Convenience Central
Join our community
extra content
Screen Shot 2021-03-01 at 1.28.24 PM

Former Nestlé Waters CEO joins Ontario’s Flow Water

Maurizio-Patarnello_Credit-Flow-Water-Inc-240x300Maurizio Patarnello, who spent almost three decades with Nestlé,  is now CEO at Flow Water Inc. He takes the lead as founder and CEO Nicholas Reichenbach moves into an executive chairman role.

Patarnello is being tapped to play a key role in scaling Flow to “meet its goal of becoming one of North America’s premier sustainable mineral spring water and wellness beverage companies,” according to a release.

Patarnello joined Nestlé in 1993. During his tenure he assumed various positions of increasing responsibility around the world, including throughout Western and Eastern Europe, Asia, and the Middle East. In 2017 he was appointed CEO and Chairman of Nestlé Waters, a role that he held through the end of 2019.

He has deep expense in the bottled water business, having significantly contributed to Nestlé Waters’ growth of brands such as Nestle Pure Life, Perrier, San Pellegrino, Acqua Panna and Poland Spring. He is also “a pioneer in the global consumer health movement from carbonated soft drinks to bottled water.”

READ: Nestle sells bottled water business

Patarnello’s appointment comes weeks after Flow Water announced it’s plans to go public in late spring.

“It is incredibly energizing to have someone of Maurizio’s stature and expertise join the Flow family, and his leadership will help us accelerate our growth, hone our strategy and execution, and scale our business in North America,” Reichenbach said in a release. “His experience in the premium bottled water space and his business acumen will be invaluable as we build Flow together into a leading North American mineral spring water and beverage brand. I’m proud to have led Flow from its inception to being a high-growth company that is now ready to go public and am so grateful be able to hand the reins to such a seasoned executive like Maurizio, while taking on a new active role as Executive Chairman.”

Flow Water is sourced from a family-owned spring in Ontario’s Bruce County, and is positioned as an eco-friendly alternative to traditional bottled water.

“I am thrilled to join the highly professional and dynamic executive team and lead Flow with Nicholas and the Board, as we stand on the precipice of an important evolution of the company and of water and beverage aisles across North America,” Patarnello said, adding: “Flow has tapped directly into the modern consumer’s desire for high quality sustainable water and functional beverage products and is poised to be a market leader in the space. Accelerating Flow’s growth will be our main goal in the coming years. I expect great things to come.”


Nestlé sells bottled-water brands in North America for US$4.3 billion

Global food giant Nestlé is selling its bottled-water brands in North America for $4.3 billion to a pair of private-equity firms that hope to reinvigorate sales.

Brands including Poland Spring, Deer Park, Arrowhead, Ozarka, Zephyrhill and Pure Life will be sold to a subsidiary of One Rock Capital Partners and investment firm Metropoulos & Co. The deal, which is expected to close this spring, will create one of the largest beverage companies in the U.S.

Dean Metropoulos, who previously led turnarounds at Hostess Brands and Pabst Brewing Co., will be serve as chairman and interim CEO of the independent company that will house the brands acquired from Nestle.

Swiss-based Nestlé said it intends to sharpen its focus on its international premium water brands, including Perrier, S. Pellegrino and Acqua Panna, which were not part of the deal.

The new owners, meanwhile, hope to boost the bottled-water brands, which have seen slower sales growth in recent years.

U.S. bottled-water sales have grown every year since the 2009 recession, as health-conscious consumers have switched away from sugary soft drinks. Bottled water outsold soft drinks for the fourth year in a row in 2019, according to the International Bottled Water Association.

But that growth has been slowing amid criticism from environmental activists about waste from single-use plastic bottles. Consumers have also been switching to flavoured and sparkling waters, like LaCroix or Coca-Cola’s smartwater brand. Lower-cost store brand bottled waters have further cut into sales.

Nestle’s North American water business has 27 production facilities and more than 7,000 employees. It sources water from 38 active springs throughout the U.S.

That practice has come under increasing scrutiny from environmental groups. Last year, lawmakers in Washington state considered – but ultimately dropped – legislation that would ban companies from bottling ground water. And Democrats in Congress launched a probe of the industry, asking Nestle for data on water extraction and sales.

In Maine, home to Poland Spring, a water rights group is worried that the new owners will backtrack on agreements with local communities.

