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Food prices forecast to rise 2% to 4% in 2020: Report

Fresh Food Display_Lg_032619Food bills are going to take a bigger bite out of Canadians’ household budgets in 2020. Food prices are expected to increase 2% to 4%, according to the 10th annual edition of Canada’s Food Price Report—a collaborative effort by Dalhousie University and University of Guelph. It predicts that annual food costs for the average Canadian family will rise by $487 from 2019 figures, with the annual tally on food spend reaching $12,667 for the year.

“For grocers, it’s not necessarily bad news to see food prices go up by 4%—the problem is that you may spook some consumers,” Sylvain Charlebois, a professor of food distribution and policy at Dalhousie University told Canadian Grocer. “The sweet spot for food inflation is anywhere between 2% to 2.5% and we’re going to exceed that in 2020 by far.”

Canada’s Food Price Report uses a predictive analytics model that applies machine learning to support decisions about future food prices. In 2019, it was predicted that Canadian families would spend up to $12,157 on food. Based on the 2019 inflation rate to date, they are likely to spend $12,180, missing the report’s target by just $23.

In 2020, meat will see the highest increases (4% to 6%), while restaurants, seafood and vegetables will all see increases of 2% to 4%. This is followed by fruits (1.5% to 3.5%), dairy (1% to 3%), and bakery (0% to 2%).

The jump in the price of meat is due in large part to Chinese demand for imported beef and pork. China recently reopened its market to imports of Canadian pork and beef after a four-month ban, as the Asian country continues to battle African swine fever. China has lost millions of pigs to the disease and needs to import large amounts of pork—driving up the price of pork and meat in general.

“[Meat] is already costing more for processors and grocers and so increases will be passed on to consumers in the New Year,” says Charlebois.

Expected Headlines in 2020

The report also looks at three big stories that will continue to make headlines next year:

1-Single-use plastic packaging: The report states that consumers are placing pressure on retailers, restaurants, distributors and manufacturers to reduce and ultimately avoid the use of disposable plastics used for food products. However, they’re less inclined to pay more for greener alternatives. “[Greener packaging] will incur more costs and this is something consumers will have to get educated about,” says Charlebois.

2-Climate change and carbon tax: In 2020, climate change will have a big impact on food systems and drive up food prices. The report states the government needs to address emissions levels, as they are above the targeted 30% reduction levels beyond year 2030, far from the Paris Agreement goals of 2016. On the issue of the carbon tax, the report notes while some Canadians believe the tax increases the cost of food for consumers, industry is absorbing most of the costs.

3-Retailing AI: The use of artificial intelligence in retail is on the rise. For example, Sobeys is piloting a technology-enhanced cart called Smart Cart.

The cart’s technology scans and weighs products when customers place them in the cart. It displays a running tally of purchases while the customer shops, and then allows them to pay on the spot. Sobeys says it plans to evolve the cart to include additional features using artificial intelligence and machine learning technology. “We are expecting more movement in the area of AI coming from grocers,” says Charlebois.

Originally published at Canadian Grocer. 


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District Ventures supports food entrepreneurs with new incubator kitchen

Nearly a year after it ran out of funding and abruptly closed its doors, Food Starter has had something of a kitchen reno.

The Toronto-based, non-profit incubator, which helped food entrepreneurs commercialize and scale the development of their products, is now owned and operated by District Ventures–the business accelerator headed by Canadian businesswoman and TV personality Arlene Dickinson.

The newly-minted District Ventures Kitchen remains in the 20,000-sq.-ft. shared food-safe production space once occupied by Food Starter, which is nestled in an industrial area of Toronto’s north-west end. The incubator will continue to offer early-stage food companies access to a commercial kitchen and marketing assistance, among other services, to help them scale.

img-8553“Access to commercials kitchens like this is rare and difficult in this city and across the country, so keeping this alive was a big mandate for us … ” said Dickinson during grand opening celebrations Monday morning.

“We are very excited about what this means for our ability to really make a difference in agri-food. We talk a lot about diversifying our economy, and to me, agriculture and the development of food products and food innovation is incredibly important to our nation’s future,”

Food Starter shut down in December 2018 after funding from the province dried up and organizers were unable to secure additional funding from other levels of government or corporate sponsors. Today, District Ventures Kitchen is launching with private sector support from Sobeys and Chartwells Canada.

