The pandemic might be playing the role of Scrooge for the upcoming holiday season, but before the snow flies, it appears retailers, manufacturers and distributors still seem cautiously jolly about sales.
Despite the fact the 2020 holidays will look and feel different than years past, the festive spirit prevails with grocers still hopeful that celebrations around Hanukkah, Kwanza, Christmas and New Year’s will be profitable. They have a lot riding on the holidays, which are typically responsible for a significant chunk of annual sales.
“This is the biggest shopping period of all,” confirms Jeff Doucette, general manager, Field Agent Canada, based in Calgary. “Sales may be down in some categories, but not on core items related to the main holiday meal.” He predicts consumers will “go all out” and splurge on premium items, since they will likely be celebrating on a smaller scale, with fewer guests at parties and dinners. And size will matter, with shoppers looking for items available in scaled-down individual servings. Think cupcakes and tarts instead of cakes and pies.
How will consumers be shopping? “Online shopping is here to stay,” says Doucette. “People will be trying to avoid crowds, especially closer to Christmas.” To navigate the surge in online orders, he suggests grocers should make sure they are well-staffed to cope and to promote an “order early” message to their customers so they avoid disappointment. “It also gives grocers a better sense of demand, which helps with managing inventory,” he adds.
COVID-19 and winter weather remain the wild cards. “It’s hard to predict what will happen,” says Sylvain Charlebois, director of the Agrifood Analytics Lab at Dalhousie University in Halifax. “We’ve seen major holidays over the last six months undermined by the pandemic.” The good news, as he points out, is consumers now have experience on how to cope with the uncertainty and follow store protocols.
That opens the door for grocers to spread some festive cheer to their customers, with positive messaging around the importance of creating happy memories with new traditions. “There’s also an opportunity for retailers to provide a layer of positivity,” explains Charlebois. “They aren’t just selling food. They are helping to build holiday spirit.” That could help offset consumer disappointment in finding fewer brands on the shelves as manufacturers rationalize their product lines.
He’s hoping to see more collaboration between grocers and local farms. It’s something consumers seem to have a growing appetite for as they seek to support local businesses. That has been true for some time, but COVID-19 has made the shop-local movement front and centre. An American Express Canada survey found 76% of respondents said they were “determined to shop local more than in the past.”
The only constant during COVID? Change. “The marketplace is shifting more than ever, more than it has in the last 20 to 30 years,” Charlebois points out.
NAVIGATING THROUGH UNCERTAINTY
“It will be an interesting holiday season,” says Justin Schley, vice-president, Quality Foods. It’s one that could hold its share of surprises—including pleasant ones. He predicted that turkey sales would be down for Thanksgiving, for instance, but they’re up. “I think eating at home and gathering with your immediate bubble could prove the same, and we could see greater sales than one would expect around the holidays,” he explains. “With families spending less in restaurants, they typically will spend more in the store and on premium products.”
Schley also notes that distribution of local and better-for-you products is on the rise and is expected to continue. And e-commerce continues to grow at Quality Foods. “The pandemic has fast-forwarded shoppers five years in the future,” he adds, “although it still remains a small percentage with less than 5% of grocery purchases being online.” Schley believes products that will perform well will be snack foods (thank you, stress eating!), baking-related items, and organic alternatives.
In many ways, it’s business as usual for the B.C.-based grocer. “We aren’t planning anything different per se,” he says. “We will just try to make the shopping experience as comfortable and relaxing as possible while making people safe.”
In Ontario, Denninger’s Foods of the World expects to have a good holiday season, which typically makes up
about 40% of its core business. Less dining out means more dining in and at-home entertaining. Denninger’s anticipates high demand for fixings for meat and cheese charcuterie boards, prepared foods, and frozen entrees. “We’re introducing a limited number of new products,” notes Nathalie Coutayar, merchandise and marketing manager. “It’s not the time to take on new challenges.” Instead, the retailer will stick to tried-and-true products customers already love.
As a grocer that has relied heavily on customer sampling to promote sales, these are tricky times. Without sampling, Denninger’s will rely on its staff to serve as culinary ambassadors. It is investing more funds towards training so staff can make recommendations and share in-depth product knowledge.
Trends to watch
HIP TO SIP
Bland non-alcoholic beers of the past may have gotten a frosty reception, but innovation has transformed this category in a big way. “In many cities around the world, millennials and gen Z-ers are driving the growth in the market for non-alcoholic beer,” says Anna Potter, key accounts, Ontario, with Premier Brands Ltd. “The importance of health and wellbeing while not sacrificing taste is a key reason for non-alcoholic beer consumption, according to a study from GlobalData. It’s a movement and a lifestyle option for millennials, and the industry will continue to blossom over the next decade.”
Growth in this category is estimated at 7.5% in the next four years, according to data from Statista. Premier Brands is on trend with two new products joining its roster of zero-alcohol European beers featuring the popular Clausthaler brand.
In provinces where grocery stores can sell wine and/or beer (including Ontario, British Columbia, Quebec and New Brunswick), consumers are thirsty. They’re stocking up on adult beverages and buying larger-size formats in Ontario, according to Gerald Whitley, regional trade marketing manager, Corby Spirit and Wine. “When in stores, browsing and trial of new brands is reduced as consumers play it safe, going with established brands,” he says. One star that continues to rise in Corby’s wine portfolio is Jacob’s Creek, which has achieved triple-digit sales growth in the last 12 months, according to the company.
