What's coming down the pipeline in grocery? That was the key question raised at Canadian Grocer's Thought Leadership CEO conference Monday.
The third annual conference attracted a who's who of the grocery industry to Toronto's Royal York hotel. Both retailers and manufacturers in the grocery industry attended the sold out event.
The first part of the conference discussed the trends affecting the industry.
Carman Allison, Nielsen's director of consumer insights, kicked off the day with a presentation on how retail is being redefined.
Download Nielsen's presentation here.
Allison said 2014 will be another challenging year for growth. However, the West is a bright spot thanks to growth from immigration.
He said value will be a key driver of sales, as 37% of retail dollars in 2013 were sold on promotion and price cuts.
Traditional retail is under attack, said Allison, with traditional CPG channels relatively flat.
Ethnic grocery is up 14%, according to Nielsen figures, and e-commerce is up 41%. Allison said that future growth will be fueled by consumer preference for online shopping.
Online in the U.S. is forecasted to be 5% of CPG sales in two years, with Amazon leading the conversion. However, 74% still believe that the grocery store is more convenient.
"Know your shopper," said Allison. "In order to build loyalty, it’s important to understand what consumers are buying outside of the store to meet new unmet needs and demand."
Next to present was Marion Chan of TrendSpotter Consulting, with exclusive, just released Canadian research into the next big consumer group: the millennials.
Download millennials presentation here.
Millennials are too big and too different to ignore, said Chan. They are 15 to 33 years old and by 2016, they and their children will represent 40% of the population.
The most interesting thing about millennials is that their participation rate in labour is split, 50/50 men and women, said Chan.
Among this group, they can be segmented into five different types: 22% are premium label lovers; 10% are value seekers; 19% are tech reliant shoppers; 19% are health niks; and 21% are traditional TV viewers.
Not surprisingly, this group shows a high affinity for social media; 95% use social media sites like Twitter and Facebook.
Millennials also look for authenticity and 41% like brands that ask them for their opinion. The millennials want more ethnic foods, prepared foods, and services that help them prepare nutritious, balanced meals, said Chan.
The key to connect with millennials is through psychological needs or four E's: engagement, exclusivity, experience and emotion.
Next, Dwight Konings, VP of innovation and commercialization at Advantage, provided new trends and insights into the vendor-retailer relationship.
Advantage research has found that collaboration is measurable, and scores correlate to growth. Konings said that best in class vendors are differentiating themselves through such things as responding to issues within 24 hours, and sharing market data and trends. Meanwhile retailers that stand out are those that understand shopper needs and tailor processes based on vendor feedback.
E-commerce has provided several opportunities. Konings said there are more partnerships and cross-promotional opportunities, as well as increased interaction and data sharing.
Download Advantage presentation here.
Lastly, there were three one-on-one interviews with the CEOs of Sobeys, Longo's and Walmart Canada.
First up was Marc Poulin, CEO of Sobeys, who discussed the plans for Safeway with interviewer Nancy Kwon, managing editor of Canadian Grocer.
Over the next 18 months, the focus will be to integrate Safeway into Sobeys' systems.
Poulin also spoke about the grocery chain's focus on offering "better food for all." He spoke of the Jamie Oliver partnership and how the chef was in line with the company's core vision on helping consumers eat better, feel better and do better.
Sobeys opened a new look store in Sage Creek, Manitoba and will open another new look store in Burlington, Ont. this Thursday. The stores will showcase staff providing education and customer support. When it came to e-commerce, Poulin noted that IGA in Quebec had the first transactional grocery website 20 years ago.
Next, Tom Barlow, president of the Canadian Federation of Independent Grocers interviewed Anthony Longo, CEO of Longo's.
Longo spoke of the importance of one-on-one discussions with suppliers to create a plan to build the business. "There's nothing better than face-to-face ," said Longo.
Longo said his company's business is about providing solutions for customers. "We try to capture the consumer with our pharmacy, HABA, restaurants," he said.
Longo said that his own Grocery Gateway online delivery service welcomes Amazon getting into grocery in Canada. Amazon will grow the channel, he said.
Finally, Shelley Broader CEO of Walmart, sat down with Canadian Grocer's editor Rob Gerlsbeck.
Walmart is making a big push into e-commerce this year, next year.
Broader also stressed the importance of working with vendors on e-commerce strategy. "We're looking at ways to be innovative together... there aren't two different strategies, but two entities (bricks and mortar and online) that are interlocked together," she said.