CCentral-Main-logo-EN-trans

Convenience Central
Join our community
extra content
Shutterstock

Cause for concern

Even in these times, barely a day goes by where there’s not a dire warning about the environmental predicament the planet faces. Climate change, for many, is no longer about what might happen, but rather what is happening. Extreme events ranging from hurricanes to rampant bush fires are becoming the norm. For Canadians, this raises the question of how their food purchases impact the environment.

Mintel’s recent report on Sustainability in Food looks at how Canadians view the connection between what they eat and the impact of that on the environment. The research also looks at what specific issues matter most to consumers, why they matter, what consumers expect from companies in the context of sustainability, and what actions they are willing to take.

Canadians do, indeed, say the environment matters to them when it comes to the food and drinks they purchase, and they are particularly motivated by a sense of personal responsibility and a pervasive concern about climate change. That said, Canadians don’t always make a clear connection between climate change and the food they eat; instead, waste ranks as their top concern—this includes both packaging waste and food waste. Fewer Canadians, however, consider carbon output when purchasing food. This makes sense because waste, of course, is visibly evident in one’s day-to-day life. It can be seen in one’s trash, recycling or compost bin, and also translates, in the consumer’s mind, to wasted money. Carbon generated through food production, by contrast, is invisible.

Younger Canadians are, however, more likely to make the connection between how their food is produced and the carbon footprint it generates, and they are more apt to express concerns over these categories. For instance, the younger generations—gen Zs and millennials—are more likely to be concerned about the impact of meat and dairy on the environment; we can presume this relates to the carbon emissions associated with the production of these products. Such concerns have undoubtedly underpinned the growth of plant-based foods and drinks.

More broadly, companies are in a quandary when it comes to their efforts to support the environment. On one hand, four in five Canadians agree that food and beverage companies are not doing enough for the environment. On the other hand, the same number of Canadians believe many companies engage in “greenwashing” and believe them to be untruthful regarding environmental claims. There’s also an element of confusion, with 80% of Canadians also claiming they’re confused when it comes to knowing which products are better or worse for the environment. The question is how to win consumers’ trust?

While there’s no easy answer to this question, initiatives that are visible and engaging can help build their level of trust. One practical way is to ensure shoppers can easily recycle the packaging from the products they purchase. This can include making them compostable or communicating a plan to extend the lifecycle of a package through “upcycling” initiatives. Other initiatives can involve using foods that would have otherwise been discarded in new packaged goods (for example, misshapen potato chips) or focusing on foods produced locally, which offers the dual benefit of supporting the environment and local economies.

When it comes to promoting sustainability in food, there are no shortcuts. But what is evident is that despite some skepticism, shoppers do view sustainability as an issue influencing their food and drink purchase decisions.

Joel Gregoire is a food and beverage industry analyst. Follow him on Twitter 

This article appeared in Canadian Grocer‘s May 2020 issue.


shutterstock_350739986

Cash Exodus: COVID 19 pandemic could accelerate shift to cashless, experts say

shutterstock_350739986Some businesses reopening with pandemic protocols in place have said they won’t accept cash for the time being, potentially accelerating what the Bank of Canada describes as a decade-long shift away from the banknote.

Cashiers at Longos, Best Buy and The Shoe Company, for instance, will refuse cash out of concern the bills are a vector for the novel coronavirus. But experts – and Canada’s central bank – warn this leaves those without bank accounts, and some others with low incomes, by the wayside.

“This is going to be a big shock to the system that will push us in the direction of a more modernized payment system,” said Walid Hejazi, an associate professor of economic analysis and policy at the University of Toronto. “And if the developments we’ve seen during the pandemic continues to accelerate, we’re going to get to that fully modernized payment system much more quickly.”

The migration away from cash has been ongoing for more than a decade, according to the Bank of Canada’s most recent survey on methods of payment, conducted in 2017.

That year, it said, 33% of transactions were done in cash, down from 54% in 2009.

