Helping Retailers To Differentiate Their Products

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“Meat is very misunderstood. I think we do a terrible job in retailing beef and there have been opportunities missed in Canada.”

For farmers looking to gain a foothold in the retail food marketplace, lesson one might be to know your customer – and it’s not the consumer. It’s the retailer, and producers need to help them differentiate their product, says John Scott, president of the Canadian Federation of Independent Grocers.

“That’s the fundamental mistake,” Scott told the Tiffin Conference here in January. “Producers don’t look at the point of differentiation that the retailer has evolved in the marketplace. They need to ask, ‘How can I help you in your differentiation?’”

Scott says while the retailer looks at the consumer, the producer’s job is to understand and cater to the retailers. “If you’re a beef producer and have AAA beef that you want to get into the marketplace, you better make sure you have a good relationship with Costco,” says Scott, noting Costco’s commitment to sell only AAA beef.

Retail food is a $72 billion industry in Canada, accelerating significantly in the last quarter of 2008, says Scott. He says some of the best indicators of market trends are Kraft Dinner and Campbell’s soup sale spikes.

It’s also important to be aware of what the consumer is demanding. According to a recent IRI survey, American consumers are looking for value and health and wellness, despite the economic downturn there. “This is a dramatic departure from people typically going for volume,” says Scott. “At the end of the day, we’re all looking for authenticity – ‘where can I go to trust what I’m consuming?’”

Scott noted several Canadian food retailers who are providing an authentic grocery experience. Qualicum Foods at Qualicum Beach, British Columbia, is making a name for itself with its upstairs café, gift shop, and a kitchen and bath store called A Step Above. It is also home to the first Starbucks in a independent grocery store in Canada.

NOTHING BUT THE BEST

Another innovative retailer is Stong’s Market in Vancouver. While it can’t compete with the big players, it is very specialized, so much so that it has a reputation that many of the chefs in Vancouver shop at this store, says Scott. The owner is willing to source any product from anywhere to cater to the chefs. She also works with small-scale producers to put their products in the market.

At The Village Grocer in Markham, Ontario, Evan and Cathy MacDonald have a strong commitment to quality food and therefore serve only AAA beef at their meat counter. “Their philosophy is nothing but the best. You may not have beef every night, but when you have beef, it better be the best,” says Scott.

Scott says that many grocers are starting to put a chef or nutritionist behind the meat counter, rather than the butcher, because consumers have questions about the nutrition and preparation of certain meats. “Meat is very misunderstood. I think we do a terrible job in retailing beef and there have been opportunities missed in Canada,” says Scott. He credits the Beef Information Centre with working directly with retailers to increase the profile of Canadian beef.

As more and more consumers shop for high-quality, nutritious food, they will be looking at independent grocers to meet their needs. If producers can understand and meet the needs of retailers, they stand to profit from increased market share.

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