We are starting to explore the different markets in our food distribution network, starting with the biggest market: the entire country. 
    

There are only a handful of retailers who really treat Canada as a market. They are: Walmart, Costco and Whole Foods. We do have other national retailers such as Loblaw and Sobeys however they still operate regions such as Quebec separately.
    

It is important to note that supplying a retailer who looks at Canada as a market does not mean you have to supply the needs of the entire market as they see it. No doubt they prefer fewer suppliers as it simplifies their business and reduces costs, but they also know that it is not realistic in a lot of categories to have one supplier across the country. It is also a risk for them to have only one vendor if there are issues and it also prevents them from having some choice which can be defined as leverage.
    

Consumers in Canada are changing and if you want to supply national retailers you need to understand the market they are operating in. According to Statistics Canada, the Canadian population surpassed 37 million on April 1, 2018. This is an increase of 1.4 per cent from the same date in the 
previous year. Your customers relate population change to the growth the market should be delivering in tonnage. Food is complicated but one parameter that is always the best starting point is population change. If the population is growing, overall food consumption should be growing at a similar rate.
    

You should also understand the source of population growth, as it will impact products consumed. In the first quarter of 2018, according to Statistics Canada, the country had the highest ever increase as a result of immigration. More than 88,000 people were added as a result of immigration whereas the natural increase (births minus deaths) was at a historic low with only 15,037. The population is growing and these consumers are likely searching for different products.
    

Again, using Statistics Canada information, there are more than six million  Canadians (16% of population) with Asian and Middle-Eastern origins and more than 70 per cent of these people were foreign-born. We know when people move from one part of the world to another, they are most likely to search for familiar foods when they immigrate. This does change over time as they are exposed to different products and is also influenced by availability. 
    

As you can see from the table, expenditures per household on food grew by more than 13 per cent from 2012 to 2016. There are many factors that impact this number. Inflation, currency, tonnage, product mix, population, consumer confidence and many other metrics will influence expenditures per household. When you are looking at the national market, this is what happened so retail customers would be trying to keep pace or exceed these numbers. Retail stores are losing share to food service, however fruits and vegetables exceeded the retail store total.
    

Looking at the national market you need to understand how consumers are changing and how this will impact the products they are looking to buy. It can result in opportunities for new items or it can also decrease the required volume of the products you have been producing. You might also consider education to help new Canadians understand the products you do produce.
    
Customers influence the buying decision

As we discussed earlier there are really only three food retailers who see Canada as a market. It is not hard to understand why they have this view with their home offices in the U.S. and the knowledge that Canada represents a smaller market than California. 
    

Walmart will focus on limited listings driving the greatest possible sales. Their perishable departments have improved the offering and the shopping experience. We know they are focused on value and if you want to supply them you need to be too. Walmart has a limited number of warehouses for fresh produce where you must meet or exceed their standards.
    

Costco will look for different sizes with a higher average price point. They will be looking to deliver better overall value or price per unit than their competition. One benefit of Costco in produce is they do consider different sizes, which helps with improving your overall saleable product. Costco moves produce through warehouses and does direct warehouse delivery. This will depend on the item, availability of supply and the warehouses you are servicing.
    

Whole Foods are only in Ontario and British Columbia and they run their stores as part of regions in the U.S. For B.C. suppliers, the office is in Bellevue, Washington and for Ontario it is in Chicago, Illinois. They have a portal on their website for potential suppliers to submit items and create a profile. (www.wholefoodsmarket.com/information-potential-suppliers)

Your competition

Supplying the national market is a challenge for understanding competition. There are many and you could spend too much time on this. Select the leaders in your category and follow what they are doing. You should understand the offering, ad pricing and regular pricing from the leaders.

How food gets to consumers

National market retailers all sell in bricks and mortar and on-line. Your products must work in both to be successful. We know Amazon owns Whole Foods and they will continue to drive change in how food is distributed and sold. Watch them carefully as they will lead change. The other retailers will be watching carefully as well.

The national market

While only three retailers really see Canada as a market, they are also experiencing growth. Many people are surprised when they consider these three retailers represent close to 30 per cent of food sold to households in Canada. They are important in the market and if you want to service the national market you need to understand the 37 million consumers and the three retailers who are trying every week to grow their share within this population.
    

If you have any questions about selling your products please give me a call at (902) 489-2900 or send me an email at peter@skufood.com.