Transcript Introducing Opportunity

Food Retail and Consumer Trends in
Ontario and Canada
Jacquelynn Ellis
Business Development Consultant
Ontario Ministry of Agriculture, Food and Rural Affairs
Food Stores
• Loblaw - #1- locations throughout Can
• Real Canadian Superstore: flagship banner
• No Frills: discount banner
• Other banners: Loblaws, Zehrs, Dominion, Provigo,
Fortinos, Valu-Mart, Maxi
Food Stores
• Sobeys Inc. - #2 - locations throughout Can
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New distribution centre in Vaughan to Summer 2009
Sobeys: flagship banner
Price Chopper: discount banner
Other banners: IGA, Lumsden, Foodland, Thrifty
Foods, BoniChoix
• Metro Ontario Inc. - #3 - locations in ON, PQ
• Converting all its banners to Metro (A&P, Ultra Mart)
• Metro: flagship banner
• Food Basics: discount banner
Food Stores
Future for Food Stores/Manufacturers
• Food stores investing more in their buildings than
general merchandise stores
• Economic slowdown a time to build competitive
advantage, differentiation
• Advertise staple products
• Consumers would prefer that
manufacturers change their price by:
• 47% - Offer larger sizes (lower cost per use)
• 15% - Introduce smaller sizes at lower
prices
• 14% - Downsize but keep same price
• When making a price increase,
consider new size format
Future for Food Stores/Manufacturers
• Canadian food store are
consolidating
• Channel blurring between
mass merchandisers/drug
retailers and food stores
• Greater growth from discount food stores than
conventional food stores
• Growth in international themed restaurants
• British, French, Italian and other European foods have a
strong influence in Canada
• Baby Boomers and some Generation Y have fueled
growth in natural and organic foods
Food Stores
Food Stores
• Although general merchandise stores have
started to sell food, Canadians still get most of
their groceries in food stores
• 83.9% food stores VS 10.6% general merchandise
• Regional consumer packaged goods inflation
Evolution of Food Stores
• Food stores have diversified products
• Sales of deli, salad bar and prepared foods for
take-out grew 6.6% annually 1998-2004
• Frozen food sales increased 5.9% annually 19982004
• Less spending in restaurants, more spending
in food stores
• Reverse trend from 1980s and 1990s
• 77.6% of food expenses in food stores, 21.9% in
restaurants in 2003
Other Food Stores
• Independent food stores
• Canadian Federation of Independent Grocers (CFIG)
 Represents over 4000 grocery retailers in Canada
 Enables independent, franchised and specialty grocers for
sustainable success
 Facilitates educational and training programs,
 Speaks for its retail members to industry,
government, and the consumer
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Highland Farms: 5 locations in the GTA
Longo’s: 17 locations in Toronto and GTA
L&M Food Markets: 6 locations
Michael-Angelo’s: 2 locations
Other Food Stores
• Specialty food stores
• Organic, functional food, kosher, halal, fair trade,
special diets (gluten-free, diabetes-friendly)
• Pusateri’s: olive oil and balsamic vinegar, fine
catering, luxury chocolates, home and garden
• Vincenzo’s: fair trade coffee/tea, ethnic ingredients,
oils and vinegars, chocolate, spices, jams,
• T&T Supermarket: Asian cuisine, order cakes and
sushi online
• Sun Valley Fine Foods: olive oil and balsamic
vinegar, bakery, exotic fruits
Other Food Stores
• Health food stores
• Natural & organic foods, vitamin and mineral
supplements, herbal products, homeopathics, sports
nutrition products, health and beauty aids
• Canadian Health Food Association (CHFA)
• Noah's Natural Foods: largest
full-service health food store
Food Distributors
Company
Channels
SunOpta
Distribution
Group
70%Supermarket
30% Natural
Tree of Life
Canada
94%Supermarket/Mass/Drug
6% Foodservice
0% Natural
Categories
Nat/Org
Specialty
Ethnic
VMS
Nat
HBA
Specialty
Nat/Org
Cheese
Foodservice
ID Foods
(Private)
100% Supermarket
Specialty
National
Importers
(Private)
100% Supermarket
Specialty
Horizon
Distribution
Group (Private)
90% Natural
10% Supermarket
Nat/Org
Jan K
Overweel
(Private)
100% Supermarket
Cheese
Specialty
Top 700 Grocery Composite Share of Retail Trade
National
52 W/E
06OCT
2007
52 W/E
04OCT
2008
SHARE
PT
CH
G
RETAIL TRADE
100.0
100.0
GROCERY + MASS +
DRUG
85.2
GROCERY + MASS
MERCH
Ontario
$%
CHG
52 W/E
06OCT
2007
52 W/E
04OCT
2008
SHARE
PT
CH
G
0.0
3
100.0
100.0
0.0
3
85.3
0.0
3
85.1
85.4
0.3
3
78.3
78.3
0.0
3
77.3
77.3
0.0
3
GROCERY
SUPERMARKETS
68.7
68.6
-0.1
3
67.2
66.8
-0.4
2
MASS MERCHANDISER
9.6
9.7
0.1
4
10.1
10.5
0.4
7
REM FOOD STORES
0.7
0.7
0.0
0
0.8
0.8
-0.1
-5
DRUG STORES
7.0
7.0
0.0
3
7.8
8.1
0.3
7
WAREHOUSE CLUBS
8.4
8.3
0.0
2
7.6
7.3
-0.3
-1
CONVENIENCE+GAS