Smaller surveys conducted by Payments Canada, which handles the clearing and settlement of payments in this country, suggest the trend has only continued in the last few years and has accelerated in the past few months. And Interac, which operates Canada’s debit payments system, said last week that e-transfers are more frequent than ever during the pandemic and use of the contactless “Flash” tap payment system is also up.

But Canada’s central bank warns that the decision to refuse cash, while legal, could be disastrous for some of society’s most vulnerable, including the homeless and others without bank accounts.

In its report based on the 2017 survey, the Bank of Canada said 99 per cent of Canadians had a debit card and 89% had a credit card.

But Hejazi said the number of Canadians reliant on cash is likely much higher than those figures indicate.

“There’s large groups within our society that will not have access to those digital platforms in the way that might be assumed,” he said.

Some may have debit cards without much – if any – money in the account, while others may have credit cards that are maxed out, he said. Others still have low-cost bank accounts with limited transactions.

And as the popularity of online and mobile payment rises, the cost of mobile data plans also factors in, Hejazi said.

For businesses, the benefits of going cashless are appealing even beyond the pandemic, he said. Businesses that don’t accept cash don’t have to carry a “float” – money to give as change. Their transactions are already counted and their books are automatically reconciled, they need to make fewer trips to the bank and are less likely to be robbed.

But the effects on already marginalized groups would also be lasting – particularly for the homeless population, some of whom rely on panhandling to survive, he noted.

The Bank of Canada last month urged retailers to continue allowing cash transactions in part for that reason.

In an effort to mitigate the consequences, the Retail Council of Canada is recommending its members “encourage” contactless payment methods rather than mandating them.

“We’re still finding that a lot of merchants will accept cash, and that’s everything from large entities that have multiple tellers all the way down to conveniencestores,” said Karl Littler, senior vice-president of public affairs for the council. “But obviously, it’s the merchant’s prerogative as to whether to do so.”

He said the council’s recommendation errs on the side of caution as both the Bank of Canada and the World Health Organization say handling cash is about as risky as touching other common household objects, such as doorknobs, and warrants a wash of the hands rather than an outright ban.

But Littler said discouraging the use of cash minimizes risk.

“If you give cash, you get cash in return,” Littler said. “And so one of the challenges there is that although the people in the store may be very well oriented towards appropriate sanitization and physical distancing and so on, you’re actually getting somebody else’s cash back.”

 


customer-loyalty-radar

Strategies for building loyalty in a post COVID-19 world

customer-loyalty-radarThe novel coronavirus (COVID-19) has had a dramatic impact on how consumers shop. In Canada, we saw attitudes and shopping preferences change in a way that will impact the consumer, retail and fast moving consumer goods (FMCG) landscape even after the threat of the virus dissipates and we are living in the new normal.

Let’s take a look at what’s been happening over the last several weeks in Canada. The week of March 21, 2020, was record-setting, with almost $3 billion in retail sales; this translates to an increase of +54% versus the previous year or an additional $1 billion in sales.

Fast-forward a couple of weeks to April 4, 2020 and year-to-date sales increased $3.1 billion, which is 27% higher than all of FMCG sales in 2019. Even though March was record-breaking for FMCG sales, April continued to post higher-than-average dollar growth, but the degree of increases slowed.

As patterns begin to emerge as the crisis continues to unfold, it will be imperative for companies in Canada to look beyond our own border to other countries. Our global counterparts in countries in Asia and Europe that are further along in the pandemic and closer to recovery can provide valuable learnings for Canadian retailers and manufacturers on how to succeed and plan for the future. Here are some things to consider:

EMPHASIZE QUALITY AND EFFICACY
Throughout the recovery phase of the COVID-19 crisis, consumers will be seeking greater assurance that the products they plan to buy are free of risk and of the highest quality when it comes to safety standards and efficacy, particularly with respect to cleaning products, antiseptics and food items. In the short term, this intensified demand from consumers will require manufacturers, retailers and other related industry players to communicate clearly why their products and supply chains should be trusted. In the longer term, and dependent on the eventual scale and impact that COVID-19 has on consumer markets, it may speed up a re-think on how shoppers evaluate purchases and the benefits that they identify as the key factors to consider.