“This water connects to all of us and should be stewarded by the local communities who depend on them, not negotiated away behind closed doors, exploited and exported by corporations for privatized profit,” said Nickie Sekera of Community Water Justice.

Last year, Nestlé tried to sell its Canadian Pure Life brand to Canadian water bottling company Ice River Springs, but the deal did not meet the requirements of the Competition Bureau.

At the same time, a group of water advocates in the area called on Nestlé to return local wells to their municipalities rather than include them in a sale of the company’s North American properties. The advocates, known as the Wellington Water Watchers, said the Aberfoyle well should be given to the Six Nations of the Grand River, a water insecure community that claims ownership as part of the Haldimand Proclamation and the 1701 Nanfan Treaty.


7-Eleven Canada proposes in-store ‘consumption areas’ for beer and wine

imagesConvenience store chain 7-Eleven Canada says it is preparing many of its Ontario shops to serve beer and wine in the store.

The company says it is planning in-store service of a small selection of Ontario-made beer and wine products.

7-Eleven says the beer and wine would be offered during limited hours in designated consumption areas of some Ontario stores.

The retailer says the Alcohol and Gaming Commission of Ontario is still reviewing its liquor sales licence applications, which were filed after the Ontario government decided to extend beer and wine retailing to convenience stores.

7-Eleven says the alcoholic drinks would complement its push into fresh and hot food, and would build on the chain’s long history of controlling access to age-restricted products.

A statement from the chain says that if the licences come through, staff would take the Smart Serve training program, which is designed for workers who sell, serve, deliver or handle alcohol in Ontario.

“We are committed to meeting the needs of our Ontario customers and we look forward to the opportunity to grow jobs and contribute to the Ontario economy,” the company said in a statement.

The plans to serve alcohol in Ontario may be hard for convenience store patrons to envision – but the Restaurants Canada industry association says it is actually a new take on an old format.

7-Eleven Canada says it is awaiting approval for liquor sales licences that would allow in-store service of beer and wine.

If the 61 licences are approved, 7-Eleven Canada says trained servers would offer the alcoholic beverages during limited hours in designated consumption areas of the shops.

Restaurants Canada vice president James Rilett says that since the convenience store chain is not primarily a restaurant, regulations don’t allow the chain to compete with restaurants by offering takeout alcohol sales.

Rilett, who is vice president of central Canada for the nation’s restaurant advocacy group, says he sees 7-Eleven Canada’s in-store venture as healthy competition – similar to long-standing cafes or delis located in bodegas.

Rilett says that while 7-Eleven will need to come up with safety policies for drivers buying gas, the convenience stores could look to restaurants at rest stops for examples of how to manage alcohol service.

“The restaurant industry is always evolving, and we see this as just another evolution. It’s actually nothing new in many ways,” says Rilett.

“There’ll probably be some hiccups along the way. They’re an innovative company, so hopefully, they’ll be able to address them. It might end up being that some restaurants that don’t have liquor licences now see this as an opportunity to do this as well.”


READ MORE: However, not everyone is supportive of the move. The president of union representing The Beer Store workers criticizes 7-Eleven’s alcohol plan, saying: “The last thing Ontario needs right now as we try to bounce back from the coronavirus pandemic is alcohol in convenience stores. It does nothing to rebuild our province. In fact, it threatens our communities even more.”


COVID resurgence slows recovery at Coca-Cola

Coke-Facebook-delivery-360x203A resurgent coronavirus slowed Coca-Cola’s recovery in the fourth quarter, and the company said the slump has continued into this year.

But, the Atlanta-based beverage giant said it’s confident it will see improvement as vaccines roll out around the world and it delivers new products in fast-growing categories, like an updated version of Coke Zero Sugar and Topo Chico Hard Seltzer, a rare foray into alcohol for the company.

As a measure of that confidence, Coke issued financial guidance for the first time since the pandemic began, saying it expects 2021 earnings to match or exceed those in 2019. Many of the biggest corporations in the U.S. have pulled projections due to the unprecedented scope of the pandemic.

“The trajectory of the recovery will be a significant factor, and we expect to be dealing with COVID-19 for the better part of the year, with the first half likely to be more challenging than the second half,” Coke chief financial officer John Murphy said in a conference call with analysts.

Coke has been decimated by the closure of arenas, restaurants, theatres and other public places, where it normally books about half its revenue.