Jana Sobey“We understand just how important it is for customers to be able to access locally grown and produced food and we try to make that easy for our customers by identifying local products at store, in our flyers and online. And as I walked around here this morning I was so proud to see so many suppliers are already on our shelves,” said Jana Sobey, vice-president of merchandising, community, Thrifty Foods and Field at Sobeys.

The Greenbelt Fund and the City of Toronto are also financial supporters of District Ventures Kitchen. Toronto Mayor John Tory was on hand for the opening and tour of the production facility, which allowed members of the media to sample products from the brands directly benefitting from the reopened test kitchen.

One such brand was Miura–a brewed hot and then flash-chilled, Japanese-style iced coffee that is now available in Sobeys, Whole Foods Market, Metro and Longo’s. “Every single can I have brewed and canned here,” said its founder Adam Lewis. “This is where the magic happens and it’s been such an entrepreneurial journey.”

img-8539Addressing the crowd, Tory said he was confident District Ventures Kitchen would be taken to unparalleled heights thanks to Dickinson, “who is herself not just a business person but an exciting entrepreneurial person who has other people lined up around her and has the profile to carry this forward.”

District Ventures has been helping support early stage food, beverage, and health and wellness companies in the consumer goods space in Canada since it launched in 2015. In all, District Ventures has supported nearly 300 companies and helped create close to 1,000 jobs, said Dickinson.

One of the company’s recent ventures is a partnership with Sunterra Market and Café in Calgary on a 2,800-sq.-ft. store that carries nearly two dozen Canadian food and beverage products that were developed out of District Ventures including, Chickapea Pasta and Drizzle Honey.

Originally published by Canadian Grocer


More than 70 nations pledge to reduce food waste

More than 70 countries have pledged to do more to cut down on the amount of food lost due to poor refrigeration.

The countries signed the pledge Saturday at an annual meeting of the Montreal Protocol where ministers, government officials and experts work on regulating man-made chemicals used in refrigeration and air-conditioning systems that are harmful to the ozone layer. The meeting took place at the United Nations’ Food and Agriculture Organization headquarters in Rome.

About one-third of the world’s food is lost or wasted and the hope is that developing better methods to keep food cold while it’s stored and transported will reduce waste.

Poor refrigeration leads to the loss of about 9% of perishable food in developed countries and about 23% in developing countries, where millions of people suffer from malnutrition.

Experts say better refrigeration would help reduce greenhouse gas emissions and the harmful gases used in refrigeration and air-conditioning systems.

The United States, China, European Union members and many nations in the Americas, Africa and Asia signed the pledge.


Shutterstock Multicultural foods

New Canadians shape the future of food in Canada

In 2018, Canada admitted more immigrants than at any point over the past 100 years. As Canada’s population ages, immigration is central to infusing youth and vitality into the economy. This, of course, has a wide-ranging impact—not only in terms of how Canada “looks,” but also in terms of what Canadians buy, which includes food and drink.

Shutterstock Multicultural foods

Shutterstock Multicultural foods

While new Canadians bring with them varied preferences in terms of the foods they eat, they also have an impact on the broader population. According to new Mintel research on ethnic food, more than half of Canadians say they view themselves as being “more open to eating international foods than (they were) a few years ago,” with three-quarters (77%) also viewing international foods as being “more mainstream now than they used to be.”

While this demonstrates that Canadians see themselves as being more open to trying a broader range of cuisines, the perceived mainstreaming of international foods also means it’s likely becoming more difficult for grocers to find new products that appeal to those interested in new foods and more adventurous eating experiences. Both these facets rank as the top two reasons why Canadians turn to international foods in the first place.

To appeal to Canadians’ desire for new culinary experiences, grocers can look to what’s less commonly eaten by Canadians. While Chinese and Italian foods rank as the most commonly eaten international cuisines, according to Mintel research, a sizeable swath of consumers is showing interest in exploring a diverse range of other cuisines. In this regard, Caribbean, African and Korean fare represent interesting opportunities for development. With the vast majority of Canadians viewing international foods as a bridge to experiencing other cultures, focusing on cuisines that are less commonly eaten yet garner interest can help grocers stand out.

Having a concerted international foods strategy is critical for today’s grocers. When asked, more than half (56%) of Canadians agree that “grocery stores that don’t offer internationally-inspired foods are not keeping up with the times,” with nearly half also agreeing that they’re “more likely to shop at grocery stores that offer internationally-inspired foods” and two in five claiming they will “go out of their way to travel to stores that offer specific internationally-inspired foods/ingredients.” Chinese Canadians and South Asians are more likely to hold these views.

