Agri-Food Trade Service

Grocery Innovations Trade Show
Trend Highlights

November 2009

The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information. This report is intended as a concise overview of the market for those interested in its potential and is not intended to provide in-depth analysis which may be required by the individual exporter. Although every effort has been made to ensure that the information is correct, Agriculture and Agri-Food Canada assumes no responsibility for its accuracy, reliability, or for any decisions arising from the information contained herein.

Please address any comments or suggestions you have on this report to: 
Ben Berry – ben.berry@agr.gc.ca  
Robin Bowes – robin.bowes@agr.gc.ca

Grocery Innovations Canada 2009 Trade Show

The Grocery Innovations Canada trade show took place October 26 and 27, 2009 at the Toronto Congress Centre and showcased new and existing food and beverage products available in retail grocery stores. The show bills itself as the largest annual gathering of the grocery industry in Canada and the premier grocery exposition and conference. The annual show is presented by the non-profit trade association Canadian Federation of Independent Grocers (CFIG), which represents over 4,000 grocery retailers across Canada. The show's sister event, Grocery Showcase West, has always provided an excellent look into industry developments, and together the CFIG shows have provided the Agri-Food Trade Service (ATS) with some excellent trend and opportunity information.

The 2009 Grocery Innovations show was well attended by national brands, multinationals, distributors and Canadian SME's, and highlighted current and future supermarket trends; essentially what consumers will see on shopping shelves in 2010. Once again the show's New Product Showcase provided an excellent window into the new and innovative products coming to the Canadian market.

The show’s official attendance numbers have yet to be reported, but from our experience the show seemed to have been better attended by both visitors and exhibitors compared to 2008, and appeared to easily reach its goal of 300 exhibitors, 500 booths, and 5,000 industry attendees. The CFIG has confirmed our impression and reported that the 2009 show gained unprecedented attendance, with more diversity among exhibitors, and was the most successful in the event’s history. That level of interest speaks to the potential of the $78 billion Canadian retail grocery industry which has maintained its strength in this challenging economic climate. While the global economic slowdown placed new pressures on the grocery industry and presented real shifts in consumer shopping behaviour, the industry itself, as demonstrated at the 2009 show, continues to innovate which is a good sign for the industry in 2010.

Media interest in this year's 2009 show, further demonstrated the impact and prominence of this industry. In order to give a more complete picture in this year's report we have decided to include the media's perspective on the event, and what they viewed as the most intriguing products and elements of the show. Adding this additional perspective to our reports allows for us to further our analysis and compare what we have seen and observed through attendance at the event.

Trend Highlights

In-line with growth predictions for the snack food industry, snack food products were everywhere at Grocery Innovations, and seem to have merged with the "healthy food" trend. "Healthy snacking" and "healthy snack alternative" products were being promoted left and right, particularly for the kid-friendly segment. Ongoing demand for high-quality, specialty and ethnic products was apparent in the amount of soup and artisan breads present at the show, while a number of provincial and national pavilions also highlighted the growing importance of fresh and local, as well as ethnic food products. The abundance of these promotions and products at the show, lead us to believe that these products will be making a strong appearance in Canadian stores this year.

Snacking

The growing trend toward snacking prevailed at Grocery Innovations. "Healthy" snack food products were quite prominent at the show, and "healthy" claims on products continued to grow with the attributes of reduced salt and fat, trans-fat free, or other nutritional/ingredient information being promoted on packaging. While nutritional benefits and ingredient reductions were prominent, there appeared to be a shift away from the abundance of functional food claims (such as probiotic/prebiotic) that was present at the 2008 show. However, snacking included not only the "healthy" segment, but also indulgence and confectionary products such as chocolate and candy. The snack category also brought innovation, with a number of new products showcased and winning awards. Another noticeable feature was the focus on convenience, which has also been mentioned as a key driver in the growing snack food trend. Convenient packaging and "on-the-go" alternatives to " original sit-down" meals were popular product attributes. The real surprise in the snack trend was the dominance of nut-based products. Borrowing from their "naturally healthy" attributes, nut-based snacks were dominant at this year's event. Everything from cookies, crackers and chips were found with a nut base, and single serving nut mixes and bulk products also put nuts as a snack squarely in front of attendees.