Global case volume slipped 3% for the October-December period, exceeding Wall Street projections for a decline of 2.2%, according to analysts polled by FactSet. Case volume rose 2% in Latin America thanks to strong demand in Brazil, but it fell elsewhere.

Unit case volumes of soft drinks fell 1% in the fourth quarter, primarily due to declines in away-from-home business in North America and Europe. Juice and dairy sales fell 2% and water and sports drink demand fell 9%. Tea and coffee sales dropped 15% as the virus hampered sales at Costa coffee shops.

Coke’s net revenue fell 5% to US$8.6 billion for the fourth quarter. It was a significant improvement from the second quarter, when revenue fell 29%, and the third quarter, when revenue fell 9%.

Coke earned $1.46 billion, or 34 cents per share. That per-share number would be 47 cents if one time costs and benefits are removed, six cents better than Wall Street had projected.

Coke Chairman and CEO James Quincey said the company is confident it will return to growth in 2021, despite sales declines that have persisted through February. Coke expects to deliver organic revenue growth in the high single digits in 2021, as well as single-digit growth in its per-share earnings.

But it also revealed a potential headwind. Coke said it could potentially face $12 billion in liability as the result of an ongoing lawsuit filed by the U.S. Internal Revenue Service over the profit split of drinks that are made and sold overseas.

In November, a U.S. tax court ruled in favour of the IRS in the six-year-old case, saying Coke must pay the bulk of a $3.4 billion tax bill. The $12 billion figure would include previous years and interest, Murphy said. But Coke is appealing and said it is confident it will eventually prevail.

Quincey said the company can emerge from the pandemic stronger thanks to restructuring actions it took in 2020. Coke pared its brands from 400 to 200 and dropped slow sellers like Tab, Zico coconut water and Odwalla juices.

Coke’s workforce is also getting leaner. The company announced in December it would lay off 2,200 workers, or 17% of its global workforce. Coke said severance packages would cost between $350 million and $550 million.

Éric Gemme

Éric Gemme to step into CFO role at Lassonde Industries

Éric Gemme

Éric Gemme

Quebec-based Lassonde Industries has announced that Éric Gemme will step into the role of chief financial officer on April 1. The appointment is what the company describes as a “long-prepared transition plan” as Gemme replaces Guy Blanchette, current executive vice-president and chief financial officer, who is retiring at the end of March after 14 years at the company.

Gemme, who joined the company in 2014, is currently senior vice-president and chief financial officer of the Lassonde Pappas and Company Inc. division.

Post-retirement, Blanchette will continue his relationship with Lassonde serving as a strategic advisor to its CEO Nathalie Lassonde.


Pandemic shakes up beverage choices



The ongoing COVID-19 pandemic and its associated effects, such as stockpiling, home seclusion and channel shifts, have had a sizable impact on the trajectory of all non-alcoholic drinks categories in 2020. In addition to changing when and how Canadians shop, these factors are altering the product attributes consumers seek. While the duration of the pandemic remains uncertain, it is clear its impact on drinks will be felt for years to come.

Data from Euromonitor International shows a net decline in sales of non-alcoholic drinks in 2020. While public health guidelines that pushed consumers to stay home resulted in stockpiling, this growth in retail sales was easily offset by the on-trade sales decline in cafés, bars and restaurants. During the early months of the pandemic, many hoped that this fall in on-trade sales would quickly reverse, especially in 2021. However, spikes in COVID-19 cases during the early months of fall have cast the chances of a speedy recovery in a much different light.

Now, it seems likely that closures impeding on-trade sales will persist well into next year. But perhaps more consequential than temporary closures is the likelihood that many businesses will permanently shutter after going through a prolonged period of inactivity. Euromonitor estimates that away-from-home availability of soft drinks in 2020 is at only 63% compared to previous years. Whether that limited availability becomes permanent depends highly on the pandemic’s trajectory over the next few months.

As home seclusion continues, on-trade closures have had the multi-pronged effect of driving stockpiling and channel shifts such as the replacement of on-trade consumption with drinks that can be enjoyed by consumers at home. Stockpiling has benefitted retail sales of soft drinks almost universally. Categories such as juice drinks (24% or lower juice products) have seen volume growth for the first time in more than a decade. This success holds true across bottled water as well, while many carbonated categories are seeing much slower declines than they have in previous years.

