Retail Food Sector Report - Canada 2012

An Expert's View about Sales in Canada

Posted on: 5 Feb 2013

In 2012, Canada’s 34.4 million consumers were estimated to have generated C$ 470 billion (US$ 469 billion) in retail sales, representing a three percent increase from 2011.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 1/23/2013 GAIN Report Number: CA13001 Canada Retail Foods Retail Food Sector Report Approved By: Scott Reynolds Prepared By: Maria Arbulu Report Highlights: In 2012, Canada’s 34.4 million consumers were estimated to have generated C$ 470 billion (US$ 469 billion) in retail sales, representing a three percent increase from 2011. Food sales in Canada contributed close to 19 percent of the retail landscape. At the end of 2012, projected food sales were C$ 87 billion (excluding alcoholic beverages and liquor store sales). From 2006 to 2011, sales increased by 17 percent and are forecasted to grow at a constant compound annual growth rate (CAGR) of 2 % through 2016. This report provides an overview of the Canadian retail food sector for U.S. food producers that are exploring opportunities to export their products to Canada. This report does not include information on alcoholic beverages. This subject is addressed in the GAIN Report on Exporting Alcoholic Beverages into the Canadian Market. Post: Ottawa Table of Contents Overview of U.S. Agricultural Products in Canada ..................................................................................... 3 Section 1: Market Summary .................................................................................................................... 3 1A. The Food Sector in Canada’s Retail Landscape .......................................................................... 3 1B. Imported Foods in Canada ........................................................................................................... 7 1C. The Canadian Shopper ................................................................................................................. 9 1D. Trends Driving Grocery Purchases............................................................................................. 10 Section 2: Road Map for Market Entry ................................................................................................. 14 2A. Overview ................................................................................................................................... 14 2B. Market Structure and Retail Food Distribution Channel ............................................................ 20 i. Retail Sub Sectors ....................................................................................................................... 21 ii. Convenience Stores, Mini Marts, and Gas Stations ................................................................... 23 iii. Drug Chains ................................................................................................................................ 24 iv. On-Line Shopping ....................................................................................................................... 30 Section 3: Leading U.S. Products and the Competition ............................................................................ 31 Section 4: Best Product Prospects ......................................................................................................... 38 4A. Food Products with Good Sales Potential .................................................................................... 38 4B. Products Facing Significant Barriers and Regulatory Challenges ................................................ 39 Section 5: Further Canadian Contacts and FAS/Canada Contacts ........................................................ 42 5A. Government Organizations ......................................................................................................... 42 5B. Industry Associations ................................................................................................................ 43 5C. Publications ............................................................................................................................... 44 5D. FAS/Canada Contacts ................................................................................................................. 45 5E. Summary of Key Resources ....................................................................................................... 47 2 Overview of U.S. Agricultural Products in Canada In 2012, U.S. agricultural exports to Canada exceeded $ 20 billion, reflecting an increase of 8% over 2011. U.S. agricultural exports to Canada account for about 15 per cent of the total U.S. food and agricultural exports. Consumer-oriented agricultural products comprise 77 % of the total U.S. food and agricultural product sales to Canada, with fresh fruits and vegetables, snack foods, processed fruits and vegetables and red meat products as the category leaders. American products account for about 60% of Canada's total agricultural imports. In 2012, the majority of US consumer-oriented agricultural categories such as fresh fruits, red meats, snack foods, fresh vegetables, breakfast cereals, pet foods, wine and beer, tree nuts, posted record annual sales in Canada. The top five categories were red meat ($2.2 billion), fresh fruits ($1.8 billion), snack foods ($1.7 billion), fresh vegetables ($1.6 billion), and processed fruits and vegetables ($1.3 billion). Canada is also an important market for U.S. fishery products. Canada is the second largest export market for U.S. fish and seafood products, with sales exceeding $900 million in 2012. Furthermore, U.S. fish and seafood products dominate Canadian imports and represent more than one-third of the country’s total imports. Under the tariff elimination provision of the North American Free Trade Agreement (NAFTA), the majority of U.S. agricultural products have entered Canada duty-free since January 1, 1998. On December 4, 1998 the United State and Canada signed a Record of Understanding, an agreement to further open Canadian markets to U.S. farm and ranch products. Since that time, U.S. agricultural exports have tripled in value 1 . Trade with Canada is facilitated by proximity, similar culture & language, common lifestyle pursuits, and the ease of travel among citizens for business or pleasure. Many American products have gained an increased competitive edge over goods from other countries as the result of NAFTA. Canada's grocery product and food service trades have been quick to seize opportunities under NAFTA, which permitted them to expand their geographical sourcing area to include the United States. Declining import duties under the trade agreements and an easing of Canadian packaging requirements for processed horticultural products for the food service sector have resulted in significant gains in the Canadian market for U.S. consumer-ready foods and food service products. Section 1: Market Summary 1A. The Food Sector in Canada’s Retail Landscape In 2012, Canada’s 34.4 million consumers were projected to have generated C$ 470 billion (US$ 469 billion) in retail sales, representing a three percent increase from 2011. A modest growth of 2.7% is expected for 2013. Although, sales in Canada are smaller than those in the U.S., retail spending per capita in Canada equals that of the United States. 