, we get an exclusive to the market,” explains Longos’ Franzone. “We did this last year with unique grape varieties in partnership with the [Shafter CA-based] Grapery. We merchandised the fruit in a place we called ‘The Flavor Corner’ for two months with signage that encouraged customers to try the six new exciting varieties,” adds Franzone.

3. Local Meets Locale

The Buy Local movement is a hot topic. “This is not a new trend, and we have seen the same strategy of featuring the grower at retail in the U.S. as well,” says Chris Veillon, director of marketing for NatureFresh Farms, in Leamington, Ontario. “However, there is a greater disconnect due to distance/proximity of where some product is grown.”

Produce displayLoblaws’ buying strategy gives priority to local and regional fresh products when the safety, quality, availability and value line up according to the retailer’s specs.

“We launched the ‘Grown Close to Home’ program to highlight and market locally grown produce in our stores nearly a decade ago. During peak growing seasons, approximately 40 percent of produce in our stores is Canadian-grown. However, we are always looking for ways to increase the amount of Canadian produce in our stores, and work closely with our growers to identify trends and invest in new commodities to support consumer demands,” says Loblaws’ Pagliaro.

Locally-grown isn’t a seasonal, but instead a year-round program at Longos. “We feature local as part of our ‘Taste Ontario’ program. Canadian-grown mushrooms and greenhouse-grown long English cucumbers, for example, are available year-round. In the winter, it’s apples and storage crops like potatoes. From May to October, it’s a variety of fruits and vegetables that total 60 to 75 percent of our fresh produce offerings, and in the fall it’s items like hard squash. We spotlight this produce with signage and point-of-sale that tells the grower’s story,” explains Franzone. Local and locale intermingle at Pete’s. “Six months of the year, we get much of our produce from farmers in the Annapolis Valley. The rest of the year, we feature what’s in season. For example, we do huge displays of asparagus in the spring when it comes into season in California,” says Pete’s Lander.

4. Answer the Daily Call, ‘What’s for Dinner?’

The Canadian customer shops often, daily to three to four days a week, with less of a tendency to pantry fill, and it shows in greater produce consumption, says Thrifty Food’s Mockler. “Because of this focus on fresh, we moved produce from the perimeter to right inside the front door at our new locations. And, the first thing customers see is a display with a meal solution. Shopping lists may have meat, fruit and vegetables, but it’s no more specific than that. It’s our job as a retailer to provide those ideas in a short amount of time. For example, we might have a nice big display of Peruvian asparagus with garlic, lemon, Roma tomatoes and pasta. The shopper sees it right as they walk in-store and it answers their question, ‘What’s for dinner?’ ”

At Colemans, the chain’s Registered Dietitian Nutritionist demos the healthy family meal featured in the retailer’s weekly flyer in-store each Friday between 2 and 4 p.m. Ingredients used are among those that are price-promoted.

Meal solutions are part of a multilayer coordinated effort at Longos. “We go in depth about a category like berries in an issue of our quarterly magazine, Experience. This includes education about season, varieties and usage suggestions. Recipes are simple meal solutions that offer customers a different idea from how they may normally enjoy the product. For example, we did a Berry Quinoa Salad with strawberries, Spring Mix, sliced almonds and quinoa. A lot of our merchandising activities in store such as displays, promotions and recipe ideas are driven from the magazine. It’s a 360 effect and meal solutions have become huge for us.”

5. Education Creates In-Store Theater

Pete's Fine Food sign

Local and locale intermingle at Pete’s. Six months of the year, the store gets its produce from farmers in the Annapolis Valley. The rest of the year, the store features what’s in season.

There’s value in a clean-store policy where excessive non-produce items don’t detract from shoppers’ clear line of sight to the enticing colors and textures of the produce department, says CPMA’s Lemaire. “At the same time, shoppers today are hungry for information. Canada’s retailers have become creative in providing this.” Loblaws, for example, focuses its attention on key events or programs throughout the year. One is a tropical event, where marketing and store displays drive awareness of new products and sales.

Suppliers are quick to assist retailers. For example, the Ontario Greenhouse Vegetable Growers, in Leamington, Ontario, kicked off its growers’ tomato and pepper production with its Spring Launch Program. This program offers funding for flyer ad placement and provides the key Canadian retailers with media buy and point-of-sale materials to help merchandise Ontario grown tomatoes, peppers and cucumbers.

Displays can take on the feel of in-store theater at many Canadian retailers. A great example of this is at Colemans, where public relations and event planner, Judy Bennet, orchestrated an awesome launch event for ENZA’s Envy Apple a few years ago.

“Large posters supplied by the ENZA people featured graphics that depicted a beautiful woman holding the apple. To have some fun with this, we selected three of our largest stores to actually execute an unveiling of the new apple with a large white sheet over the apples. In those three stores we hired a model to dress up like the lady in the poster complete with long black gloves, a large brim black hat and red blouse. The envy apple display was huge and produce managers were instructed to pull the sheet at exactly at 10:30 a.m. The model stood in front of the display posing with the apple in her hand.  Then, she gave out samples of the apples to customers and sampled a salad made with Envy apples,” explains Bennet.     Regardless of which side of the border the retailer is on, what makes a program successful is execution.

Chef Maurizio and Girl Scouts

“Colemans at the Gardens” event, Chef Maurizio shows Girl Scouts a series of safe food handling tips.

“Partnering with retailers that are willing to try new things and work together to execute a program brings forth success,” says Mastronardi’s Sbrocchi.

Beyond this, many retailers rely on staff for shopper education. Mockler at Thrifty Foods offers three four-hour sessions for groups of eight to 10 as part of his Produce Passion training. Staffers learn everything from how to trim and crisp to how to answer customers’ produce questions. Mockler says this process not only boosts produce sales, but creates chain ambassadors. To assist all Canadian retailers, the CPMA is launching a new educational drive. Staff new to the industry can earn the Produce Basics certification, which has been online since December 2015. Ongoing education comes in the form of a Produce Essentials training credential. This launches this month at CMPA’s annual convention.

6. Produce-Centric Community Partnerships

Metro has made healthy eating and the well-being of its customers a company priority, a concern that is clearly expressed in the retailer’s Corporate Responsibility Plan. As such, Metro’s Health and Wellness Program rests on four pillars. One of these is promoting healthy eating within the community.

“Our various initiatives are integrated into a global approach. That is, we offer nutritional attributes, in-store tips and recipes for our many product lines, both on our website and in the circular, as well as our Green Apple School Program. In this program, Metro awards 1,500 grants, each worth $1,000, to elementary and high schools in Quebec and in Ontario for carrying out projects aimed at eating more fruits and vegetables for young people,” says Hamel.

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