Exceptions to this growth do exist, however. Emerging categories just gaining traction have faced challenges in 2020 as many consumers opt for products with which they are more familiar. Carbonated ready-to-drink teas and kombuchas, for example—which are still new to many Canadians— have seen slower growth.

Lastly, soft drinks did benefit from channel shifts, but not to the same extent as hot beverages. As trips to cafes are replaced with options prepared at home, ground coffee, pods and whole beans have seen large increases in growth, and most tea categories have also improved their performance.

While stockpiling, home seclusion and channel shifts have had a large impact on 2020, we do not expect their reach to extend far beyond 2021. Instead, some of the most indelible results of the pandemic may be trends in product attributes and retail channel distribution. Concerns over contracting COVID-19 have ramped up existing interest in foods and drinks that benefit various types of immunity. As the pandemic subsides, interest in functional drinks that promote immune system health may remain, benefitting a wide swath of categories from juices and tonics with added probiotics to medicinal and herbal teas. The success e-commerce has experienced in 2020 will likely also endure over the next five years, as home seclusion has led to buying drinks online and improved distribution networks for internet retailing.

For now, the pandemic has had a dampening effect on overall drink sales in Canada, and the prospect of full recovery does seem more distant than initially expected. On-trade channels, especially, will take years to recover to levels experienced prior to 2020, and off-trade growth is not compensating for this loss. Nonetheless, opportunities exist as certain categories see growth through channel shifts and new trends in product attributes develop.

Alexander Esposito is a senior research analyst at Euromonitor International, an independent provider of strategic market research.

Originally published at Canadian Grocer. 


Cheers to non-alcoholic beer

Wherever your location and whatever the rules, alcohol-free beer is a fast-growing segment and an immediate gateway for all c-stores to get in the beer game


One of my earliest memories of consumer packaged goods was watching Toronto Maple Leaf hockey broadcasts in the late 1960s. In those days, television was in its infancy, and only half the game was shown live on TV.

During the startlingly few commercial breaks, there were innocent lifestyle ads for new cars, gasoline, and a product called Molson Export Ale—The BIG ale, in the BIG land. Eventually, I came to associate these commercials with the distinctive bottles of Export Ale my father had in our refrigerator. Hockey was Canadian, and beer was, by extension, the quintessential Canadian way to imbibe. 

Beer in Canada

Screen Shot 2020-12-14 at 11.22.48 AMAccording to industry group Beer Canada, in 2019, Canadians of legal drinking age consumed on average 71 litres of beer, a decline of 5% from 2018. Provincially, Newfoundland had the highest per capita consumption at 87 litres of beer, followed by Quebec with 81 and P.E.I with 77 litres. Ontario had the lowest per capita consumption of all provinces at 66 litres. 

The overall trend on per capita beer consumption in Canada over the last 20 years has been down, while other types of alcoholic beverages have seen some growth. At the same time, within the beer segment, the number of brewers has grown exponentially as consumers have migrated to a diverse range of domestic craft and premium offerings.

Screen Shot 2020-12-14 at 11.23.05 AM

The emergence of non-alcoholic beer

Back in 2014, global new product research company Mintel reported the emergence of a “new wave of higher quality non-alcoholic beer in Germany.”

Mintel associate director Jonny Forsyth predicted,  “Non-alcoholic beer (NAB) has huge long-term sales potential, both in Muslim-dominated regions and health-conscious but beer-loving Western markets. This is an area of innovation which all major brewers should be focusing on.”

In the last two years, this trend has manifested itself in the launch of new 0% versions of key brands by Budweiser, Labatt’s, Heineken, Molson Coors, Carlsberg, Peroni and Erdinger, as well as Canadian craft brewers like Partake Brewing and Le Bockale. AB InBev, the world’s largest brewer, anticipates that no/low alcohol beer will represent 20% of its sales by 2025.

Size of the prize 

According to Euromonitor International, an international provider of strategic market research, volume consumption growth of low/no alcohol beer in Canada in each of the last three years has been more than four times higher than overall beer market growth.

The LCBO reports: “No/low alcoholic beer was introduced to the LCBO in the 2018/2019 fiscal year and has grown from five to 11 total SKUs… (and) sales have grown 88% compared to last year, while overall beer and ciders sales have grown 0.1%.”