In time for the holidays, Corby has introduced Jacob’s Creek Classic Shiraz Cabernet (1500 mL). Whitley is suggesting grocers ensure adequate stock levels, given recent growth trends. Several Corby SKUs will be available on a limited-time-only basis. The holiday push starts in October with Jacob’s Creek’s new “reconnect with what really matters” campaign, backed by advertising and store-level contests.
Warm and fuzzy holiday feelings will be rooted in nostalgia for many Canadians, so a couple of new yuletide products from well-known names under the Mondelēz Canada umbrella are timely: Oreo White Fudge Covered Cookies, and two fresh SKUs from Ritz crackers—snowflake designs and fudge-covered for the holidays. For chocoholics, there’s a Cadbury Dairy Milk Advent Calendar and Cadbury Dairy Milk Mousse Snowman. “The ongoing pandemic will also mean that the ‘sharing’ element this year will mainly be within their own households; therefore, there is an opportunity for retailers to make the most of larger-format products,” says Julie Sirois, vice-president of sales, Mondelēz Canada. For example, the new holiday-inspired Maynards Sour Patch Kids Red & Green come in shareable bags and a 100-gram theatre box.
BAKING IS BACK
“While scratch baking already enjoys strong penetration across all demographics, the pandemic has led to a consumer behaviour shift to increased baking frequency,” says Stephen Kouri, vice-president, sales and trade marketing, Smucker Foods. “As we enter the festive season, we expect continued double-digit growth in baking as light bakers bake more, and that familiar holiday feeling takes hold.” But will consumers be stocking up on flour at a feverish pace again? He says the company is “laser-focused” on ensuring supply and building inventory of key items in its portfolio, which includes Robin Hood (now offering an organic 100% Canadian wheat version) and Five Roses flour, Carnation Evaporated Milk and Eagle Brand Sweetened Condensed Milk.
Kouri recommends grocers plan for inventory levels to reflect increased consumption over the holidays. Watch for new offerings that include Jif dark roast peanut butter, ideal for added flavour in baked treats. Also new, 1850 Coffee, a premium line of bold-tasting coffees based on Folgers blends dating back to 1850, which pair nicely with dessert at the end of the family meal.
SENSE OF ADVENTURE
Some consumers may be more willing to venture out of their comfort zones as they seek unique experiences through food. Paul Blake, president, Finica Food Specialties, says virtual wine and cheese parties “will be the hot ticket with COVID still upon us and everyone social distancing.” Trying the latest gourmet cheeses to arrive in the deli section brings people together. Highlights from Finica’s latest offerings include: Beemster Premium Dutch Gouda with Truffles, Snowdonia Welsh Cheddar Truckles with truffles, paired with new chutneys like pear, date and cognac, Colliers Powerful Aged Cheddar Hand-Smoked over oak and applewood, Bellavitano infused with chardonnay, and Sartori’s BellaVitano infused with Tennessee whiskey. These are ideal for customers looking for “bragging rights” with products that are best-in-class selections, notes Blake.
Whether at a virtual meet-up or a small in-person gathering, consumers can also pair artisanal cheeses with charcuterie salami packs from Freybe called “A Taste of Europe” featuring the greatest hits of German deli cuts—a nod to the company’s heritage. “Amongst a sea of Spanish and Italian options, we felt our German-style salamis offered consumers something really unique,” explains Freybe’s marketing director Michelle Harper. “For retailers, there’s a real opportunity to promote items that capture the essence of experiences consumers might not have been able to have this year.”
Even a go-to main such as beef can go in new directions with preparations that are out of the ordinary. Instead of pulled pork, holiday entertaining could feature pulled beef, slow-simmered in a Crock-Pot. Duane Ellard, director, channel marketing at Canada Beef, is encouraging retailers to let consumers know about Canada Beef’s free “The Roundup” app, which answers questions like “How do I cook that?” and inspires experimentation through innovative recipes. “Retailers should be taking a consultative role,” he says. “Consumers need help. Set them up for success.” Ellard also recommends that grocers stock up on higher-end cuts such as strip loins and prime rib, as well as budget-friendly chuck roasts and ground beef.
Dufflet Pastries is taking smaller holiday gatherings into consideration for its latest launches that include cakes that serve four to six people. It also taps into our desire for nostalgic comfort flavours; case in point, Burnt Toffee Simple Layer Cake and Pineapple Banana Brown Sugar Cake with cream cheese frosting. Returning faves include classic yule logs, single-serve pastries and plant-based cakes. Marketing manager Heather Chu suggests grocers try to attract gen Z and millennials, who are more willing to shop in-store during the pandemic. To encourage impulse buys, she recommends a “Don’t Forget Dessert!” message near the check-out.COVID has made it clear that consumers are more interested than ever in local products and ones that have a story. Peace by Chocolate delivers on both fronts. It was founded by the Hadhad family who, as refugees, came to Nova Scotia to start again after a bomb destroyed their chocolate factory in Syria. They opened Peace by Chocolate in the town of Antigonish in 2016 and have been crafting artisanal chocolates ever since. The Hadhad family’s success is a feel-good tale about resilience, love and peace— something reflected in their chocolate-making. The packaging features a range of languages and a portion of sales goes to non-profits that focus on international peace projects, local homelessness issues, mental health and Indigenous organizations. “We are all about inclusivity,” says CEO Tareq Hadhad. “All religions, all cultures. No one should be left out.”
In time for the holidays, Peace by Chocolate will add 18 fresh flavours, like a pistachio/cherry combo, and mixed boxes with half milk chocolate, half dark (popular in these health-conscience days), along with an innovative new type of gold chocolate, created by blending roasted caramel into the chocolate. Hadhad adds: “We hope our messages will be uplifting for everyone living in these hard times.”