Kid-Focused Healthy Snack Products

A variety of healthy new products geared toward children were present at the show, particularly in the snack food category. Numerous child-friendly snack products were promoted and included taglines or names such as "healthy snack alternative", "healthy snacking", "smart snax" and "good for you and great tasting too!". The "Health Check" logo of the Heart and Stroke Foundation was also present on new snack products, as well as "no sugar added" attributes. Well-established companies SUN-RYPE and DelMonte both promoted new "100% fruit" snacks, which was also a very popular ingredient among other kids' snack products. The main selling point of these products appeared to be healthy snacks that kids will still eat and enjoy.

Lunch-related products remained popular and a hot-trend segment at the show, such as the mini burger trend being tailored toward children in the form of Schneiders' popular Lunch Mate product series. Alternatives for "original" or "classic" lunch ingredients also played a role in new product launches in this category, as companies looked for new ways to provide products that meet increasingly strict school lunch policies. Not surprisingly, the biggest push in this category may have come from allergen and "school-safe" products. The main focus here was obviously products that offered an alternative to peanut butter. Most notably, two companies offered a 100% nut-free soy butter product that was introduced as a school-safe alternative to peanut butter, and two companies produced an almond butter product, again designed to simplify the lives of parents desperately looking for an alternative to the lunch staple. Other nut-free products were also visible, such as Treasure Mills' school-safe 100% nut and peanut free products, as well as a line of gluten-free baking mixes and several other gluten-free snacks.

Packaged Nuts and Nut-Based Products

There was a variety and prevalence of nut-related products at the show, which can likely be attributed to the combination of two popular trends of the moment; health awareness and snacking. Nuts are being promoted as a "healthier snacking alternative" compared to other sweeter or deep fried snack products, and at the show were present in a variety of different forms: packaged nuts, crackers/thins/crisps, and ingredients. New flavours and processing methods were noticeable trends that could be found in products such as "almond thins/chips" and a "thin and crunchy toasted almond cookie". Innovation in this category appears to be on a roll. Similarly to healthy snack food products for children, processed nut products also capitalized on their "smart"/"healthy" nutritional benefits.

High-quality, “Good-for-you” Soup

Healthy products, natural products and home-style or homemade quality products were apparent across the product groups and soup was a prime example. The impact of the "healthy food" trend was apparent in soup products promoted as organic and all natural. These attributes were also combined with other nutritional/ingredient information (reduced sodium, vegetable servings, whole grain pasta, no MSG, no glutens, etc.) to create an overall healthy product message. Staying true to the increasing trend toward providing healthy and innovative products for children, a new line of Campbell's kid-inspired soups was also showcased. Companies appear to be taking consumer awareness and concern for health and healthy food products seriously, and providing soup products to meet this demand and capitalize on this growing shift in consumer behaviour. With consumer concern of food ingredients increasing significantly in the past five years, and sodium a purchasing-factor affecting three quarters of adults in Canada, it is no surprise that industry is taking action and offering products that can alleviate these concerns (Giguère, 2009).

The influence of the trend toward specialty, high-quality products was also evident in the soup product category. This trend was particularly prevalent before the economic slowdown and appears to be beginning to pick up speed again. Within the soup category, superior-quality was showcased through messaging and product names that involved references to being "homemade/classic/original", deluxe, or containing quality ingredients such as "real cream", sea salt, etc.

Overall, the messaging of these products to consumers encompassed several differentiating factors, resulting in a combined product meaning of superior quality and taste along with the benefits of being a healthy and nutritional product for consumers and their families to enjoy. Positioning around these two significant consumer trends, will likely aid in helping place these products in an increasingly favourable light with consumers.