In British Columbia, the Liquor Distribution Branch (LDB) is responsible for the wholesale distribution and retail sale of beverage alcohol and cannabis. The LDB has the sole right to purchase beverage alcohol both within B.C. and from outside the province. 

Screen Shot 2020-12-14 at 11.23.25 AMIn its most recently completed fiscal year, LDB sold more than $1B dollars (wholesale value) of beer to on-license and off-license outlets. By volume, beer sales were down about -3.1% in B.C. By dollar value, the decline was -1.7%, reflecting growing consumer preference for premium & craft beer. Further, according to LDB data, over the last five years the value of shipments of alcohol-free beer to B.C. liquor stores, restaurants, and pubs increased, on average, double-digits per year. 

Non-alcoholic beer products accounted for only 1.2% of total beer sales in 2018, however the category grew in volume by more than 50% between 2013 and 2018, according to Beer Canada. 

While alcohol-free may as yet represent a small share of suds sales, it’s already a million dollar piece of a multi-billion dollar pie. 

Get in the game

The number of retailers selling alcohol in the U.S. has been rising—up 20% over the last 10 years. In Canada, provincial regulations vary widely with respect to permitting convenience retailers to sell alcohol. In Ontario, 450 grocery stores may sell beer and cider. In addition, there are more than 250 designated LCBO Convenience Outlets. The government of Ontario suggests that it is currently working on its plan to continue expanding alcohol sales to more retail locations. 

In the meantime, non-alcoholic beer is an opportunity to take action. The Liquor Licence Act (LLA) says, “Beer means any beverage containing alcohol in excess of the prescribed amount obtained by the fermentation of an infusion or decoction of barley, malt and hops or of any similar products in drinkable water. The prescribed amount is 0.5 of 1% of alcohol by volume or 0.4 of 1% of alcohol by weight.” A government spokesperson confirmed to CSNC that, as non-alcoholic beer does not fall within the definition of beer, it is not subject to the LLA and can be sold like any other beverage. 

Euromonitor International research indicates that more than 80% of no/low alcohol beer volume in Canada last year was sold “off-trade” to consumers via retail outlets. Wherever your location and whatever the rules, alcohol-free beer is an immediate gateway for all convenience operators to get in the beer game. 

Still not convinced? Well, beer and sports are still a thing. Heineken’s alcohol-free brand 0.0% is the new official sponsor of the UEFA Europa Soccer League through to June 2024. The sponsorship recognizes the rapid growth and potential of the 0.0% brand. Heineken has said that it will be backed up by a new brand slogan, ‘Now You Can’.



C-stores connect brewers and consumers around the globe

Carlsberg is making a big bet on alcohol-free beer and aims to offer alcohol-free beer products in all of its markets by 2022. 

  •     Alcohol-free beers make up 3-5% of the global beer category
  •     In Spain and Sweden, alcohol-free beer has a 12-13% share
  •     In Japan, alcohol-free beer is above the global average, owning a nearly 4.5% share
  •     The alcohol-free beer category is growing double-digit YOY in most European countries

In Singapore, Carlsberg recently introduced two new alcohol-free beer SKUs under the same banner. In order to drive consumer trial, Carlsberg allowed consumers to add samples of the new products to their online shopping carts for $0.10. The Carlsberg alcohol-free beer launch placed product in convenience stores, supermarkets and on e-commerce sites.

Screen Shot 2020-01-16 at 3.50.24 PMDarren Climans is a foodservice insights professional with close to 20 years’ experience partnering with broadline distributors, CPG suppliers, and foodservice operators. His practice is to understand issue-based decisions by taking a data-driven approach to strategic decision making.


What’s brewing with RTD coffee?

Not even a pandemic can cool off the hot ready-to-drink coffee market. Sales are percolating well, with big-name players coming onto the scene and providing c-stores with innovative options for customers. Though RTD coffee business may seem small, it’s a robust one with expected growth of 20%. In 2014, it represented just 2.5% of the total coffee market, but that figure doubled to 5% by 2019, according to the Coffee Association of Canada.




To a large degree, its Gen Z (those born between 1995 and 2007) leading demand with 46% drinking RTD coffee, as per September 2020 data from Mintel. Millennials are sticking with ground coffee, while their younger counterparts haven’t yet made that switch. 

