Convenience Central
Join our community
extra content
Fresh Food Display_Lg_032619

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. 

Screen Shot 2019-11-20 at 2.28.43 PM

Mondelez report dives into the ‘State of Snacking’ 

Global snacking is on the rise as more consumers opt for snacks over meals to fulfill evolving needs, and that is helping lead the future of food.

Screen Shot 2019-11-20 at 11.14.40 AMAccording to Mondelēz International’s first-ever State of Snacking report, six in 10 adults worldwide (59%) said they prefer to eat many small meals throughout the day, as opposed to a few larger ones, with younger consumers especially leaning into snacks over meals as that number rises to seven in 10 among millennials (70%).

State of Snacking is a global consumer trends study examining the role snacking plays across the world in meeting consumers’ evolving needs: busy modern lifestyles, the growing desire for community connection and a more holistic sense of wellbeing. It reveals the rise of global snacking, underscored by regional parallels demonstrating how snacks are helping lead the future of food by delivering on the spectrum of needs that exists in our day-to-day lives.

The report, developed in partnership with consumer polling specialist, The Harris Poll, complements Mondelēz’s global snacking knowledge estate with new research conducted among thousands of consumers across 12 countries, according to the company.

Key findings from the report include:


  • People are more commonly considering how smaller bites/snacks effect their emotional wellbeing, as well as their physical health.
  • For more than eight in 10 people, convenience (87%) and quality (85%) are among the top factors impacting snack choice.
  • 80% of consumers are looking for healthy, balanced bites, while 71 of adults say snacking helps them control their hunger and manage their calories throughout the day.


  • 80% of adults acknowledge the need for balance by appreciating the option of both healthy and indulgent snacks depending on the moment of need.
  • 77% of consumers agree there is a time and a place for a healthy snack, and a time and a place for an indulgent one.
  • The majority of people say snacks are just as important to their mental (71%) and emotional (70%) wellbeing as their physical wellbeing.


  • 71% said snacking is a way to remind themselves of home.
  • Seven in 10 adults make an effort to share their favorite childhood snacks with others (70%).
  • Around the world, more than eight in 10 parents use snack time as a small way to connect with their children (82%).
  • 76% of parents use snacks to pass cultural snacking rituals on to their children.
  • More than three out of four parents (78%) say the snacks they choose for their children reflect who they are as a parent.

“As the snacking market continues to grow globally, we’re living our purpose to empower people to snack right by constantly learning about the many different ways consumers around the world are snacking and evolving their relationship with food,” said Dirk Van de Put, chairman and CEO of Mondelēz International. “We see that the average global adult now eats more snacks than meals on a given day, driven by a number of evolving demands largely associated with how we live today, including a growing need for convenience, yearning to share nostalgic and cultural experiences, expanded wellbeing preferences and the desire for choices that range from wholesome to indulgent.”

Screen Shot 2019-11-20 at 11.14.21 AMMondelēz launches the State of Snacking report a year after it announced a new business strategy and purpose. Over the last year, the company made strong progress on its mission to offer consumers the right snack, for the right moment, made the right way. This includes developing an ever-deeper knowledge estate of the demands that motivate people to reach for snacks while continuing to meet people’s more holistic understanding of wellbeing by focusing on sustainably sourced essential ingredients, evolving its product portfolio to a broader range of options and inspiring mindful snacking habits.

“We embrace the fact that snacking habits around the world are as diverse as the consumers who enjoy them,” continued Van de Put. “However people snack, they should not have to choose between snacking and eating right, or to worry about the impact their choices have on the world and their communities. That’s why we’re committed to empowering people to snack right.”

The State of Snacking report is available here.

Originally published at Convenience Store News. 


Screen Shot 2019-07-22 at 1.33.18 PM

Forecourt Performance Report 2019

Change is the only constant for Canada’s evolving fueling sector

 Canadas fueling sector is an industry that has experienced considerable change in recent decades. The upstream side of the business has undergone consolidation and brand shifts leading to a shrinking number of stations, while technological evolution brings greater efficiency. For the fuel sector change is the standard norm.

 This year, Octane is again partnering with the Kent Group Ltd., a data-driven consultancy that is a leading authority on fuel sector marketing economics, performance measurement and benchmarking, as well as price/margin reporting/analysis, regulation, and industry economic research and analysis, to bring you a comprehensive snapshot of the industry. Since 2004, the Kent Group has generated a complete site census that lays bare the downstream side of Canadian petroleum.

 This year, Kent reports that brand diversity continues to grow, while refiner controls over pricing are in decline. Canada now offers 67 distinct companies marketing 88 brands of gasoline. Refiners’ position as a controlling force has declined since 2004: Today, only 23% of Canadas fuel is price controlled by one of the seven refiner marketers. This is a 9% decline over 14 years and shows how refiners have divested their forecourt holdings in favour of more emphasis on their downstream operations.


