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09/24/2014

Committed to Central Canadians

As its city’s primary form of underground public transit, the Montreal Metro is an amenity on which many Montrealers rely every day. Canada’s busiest subway system, it comprises 68 stations on four lines and delivers an average of 1.2 million daily unlinked passenger trips per weekday, according to the American Public Transportation Association.

It seems fitting that Canada’s third-largest grocer, Montreal-based Metro Inc., bears the same name as the renowned transportation system. Canadians across Ontario and Quebec rely on the retailer every day for their food and non-food essentials.

Metro actually opened its doors in 1947 as Épiceries Lasalle Groceteria, then changed its name to Magasins Lasalle Stores Ltée in 1952. But when it decided a refresh was in order come 1956, the retailer took its renaming inspiration from then-Montreal Mayor Jean Drapeau’s discussion about building the state-of-the-art Montreal Metro, says Geneviève Grégoire, the retailer’s communications advisor.

“‘Metro’ was the buzzword of the day in Montreal” at the time, Grégoire states.

Today, Metro — the retailer — serves Ontarians and Quebecers via a network of more than 800 food stores under various banners and formats — conventional supermarkets, discount stores, convenience stores and more — including Metro, Metro Plus, Super C and Food Basics. It also operates 250-plus drugstores under the Brunet, The Pharmacy, Drug Basics and other banners. And approximately half of the stores are independently owned.

Additionally, Metro recently purchased 75 percent of Boulangerie Première Moisson, a Quebec bakery manufacturer and retailer that also sells its products in Metro, Loblaw, Sobeys and other Canadian retailers’ stores. Grégoire says the retailer plans to double the chain’s 20-plus stores over the next five years.

A robust selection

But arguably one of Metro’s best tools to serve shoppers and gain their loyalty is its expansive and innovative store brand program, which offers everything from everyday essentials to gourmet items and eco-friendly household goods under two brands: Selection, which comprises national-brand-equivalent foods and non-foods, and Irresistibles, a line of premium products for “food lovers,” says Marie-France Gibson, vice president, private label.

Under Selection is the Selection Eco sub-brand, a line of environmentally friendly products in the paper, household cleaners and household goods categories, as well as Le Petit Charcutier, a brand of deli meats brand, Gibson states. Meanwhile, Irresistibles offers a number of sub-brands, including Irresistibles Gluten Free for gluten-free products (said to be the first gluten-free private brand in Canada), Irresistibles Market Fresh for 100 percent air-chilled chicken, Irresistibles Organic for organic foods and beverages, Irresistibles Life Smart for better-for-you options and Irresistibles Artisan for artisan breads, cheeses and deli meats.

According to Gibson, brand and product assortment vary from banner to banner. For instance, conventional banners carry a wide selection across all brands — particularly “destination brands” such as Irresistibles Life Smart, Irresistibles Organics and Irresistibles Fresh Market. But discount banners carry mostly Selection products in their store brand offering, as the products provide national brand equivalency at a competitive price.

However, Gibson notes that some Irresistibles offerings are necessary in discount banners to provide differentiation through unique, quality products at a good price.

“We also have proximity banners, which are smaller stores in certain areas,” she states. “And we also have more high-end stores in certain areas here in Montreal and in Toronto. So our items are available, but the depth or the breadth of the assortment can differ according to the concept, store size, market, customer profile and competition.”

In total, Metro’s private label program comprises more than 4,500 SKUs — not counting ready-to-eat meals made in the retailer’s in-store kitchens — manufactured by nearly 400 outside suppliers, Gibson notes.

“This tends to be higher some years and a little lower some other years, depending on trends and new opportunities that come our way,” Gibson explains.

And Metro rejuvenates or creates more than 1,000 store brand products every year to keep the portfolio “fresh” and “in line with our customer needs,” Gibson explains, with outdated products removed or refreshed, and new items added.

Of its most recently introduced private brand products, Gibson points to a few lines as her favorites. First is the retailer’s Irresistibles frozen pizza program, which includes eight varieties that offer higher quality than that of their counterparts under the Doctor Oetker brand, a leading frozen pizza brand in Canada. Even the line’s packaging is high quality — Metro won a PAC Leadership Award in 2013 for design quality.

“We have really original flavors,” she explains. “Our last that we’ve done is a spicy chicken and provolone, and it’s quite tasty.”

And this fall, Metro will be adding a new segment to the pizza program: a line of tortas. These deep-dish products incorporate vegetables and meats not normally used in traditional pizzas, Gibson notes.

Another favorite of Gibson’s is Metro’s premium ice cream and frozen novelties.