In fact, COVID-19 also has played a part in the rising popularity of RTD coffee. Java enthusiasts are looking for ways to have café-calibre, coffee-sipping experiences at home, now that lingering over a cuppa prepared by a barista is less viable. 

“Pre-COVID sales were being fuelled by taste and time,” says David Schneiderman, CEO and co-founder of Two Bears Coffee. “Our lives had become busy without time to slow down. Now, RTD coffee gives customers something delicious with a great hit of caffeine without the line-ups at the local café.”

With wellness top mind for many Canadians, the door is open for c-stores to do well by stocking healthier versions of RTD coffees. Two Bears is the first Canadian company offering plant-based, ethically-sourced lattes and brew coffee made with oat milk. Its approach to retailer support is a multi-tiered system, which includes in-store promos, cross promotions with larger, more well-known brands and a digital campaign.

“Convenience stores have been selling RTD coffees for years with great success,” explains Schneiderman. “But they are losing out on the consumer who doesn’t want to drink something with as much as 48 grams of sugar and artificial ingredients.”

Station Cold Brew Coffee Co. will also be building on its roster, which includes top-sellers New Orleans-Style and Vanilla Nitro Cold Brews, with the new launch of its own plant-based, oat milk-based lattes. Mitchell Stern, company co-founder and VP, sales and marketing, says it is looking to expand into convenience stores and will support sales through in-store promotions, giveaways and price breaks. “We are constantly exploring new opportunities in this [c-store] space and, as the leading cold brew coffee brand in Canada, we want to own the space,” he explains. “Our biggest challenge as an independently owned, private company is competing with major companies with deep pockets who own the fridges.”

Clearly, competition is brewing in the RTD coffee space. Coca Cola with Coffee (made with Brazilian coffee) is set to roll out in Canada and the U.S. early in 2021. The beverage giant refers to the new offerings (available in 12-oz cans of Dark Roast, Caramel and Vanilla flavours) as “hybrids” in a new category it calls “refreshment coffee.” Joining the fray is Monster Energy, best known for its high-octane energy drinks. It already has Java Monster, which has performed well, but will bring on board Espresso Monster featuring a triple shot of coffee, plus natural stimulants like taurine and ginseng. It will come in two flavours, Espresso & Milk, and Vanilla Espresso, formulated to appeal to a market keen on embracing the cold brew coffee RTD trend.

Screen Shot 2020-11-30 at 2.40.38 PMThough the battle between brands will be steamy, there’s room in a category that has not reached its peak. “Canada is playing catch-up with the growth and popularity of our neighbours to the south,” explains Alfonso Tupaz, founder of Hatch, a Toronto-based company that produces private label RTC coffee available in the c-store space. “We would say that we’re four years behind, but it’s now reaching the level of where we think RTD coffee should be, compared to the U.S.”

The majority of Hatch’s beverage unit sales come from their private label business. According to Tupaz, 2020 has been its busiest year yet with cold brew. “Our clients fare well in the retail space.”

There’s still an unquenched demand above coffee enthusiasts. “Coffee is a daily routine for many people in Canada,” he points out. “By natural extension, we’re seeing coffee enter more point-of-sale areas, including convenience stores. RTD coffee, in particular, is a convenient pack format, and fits nicely with the convenience store model.”


Originally published in the November/December issue of Convenience Store News Canada.

Screen Shot 2020-11-09 at 4.34.12 PM

Consumers crave immune-boosting foods and beverages

You may be surprised to learn that, until fairly recently, Coca-Cola was presented and sold to consumers as a functional food.

Screen Shot 2020-11-09 at 4.34.12 PMPharmacist John Pemberton’s prototype recipe, that evolved into Coca-Cola, originally included both alcohol and coca leaf (the source of cocaine). Prohibition in Atlanta in 1886 prompted the removal of alcohol from the formulation. Coca remained the main active nutraceutical in Coca-Cola until 1903, when it was replaced by caffeine. 

During the first 70-80 years of its existence, Coca-Cola, now universally viewed as an indulgence beverage, used nurses and doctors in its advertising to convince people of its wellness benefits.

The link to COVID-19 restrictions

Human nature being what it is, we are hardwired to seek shelter in a storm. The initial shock of COVID-19 initially translated into panic buying of household staples, but the more profound and lasting impact may be a heightened consumer interest in functional foods.  