1 1998 U.S. agricultural exports to Canada were valued at $ 6.8 billion. The Office of Consumer Affairs of Canada reports the retail landscape has changed considerably as there has been a shift from the independent to chain stores. The strong presence of U.S. franchises and their chain stores have resulted in a high receptivity to American products and services. Also, most consumers recognize and are familiar with U.S. products and services due to the geographical proximity and cultural similarities. Food sales in Canada contributed 19 percent to the retail landscape in 2011. Projected sales for 2012 are C$ 87 billion (excluding alcoholic beverages and liquor store sales). From 2006 to 2011, sales increased by 17 percent and are forecasted to grow at a constant value of 2 % CAGR* through 2016. Table 1: Food Sales in Canada’s Retail Landscape in 2012 Source: Statistics Canada *Compound Annual Growth Rate Table 2: Six Year Trend in Food Sales 4 Source: Statistics Canada *P = Projected There are 20,661 stores in Canada selling food products, the vast majority of sales continue to be through grocery stores and supermarkets, representing 63 percent of the total food sales in 2012. Foods sales through non-traditional food retailing channels such as general merchandise stores, club stores, convenience stores, drug stores, specialty stores and gas stations have grown from 33% in 2010 to 36% in 2012. Walmart Canada and Costco along with other non-grocery retailers including Canadian Tire, Shoppers Drug Mart, and London Drugs have been strategic in placing more food products on their store shelves, making it convenient for customers to spend some of their food dollars in these channels. Table 3: Definition of Retail Channels Type of Description Channel Grocery Store Any retail store selling a line of dry groceries, canned goods or non-food items plus perishable items. Supermarkets A full-line, self-service grocery store with annual sales of C$2 million or more. Mass A retailer of soft and hard goods wherein the selling of grocery products have been Merchandiser an add-on and not traditionally the prime focus of the retail format. Warehouse A membership retail/wholesale hybrid with a varied selection and limited variety of Clubs products presented in warehouse-type atmosphere. These stores are typically 100,000 square feet or more and feature a majority of general merchandise, as well as a grocery line dedicated to large size and bulk sales. Convenience A compact store offering a limited line of high-convenience items. Many sell Stores gasoline and fast food. They are usually less than 2,400 square feet in size and are 5 open long hours. Drug Stores Stores (often chain) with retail pharmacies and specializing in Over-the-Counter (OTC) medications and selling health and beauty aid products. Offering a limited range of convenient groceries. Specialty Small specialized stores, often approximately 3,000 square feet specializing in a Stores specific food market sector, such as meats or health foods. Gas Stations Convenience stores operating under or in conjunction with a gasoline banner. Source: Canadian Grocer 2012 Table 4: Breakdown of the Retail Channels in Canada Channel 2010 2011 2012P Sales Market Sales Market Sales Market (C$ Share (C$ Share (C$ Share Millions) Millions) Millions) Grocery Stores/ Supermarkets 56,412.6 66.8% 55,567.9 65.0% 55,490.3 63.7% Mass Merchandiser 8,951.7 10.6% 9,232.8 10.8 % 9,756.5 11.2% Warehouse Clubs 5,911.5 7.0% 6,753.6 7.9% 7,230.3 8.3% Drug stores 5,320.4 6.3% 5,642.3 6.6% 5,923.6 6.8% Convenience stores 4,982.6 5.9% 5,043.9 5.9% 5,139.6 5.9% 1,689.0 2.0% 1,709.8 2.0% 2,003.5 2.3% Specialty Sores Gas Stations 1,182.3 1.4 % 1,538.8 1.8 % 1,568.2 1.8% Total 84,450 100% 85,489 100% 87,112 100% Post estimates based on Statistics Canada, 2013 Who’s Who Directory, ACNielsen Banner Share, Euromonitor, Canadian Grocer- Executive Report The Discount Retail Channel: Since 2008, the number of discount retailers has grown and is likely to increase further as they account for more than one-third of grocery purchases. In order to compete with the discount stores, traditional grocery stores have been quick to respond to their shoppers by offering 6 discounts on selected food products. Retail prices remain competitive between the two groups and forecasts indicate the discount segment of the market will continue to grow. Table 5: Growth of Discount Retailers in Retail Food Sector Source: Executive Report Canadian Grocer (2012-2013) -Nielsen Homescan Retailer Grocery Watch 1B. Imported Foods in Canada The Centre for Food in Canada detailed the contribution that imported foods have had in the Canadian diet. In 2011 the total amount of imports registered at C$ 22.5 billion, represented 24 percent of the total food sales. The leading imports into Canada were fresh fruits and vegetables, followed by fish products. In the last two decades, Canadians have changed their eating habits to include more fruits, vegetables, cereal products and nuts. Table 6: Top Food Imports of Final Goods in 2012P Percentage of Product Total Canadian Food Total Imports (C$ Millions) Fresh Fruit, excluding tropical 6.5 % 1,495 Other vegetables, fresh or chilled 5.1 % 1,173 Tropical fruit 4.2 % 966 Fish and seafood products, canned or otherwise preserved 2.3 % 529 Chocolate confectionary 2.3 % 529 (continued) Percentage Product of Total Canadian Food Total Imports (C$ Millions) Fruit juices, excluding frozen concentrates 2.3 % 7 529 All other miscellaneous food products 2.2 % 506 Other confectionery 2.1 % 483 Other bakery products 1.9 % 437 Prepared meat products 1.8 % 414 Fish and seafood products, fresh, chilled, or frozen 1.7 % 391 Roasted coffee 1.4 % 322 Frozen fruit and juice concentrates 1.3 % 299 Nuts 1.3 % 299 Pickles, relishes, and other sauces 1.3 % 299 Biscuits 1.3 % 299 Beef, fresh chilled, or frozen 1.2 % 276 Other fruit products, including dried fruit and fruit peel 1.2 % 276 Pasta products, excluding dry pasta 1.2 % 276 Breakfast cereal products 1.0 % 230 Food snacks, excluding potato chips and nuts 0.9 % 207 Poultry, fresh, chilled or frozen 0.9 % 207 Cheese 0.9 % 207 Other preserved vegetables 0.9 % 207 Fish and seafood (except animal aquaculture) live, fresh, chilled or frozen 0.8 % 184 8 Source: Statistics Canada. List does not include alcoholic beverages Table 7: Total Consumer Oriented Agricultural Imports into Canada Year Total Imports Total Retail Food Sales (C$ Millions) (C$ Millions) 2007 18,167.0 76,310.0 2008 19,950.1 79,277.0 2009 20,936.0 83,341.0 2010 20,848.0 84,450.0 2011 22,590.1 85,489.0 2012 23,000.1 P 87,112.0 P Source: Statistics Canada and Global Trade Atlas *P = Projected 1C. The Canadian Shopper The changing attitudes and demographics that have taken place in the last ten years in Canada are responsible for the types and choices of foods that most Canadians buy and thereby influence the foods that are found in retail stores today. Demographics o Graying Population Canada has an aging population whereby 40 percent of the population is 45 years or older and by 2026 this will increase to 48 percent. As there are more seniors and fewer children in the home, the types of food people eat and buy changes. Furthermore, as Canadians get older there is an increase of health related issues associated with aging. The National Institute of Nutrition rated heart/cardiovascular disease, cancer, diet, weight, diabetes, and lack of exercise are the leading issues among seniors. Scientific studies show the foods people eat have a direct benefit to their health and the trend indicates that older Canadians are changing their diets in order to live better lives. o Household Size and Women in the Labor Force The average number of family members per household has decreased from almost 4 in 1970 to less than 3 people per household in 2008. There are more single-person households than ever before. This has created market opportunities for retailers and food manufacturers to introduce smaller sized food packaging offering single portions. In addition, the number of working mothers with children under the age of 16 has increased from 39.1 percent in 1976 to 72.9 