In terms of product assortments, by their own account South Asians are more likely to want to try internationally- inspired versions of desserts, baked goods, snacks and breakfast foods relative to Canadians overall. This points to the importance of looking beyond the core supper and lunch occasion when considering how to develop or expand offerings that are inspired by other countries.

With immigration contributing greatly to Canada’s population growth, it’s critical for grocers to have a strategy that considers internationally-inspired offerings throughout their stores to appeal to newer (and even not so new) Canadians. It will set them up for success in an evolving consumer landscape.

This column appeared in Canadian Grocer’September/October issue.


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For Canadians, food affordability is top agri-food issue in election: Survey

With the upcoming federal election, party leaders have a lot issues on their plates, but food and agriculture may not be one of them.

A recent survey by Angus Reid Global, in partnership with Dalhousie University’s Agri-Food Analytics Lab, found that only 31% of Canadians believe food and agriculture will be a prime electoral issue. Just 25% of respondents in Alberta, Manitoba and Ontario believe food and agriculture will be a key issue, compared to 46% of Quebecers.

“Food and agriculture has never been as hot of an issue as it is now … but when the elections come, people think about other issues like jobs, healthcare and education,” says Sylvain Charlebois, professor of food distribution and policy at Dalhousie University. “These issues are obviously very important, but food and agriculture represents the largest manufacturing sector in the country. Most Canadians spend well over 10% of their budget on food so I think we should talk about it [during elections].”

When asked which agri-food issues deserve more attention during the federal election campaign, food security and affordability ranked number-one, with 60% of Canadians saying it’s an important issue.

Manitoba and the Atlantic region have the most respondents believing food security and affordability is an important election issue in agri-food, both at 68%.

When asked what should be the next government’s priority in agri-food over the next four years, food security and affordability also came out on top, at 55%.

“I think the results point to the fact that people are dealing with stagnant wages and higher consumer debt. People are feeling the pressure,” says Charlebois. “For example, fruit and vegetable prices have gone up 17% this year. If you increase your prices by 3% steadily every year, I don’t think people would mind that much. But when it goes up 17%, people notice.”

The survey also found that the use of plastics in the food industry has clearly caught the attention of voters: 54% of respondents believe the use of plastics in food is an important electoral issue.

Food waste was identified as the third most important agri-food issue for Canadians. A total of 61% of Quebecers believe food waste is an important issue for the upcoming election, compared to 45% in Atlantic Canada.

When it comes to agri-food trade policy, Canada is a “highly divided country,” says Charlebois. The issue of supply management and our quota system ranked the highest in Saskatchewan, with 35% saying it deserves more attention during the election campaign, compared to 32% of Ontarians and 27% of Quebecers.

In Saskatchewan, 51% believe global trades for the agri-food sector is important issue for this campaign, compared to only 19% in Quebec.

“Canada’s breadbasket, which is the Prairies, will see trade very differently than say, Quebec. And that comes out in the survey for sure with supply management,” says Charlebois.

Finally, Canadians were asked which national party is best positioned to support the agri-food sector. The Conservatives are seen as the best national stewards for the agri-food sector, followed by the Liberals and the Green Party. However, the number of respondents who are unsure is very high, at 42% nationwide.

The sample size for the survey was 1,524 from across the country, with a margin of error of less than 3%, 19 times out of 20.

Originally published at Canadian Grocer


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7-Eleven’s parent company sees opportunities for fresh foods

7-eleven-logo-500x4007-Eleven Inc.’s parent company Seven & I Holdings Co. Ltd. is giving two thumbs up to the convenience store’s efforts in fresh food.

On July 18, the Japanese company announced that 7-Eleven’s U.S. operations reported the highest operating income in its history, and saw a 3.4% comparable store sales increase during the first quarter of 2019, with fresh food and 7-Select private brand products driving results, reported the Dallas Morning News.

Looking forward, the company intends to continue down this path and lend some of Japan’s strengths to the United States branch.

“The development and improvement of fast food items is important and something which we will be doing going forward,” Tokyo-based Seven & I Holdings wrote in its Q1 report. “We also believe changing public perceptions of 7-Eleven in the United States to be important. In order to change public perception when it comes to buying food products at 7-Eleven, like is common in Japan, we will be strengthening store cleanliness and improving customer service.”