“We have a very important place in Metro’s sales for these categories, and that’s because we’ve been able to develop ourselves within each segment: indulgence, economy, everyday [and] healthy,” she states.

As for her third favorite, Gibson points to Irresistibles Life Smart smoothies.

“We’re coming up with Greek smoothies that will have antioxidants [and] are very tasteful,” she notes.

Working together to serve better

When developing products, Metro works closely with its suppliers, offering specifications concerning product recipes and ingredient decks, Gibson states.

“We will engage directly with the R&D [departments] of our suppliers that get the business so that we can adjust the formulation and taste profile to suit our customer,” Gibson notes. “And we also monitor them closely [to make sure they meet] our brand standards.”

Metro also requires suppliers to participate with Metro’s panel of customers and employees to help develop the right product formulations, Gibson points out. In addition, it conducts quarterly reviews with suppliers to review sales data and discuss category strategy, as well as annual vendor community meetings to discuss objectives, initiatives and the vision for upcoming development.

On the distribution end, Metro monitors service levels for all store brand products on a weekly basis in each region. If a supplier has issues with replenishment, the buying team will reach out to develop a solution, Gibson says, which may involve substitute suppliers and keeping a closer watch on problematic products.

Metro also deals with certain procurement issues through brokers. Gibson notes that brokers — especially ones involved with foodservice operators and wholesalers — are especially useful when it comes to developing innovative products.

“So we like to go see these people to find … new products for the future,” she states. “And we partner with a buying group here in Canada, United Grocers Inc., for certain categories to maximize our purchasing power in ultra-competitive areas. However, we maintain the control on all formulation and specifications of our products.”

Brokers also help to get the best prices on products in particularly sensitive commodity categories, Gibson says, as well as imported items that might be difficult to monitor in terms of quality, safety and environmental impact.

A commitment to sustainability

Speaking of environmental impact, Metro prides itself on its dedication to sourcing products sustainably One recent initiative of which Gibson is particularly proud is the retailer’s efforts to remove palm oil from products or replace it with sustainable palm oil.

“[Since 2013], we’ve asked our vendors to try to help us monitor where they get their palm oil and [tell us] if it’s sustainable, and we’ve been working with them in trying to eliminate it in key categories,” she says. “Cookies have been our first attempt, and we’ve been able to do this with Biscuits LeClerc.”

Another noteworthy area is Metro’s Sustainable Fisheries Policy, which launched in 2010, Grégoire states.

“Since then, we obviously have made a lot of initiative and actions in the program,” she says.

Metro said it removed all Selection brand albacore tuna and red-listed yellowfin tuna because of stock health concerns, and promises to source tuna from alternative fishing methods if fisheries are using unsustainable methods.

It followed up on this initiative by releasing its Irresistibles Life Smart pole-caught canned tuna this January. The tuna is very resilient — thanks to its rapid growth and very high fertility — and caught via an ancestral fishing technique that respects marine resources.

Sustainability also matters on the packaging side, Gibson states. Metro asks its suppliers to help with both packaging reduction and finding new ways to bring products to market. Efforts here include changing the packaging of Irresistibles European cookies to be 100 percent recyclable, reducing the thickness of Selection garden soil packaging by 6 percent and more, thus removing almost 1,800 kilograms of packaging. These efforts are “small things,” Gibson says, but everything adds up.

‘Loco’ for local

In addition to sourcing sustainably where possible, Metro sources many of its own-brand products locally. According to Grégoire, the company launched its local purchasing policy in May 2013. And given that it is the only food distributor headquartered in Quebec, Metro believes in the importance of favoring Quebec suppliers for its Quebec stores.

“In Ontario, that is upcoming, but we began with the Quebec market,” she explains. “We strongly encourage our Quebec suppliers to register their products so they can have the Aliments du Québec (Food from Quebec) logo on their package.”

One recent example: In July, Metro announced that, for the third year in a row, it partnered with the Équiterre Family Farmers Network, Montreal, to distribute baskets of organic vegetables in eight regions of Quebec: Montreal, Mauricie, Montérégie, Centre-du-Québec, Outaouais, Estrie, Quebec City and Lanaudière. Nineteen stores in all are serving as drop-off points until October for baskets of fresh vegetables that are certified or in the process of being certified organic and prepared by agricultural producers that are members of Équiterre. Grégoire points to a few other examples of Metro’s dedication to local sourcing.

“Our apples sold in Ontario come from Ontario and our apples sold in Quebec come from Quebec,” she states. “We also have Irresistibles maple syrup — really a Quebec thing — and have worked with the same supplier for many years” — a comopany based in Saint-Nicholas Quebec.