BE TRANSPARENT ABOUT LOCAL ORIGINS
More than ever, shoppers want to understand the supply chain, with complete transparency from farm to factory to distribution, and they want details of the measures being taken to assure their safety. Promoting a product’s local origins could help manufacturers and retailers assuage some consumer concerns. A Nielsen survey on disloyalty conducted last year found that global consumers report being heavily swayed by origin: 11% of global consumers said they only bought products manufactured in their country, while an additional 54% “mostly” bought local products. Manufacturers need to be transparent and reinforce their quality measures and protocols.

LEVERAGE TECHNOLOGY
With millions of people working from home and digital connectivity taking even more of a hold on everyday habits, consumers will have greater motivations and fewer perceived barriers to more actively seek technology-enabled solutions to assist in their everyday tasks, including shopping. Companies that can leverage technologies—by meeting changing consumer demands online, enabling seamless interactions through direct-to-consumer offerings and enhancing consumer experience with augmented and virtual realities— have the opportunity to earn consumer loyalty well after consumers’ concerns subside. So, how does your brand play a role in helping consumers live a little bit easier at home? Retailers and manufacturers that can help solve the challenges consumers are faced with in their homes, such as cleaning, personal care and mental health tips will go a long way in building consumer loyalty.

Carman Allison is vice-president of consumer insights at Nielsen in Toronto. This article appeared in Canadian Grocer‘s May 2020 issue.


Shutterstock

Three ways COVID-19 is influencing consumers’ confectionery buying

Shutterstock

Shutterstock

The confectionery industry is facing a once-in-a-lifetime period of uncertainty, as it is not immune to the pressures brought on by the COVID-19 pandemic. Consumers’ candy buying behaviour is reflecting heightened price sensitivity on one hand and, on the other, desiring moments of comfort and escapism.

This is something convenience store retailers need to understand and respond to — be it by offering experimental flavors that encourage affordable moments of indulgence, or offering traditional flavors that remind people of simpler times.

A recent webinar entitled “Seasonal Candy in the Time of COVID-19,” hosted by Candy Industry Magazine and sponsored by Cargill and Ferrera Candy Co., explored how the confectionery industry will likely be impacted by the ongoing coronavirus crisis, and what effect it will have on consumers’ attitudes, behaviours and shopping habits.

“I think it’s fair to say that events of the last couple of months have hit the industry hard and forced a lot of companies to reevaluate their strategies,” said presenter Mike Hughes, director of insights for FMCG Gurus, a global market intelligence agency that specializes in consumer, category, packaging and product insight analyses.

Customarily, consumers’ confectionery consumption habits change on a seasonal basis. According to a recent FMCG Gurus survey of 2,000 consumers in the U.S., 94% of respondents said they purchase confectionery products, with 58% expressing that their buying habits change throughout the different seasons of the year: 64% said, though, that these habits will change now as a result of COVID-19.

“What this means is that consumers will be driven by risk of items; they will be less willing to purchase items they don’t know about; and they may be less willing to try experimental flavors and turn to tried-and-true flavors for comfort,” said Hughes. “FMCG Gurus predicts this will drive sales of traditional flavors, so how these products are marketed will be crucial.”

According to additional findings from the survey, consumers say they are most likely to:

  • Seek out experiential flavors when buying confectionery in the spring;
  • Seek out traditional flavors when buying confectionery in the winter; and
  • Be most willing to trade up to premium products when buying confectionery in the fall.

ADAPTING TO A NEW NORMAL

Now more than ever, consumers are facing uncertainty about everyday life, such as the state of the economy and long-term job security; food safety and the origin of products; the adverse effects of restrictions on physical and mental health; and concerns about contracting the virus, as well as the safety of their loved ones.