7-Eleven’s recent efforts include the opening of a lab store and experiential testing ground in Dallas. Highlights of the lab store include made-to-order smoothies and aguas frescas, street tacos with handmade tortillas, baked-in-store cookies and croissants, a growler station that pours local craft beers, and both patio and in-store dining areas, as Convenience Store News previously reported.

These solid results continued into the second quarter. Same-store sales at U.S. 7-Eleven stores were up 5.2% in April and 2.8%. Additionally, the 7Rewards loyalty program and introduction of 7-Eleven private label products at the c-stores it acquired from Sunoco in 2018 increased profit margins, according to the company.

Looking ahead, the retailer plans to continue renovating U.S. stores and testing a scan and payment system that enables customers to pay using their smartphones. The latter is part of the company’s personnel-saving efforts and designed to increase profitability.

Seven & I Holdings also reported that 7-Eleven’s U.S. operating income reached $161 million during the quarter, up $31 million from the previous year, allowing the parent company to post profits exceeding its guidance for the three months ending March 2019.

Irving-based 7-Eleven operates, franchises and/or licenses more than 68,000 stores in 17 countries, including 11,800 in North America.

Originally published at Convenience Store News. 


Canadian food supplies at risk if climate change not slowed: UN report

Canada will not be spared the impact of food shortages and price shocks if global warming is not kept below 2 degrees Celsius, a new report on land use and climate change suggests.

The report, released this month by the United Nations Intergovernmental Panel on Climate Change, delivers stark warnings about the need for drastic changes to agricultural practices, human consumption habits and forestry management to prevent an escalation in the climate-change-related floods and forest fires that could lead to a global famine.

The Paris climate change agreement is straining to keep global warming below 2 C and as close to 1.5 C as possible, and Thursday’s report is the third in 10 months to lay bare the consequences if it fails. It also comes a week after the planet experienced its hottest month ever in July, following the warmest April, May and June on record.

At warming above 1.5 C, the report predicts periodic food shocks, significant and widespread melting of permafrost and an increase in the length of wildfire seasons.

Above 2 C, there will be sustained disruptions in food supplies all around the world, widespread increases in wildfire damage and detectable losses of soil and vegetation that can be attributed to climate change.

It is projected that for every degree of global warming, the world’s yield of wheat will fall 6%, corn by 7.4%, and rice and soybeans both by a little more than three per cent each. Together those four crops account for two-thirds of the calories consumed by people, and with the population growing by 80 million people each year on average, the world needs to produce more food, not less.

Werner Kurz, a senior research scientist at Natural Resources Canada and one of two Canadians among 108 scientists who co-authored the report, said he doesn’t think most people understand the magnitude and pace of climate change, but he also said he believes reports like Thursday’s must be used to deliver potential solutions, not just nightmares.

“As scientists we need to be careful in sort of communicating doomsday scenarios because if we create a fearful world, then inaction will be the consequence,” he said. “People will be paralyzed and fearful.

“What instead this report is trying to do – and I hope is successful in achieving – is to, yes, lay out the consequences of inaction, but also then highlight the many opportunities we have for action and the co-benefits this has for livelihoods, for water.”

Kurz said to slow global warming, people need to burn fewer fossil fuels and improve how land is used, so that it not only contributes fewer greenhouse emissions, but also absorbs more of them.

The report suggests agriculture, forestry and other land use activities contributed almost one-quarter of the greenhouse gas emissions produced by human activity between 2007 and 2016.

That includes changing human diets to be more plant-based and less meat-based, because plant-based proteins require less farmland.

It also means diversifying the kinds of trees being planted in forests rather than focusing entirely on coniferous trees, which burn differently than deciduous trees. Using more wood to build things like houses and buildings and replanting with more diverse species can help regenerate forests, which become bigger risks for fires when they are old, he said.

But Kurz, whose job for Natural Resources Canada is to track the contributions forests make to Canada’s emissions, said there is a vicious cycle in play where climate change has made more forests vulnerable to burning, but that burning is then contributing to more climate change.

Catherine Abreu, executive director of the Climate Action Network Canada, said the idea of diversifying forests is critical to improving their management.

“Canadians and Canadian governments tend to think of our forests as carbon sinks rather than sources of emissions, but we know that has been false now for a couple of years,” she said.