percent in 2009. Added time constraints on working women and mothers, who still remain the primary decision makers in grocery purchases, has increased the demand for convenient meal options. o Ethnic Diversity 9 Cultural diversity is a critical force in the retail marketplace and many retailers are responding to this change. The arrival of new immigrants into the country has helped to boost Canada’s population. Consumers of South Asian and Chinese backgrounds make up the largest ethnic groups. Statistics Canada projects that by 2031, ethnic shoppers will represent 31% of the consumers in Canada. Canadian Purchasing Attitudes In a survey conducted by Agriculture and Agri-Food Canada, the top four attributes influencing Canadian shoppers in their selection of (in order of importance) are: price, quality, freshness and health/nutrition. o Price Many Canadian consumers have become bargain shoppers due to a slow economic recovery and rising food prices in 2011, which increased by 4.4 percent. These factors have caused shoppers to remain cautious in their spending habits. A recent audit conducted by Deloitte Canada for the leading trade magazine, Canadian Grocer, predicts ‘the consumer will remain just as price conscious as ever, with little to no evidence of change 2 .’ o Quality Consumers associate quality with freshness, nutrition, safety, appearance and flavor. Although, the annual average household expenditures on food have decreased from 18.7 percent from 1969 to 10.2 percent in 2009, real spending per person has increased. Shoppers are buying high-value and quality items. Post estimates the annual average spent on groceries per person in 2010 was C$ 3,494. In response to these buying preferences, retailers are offering more specialty and gourmet foods to their customers. o Freshness Freshness is becoming synonymous with quality among Canadians as it implies good taste, nutrition, and more natural (not processed). The consumption of fruits and vegetables by Canadians has increased significantly over the last decade. Agriculture and Agri-Food Canada report Canadians have added 10.9 percent more vegetables into their diets. In 2010 Walmart Canada recognized this trend and introduced fresh produce into their stores. Also, noted earlier in Table 6 on Canada’s top leading food imports, fresh fruits and vegetables were ranked #1 and #2 at the top of the list. o Health/Nutrition Consumers are informed about the many health benefits and risk associated with diet and many have become conscious of reading food labels to check their nutritional value and list of ingredients. Although Health Canada reports Canadians have reduced their intake of daily calories from 2,500 in 2001 to 2,358 in 2009, the incidents of childhood obesity have tripled in the past 30 years. Foods that address the health concerns of younger and older consumers with appealing taste will continue to show promise in the marketplace. 1D. Trends Driving Grocery Purchases Value 2 Canadian Press. December 14, 2011. Food Industry Weathered Economic Report. 10 Discount Shopping: Higher food prices have caused consumers to switch to cheaper brands and cheaper groce 3ry stores. Promotional Priced Products: A growing number of Canadian shoppers browse their store flyer for lower-priced specials and search the internet for coupons.4 This trend is expected to grow through 2013. Although Canadians are price conscious shoppers they will not sacrifice quality for price. Private Label: Traditionally, private label had been seen as lower quality and generally less desirable than national brands but this has changed. In 2011, private label represented C$ 11.3 billion in sales and continued to increase in 2012. Economical Meal Solutions: A resurgence of traditional products that offer value such as dehydrated soups. Quality/Freshness Fresh Foods: Consumers are switching to fresh foods for they equate "fresh" with better value that offers taste, health and nutrition. Canadian Grocer reports that Target Canada will offer a limited selection of fresh products at a reasonable range to the consumer. Frozen Foods: Retail sales of frozen foods grew by 3% and are predicted to increase as new technology helps to improve the flavor of frozen food. Microwavable frozen meals that offer steam packaging have become popular. Convenience Ready to Heat and Eat Foods: Women continue to do the majority of food purchasing, preparation and clean up. As a result, the demand for foods that are easy and quick to prepare yet tasty, fresh and nutritiously sound continues to grow. One Dish Meals: Growth in quick one-dish meal kits such as stir-fries and stew are expected to grow. Custom Quick Food: Consumers do not spend an extensive amount of time preparing meals; but it still is important to feel that they have contributed something to the preparation. Therefore, opportunities exist for ready meals or kits, which allow the persons preparing them to add their own personal touch. Smaller Food Portions and Packages: Individual portions sizes are in demand as there are more single-person households. Flexible and Portable Packaging: Eating in vehicles or “Dashboard Dining,” as well as eating lunches at the work desk is more common. Snacks and Mini Meals: Canadians eat more snacks than Americans. Eating patterns are changing from eating three main meals a day to eating several smaller meals throughout the day. Convenient, nutritious snacks or mini meals will increase in demand (i.e. breakfast bars, wraps, sports drinks). 3 2011 Ipsos Survey reported in a sample population that 44% of Canadian grocery shoppers switched to a cheaper brand and 36% switched to a cheaper grocery store. 4 Brandspark International reported the 93% of Canadian grocery shoppers browse flyers while 54% subscribe to a coupon website. 11 Innovation: Convenience foods will continue to be popular but the key to success will be innovation. Physical and Emotional Energy: Stressed out consumers that are seeking energy, power and performance from food are turning to sports drinks, energy bars and snacks. Health and Wellness Correcting Condition: Food and food ingredients continue to increase in popularity as a method for self-medication and disease prevention. As a result, the demand for functional and nutraceuticals foods will continue to increase and new products will be developed. Healthy Foods for Kids: Approximately 26 percent of Canadian children ages 2-17 years old are currently obese. Food Safety: Consumers are increasingly interested in food products that provide reassurances about food safety. Gluten-Free: The demand for gluten-free products will continue to grow and it has more than doubled since 2005. Low Sodium: Canadian consumers are becoming conscious about the level of sodium in prepackaged processed foods and in restaurant meals. Health Canada is currently reviewing new recommended target levels of sodium intake. Low Sugar: Canada’s Food Guide recommends moderate consumption of sugar, glucose, fructose, and various kinds of syrups, as they are the major contributors to weight gain. Low Calorie: Interest in weight loss products and lower calorie foods continues to be high among Canadians. Organics: The value of organic food products is estimated at C$ 2 billion and is predicted to grow steadily. Trans Fats and Saturated Fats: Canadians are continually concerned about fat intake and health concerns associated with trans and saturated fats. As a result, low-fat cereals, dairy products and frozen meals are rising. Pleasure/Ethnic Foods Economic growth and rising disposable income has made Canadians more confident about spending for products and services that make their lives easier or provide pleasure. Indulgence or Comfort Foods: Although Canadians are concerned about the nutritional value