Survey respondents admit that COVID-19 is going to have an impact on their confectionery buying habits. FMCG Gurus has identified three key areas of impact:

  1. The Experience

As the coronavirus creates a scenario whereby consumers are simultaneously concerned about their health and their ability to handle everyday living costs, they will desire moments of non-essential indulgences for escapism reasons. This will be driven by increased feelings of anxiety and stress.

“As consumers trade down on foodservice occasions such as trips to restaurants and bars, they’ll be looking to replicate consumption experiences in the comfort of their own home,” Hughes explained. “This will drive demand for bulk and shareable products, as well as indulgent and premium products.”

According to the survey, 51% of consumers say they will trade-up on confectionery to compensate for reduced expenditure elsewhere, and 52% say they will seek confectionery products suitable for “big nights in.”

Additionally, in the last month, 79% said they purchased more comfort food such as ice cream and confectionery: 40% said they purchased more chocolate as a result of COVID-19, while 28% said they purchased more sugar confectionery.

  1. Back to Basics & Risk Avoidance

Consumers will turn to nostalgic products that remind them of the past and simpler times, driving a demand for traditional flavours that offer moments of comfort.

In turn, 60% of survey respondents said they will be more likely to seek out confectionery products they know and trust, and 41% said they will be more likely to seek out confectionery products that remind them of the past.

According to FMCG Guru’s findings, consumers today are also demonstrating ethnocentric attitudes with favourable perceptions of homegrown brands that practice values and policies that closely align with their views: 58% of consumers said they will be more conscious about purchasing new types of confectionery.

“Consumers will be more price-sensitive when it comes to confectionery or looking to trade down. However, they will be more risk-adverse, seeking out products that they know and trust and that offer comfort,” Hughes noted.

  1. Maximized & Defined Value

Consumers are willing to shop multiple places to get what they want. With stay-at-home orders in place, they are already utilizing multiple channels and showing less value to brand loyalty in this time of uncertainty.

However, they aren’t searching for the cheapest price possible; instead, they are focusing on retailers and products that offer the maximum value and meet their need states, according to Hughes.

More information on the “Seasonal Candy in the Time of COVID-19” webinar is available here. Originally posted at Convenience Store News in the U.S.


Screen Shot 2020-05-11 at 3.47.43 PM

COVID-19 will have lasting effects on consumer behaviour: Accenture

Several underlying consumer trends have risen to prominence during the COVID-19 crisis, leading to a wave of new behaviours—from online shopping to buying local—that are likely to persist long after the pandemic is over, according to a new study from Accenture.

The survey of more than 3,000 consumers in 15 countries (including Canada) found that people are purchasing more personal hygiene and cleaning products, plus canned and fresh foods. But it’s not just what consumers are purchasing that has changed, but how they’re purchasing.

According to Accenture, the crisis has led to a significant increase in e-commerce (particularly in North America) as well as interest in purchasing local. The study also reports an expected rise in so-called “conscious consumption,” characterized by an emphasis on limiting food waste, shopping more consciously and seeking out more sustainable options.

Perhaps the most visible manifestation of the impact of the COVID-19 crisis is in e-commerce—which has risen exponentially as consumers around the world have retreated to the safety of their home. Online grocery has become highly sought-after, though its sudden rise in popularity has exposed infrastructure flaws that retailers will need to address.

Most notably, says Accenture, the lack of system capacity left many consumers struggling to find a timely delivery slot. That led to many high-frequency users looking elsewhere (most notably to local brands) to fulfill their orders.

In the U.S., food delivery service Instacart saw its subscription grow 10 to 12 times in states with the most reported COVID-19 cases. Accenture found that one in five consumers who ordered groceries online during the crisis did so for the first time, a number that rose to one in three among consumers 56 and over.

According to the U.K. online supermarket chain Ocado, nearly every one of the close to 800,000 active customers it had at the end of 2019 wanted to place an order once a week during March. Basket size also rose in tandem with demand, growing by more than 50%.

Accenture says demand for e-commerce capabilities (both grocery and otherwise) will persist beyond the pandemic, with online expected to account for 37% of all consumer purchases of goods and services, up from 32% currently. The data suggests a “clear need for a substantial increased investment in this channel,” says Accenture.