Additionally, Gibson notes that Metro’s own-brand tea infusions and cookies are made by Quebec suppliers. And her team encourages that Metro’s frozen and canned vegetables be produced in Quebec and Ontario The same goes for potato chips.

Another big local-sourcing announcement came in May when Metro announced that all Irresistibles and Life Smart air-chilled chicken used for its Irresistibles brand products sold in Metro Super C and Marche Richelieu stores in Quebec will be farmed and processed in the province.

“We work with our farmers to get the right specs to be able to sell these products under the Life Smart brand and they’re also local,” Gibson explains describing the products as homegrown and healthful.

Health- and wellness-minded

Healthful products and healthy living are another area of commitment for Metro Last October it launched the My Healthy Plate initiative, which is part of its corporate responsibility approach and intended to go deeper than a marketing program, Grégoire says.

“Our four pillars are: Improve our product range to promote healthy eating; help our customers select healthy food products; provide access to healthy products at affordable prices; and promote healthy eating habits in the community,” she says.

As an example of the fourth pillar, she points to Metro’s Green Apple School Program, an initiative in which the retailer awards $1.5 million Canadian dollars (approximately $1.4 million U.S. dollars) annually to Quebec and Ontario schools to help them develop healthy eating programs.

Additional initiatives “are related to helping customers buy more fresh fruit and veggies and less [processed] food products,” Grégoire states. “We have programs based on tips and recipes; we have a nutritionist and a chef that work for us, and they help us provide content. We also now have a very rigorous system of small and big smiles for good and great choices in the various grocery categories, identifying better choices directly on the price tags.”

On the private brand side, Metro is introducing more Irresistibles Life Smart products. It also is reviewing and altering formulations for various existing store brand products based on suggestions from its dietician and corporate chef to make them better — in terms of both healthfulness and taste — Gibson states.

“It’s also based on what is guided by McGill University and also by Health Canada,” she says. “So it’s really bulletproof in that case.”

For instance, Gibson says her team is working to remove trans fat from all store brand products. It’s also adding fiber and vegetables to many Selection products, and reducing sugar and sodium wherever possible.

“We’ve reduced the sodium just this year on close to 200 Selection products, so that gives you an idea on how much we’re committed,” she states.

Gibson notes that her team’s efforts to make products more healthful haven’t gone unnoticed. On Jan. 30, Irresistibles Life Smart received first prize in the Improved Product — Large Company category at the 2014 DUX Gala in Montreal. According to Metro, the line — which comprised around 300 products at the time of the event — sets itself apart thanks to its appeal to foodies and focus on offering shoppers the ability to eat healthfully every day at an affordable price.

Metro stated that each product’s goal is to target one to three specific attributes that contribute to healthful eating habits, ranging from lower sodium to higher fiber content. The line also meets needs related to allergies such as gluten sensitivity, or to pathologies associated with eating such as cholesterol. And none of the products contain manufactured trans fats, artificial flavoring or coloring.

No rest for success

But even with all the recent success, Metro does not intend to rest on its laurels. Gibson notes that the Canadian food business is “quite competitive.” And given the recent merger and acquisition activity in the Canadian market — specifically Loblaw’s acquisition of Shoppers Drug Mart and Sobeys acquisition of Safeway’s Canadian operations — competition will heat up even more in the coming years.

“Because of this, we need to make sure that we concentrate our efforts on segments that are growing and on trend,” she says.

Metro’s brands also need to watch and keep up with evolution and innovation in the national brand space.

“On innovation, we can’t stop,” Gibson says. “The national brands are there, and we need to keep our portfolio fresh and active all the time. So … we have to accelerate assortment reviews of categories even more now.”

Her team will continue to focus on determining what its value-conscious and foodie shoppers want via data from its loyalty program, which Gibson says is one of the best in Canada. This will help her team better develop and tweak Selection and Irresistibles products to meet these shoppers’ needs and keep up with the high standards of the brands.

“Selection has a great rate in terms of repeat [purchases] — 65 percent,” she says. “We also know our Irresistibles products are favored by food lovers and also people that” need a qualitative time-saving solution for snacks and meals. “We have this in mind when we attack new developments, and we can go and develop even more in the categories that we see where we have good repeat [sales] and are appreciated by customers.”

And, of course, Metro will continue to focus on helping its health-conscious shoppers eat and live better as it goes forward.

“Our healthy customer has a certain attitude, and we are also able to see what is more appealing,” Gibson explains. “So we are very attentive to sodium and sugar, but we still know that many people that buy our Life Smart products are attentive to calories. So that’s something we know we need to stay sharp on.”

“Most of all, food is pleasure, and we need to give good-tasting … products to satisfy our customers every day and continue to enhance their shopping experience,” she adds.