of foods, they still are reaching out for tasty snacks that are high in fat, sugar and salt. The demand for these foods continues to be high for they are often considered a reward for healthy eating or surviving the stresses of everyday life. Gourmet products of Meal Excitement: New, unique, high quality and expensive products will be small indulgences for consumers who are seeking meal entertainment. Regional Cuisine: Consumers are becoming more interested in seasonal, regional and high flavor foods. Ethnic Foods: Immigration to Canada and the number of minority groups has increased dramatically. Consumers are flocking to healthful and flavorful ethnic cuisines such as Asian and Mediterranean foods where the emphasis is on ingredients such as vegetables, grains and 12 fish. In 2010, ethnic food markets generated C$ 65 billion in food sales and are projected to increase 15 -20 percent annually. Ethical Buying A small but growing number of Canadians are making buying choices based on where and how their foods are grown. This trend goes beyond taste and health concern and into the realm of green politics and anti-globalization. It includes the concepts of “fair trade”, “sustainable practices”, and “food miles.” Buy Local Products: Consumers are concern for their local economy and where there foods come from. Although, U.S. foods are not viewed as local this may present opportunities for U.S. food companies. Canadians view U.S. products as safer and of better quality than imports from other countries. Recycled and Biodegradable Food Packaging: Most Canadian cities have instituted recycling programs for their citizens and businesses. Each sector is looking to maintain a ‘green image.’ Non-Traditional Media Influencers Canadian Grocer recently reported that more than half of all shoppers use some form of technology before or during their shopping trips to the grocery store. Research findings show that most shoppers look for coupons, email offers from retailers, recipes and other valuable information about the product from manufacturers’ websites. The Foreign Agricultural Service in Canada commissioned a consumer survey in 2012 and learned that 48% of the respondents will use “apps” and research a number of websites to assist them in their making food choices. The results below not only illustrate the importance of developing and maintaining an active company website but also highlights the impact that information technology will continue to have in the coming years, particularly with younger shoppers. Source: 2012 Leger Marketing, 1505 Canadian respondents surveyed. Table 8: Advantages and Challenges Facing U.S. Exporters Advantages Challenges Canadian consumers enjoy a high disposable income, Competitive pricing as the cost of doing business coupled with a growing interest in global cuisine. in Canada for retailers and distributors are higher than in the United States pushing food prices up. 13 U.S. food products closely match Canadian tastes and Tariff rate quotas for certain products. expectations. Fruit and vegetable consumption in Canada is With consolidation, sellers often face one substantially higher than that in the United States. Except national retail buyer per category; this buyer will for its greenhouse industry Canada’s horticulture often purchase for all banners under the retailer. production is limited. This provides opportunities for U.S. Buyers are constantly looking to reduce price, producers in the off seasons. Canadian retailers rely improve product quality and extend the product heavily on imports to supply the domestic market all year range with new entrants. round. Canada and the U.S. share a 3,145-mile of border with 2/3 Canada has a very high ethnic population with of the Canadian population living within 200 miles of the specific dietary preferences. [The three largest U.S. border. This geographical proximity facilitates cities consist of more than 1/3 new Canadians]. communication and transportation. There is also This consumer ethnic diversity tends to be a significant over flow of U.S. television and print media in challenge for some large scale mass marketing most Canadian centers, which can reduce advertising companies with products and marketing costs for U.S. companies with media campaigns in U.S. campaigns more targeted at the U.S. market. On cities bordering on Canada. the other hand the different ethnic markets in Canada can create niche opportunities for smaller companies. Canada’s strong dollar is an advantage for U.S. exporters. Retailers and brokers/distributors may charge high listing/placement fees. Canadian ethnically diverse population provides Food labeling, including bilingual packaging opportunities for specialty products in populated centers. requirement, and nutritional content claims are highly regulated and frequently differ from the United States. Retail consolidation favors large-scale suppliers and Retailers are interested in category extension, not increases sales efficiency with fewer retailers to approach. cannibalization. Products entering the market must be innovative; not duplicative. Duty free tariff treatment for most products under Differences in Food Standards may require NAFTA special production runs and packaging due to Canadian standard package sizes. High U.S. quality and safety perceptions. Differences in approved chemicals and residue tolerances. Private label presents opportunities for custom packers of Private label brands continue to grow in many high quality products. categories; sometimes taking shelf space from American national brands. The total population of Canada is slightly less than California and much more spread out, making marketing and distribution costs generally higher than in the United States. Section 2: Road Map for Market Entry 2A. Overview Entry Strategy 14 US food manufacturers seeking to enter the Canadian marketplace have many opportunities. The United States is Canada's largest trading partner with 63% per cent market share of Canada’s manufactured food imports originating from the United States. This is a result of a number of factors, including a convenient shipping corridor and a familiarity with consumer tastes and expectations, and most importantly the North American Free Trade Agreement (NAFTA). There are a number of challenges U.S. exporters must meet before exporting to Canada. Some of these include currency, customs procedures and labeling requirements. To meet these market challenges, we recommend that U.S. exporters entering the Canadian market take the following steps: 1) Contact your State Regional Trade Group, 2) Research the market for your particular product, 3) Locate a Canadian partner: broker/distributor/importer, and 4) Understand the Canadian government standards and regulations that pertain to your product.  