For the past 10 months we have explored the different markets across Canada. We will finish our journey in the north – the most challenging market to service and supply for a number of reasons. Small populations spread across vast geography, with very complicated supply chain networks far from the product source and very little local supply make Canada’s northern territories a very challenging market to supply with fresh produce. These are difficult and expensive markets to maintain a consistent offering in different categories.

It has to start with the consumer

Consumers in Canada’s three northern territories are spread across an area equal to 40 per cent of the country’s total landmass and less than .5 per cent of the total population. The following table illustrates the breakdown of population in the three territories:

                                                                                    Source: Statistics Canada

Similar to other markets in Canada the urban centers are home to most of the people. The three largest cities make up more than 40 per cent of the population. Whitehorse is the largest city in the north, home to more than half of the residents of the Yukon Territory.

The challenges of servicing this market outlined earlier make it the most expensive market for food in Canada. As you can see from the following table, expenditures per household in the territories are very high relative to the rest of the country. The Nunavut government conducts a comparison of process across the territory compared to the rest of Canada.

In select markets, prices are subsidized to make the cost of living more affordable. Retailers and food service establishments apply for the subsidies and they must show details of the price reduction on the consumer’s receipt.

Customers influence the buying decision

Many of Canada’s major retailers operate in the northern territories.

Save On have expanded to open a store in Whitehorse. Save On stores offer a traditional supermarket format with more emphasis on local. On line shopping is available in this store, which is relatively new.

Arctic Cooperative operates 32 stores in the northern territories. These stores are spread across the region and they are locally owned and operated. The majority of the stores are in Nunavut with half of the stores in remote communities north of the Arctic Circle.

Loblaw operates one Real Canadian Superstore in Whitehorse and independent stores in Whitehorse and Yellowknife. The Yukon stores are serviced from Edmonton, as is the Yellowknife store.

Walmart has expanded into the Yukon and Northwest Territories with stores in the largest markets. These are not SuperCentres so they do not offer perishables and assortment of food is limited.

The Northwest Company services 18 communities in the Northwest Territories and 21 communities in Nunavut with their Northern Stores. They offer a full service grocery and fresh assortment with some prepared foods as well.

Sobeys, Metro and Costco do not operate stores in the northern territories.

As online shopping grows in Canada, this trend will have an impact on residents in the northern territories. We see the impact of Amazon Prime now where shipping costs are identical across the country for grocery products and other consumer goods.  As the availability of fresh foods expands in the online offerings it could be very positive for residents in this market.

Your competition

The climate obviously makes production challenging for fresh produce. That being said there are some people growing horticulture crops in the Yukon and there is also a Yukon Gardens, greenhouse operation in Whitehorse. With more focus on controlled atmosphere agriculture in southern growing regions we could see more production to service the needs of the north with more fresh fruits and vegetables.

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

WHAT’S IN STORE?

Controlled atmosphere coming soon

At the Canadian Produce Marketing Association annual convention in Montreal, Del Fresco showcased their new Living Cube. This is a great example of innovation being employed to produce fresh produce anywhere. They will be launching products soon in grocery stores. They are currently producing different lettuce products with plans to expand.

Consumers are looking for more information about where their products are coming from and how they are produced. This form of production answers a lot of questions and if the economics work it could be something that is very popular.