Artisan and Specialty Breads

Bread was everywhere at the 2009 Grocery Innovations show. Bread products of all types were present, along with both Canadian SME's and the larger players. What has been called artisan quality bread has been a fixture at more recent events in Canada and introducing these products in large format retail stores has been an ongoing effort, but the real shift at this years event was the introduction of high quality breads by the country's largest bakeries. For instance, Weston presented a wide range of high quality breads and made it clear that they were not leaving the market for artisan quality breads to smaller bakeries and SME's anymore.

Apart from new players in the arena, flavours, new ingredient combinations, and product formats were driving innovation and differentiation in this category. Again, there was an overall trend toward high-quality products that are also healthy and provide nutritional benefits. As with other product trends mentioned in this report, the bread category was also heavily promoting unique and healthy food ingredients, the lack of ingredients perceived by consumers to be "less healthy", and being organic/natural. As with other product categories at the show, bread was not going to miss out on the benefits of promoting the nutritional attributes of these products, which also were the basis for some new product launches.

Provincial and National Pavilions Showcasing Region Specific Products

Adding to the national flavour of this event, which in past years has felt very much Toronto centered, was the presence of several provincial pavilions and national booths. Ontario growers and producers were present at last year's event, but this year their common aisle and grouping under Pick Ontario Freshness Market, highlighting local, producer associations of Ontario, had a much stronger impact.

The presence of provincial pavilions and national booths was one of the most striking changes from the previous year's event of 2008 and illustrated the impact of increasing demand for ethnic and diverse products in the Canadian consumer market, as well as the increased interest in local and fresh products.

Presenting and promoting products in-line with the benefits and traits unique to their production region was a strong occurrence at the show. On an international scale, products from Austria, Poland and Jamaica were present at the Ethnic Fare pavilion, while from within Canada, Nova Scotia, New Brunswick and Ontario products were featured in regional pavilions. It was interesting to note that while the Ontario pavilion focused very specifically on local, fresh products at the producer-level, Canada's other regional pavilions featured more high quality, processed products.

Conclusion

• The snacking trend is significantly impacting new product innovation and development in the industry, and is capitalizing on other current consumer demands for healthy, allergen-free food products. The link between consumers' need for convenience and the desire for healthy, natural products is certainly a key strategy for this category, and the driver for new product development and differentiation.
• High-quality, specialty and artisan products had a prominent re-appearance in several food categories, showing that the demand for ethnic and "authentic" foods also continues to thrive among Canadian consumers. The growing importance of this market was highlighted by the presence of large companies also entering the artisan product category. Similarly to snack products at the show, companies were interested in reaching consumers on more than one type of product attribute and were keen to also promote these "deluxe" products along nutritional/health features.
• As was noted at last year's show the attributes of products appeared to take increasing precedence in product messaging and promotion; providing a method of differentiation in the congested marketplace, and the opportunity for products to appeal to consumers based on more than one feature of importance in consumers' minds. This appears to be a movement taking place throughout all categories of grocery products, as 32% of Canada's most innovative food products from national and private label brands featured one or more health benefits (Giguère, 2009).
• "Health" related attributes, whether based on nutrition/ingredients, organics, or "fresh" local food was the common thread running through the very large majority of products present at Grocery Innovations. As consumer preferences and perceptions toward healthy products evolve and expand throughout the mass-market, becoming a common factor for making grocery-shopping decisions, the products targeting consumers on these attributes will likely only expand and increasingly innovate.

Media Interest in Healthy, Alternative and Specialty Products

The Toronto Star (in an article by Susan Sampson titled Bottled ‘bergs, beefy bacon: New products for supermarket, dated October 28, 2009), highlighted their 10 favourite items showcased at Grocery Innovations 2009, which are also listed below. For comparison's sake and the additional viewpoint of another perspective, it was valuable to have the media's outlook on the most interesting products featured at the event, and to see how they aligned with what we had observed while attending the show.

While the media appeared to have more of a focus on new and innovative products at the show, many of the highlighted items tie-in to the major trends we noted at this year's Grocery Innovations and discussed above. A number of the products highlighted in the Toronto Star article are "healthy" or healthier alternative food products, with varying attributes related to ingredient reductions or nutritional benefits. Crofter's organic Superfruit Spreads, with a third less sugar and a pound of fruit, are a prime example of the industry focus toward presenting healthier food products to consumers, as is the North of 90 beef bacon which possesses 35% less fat than traditional bacon.