Step 1. Contact your State Regional Trade Group/State Regional Office State Regional Trade Groups (SRTG) are non-profit organizations that offer many services to U.S. food/agricultural product exporters. They are comprised of representatives from their region’s Department of Agriculture and work together in supporting U.S. food companies. Primarily, they assist in providing privileged information about the various food sectors in targeted foreign countries. Also, key contact information on buyers and specifics about important trade and consumer shows in Canada is available for potential exporters. Through the SRTGs, branded food products and agricultural commodities can be promoted with assistance from Market Access Program (MAP) funds administered by USDA’s Foreign Agricultural Service. Packaging and label modifications, product tasting/demonstrations, in-store promotions, point-of-sale materials, advertising, and trade show participation, are some of the activities for which eligible participants can obtain partial reimbursements. Table 9: State Regional Trade Groups State Regional Trade Group Web Site States Food Export USA http://www.foodexportusa.org Connecticut, Delaware, Maine, Northeast Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont Food Export http://www.foodexport.org Illinois, Indiana, Iowa, Kansas, Association of the Michigan, Minnesota, Missouri, Midwest USA Nebraska, North Dakota, Ohio, South Dakota, Wisconsin Southern U.S. http://www.susta.org Alabama, Arkansas, Florida, Trade Association Georgia, Kentucky, Louisiana, (SUSTA) Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Puerto Rico, Virginia, West 15 Virginia Western U.S. http://www.wusata.org Alaska, Arizona, American Agricultural Trade Samoa, California, Colorado, Association Guam, Hawaii, Idaho, Montana, (WUSATA) Nevada, New Mexico, Oregon, Utah, Washington, Wyoming National http://www.nasda.org/cms/7195/8617.aspx State Directory of the State Association of Departments of Agriculture State Departments of Agriculture (NASDA)  Step 2: Research the Market for Your Specific Product A thorough understanding of consumer trends and needs are required in developing an effective market strategy in Canada. There are many organizations in Canada with a wealth of information for U.S. exporters interested in researching the many aspects and particularities of the Canadian food sector. Fortunately, as Table 7 indicates, much of that information is available via the internet. Though some consumer data can only be obtained with a fee, there are several trade publications that continuously report on current developments of interest for U.S. exporters. These publications are Canadian Grocer (www.canadiangrocer.ca) and Grocery Business (www.grocerybusiness.ca), closely follow upcoming trends in the food retail industry in Canada. Table 10: Organization and Data Sources within Canada Organization Function/Purpose Website Agriculture and Agri-food Provides information, research and technology www.agr.gc.ca Canada, Agri-Trade Food policies and programs. Also provides access to Service statistics. This department is the counterpart to the U.S. Department of Agriculture. Food & Consumer Products FCPC is national, non-profit organization www.fcpc.ca of Canada (FCPC) representing the food and consumer products industry in Canada. Canadian Federation of CFIG represents Canada’s independently owned www.cfig.ca Independent Grocers and franchises supermarkets. (CFIG) Canadian Restaurant and The largest foodservice and hospitality association www.crfa.ca Foodservices in Canada. Association(CRFA) Centre of Food in Canada A non-profit organization addressing issues related www.conferenceboard.ca to food and its impact on Canadians. Consumers' Association of Represents consumers to all levels of government www.consumer.ca Canada and to all sectors of society. 16 Industry Canada Trade databases. www.ic.gc.ca Statistics Canada The official source for Canadian social and www.statcan.gc.ca economic statistics. I.E. Canada (Canadian I.E. Canada is a national, non-profit organization www.iecanada.com Association of Importers committed to providing services to develop and and Exporters) enhance the international trade activity and profitability of importers and exporters.  Step 3: Locate a Canadian Food Partner- Broker/Distributor/Importer It is recommended that most new entrants to the Canadian market strongly consider securing the services of a broker/distributor/importer. Local representation provides exporters with a domestic advantage to understanding the local, regional and national markets and opportunities available. Brokers and distributors provide guidance on best business practices, sales contacts, market development, logistics and government regulations. Many also provide merchandising and marketing programs and their volume purchasing power can help reduce retail slotting fees. For companies planning to export US food and beverage products to Canada, please contact FAS/Canada (see table 23) for a partial listing of Canadian food brokers. Exporters from the United States are advised to consult with their regional SRTG as their export assistance may be helpful when evaluating appropriate Canadian partners. FAS/Canada can provide some assistance in identifying a broker/distributor/importer. In addition, companies are encouraged to visit and/or participate in specific trade shows in Canada (see http://www.ats-sea.agr.gc.ca/eve/eve-can-eng.htm for a complete listing of trade shows in Canada). These events provide an opportunity to exhibit products and meet potential buyers, brokers, distributors, and importers. FAS/USDA also endorses one of the largest food shows in Canada, SIAL Canada. The event rotates between Montreal, Quebec in the even years and Toronto, Ontario in the odd years. This year the show takes place in Toronto, April 30 to May 2, 2013. U.S. food companies wanting to exhibit in the USA Pavilion may contact Sharon Cook, USDA/FAS Washington, DC at sharon.cook@fas.usda.gov  Step 4: Understand Canadian government standards and regulations that pertain to your product. FAS annually publishes the GAIN Report on Exporting to Canada and the Food and Agricultural Import Regulations and Standards (FAIRS) Country Report that reviews the various regulations in Canada. Some of the key governing acts and regulations are the following: Canada Agricultural Products Act and Associated Regulations Consumer Packaging and Labeling Act Customs Act Fish Inspection Act Food and Drug Act 17 Importation of Intoxicating Liquors Act Meat Inspection Act Weight and Measures Act Canadian agents, distributors, brokers, and/or importers are often the best equipped to assist exporters through the import regulatory process. The best entry method depends on the food product and the sub- sector identified as appropriate for each food product. Government and industry import policies and trade acts regulate each sub-sector. Each U.S. export opportunity must be thoroughly investigated relative to the legislation that exists for the product requesting entry. Table 11: Canadian Government Organizations Related to Food Government Bodies Function Information Canadian Food Inspection Government of Canada’s regulator for food www.inspection.gc.ca Agency (CFIA) safety, animal health and plant protection. Canada Customs and Revenue Its mission is to promote compliance with www.ccra-adrc.gc.ca Agency (CCRA) Canada’s tax, trade, border legislation and regulations. Canadian Food and Drug Act A regulatory document provided by Health www.hc-sc.gc.ca/food- Canada, which outlines information regarding aliment specific food import restrictions. Health Canada Administers the Food Safety Assessment www.hc-sc.gc.ca Program, which assesses the effectiveness of the Canadian Food Inspection Agency's activities related to food safety. Foreign Affairs and Responsible for allocating tariff rate quotas to www.dfait- International Trade (DFAIT), importers. maeci.gc.ca/eicb Export & Import Controls Bureau Measurement Canada Administers and enforces the Weights and www.strategis.ic.gc.ca Measures Act for food labeling purposes. The Canadian Food Inspection Agency (CFIA) has prepared a Guide to Food Labelling and Advertising and is accessible through the internet. The guide details the regulatory requirements for selling packaged foods and beverages in Canada. The CFIA has the authority to refuse entry, detain, return, or remove from retail shelves any imported processed food product that does not meet the federal food labeling requirements. The CFIA Guide includes information on: Basic Labeling Requirements * Advertising Requirements Claims as to the Composition, Quality, Quantity and Origin of Foods Nutrition Labeling * Nutrient Content Claims * Health Related Claims * New regulations on food allergens * Other Product Specific Requirements as alcoholic beverages, processed fruits and vegetables, honey, meat and poultry, fish and supplementary products. 