Kurz acknowledged that the changes needed likely won’t come easily for many people, but he said understanding the implications of not doing it should help.

“What we need to realize is that how we choose to live will have an impact on future climate.”

 


Scheer’s pledge to review new Food Guide challenged by health community

Conservative Leader Andrew Scheer is facing criticism from nutrition experts after he pledged last week to review the new Canada Food Guide should the Tories win power this fall.

Scheer, who spoke at an annual meeting of the Dairy Farmers of Canada in Saskatoon on Wednesday, says the process to craft the new version of the document designed to assist Canadians in meeting their dietary needs was flawed and that his party wants to ensure the guide reflects what “science tells us.”

The Dietitians of Canada tweeted that Canada’s new Food Guide is most definitely based on science, adding it encourages people to eat vegetables, fruits, whole grains and protein foods, including dairy.

The Canadian Digestive Health Foundation says Scheer’s comments were not backed up or founded by any scientific data, adding it supports the current direction of Canada’s Food Guide.

An overhauled version of the document was publicly released in January and did away with food groups and portion sizes, focusing instead on broader guidelines including eating more plant-based protein and drinking more water.

Health Minister Ginette Petitpas Taylor issued a statement that accuses Scheer of “spreading lies” about the guide and says it was enthusiastically welcomed by Canadians and celebrated as a world-leading document.


The key to attracting health-conscious shoppers

snackbuyer-teaserForward-thinking convenience store operators are jumping onto the healthier bandwagon.

In early May, c-store industry giant 7-Eleven Inc. announced that it was introducing nearly 100 new better-for-you items from 31 up-and-coming companies into select stores as part of a test. The selection, placed in 125 Los Angeles-area stores, was curated from 7-Eleven’s first “Next Up” emerging brands showcase, which was held at its Store Support Center in Irving, Texas, last fall.

The better-for-you product assortment includes options for power-snackers, restricted diet-followers and anyone looking for ways to incorporate more functional, better-for-you sips and snacks to keep them fueled while on the go, according to 7-Eleven. The items span keto, paleo, vegan, organic, high-protein, low-glycemic, gluten-free, nutrient-dense, plant-based and cold-pressed.

“When our emerging brands team created this unique product assortment in collaboration with our category managers, the goal was to give customers drinks and snacks that they might not expect to find at a 7-Eleven store,” said 7-Eleven vice-president of new business development Chris Harkness. “Customers are demanding healthier options, and we know LA customers are leading the country in health and wellness trends, always willing to try the newest and most innovative products and services.”

Young consumers between the ages of 18 and 34 are particularly interested in the functional aspect of foods, according to research conducted by youth marketing and millennial research firm Y-Pulse.

These consumers want products that not only satisfy their hunger, but also pack a nutritional punch. They say they enjoy eating superfoods such as dried fruits, nuts and seeds that serve specific functional purposes.

Along with wanting their healthier foods to taste good, younger consumers also want healthy eating to be easy, convenient and work around their on-the-go lifestyles. Specifically, the findings of a recent Y-Pulse study showed that:

  • 81% say they shouldn’t have to try too hard to eat healthy;
  • 76% say they are likely to buy raw fruits and vegetables to eat on the go; and
  • 66% say they don’t mind paying extra for a snack if it’s a healthy option.

WHAT IS HEALTHY, REALLY?

Today, “healthy eating” isn’t a set of hard and fast rules, but rather a state of mind — “a continuous, aspirational approach to food with balance, flexibility and practicality,” according to Ellen Rudman, vice president of strategic planning and research for marketing agency Blue Chip Marketing Worldwide.

Fresh, whole and minimally processed are the current cornerstones of better-for-you. However, the definition of what is “healthy” is in constant evolution.

“Having conducted quite a number of focus groups recently on this topic, what we consistently find across geographic markets and demographic groups is that better choices are typically identified with food that is either known to be fresh-made or made-to-order,” said veteran convenience store industry consultant/designer Joe Bona of Bona Design Lab. Consumers equate freshness with quality and being healthier, he added.

While the definition of healthy continues to evolve, the need for convenience and “on the go” is steadfast and, in fact, stronger than ever. “Consumers demand convenience and evaluate every option through a whole new set of food values,” Rudman said.

She wants c-store retailers to consider: Some consumers think it’s inconvenient to be healthy, so how can your convenience stores change that perception?