The Ipsos FIVE daily consumer diary panel tracks what 20,000 respondents ate and drank yesterday across all categories, brands, occasions and venues. The Ipsos FIVE database quantifies shifts in both behaviour and attitudes. 

Screen Shot 2020-11-09 at 4.34.37 PMIn 2019 and the first two months of 2020, Ipsos Five was already tracking faster growth in consumption of functional foods compared to overall food consumption, roughly +8% to +9%, year-over-year. In the first month of lockdown, the rate of growth of functional foods consumption increased an additional 13% versus the pre-COVID timeframe. 

Kathy Perrotta, VP of market strategy and understanding with Ipsos, says: “The functional food choice is (generally) motivated by the need for specific benefits, like aiding with digestion. Beyond physical health and dietary requirements, consumers also opt for functional foods to meet personal emotional and lifestyle needs and beliefs (Exhibit 1)…. The rising focus on bolstering personal immunity is certainly a sign of the times and something we could expect to continue as a result our current health pandemic.” 

Perrotta suggests that this recent bump in consumer purchases of functional foods was “driven by young adults now eating in a highly homebound environment, who seem to be more focused on overall wellness benefits”.

Follow the crowd

The online app Pinterest refers to itself as a visual discovery engine. It is a platform where people go to find inspiration for food, fashion, hobbies, crafting and more. Pinterest, which started only ten years ago, currently welcomes nearly 400 million Pinners to the platform every month to explore and experience more than 200 billion ideas that have been saved.

Screen Shot 2020-11-09 at 4.33.54 PMA review of global Pinterest searches for the last two weeks of March 2020 versus pre-COVID-19 reveals that consumer searches for “healthy things to cook” increased 4X in the first weeks of the COVID-19 lockdown, when consumer interest in healthy eating spiked.

Pinterest searches in the month of June for healthy eating in Canada were way up, year-over-year: 

  •       Canadian consumer searches for “Healthy things to cook” increased 3.5X; 
  •       “Healthy cooking” searches were up 2.9X, and;
  •       “Healthy snacks” searches were up 35%.


Form follows function

Sophie Mir, associate editor at consumer and foodservice insights provider Technomic, confirms that Technomic research has been tracking growth in better-for-you “healthful” foods for the last several years. In Technomic’s 2018 Canadian Convenience Store Foodservice Consumer Trend Report, 41% of consumers reported that healthfulness of food/beverages is an important attribute in deciding to purchase prepared foods or beverages from a convenience store. 

However, Mir also notes a “shift in consumers’ definition of health moving away from the emphasis on nutritional benefits (such as lower fat or lower cholesterol) to functionality, that is, ingredients that provide holistic gains… (Including physical, mental and emotional benefits).” 

Screen Shot 2020-11-09 at 4.35.16 PMPractically, there are a significant number of examples of products for c-store operators to consider (Exhibit 2). Technomic advises its clients that “offering food and beverages with functional ingredients (aligns) with what consumers are looking for.” At the same time, c-store operators have an opportunity to, in partnership with manufacturers, draw awareness and educate their consumers on functional benefits via signage, POP information, online advertising, and social media channels. 

Immunity is key

Andrew Wardlaw, of MMR Research Worldwide Research, recently noted that “research findings published in December 2019 by Wellmune, part of the Kerry Group, spanning 11,000 consumers across 14 global markets, found that nearly two thirds (63%) placed immune health ahead of supporting healthy bones and joints, good digestive health, improve energy levels and heart health.” This suggests that, even prior to COVID-19, consumers around the world were making food purchase decisions motivated by immune health. Further, “new research undertaken by MMR in association with TOLUNA in April 2020 found that immunity was now the number one health concern in China and South Africa, and only beaten by heart health in the UK and U.S.”

Don’t miss the functional foods train

With “live and active cultures” promoting gut health, U.S. Greek Yogurt brand Chobani, from its origins in an abandoned yoghurt factory in New Berlin, New York in 2007, has risen to be a market maker and the dominant player in the U.S. premium Greek yoghurt category. Chobani took a dormant commodity category upscale, and went from zero share to being a multi-billion dollar CPG player in about 10 years. It’s currently investing heavily in plant-based dairy in general, and oat milk specifically.