18 *Regulations differ from the United States and require adherence for retail sales in Canada. For more information on food labeling regulations and other information useful to U.S. food exporters, refer to the Export Guide: A Practical Guide on Canada available online at: http://gain.fas.usda.gov. In order to assist exporters to Canada, the Canadian Food Inspection Agency and the Canada Border Services Agency have established two regional Import Service Centers in Canada. The staff at these centers can be contacted to obtain pertinent information on specific import requirements and documentation. Table 12: Canadian Import Service Centers Import Service Center Open Contact Eastern Canada ISC 7 a.m. to 11 p.m. Telephone: 1-877-493-0468 or 514-493-0468 [local time] Fax: 1-613-773-9999 Central Canada ISC 7 a.m. to 12 a.m. Telephone: 1-800-835-4486 or 289-247-4099 [local time] Fax: 1-613-773-9999 19 2B. Market Structure and Retail Food Distribution Channel U.S. Manufacturer Brokers Importers Distributors & S elling to importers, Selling to distributors, Wholesalers distributors, wholesalers, Selling to distribution wholesalers, distribution centers centers and various distribution centers and various retailers retailers a nd various retailers Distribution Centers Leading Minor and Other Chain Supermarket Specialty Retailers and Chains Retailers Independent Grocers Imported food products into the Canadian marketplace may be sold directly to the retailer or to importers, brokers, distributors and wholesalers. A significant amount of U.S. agricultural and food products are shipped as an intra company transfer to the Canadian corporate entity as a branch or subsidiary operation. Traditional supermarket outlets are split between chains and independent stores. All major Canadian supermarket chains are involved in wholesaling and retailing operations. They maintain sizable distribution centers strategically located across Canada. These distribution centers not only supply their own store outlets but may also supply to franchised stores and independent grocers. Some independent grocers may be affiliated with a wholesaler through a voluntary buying group. Wholesalers and the distribution arm of a leading grocery retailer often supply convenience stores and smaller grocery retail chains. Importers, distributors and some wholesalers can sell a specific category or line of products to the chain distribution centers, as they will breakdown the quantities to ship to their stores. In addition, as in the U.S., some brokers, distributors, and importers sell directly to specified chain units by providing a direct store delivery. However, the product and designated stores must be approved by the chain’s head office. Larger retailers often procure perishable products, such as dairy, produce, meat, poultry and value-added items, directly. Some Canadian retailers, such as Loblaw Co. Ltd. and Sobeys Inc., employ procurement 20 offices in the United States for this purpose. On the grocery side of the business, most retailers rely on brokers, importers and distributors, particularly to identify unique products to sell in their stores. Both retailers and suppliers are seeking efficiencies to reduce costs in their operations. Among some of the strategies is reducing the number of vendors that category buyers work with. In response to this trend, the broker/distributor industry is making efforts to consolidate products while introducing unique novel products into the market. Larger firms are purchasing smaller brokers/distributors to offer national coverage, while regional organizations are forming alliances across the country to stay competitive by securing national coverage. Brokers and distributors focus on selling to the appropriate category buyer of a head office. Larger brokerage or distribution firms offer merchandising services to help in monitoring product movement and placement, as smaller companies will outsource these services. Consolidation in the food distribution sector has an important impact on the rest of the agri-food system as fewer buyers control more of the business through selected suppliers. This may place greater pressure on suppliers to deliver quality products at lower prices as well as continuously updating the product line with new offerings. The food distribution sector is playing an increasingly important role in the Canadian agri-food sector by generating significant economic activity and contributing to the provision of one of the world's most affordable food supply system. Today’s growing non-traditional channels are forcing brokers/distributors to focus on specialized sales teams to call on drug stores, c-stores, grocery stores (g-stores) clubs and mass merchandisers. Furthermore, with new technologies being introduced at the home office and store level, some brokerage and distribution firms are offering value-added services to their suppliers/principals. Services such as promotional and sampling support, merchandising, computerized ordering, logistical support, and data collection remain competitive in the market. To partner with a broker/distributor, food manufacturers pay a percentage of the product sales revenue. Fees can range from 3% to 10% depending on the volume and the amount of time and labor is required. The percentages are influenced by several factors: the type of product line, expected sales volume, additional special services such as planning promotions or data collection. Pioneering new product lines may have a monthly retainer fees until the products generate enough sales volume to switch to a percentage-of-sales format. All fees are negotiated between the principal and the broker prior to future transactions. In trying to introduce a new product and obtain a product listing, a broker will call on the head office of key store chains and wholesale groups. Once a product listing is secured, there may be a listing fee on new products unless the retailer views the product as a “must have” item. This fee will vary and will be determined by the product’s uniqueness, the demand for the item, along with the advertising and promotional expenditures required to launch the product in a store. i. Retail Sub Sectors Grocery Stores/Supermarkets/Superstores, Club Warehouse Outlets and Mass Merchandisers The majority of retail foods continue to be sold through Canada’s traditional grocery retailers. Canadian-based retailers Loblaw Co., Ltd., The Empire Company Ltd. (referred to as Sobeys’s) and Metro Inc., are responsible for 43% of retail food sales in the country. These market leaders have positioned themselves as the food specialists over their mass-merchandising competitors. They offer discount banner stores that compete with some of the merchandisers. In the last year, the price 21 differential on certain foods has been minimal among stores, indicating retailers are responding to a price conscious Canadian shopper. All three companies have been aggressive in developing their private label brands, including their discounted private label. In the coming year, it is forecasted that these retail leaders will aggressively compete with one another by offering discount promotions and enticing shoppers with customer loyalty programs that offer award points and specials on groceries. Loblaw Company Limited is the largest grocery retailer in the country with 1,027 stores across the country and 20% share of the food market. The company’s 22 banner stores cover the complete spectrum in types of stores as they include: large Superstores selling one third general merchandise