Grocery industry is stable despite 'a couple black eyes,' expert says
During a conference session at SIAL in Montreal last week, Sylvain Charlebois, dean of the faculty of management at Dalhousie University, sat down with Paul Uys, senior director external of the Arrell Food Institute of the University of Guelph (and a former Loblaw executive) to discuss the current state of the Canadian grocery industry.
The two touched on everything from blockchain technology to Amazon and the rise of the halal food market. Here is an edited version of their conversation:
Charlebois: How do you see the overall state of the food distribution industry in Canada?
Uys: Other than a couple black eyes from a consumer trust point of view, I actually think the state is very stable. A year ago we heard about the Amazon impact potentially around Whole Foods, but I think generally
Financial statements of most grocers are pretty healthy right now. Loblaw is particularly surprising given the headwinds it had to face with the price-fixing situation, distribution challenges and people are converging online. The Amazon effect is real. You can feel it.
There’s no question if anything is keeping Galen Weston up at night, it’s what’s happening
Do you think consumers are willing to pay for everything you just said?
I used to talk about the Walmart versus Whole Foods, but they became the epitome of what is the dichotomy in the industry. You have to be the most efficient player in the commodity business—and commodities can be fresh chicken—all you have to then offer the consumer is something different for which they will pay some form of premium. But, even then it's a very competitive environment because I think even organics are becoming commodity products, and with that they’re in the same fight everybody else is in.
The organic segment is growing. We just did a study at Dalhousie that asked Canadians if they identified as vegetarians or vegans. In Canada, 52% of Canadians who see themselves as vegetarians are under 35. Another interesting result we found from our study is looking at halal and kosher: Older Canadians tend to leave the kosher diet, but with halal it's the opposite, they seem very committed.
At Loblaw as head of product development, we focused a lot on kosher and at the time kosher probably had a halo effect about the fact it was coming from a regulated process. But—and this is a generalization—within the Jewish community, kosher became important around high days and holidays. With the Muslim community it’s very different, it’s every day. Therefore, the purchasing power of
What are your thoughts about blockchain? Do you think it’s a concept that could work in Canada?
Carrefour has done it. Walmart has done it. It's an interesting model;
But challenges are arising. Not everyone is equal across the supply chain.
When payment is involved through blockchain you have privacy factors as well. I think there's a lot to learn and I think if