MM
0.7
0.6
0.0
-2
0.6
0.7
0.0
9
All Other
5.0
5.1
0.0
4
5.9
5.8
-0.1
2
$%
CHG
80.0
70.0
Top 700 Grocery Composite Share of Retail Trade
52 Weeks Ending October 4, 2008
60.0
50.0
40.0
30.0
20.0
10.0
0.0
GROCERY
1
SUPERMARKET
MASS MERCHANDISER
2
REM FOOD
3 STORES
National
DRUG STORES
4
WAREHOUSE
5 CLUBS
CONVENIENCE+GAS
6
MM
Ontario
All Other
7
Consumers and Shopping Behaviour
• Consumer confidence
• Although decreasing, Canadian consumer confidence
is significantly higher than Global and American
confidence
Consumers and Shopping Behaviour
• Rising prices: food and gas
• 89% of Ontarians are “very” or “somewhat
concerned” about food price increases
• Impact on Ontarians due to higher gas prices
Expenditure trips/household
decreased 4%, from 149 to 143
per year from 2007 to 2008
Consumers and Shopping Behaviour
• Economic impact: Ontario
• Recession proof food items: 0%
would stop buying fresh meat
and seafood
 Recession indifferent consumers =
smaller households with high
incomes not likely to change
shopping behaviour
• Recession sensitive food items:
13% would stop buying frozen
foods
 Panic stricken consumers = larger
families that will do whatever it
takes to save money
 Primarily located in the GTA and
South Western Ontario
Canadian Demographics – Age
Age groups
Total - Age groups
Total - Sex
Male
Female
31,612,895
15,475,970
16,136,930
Under 5 years
1,690,540
864,600
825,940
5 to 9 years
1,809,370
926,860
882,515
10 to 14 years
2,079,925
1,065,865
1,014,065
15 to 24 years
4,220,875
2,143,235
2,077,645
25 to 34 years
4,005,805
1,963,660
2,042,145
35 to 44 years
4,818,730
2,369,030
2,449,705
45 to 54 years
4,977,905
2,449,095
2,528,805
55 to 64 years
3,674,490
1,806,530
1,867,960
65 to 74 years
2,288,360
1,087,270
1,201,095
75 to 84 years
1,526,280
637,905
888,375
520,605
161,920
358,685
40
39
40
85 years and over
Median age
Canadian Demographics – Immigrants
Population by immigrant status, 2006
Non-immigrant population
Geographic name
Immigrant population
Total
Percent
Total
Percent
31,241,030
79.3
24,788,720
19.8
Newfoundland and Labrador
500,610
98.1
490,855
1.7
Prince Edward Island
134,205
96.2
129,150
3.6
Nova Scotia
903,090
94.6
854,495
5
New Brunswick
719,650
96
690,695
3.7
Quebec
7,435,900
87.9
6,535,430
11.5
Ontario
12,028,895
70.8
8,512,020
28.3
Manitoba
1,133,510
86
974,735
13.3
953,850
94.5
901,080
5
Alberta
3,256,355
83
2,702,225
16.2
British Columbia
4,074,385
71.3
2,904,240
27.5
Yukon Territory
30,195
89.4
26,990
10
Northwest Territories
41,055
92.5
37,985
6.9
Nunavut
29,325
98.3
28,820
1.6
Canada
Saskatchewan
Canadian Demographics – Immigrants
Canadian immigrants’ place of birth, 2006
Europe
2,278,350
Western Europe
424,640
Eastern Europe
511,100
Southern Europe
698,085
Italy
296,850
Other Southern Europe
401,235
Northern Europe
United Kingdom
Other Northern Europe
644,525
579,620
64,905
Canadian Demographics – Immigrants
Canadian immigrants’ place of birth, 2006
Asia and the Middle East
2,525,155
West Central Asia and the Middle East
370,515
Eastern Asia
874,365
China, People's Republic of
466,940
Hong Kong
215,430
Other Eastern Asia
191,995
Southeast Asia
560,995
Philippines
303,195
Other Southeast Asia
257,800
Southern Asia
719,280
India
443,685
Other Southern Asia
275,595
Consumer Eating Trends
• Mediterranean diet is associated with lower LDL
cholesterol, lower risk of heart disease and
cancer
• Consumers will be disconnected from food
preparation, food will become more portable
• Increased spending on
prepared meals and
takeouts
• Shopping and eating will
be sporadic, snacking
will replace whole meals
Consumer Eating Trends
• Adoption of adopt healthier
lifestyles to combat obesity (heart
disease, diabetes)
• Reading food labels is more
common, more conscious of transfats, sodium, fibre, sugar, allergen
identification, fortification, and
health claims
• Immigration, travel, job mobility and
religious influences will lead to food
diversification, fusion of cuisines,
different cooking methods
Consumer Eating Trends
• More meatless meals, but no dramatic increase
in true vegetarianism
• Organic, functional, gourmet, and slow food, as
well as boutique brands, high quality, smaller
portions, and nutritious foods will replace
demand for fast, big and cheap foods
• Foods tends will mirror current
news/health report of the day
• Trans-fats, animal diseases, safe
food production, additives,
ethical treatment of animals
How We Can Help
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Finding co-manufacturers in Ontario
Sourcing ingredients
Finding a site location
Linking you with people and information
Efharisto !
• Jacquelynn Ellis
Business Development Consultant
Ontario Ministry of Agriculture, Food and Rural
Affairs
[email protected]