As the crisis continued, survey respondents also indicated they planned to do fewer and larger grocer shops, as well as shop in closer neighbourhood stores and shop more cost consciously.

Originally published at Canadian Grocer.


Shutterstock

Post COVID grocery store sales high but below mid-March peak: StatCan

Shutterstock

Shutterstock

Consumers continued to buy more hand sanitizer, toilet paper, canned goods and baking supplies in April than before the COVID-19 pandemic even as the mid-March shopping frenzy started to die down, according to Statistic Canada’s latest data.

Retail grocery store sales jumped 40% for the week ending March 21 compared to the same week last year, the agency said in a special report on how shopping patterns have changed since Canada stepped up its COVID-19 public health campaigns.

The week prior, sales soared 46%. That week included the introduction of a government advisory against non-essential travel.

The StatCan report, the second since the onset of the pandemic, covers a period from the week ending March 21 to the week ending April 11.

The March surge came as Canadians re-stocked depleted pantries and prepared to shop less frequently, among other reasons.

In turn, 83% of consumers in Canada are limiting the number of times they shop, according to a new survey by Accenture, a global professional services company. Accenture commissioned the survey of 3,074 consumers in 15 markets, including Canada, and it was conducted between April 2 and 6.

Across the 15 markets, 39% of respondents agreed they’re likely to continue doing fewer shops after the pandemic subsides and 26% saying they’re likely to continue doing larger shops.

The sales increase slowed the last week of March and first week of April, according to Statistics Canada, with 12% jumps compared to the same weeks in 2019, while the week ending April 11 saw a 19% rise.

The slowdown mimics trends seen by Canada’s largest grocers.

Empire Co. Ltd., the parent company of Safeway and Sobeys, said it saw “sales intensity began to subside” by March 22, in an update released mid-April. It continued to see heightened demand for canned goods, baking supplies, and cleaning and sanitization products, it said, while fuel sales dropped as Canadians drove less.

“Metro Inc. also saw sales level off after an initial surge, the company said during its most recent quarterly financial release late last month. Between March 15 and April 11, the company saw same-store food sales, a key retail metric, rise 25% compared to the same time last year.

The sales have levelled off since the first week of the company’s third quarter, which began March 15.

Loblaw Companies Ltd., meanwhile, saw grocery store sales grow about 44% during the two weeks ended March 21, the company said during its quarterly release April 29. During the first five weeks of the retailer’s second quarter, which started March 22, food sales grew about 10%.

Sales of health and personal care items slowed after the March surge, Statistics Canada said.

In the first week of March, for example, hand sanitizer sales increased by 792% compared to the same week of 2019. By the week of April 11, hand sanitizer sales were up 345%.

Soap, and mask and glove sales remained high in the week ending April 11 with 68% and 114% jumps respectively.

Bathroom tissue sales moderated, but were still 81% higher that week.

Purchases of shelf-stable products moved closer to pre-pandemic levels, according to the agency.

For the week ending April 11, rice sales rose 12% while canned goods rose 47% and pasta jumped 49%. In contrast, infant formula sales fell 15%.

People continued to buy baking supplies amid ongoing efforts to remain at home.

In the second and third week of March, flour sales increased 208 and 207% respectively.

By the week ended April 11, that had slowed to an 81-per-cent increase. Butter and margarine sales rose 18%, milk was up 21% and eggs jumped 44%.

Sales for Easter-related products remained similar to trends seen in 2019, with the exception of flowers.

At grocery stores, flower sales fell 47% in the week leading up to Easter compared with the same week the previous year.

With the closure of many bars and restaurants, as well as authorities encouraging people to stay home as much as possible, Statistics Canada noted alcohol and coffee sales for at-home consumption increased.

In the week ending April 11, alcohol sales were up 46%, while coffee filters saw a 68% rise.

Hair dye sales jumped 75% that week, but cosmetic products fell 33%.