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As stakeholders in the Canadian food industry, processors and independent retail grocers are both well aware of the demands of competing in today’s changing food landscape. Increased retail
consolidation, the falling loonie, rising input costs and the challenges of our supply chain are but some of the issues with which we both must contend.
For independent grocers, margins of one – two per cent are pretty much the norm, and well below the margins in other retail sectors. So to not only compete, but to grow their business, an independent retailer has key pillars around which they must build their store or company. Independent operators provide an enhanced customer service experience: they aggressively innovate;
maintain a strong presence in and support for their community; and look to differentiate their operation from the offerings of larger national chain supermarkets.
A critical part of achieving that differentiation strategy is, of course, sourcing local and new products and promoting such to their consumers. ‘Buying local’ is not just a slogan for independent retail grocers – it is an essential part of their business model. The Canadian Federation of Independent Grocers (CFIG) supports the current definition of ‘local’ as provincial. As such, processors in the Western provinces are viewed as essential industry partners by independent grocers.
Independent retail grocers actually have a stronger presence in Western Canada in comparison with any other region of the country. They even constitute a majority of retail grocery in the province of British Columbia. These retailers are aggressively looking for new products to showcase or test in their stores, and new processors to partner with. One fact often overlooked
by many in industry, is the combined cumulative sales revenue generated by independent retail grocers in Canada. It’s about $13 billion, which puts them ahead of other more well-known – and courted -retailers such as Costco and Wal-Mart.
But have processors and independent retailers done enough to grow our respective sectors in tandem?Probably not. Perhaps many processors do not realize the ‘size of the pie’ that resides with the independent retail grocery sector, nor been aggressive enough in pursuing that market. CFIG operates an annual trade show and convention in Vancouver every April. This year, that event has been revamped and renamed as Grocery & Speciality Food West (GSF). It is attended not just by the Western retail grocers I previously mentioned, but by retailers (customers!) from across the country. CFIG would like to see a stronger presence of local processors at GSF, because our members want the opportunity to develop new relationships with local producers and processors.
That is why as an association, we believe that a processors’ costs of exhibiting and getting in front of your retail customers is not an expense – but an investment.
Our retail members have told us they want to see more processors, particularly specialty, at our trade show. Governments and industry for years have funded and partnered on numerous variations of ‘Buy Local’ advertising and marketing campaigns, aimed entirely at the consumer. That is fine, but it is not in itself the way processors will see more of their products on the shelves
of retail grocers. Both processors and retailers must become more focused on developing relationships and exploiting all opportunities for direct interaction and dialogue.
On today’s food industry landscape, we must spend more time turning obstacles into opportunities. Together, we can do just that and accomplish so much more. I hope to see many of our processing Partners — and partners to be — at GSF in April meeting and forging relationships with our retail members. This event, in your own Western backyard, is your door to making
that happen. Let’s open that door together.
See you in Vancouver!
Thomas A. Barlow is the president and CEO of The Canadian Federation of Independent Grocers, which represents more than 4,000 independent grocery retailers across Canada. Independents account for more than $13 billion of the grocery market share in Canada. CFIG provides numerous programs for operational excellence and fosters solid relationships among retailers and suppliers. Visit www.cfig.ca
This article originally appeared in Western Food Processor Spring 2015