products, conventional supermarkets, discount units, convenience and club stores. Loblaw’s reported they attracted 14 million customers to their stores in 2010. The company has earned a strategic advantage among their competitors with their control-label brands or more commonly referred to their private label brands. Some of their brands compete head-to-head with the national brands. Last year management launched over 1,200 new control brand products. Among their 13 private label brands, their most recognizable are “President’s Choice (PC)” and the “No Name’ brand representing over 5,200 products. (As a note of interest selected PC brands are now widely distributed in certain regions in the U.S.) On the high end of the price spectrum, Loblaws offers its “Black Label” products which primarily include specialty products, such as artisan-style croutons and cherry shiraz jelly. While at the other end, the retailer offers their “No Name” brand to compete with rising food prices and competition. During the 2012 holiday season this discounted brand was aggressively promoted in large urban centers through television advertisements. In addition, the company has invested more than $ 700 million in store improvements on 200 of their existing retail units. Some of the improvements included added floor space to their produce and seafood departments, along with more counter space for meals on the go. To reach the growing Asian market, Loblaws acquired T & T Supermarkets in Canada in 2009. The stores offer Asian food products not found elsewhere. Today, there are 22 stores, primarily located in British Columbia and in Ontario. Today, Sobeys, is behind Loblaws with 13% share of the retail market; however, they offer more stores than its leading competitor; 1,334 locations across the country. Between 2008 and 2011, the company reported a 14% growth rate. In 2011, their sales topped over $ 16 billion. The company’s success has largely been attributed to real estate choices and responding to the country’s changing demographics. For example, with Canada’s population residing in dense urban areas, along with the growing number of single and double person households, Sobeys introduced a new banner store called ‘Urban Fresh.” The stores are smaller but efficient. They are located in high traffic neighborhoods next to high-rise apartments and condominiums, catering to singles and smaller families living in downtown areas. Sobeys also moved to expand its private label category and now offers seven brands with their “Sensations Complements” line being the most recognizable on their store shelves. To capture the ethnic and discount shopper, Sobeys moved to rebrand their former banner store, “Price Shopper” and converted the stores to “FreschCo” in 2010. The new stores were redesigned to display more produce, baked goods and meats as well as provide more shelf space to ethnic packaged goods. Lastly, the forecast for increased sales looks promising for Sobeys as its wholesale division will become the primary supplier of frozen, dairy and dry goods to Target Canada. Metro Inc., represents 9% of the market as they operate a total 564 food stores, along with 257 drug and convenience stores in Ontario and Quebec. The conventional supermarkets make up most of Metro’s portfolio of stores however the company also operates discount stores under the Food Basics banner in Ontario and Super C in Quebec. The company as well, increased their number of private label products under the “Irrestibles” and “Selection” brands. To attract shoppers with food allergens, Metro Inc., partnered with the Quebec Association of Food Allergies (AQAA) to identify certain Metro brands as 22 “Certified Allergen Control” (CAC) products. Metro recently partnered with Quebec based Marche Adonis, an ethnic food retailer offering Mediterranean style foods. The company intends to open stores in the Ontario markets and capture more business from the growing ethnic market. Although, Loblaws, Sobeys and Metro continue to be the market leaders, there are regional stores that should not be overlooked. They are U.S. based Canada Safeway and Overwaitea Food Group in Western Canada, along with Federated Co-ops stores in Alberta. Many of these retailers are also moving forward with similar corporate strategies that reflect the changing demographics in the country. For instance, Overwaitea Food Group with 124 stores offers an impressive selection of international foods that includes 7,000 Asian food products to its customers. There are some regional based grocery chains that have a loyal customer base and have aggressively opened up stores in downtown locations as family owned firm, Longo’s. This past November Longo’s opened up its 26th store in the Greater Toronto Area (GTA). The latest store includes cooking classes and a full-service restaurant on its 48,000 square foot premise. Warehouse Clubs stores such as Costco Canada have left a permanent foothold in Canada’s retail landscape. With fewer weekly shopping trips made by Canadians, some shoppers, particularly younger shoppers prefer the convenience of loading up on their groceries even if it means spending more on their grocery bill in a single store visit. The warehouse format does not offer many frills but does offer competitive prices by buying larger quantities directly from manufacturers. Club products carry an average profit margin of about 11 percent, while other retailers mark up their goods anywhere from 25 to 50%. Stores such as Costco actively engage their customers by sampling all kinds of food products in their stores on a regular basis. Walmart Canada is the largest mass merchandiser in the country. In comparison to the market leaders, the company’s share of the grocery receipts is only six percent. However, food sales grew exponentially for Walmart Canada from $ 130 million in 2006 to $5.2 billion in 2011. A significant gain was made in the last two years as they introduced frozen foods and produce in their stores, making it convenient for time conscious shoppers to pick up all their items in a single shopping trip. Target Canada, another merchandising giant, is to set to open 126 stores in 2013 with the first stores opening in Ontario and Alberta. In addition to providing produce and chilled/frozen foods in their stores, Target will offer both the national brands and their store brands called “Market Pantry” and “Archer Farms.” Canadian Grocer forecasts that in its first few months, Target’s priority will likely not be on food. However, competitors’ remain watchful as Target’s food and pet supplies categories have grown by 5% in the last four years in the United States, and Target will surely put pressure on Canadian grocery prices. ii. Convenience Stores, Mini Marts, and Gas Stations The Canadian Convenience Store Association reported 10.4 million visits are made each day to Canada’s 23,000 convenience stores and gas stations. The sector is expected to continue to grow at a steady pace. This growth has attracted newcomers and forced players to reinvent themselves to keep their position in the market. Floor space for food products such as sushi, baked goods and snacks is growing as many stores are expanding their premises to accommodate the increasing number of products and services. The focus has been on equipment to prepare and stock high quality convenience foods, particularly chilled items such as soft drinks. Much like the trend in the supermarket sector, products that are perceived to be healthy are now becoming readily available in these types of stores. 