Lay of the land

Screen Shot 2019-07-22 at 1.34.13 PMIn 2017 Canada was home to 11,948 retail gasoline outlets. This years survey establishes the 2018 national site count at 11,929, a 0.2% decrease. Kent reports that this ends a three-year run of site increases, which followed 25 years of steady site decline (Figure 1).

 Our estimates show that the Canadian retail gas station population peaked at about 20,360 in 1989, declining at a steady pace until about 1999, and then at a moderately slower pace through to 2014,says Kent Group managing director Jason Parent, adding that since 2015 the number of retail gasoline outlets moved marginally higher until the slight decline in 2018. 

Screen Shot 2019-07-22 at 1.34.29 PMConsumers enjoy 3.2 outlets per 10,000 persons (Figure 2), with Ontario having the most stations per customer. Overall, operators offered 88 brands of gasoline, a number than has declined by 10 from 2004. The two largest refiners, Shell and Suncor, also have a smaller share of the forecourt, with just 11% of stations taking price direction from these companies. And, while only 23% of forecourt sites are price controlled by big name players, 40% still use the big names, such as Esso, Shell and Petro-Canada, on the canopy.

In 2018, a notable change to the retail fuel landscape is the rebranding of BG FuelsLoblaw fuel networks to Mobil. This move impacted more than 200 sites across Canada. Mobil is now the ninth most common brand in the country, representing about 2% of all sites.

Screen Shot 2019-07-22 at 1.34.38 PMOne of the biggest shifts is among the group of non-traditional gas marketers. These operators include grocery chains (Sobeys and Federated Co-operatives), big-box retailers (Costco) and others, such as Canadian Tire, 7-Eleven and Couche-Tard, where the main business is something other than fuel (Figure 3). This group has grown from a 15% share of the market in 2004 to 23.5% in 2018.

Regionally, there are a variety of companies marketing leading brands of gasoline. For example, Esso products are marketed by 11 companies. Both Shell and Suncor also market under similar arrangements (but to a lesser degree). Kent suggests this format works to manage relationships with former brand associates and gives the refiner-marketer more leeway as they focus on higher value outlets (Figure 4).

 Sharper tools

Screen Shot 2019-07-22 at 1.34.57 PMThe rise in consumer demand for fuel, coupled with the decline in the number of outlets, work to create considerable unit efficiency. Back in the early 1990s, when Canada had more than 20,000 gas stations, average throughput was about 1.5 million litres per site. By 2017, the average hit close to 3.8 million litres at just 11,948 retail gasoline outlets. Last year, the number of litres declined by a modest 1.8% (the number of outlets declined by 0.2%) to reveal a trend that indicates sales per outlet may well have spiked (Figure 5)

Non-traditional marketers of fuel, such as grocers, vehicle repair and big box retailers reported gains of 15% from 2004 to 2018. Since 2004, non-traditional marketers have increased their presence more substantially in central and eastern regions of the country, more than doubling in Ontario and Quebec, and growing at an even much higher rate in many Maritime provinces,says Parent.

He points out that big-box outlets, such as Costco, as well as couponing and cross-promotions between the gas bar and chain store, can create significant impact on retail fuel markets even though thee outlets have a relatively limited market share. Retail outlets under this category tend to be high volume retailers (HVR). This means that throughputs are much larger than market averages. HVRs generally have a pricing advantage over traditional retailers due to their low operating costs per litre and the ability to cross-merchandize with their non-petroleum offerings, meaning markets with a high concentration of HVRs are generally characterized by lower average pump prices.” (Figure 6)

 Screen Shot 2019-07-22 at 1.35.19 PM

Gas versus Diesel

Diesel penetration is up at Canadas fuel sites and diesel is available at 76.5% of reporting sites. This represents a significant climb from 2014, when just 47.3% of sites sold diesel. Even so, the diesel market remains small in comparison with gasoline sales. In 2018, diesel accounted for 7.3% of total retail petroleum sales. 

Backcourt remains essential

In Canada, 85% of fueling sites feature a backcourt offering, such as convenience store, car wash or quick service restaurant (QSR). 

 Screen Shot 2019-07-22 at 1.35.33 PM

In 2004, Kent reported that about 40% of c-stores were 500 to 1500 sq. ft. Today, the most common configuration exceeds 1500 sq. ft. This illustrates how retail is tapping in to higher margin sales at locations, as well as increasing development from convenience leaders, such as 7-Eleven and Couche-Tard (Circle K). 

The Kent Report found 2,034 car washes associated with the 10,153 fuel stations that reported ancillary offerings. This representation is up 0.2% from 2017 (19.8%), but down slightly from the high of 2014 (20.6%). The three largest brands, Petro-Canada, Shell and Esso increased their car wash market penetration slightly. Kent reports these players took their share to 13.2% in 2018, from 12.9% in2017.

 In 2018 there were 1,188 quick service restaurants associated with Canadas fueling sites. Here, the 10,153 locations that responded to the survey showed an 11.7% market penetration rate. This is up from 7.8% in 2004, but remains virtually unchanged over the last decade, revealing what could be a significant development opportunity.