A school-safe allergen free product also made it in to the Toronto Star's top ten items, which was the SchoolSafe Soy Butter also mentioned in the report above as an alternative to peanut butter. This product also tied-in to the healthy, natural products trend that we noted, as it is made with no added colours, flavours, or preservatives and non-GMO soy. The snacking trend was also represented in the list of favourite products, with Nestlé's 70% dark chocolate versions of its Aero, Kit Kat and Coffee Crisp bars.

Some specialty products also made it in to the top ten, but also continued to stay true to the all-encompassing healthy food trend. These included Canoe Cooked Wild Rice from Winnipeg, bottled iceberg water from off the coast of Newfoundland and packaged in biodegradable bottles, a "good fat" cold-pressed extra-virgin coconut oil marketed by a New Brunswick company, and rice bran oil from New Zealand, a nutritious alternative to other cooking oils. As mentioned earlier with the other specialty products present at the Grocery Innovations show, these products are also appealing to consumers on more than one attribute, encompassing not only the health and specialty product trends, but also using their regional origin as a form of differentiation. This regional and national focus was again another significant component observed at the 2009 Grocery Innovations show.

In all, the top ten items highlighted by Susan Sampson also draw attention to many of the key product trends appearing at the 2009 Grocery Innovations show, and likely appearing on many grocery store shelves in 2010.

Favourite Ten Items by Product Name and Company:

• 80 Degrees North Iceberg Water, by Canada Ice Enterprises Inc
• SchoolSafe Soy Butter, from Hilton Soy Foods
• Superfruit Spreads, by Crofter's
• Canoe Cooked Wild Rice and Oh Canada Pancake and Waffle Mix, by Shoal Lake Wild Rice
• CocoVie cold-pressed, extra-virgin coconut oil, by Olivier
• Alfa One rice bran oil, from Old Fashioned Foods Group
• North of 90 beef bacon, from St. Helen's Meat Packers
• Aero, Kit Kat and Coffee Crisp 70% dark chocolate versions, by Nestlé

The full article, Bottled 'bergs, beefy bacon: New products for supermarket - Grocery expo showcases new products coming to a supermarket near you, can be found at: www.thestar.com/living/food/article/717028--bottled-bergs-beefy-bacon-new-products-for-supermarket

Key Resources

Canadian Federation of Independent Grocers. Retrieved October 29, 2009, from http://www.cfig.ca

Giguère, Louis. (2009, October). The Shape of Things to Come: Consumers today expect more and processors are rising up to the challenge. Food in Canada, 69(8), 36-38.

Canadian Federation of Independent Grocers. (2009, November 2). 35th Grocery Innovations Canada Most Successful Yet! Grocery Innovations Canada. Retrieved November 10, 2009, from http://www.groceryinnovations.com/media/media_press.htm

Canadian Federation of Independent Grocers. (2009). A one-stop-shop for grocery trends, new products and retail intelligence. Grocery Innovations Canada. Retrieved October 29, 2009, from http://www.groceryinnovations.com/media/media_press.htm

Canadian Federation of Independent Grocers. (2009, October 8). Canadian grocers are ready for 2010. Grocery Innovations Canada. Retrieved October 29, 2009, from http://www.groceryinnovations.com/media/media_press.htm

Canadian Federation of Independent Grocers. (2009). Ethnic foods given greater space at Canada's largest grocery trade show. Grocery Innovations Canada. Retrieved October 29, 2009, from http://www.groceryinnovations.com/media/media_press.htm

Sampson, Susan. (2009, October 28). Bottled 'bergs, beefy bacon: New products for supermarket. Toronto Star. Retrieved October 29, 2009, from www.thestar.com/living/food/article/717028--bottled-bergs-beefy-bacon-new-products-for-supermarket

Statistics Canada. (2009, October 22). Retail trade, by industry. Retrieved October 29, 2009, from http://www40.statcan.gc.ca/l01/cst01/trad15a-eng.htm