23 iii. Drug Chains Grocery sales through the drug stores remains small in comparison to the other retail channels however, a few drug store chains have expanded their grocery section and will continue to increase their food sales. Although, food prices are for the most part higher in drug stores, retailers such as Shoppes Drug Mart have been aggressive in offering price specials on items like boxed cereal and other basic groceries. These tactics are done to capture more food dollars from their regular shoppers. The following table lists the leading retail chains and their major respective banner store as reported at the end of 2011. Provinces Abbreviations: AB: Alberta NS: Nova Scotia BC: British Columbia NU: Nunavut MB: Manitoba ON: Ontario NB: New Brunswick PE: Prince Edward Island NL: Newfoundland and Labrador QC: Quebec NWT: Northwest Territories SK: Saskatchewan YT: Yukon Canadian Regions: Eastern: NB, NS, PEI, NL Central: ON & QC Western and Prairies: AB, BC, MB, SK Store Type: SS: Superstore SC: Super Centre SM:Supermarket C: Convenience Price Category: D: Discount M: Medium U: Upper L: Low W: Wholesale Table 13: Grocery Stores/Supermarkets/Superstores Banners Re Store Price No tailer Name of banner Location type category units Loblaw Companies Total Chain Sales = C$ 32.4 B. Ltd. loblaw.ca 24 Re e Price No tailer Nam Store of banner Location type category units Eastern Canada Atlantic Superstore SS D 51 NB, NS, PEI Dominion SM M 11 NL NB, NS, PEI, Save Easy Foods SM D 45 NL Central Canada Cash & Carry SM D 15 ON, NS Fortinos SM/SS M 20 ON L’Intermarche SM M 64 QC Loblaws SM/SS M 75 ON, QC Maxi SM D 90 QC Maxi & Cie SM D 16 QC BC, AB, ON, NB, NS, NL, NoFrills SM D 173 PEI Presto SM M 12 QC Provigo SM/SS M 76 QC Real Canadian BC, YT, AB, Superstore SS D 110 SK, MB, ON Real Canadian BC, AB, SK, Wholesale Club SS D 36 MB, ON Valu-Mart SM M 61 ON Your Independent Grocer SM M 53 ON Zehrs SM/SS M 45 ON BC, YT, NT, Extra Foods SM D 78 AB, SK, MB,ON Western Canada/ Real Canadian BC, AB, SK, Prairies Wholesale Club SS D 36 MB, ON Shop Easy Foods SM D 34 BC,AB, SK, MB SuperValu SM D 19 BC, YT, SK T & T SM M 20 BC, AB, ON Sobeys (Empire Total Chain Sales = C$ 17 B. Company Ltd.) Sobeys.com All Provinces BC, AB, SK, MB, ON, NB, Sobeys SM M 281 NS, PEI, NL NB, NS, NL, Cash & Carry SM W 6 MB ON, NB, NS, Foodland SM M 197 NL 25 Re tore Price No tailer Nam Se of banner Location type category units Freshco SM L/M 27 ON IGA Extra SM M 98 QC, NB Marché Bonichoix SM M/U 89 QC, NB Les Marché Tradition SM M/U 31 QC ON, MB, NB, Price Chopper SM D 110 NS, PE, NL Rachelle-Bery (Natural Health Foods) SM M/U 19 QC Metro Inc. Total Chain Sales = C$ 12.13 B. Metro.ca Central Canada Food Basics SM D 115 ON Marché Richelieu SM M 86 QC (1 in ON) Metro SM L/M 371 ON, QC Super-C SM D 78 QC Canada Safeway Total Chain Sales = C$5.3 B. Safeway.ca All provinces BC, AL, SK, Family Foods SM M MB BC, AB, MB, Safeway SM M ON Federated Co- Total Chain Sales = C$ 3.35 B. Operatives Ltd. coopconnection.ca Central /Western/ BC, AB, SK, Prairies Bigway Foods SM M MB, ON, YT Cash & Carry Depots SM W AB, BC BC, AB, SK, Co-op Food Store SM M MB BC, AB, SK, MB, NWT, YT, Federated Co- Super A Foods SM M ON operatives Ltd. The Grocery People SM M BC, NWT, YT TAGS SM M AB, SK, YT 26 Re Store Price No tailer Name of banner Location type category units Overwaitea Food Total Chain Sales = C$ 2.92 B. Group Owfg.com Western Bulkley Valley Wholesale SM D/W BC Cooper’s Foods SM M BC Overwaitea Foods SM M BC PriceSmart Foods SM L/M BC Save-On-Foods SM M BC, AB Urban Fare SM M BC Source: Canadian Grocer, Who’s Who ( 2012 ) ( 2013) and 2012 Directory of Retail Chains in Canada. Table 14: Club Warehouse Store Banner Re Name of Store Price No. tailer Banner Type Cat n egory Uni Locatiots Costco Total Chain Sales = C$ 7.8 B * Canada Inc. Costco.ca Costco CW W 82 BC, AB, SK, MB, ON, QC, NS, NB, NL Source: Canadian Grocer, Who’s Who ( 2012 ) ( 2013) and 2012 Directory of Retail Chains in Canada. * Food sales 2011 Table 15: Mass Merchandisers 27 Retailer Name of Banner Sales No. Units Location Re (C$ tailer Name Store Price Sales No. Units Location Bann 000) er Type Category (C$ 000) Canadian Tire Canadian MM MM 10C$10.3 B. 487 All Corporation Tire provinces Dollar Tree Dollar Giant MM D N/A 101 BC, AB, Canada SK, MB, ON Dollarama Dollarama MM D C$ 1.4 B. 667 All Stores provinces, mostly ON and QC Giant Tiger Giant Tiger MM D C$ 1.4 B. 196 All Stores provinces The Northwest Northern MM M C$ 1.4 B. 196 All Company pr Nor ovinces th Marts L/M QuickStop L/M Wal-Mart Wal-mart MM/SC D C$ 5.2 B * . 328 All Canada provinces Corporation Supercenters D 146 Zellers Inc.- A Zellars MM L/M C$ 5.9 B 279 All Division of provinces Hudson’s Bay Company Source: Canadian Grocer, Who’s Who 2012 and 2012 Directory of Retail Chains in Canada * Food sales 2011 Table 16: Convenience Stores, Mini Marts, and Gas Stations 28 Alimentation Couche-Tard, Couché-Tard 1000 QC Inc. Becker’s 12 ON, MB Daisy Mart 203 ON Dépanneur 7 jours 392 QC $ 1.2 B* BC, NWT, SK, MB, Mac’s 1,171 ON Tabatout 23 QC Winks 19 Western Canada Husky Oil Marketing Husky and 500 BC, AB, SK, ON Company Mohawk Metro Marché Ami N/A 84 QC Marché Extra 209 QC Servi-Express 94 QC Sobeys Needs N/A 140 Eastern Canada Parkland Industries LP Fas Gas Fas Gas Plus Short Stop N/A 150 BC, AB, SK, MB Short Stop Express Petro Canada SuperStop N/A 1,421 All provinces SuperStop Express Quickie Convenience Stores Quickie N/A 50 ON, QC 7-Eleven Canada Inc. 7-Eleven N/A 468 BC, AB, SK, MB, ON Shell Canada Products Select N/A 632 All provinces Limited Source: Canadian Grocer, Who’s Who 2012 and 2012 Directory of Retail Chains in Canada * Food sales 2011 Table 17: Leading Drug Chain Retailer Name of Banner Sales (C$ 000) No. Units Location 29 Shoppers Drug Mart Shoppers Drug Mart $ 620 M * 1257 All provinces Source: Canadian Grocer, Who’s Who 2012 and 2012 Directory of Retail Chains in Canada * Food sales 2011 iv. On-Line Shopping Grocery on-line shopping has been slow to take off in Canada as compared to the United States. Most shoppers that order on-line, shop occasionally or have challenges in getting to their stores. Very few retailers have invested in this sales channel and their service is localized to a limited georgraphical area. The more recognized on-line grocers are: IGA, which is operated by Sobeys in selected areas in Quebec; Metro Glebe operated by Metro in Ottawa; and Grocery Gateway, owned by Longo Brothers Fruit Market, Inc., operating in Toronto and its suburbs. There are operations in smaller communities servicing Vancouver Island in British Columbia by Quality Foods and, Tele Grocer in the southern part of Ontario. In an effort to increase on-line sales and highlight the convenience of shopping on-line, retailers such as Grocery Gateway and Quality Foods have introduced new ‘apps’ for both the internet and mobile devices. For example, in the autumn of 2012, Grocery Gateway partnered with Unata, a digital marketing firm to offer a mobile app to its customers with smart phones. The app permits customers to order their groceries and schedule a convenient delivery time. The increased use of mobile devices, along with growing time constraints on shoppers may help to boost on-line sales in the future. 30 Section 3: Leading U.S. Products and the Competition Table 18 Product Major Strengths of Key Supply Advantages and Disadvantages Category Supply Countries of Local Suppliers Sources FRESH FRUITS &  Canada is the largest foreign  Dry onions, carrots, lettuce, sweet corn, VEGETABLES buyer of U.S. fruits and cabbage are the leading vegetables sold vegetables. The U.S. benefits in the fresh market. from relatively unimpeded  Apples are the largest production item, VEGETABLES: VEGETABLES: export access into Canada during followed by blueberries, cranberries, CANADIAN Canada’s winter or non-growing grapes and peaches. GLOBAL 1. U.S.: 66% months.  Seasonality pose
Posted: 05 February 2013

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