Consider the Canadian brand, Sapsucker, an Ontario-based new entrant to the wellness beverage market available across Canada. Sapsucker markets itself as a Maple Tree Water, a “tapped in Canada” naturally hydrating beverage that advocates for people to make healthy, mindful choices. The product is harvested sustainably from Canadian forests, and purports to be “plant-based and nutrient rich, powered by 46 naturally occurring minerals, vitamins and antioxidants.” Its lineup includes three lightly carbonated tree water beverages: The Original One, The Lime One, and the Lemon One. Like Coke, Sapsucker sells taste, lifestyle and feeling: its tagline is “Sip a Sapsucker, because there’s no time for regrets.”

Clearly, life as we’ve known it changed. The path forward demands that operators remain relevant with customers. The gap between seeing and embracing new functional foods, and achieving a return on these investments, is a bridge worth crossing for operators. 

Darren Climans is a foodservice insights professional with close to 20 years’ experience partnering with broadline distributors, CPG suppliers, and foodservice operators. His practice is to understand issue-based decisions by taking a data-driven approach to strategic decision making.




Beyond beer: Molson Coors sales dip but brewer remains focused on future growth

UnknownMolson Coors Beverage Co. recorded a lacklustre third-quarter as ongoing COVID-19 restrictions and packaging material constraints curbed the brewing giant’s sales.

The Montreal-based company, which reports in U.S. dollars, said it recorded net sales of US$2.75 billion for the three months ended Sept. 30, down 3.1% compared with US$2.84 billion for the same quarter last year.

Molson Coors chief executive Gavin Hattersley said the pandemic has presented obstacles for the brewer.

“Like all other beverage companies, one of the biggest challenges this year has been packaging supply,” Hattersley said during a conference call with analysts.

“To put into perspective the scope of the challenges, we sold 300 million more cans of beer in the first nine months of 2020 than we did in same period in 2019.”

He added: “There have been times over the last few months when demand for tall cans was four times what it was in 2019.”

But Hattersley said there has been a steady improvement in supply over the last several weeks.

He said the supply of 12-ounce industry standard cans is stabilizing, and the company is starting to improve its inventory of tall cans as well.

Meanwhile, the company said Coors Light and Miller Lite grew 6% and 9.5%, respectively, in off-premise sales in the U.S. so far this year.

The combined U.S. segment share for Coors Light and Miller Lite has grown for 24 consecutive quarters – six straight years, according to data and market firm Nielsen.

Molson Coors’ said its so-called above-premium products made up a record portion of the company’s U.S. portfolio in the third quarter.

The brewer’s light citrus wheat beer Blue Moon LightSky was listed as the top selling new beer in the U.S. in 2020, according to Nielsen.

The company also recently launched Coors Seltzer at the end of August and sold over 500,000 cases in the first month.

Meanwhile, in a bid to expand beyond the beer aisle, the company has broken into the cannabis beverage market in Canada.

Molson Coors said Truss, its Canadian cannabis joint venture, has become a market share leader of ready-to-drink cannabis beverages, with an estimated market share of over 50% in Quebec.

The Company also launched Vyne Botanicals hop water in Canada.

Last October, the company announced a revitalization plan with the aim of strengthening its core brands, growing above-premium brands and expanding “beyond the beer aisle.”

Hattersley acknowledged there are questions about the complexity of the company’s revitalization plan, expansion of products and ability to execute the goals.

But he said the company is already making progress and seeing improvements in both core products and newer brands.

He said retailers are “hungry” for innovation, while 80% of its distributors already carry non-alcohol products and half carry wine and spirits.

“They’re actually ahead of us,” Hattersley said. “We’re playing catch up with them.”

From a supply chain perspective, he said the new products are not going through the company’s breweries and Molson Coors is expanding its warehouse capacity.

Still, Hattersley said the can shortage during the pandemic forced the company to make some decisions around slow-moving brands and stock keeping units.

“I would expect some of those SKUS won’t come back, so from a complexity point of view from a brewery point of view I would expect that we will have less SKUS when we come out of this pandemic than we did coming into the pandemic,” he said.

Molson Coors said it earned net income of $342.8 million or $1.58 per diluted share for the quarter compared with a net loss of $402.8 million or $1.86 per diluted share a year ago when it took a large goodwill impairment charge.

The brewer said its underlying net income for the third quarter was $350.8 million, or $1.62 cents per diluted share, compared with an underlying profit of $321.2 million, or $1.48 per share, in the third quarter of 2019.