Food Sales Of Canadian Supermarkets Case Assignment

Food Sales Of Canadian Supermarkets Case Assignment

Instructions

Food Sales Of Canadian Supermarkets Case Assignment

THE FOOD INDUSTRY

Food sales of Canadian supermarkets and convenience stores surpassed $75,727 million in 2007. The Province of Ontario represented 33.5 per cent of the total sales. The grocery industry typically averaged a net profit margin of six per cent. Canadians had readily supported the movement towards healthier lifestyles, as reflected in an increased demand for organic and healthy foods, as well as vitamins and supplements, over the past five years; however, these nutritional products were often more expensive than

alternative food choices. Industry studies reported that high-income households most often met the recommended minimum fruit and vegetable intake; however, lower-income families and “on-the-go” individuals were less likely to consistently eat organic produce. Larson completed a survey of grocery shoppers, and her results showed a desire for higher nutritional value in bread products and snack foods. A recent study revealed that 75 per cent of U.S. residents failed to consume the minimum recommended intake of five servings of fruits and vegetables each day.5

In 2009, Canada was in the midst of an economic recession. In particular, Southwestern Ontario, a major automotive manufacturing centre, was hard hit, a circumstance that forced Canadian consumers to reduce their spending and to become more price-conscious. As a result, many Canadians eliminated non-staple items from their grocery lists, such as vitamins, supplements, and organic fruits and vegetables. Although the economy showed signs of improvement in 2010, economists predicted that Canadian consumers would remain price-conscious for some time.

All products sold in the food industry were subject to approval from the Canadian Food Inspection Agency (CFIA). Before distribution occurred, companies had to submit nutritional and production information to CFIA for evaluation, a process that could take up to two years to be completed

THE COMPETITION

Nutrifusion had no direct competition in Canada. It was the only product of its kind that offered full servings of fruits and vegetables in the form of a tasteless powder that retained micronutrients and phytochemicals. Furthermore, HLG had been granted exclusive distribution rights to the Nutrifusion product for Canada. To ensure that other companies could not duplicate this product in Canada, HLG planned to obtain a patent for the ingredients, the technology and the process used to break down fruits and vegetables into the powder.

There was plenty of indirect competition facing both HLG and Nutrifusion. Consumers could readily purchase servings of fruits and vegetables and consume them on their own or use them as ingredients in various dishes; however, for the nutritional value offered by Nutrifusion, consumers would need to purchase organic fruits and vegetables for consumption.

Alternatively, consumers could choose to forgo the fresh fruit and vegetable servings, instead opting to improve their diets through vitamins and supplements, which were widely marketed to provide similar benefits. Varieties of these products existed and were easily available throughout grocery stores, drug stores and nutritional supplement specialty stores, which were growing in popularity.

Another form of indirect competition existed. If HLG chose to infuse products such as potato chips, cookies and bagels with Nutrifusion powder, it also had to convince consumers to purchase the company’s new line of these three items: potato chips, cookies and bagels. Consequently, all other brands of potato chips, cookies and bagels would become HLG’s competition.

Because of their high fibre content, items such as multigrain and whole-wheat bagels had historically represented healthy-choice items to consumers, but they did not provide any fruit or vegetable servings. For potato chips, the closest competition likely came from kettle chips that were marketed as containing 65 per cent less fat than regular potato chips.

Whichever product HLG chose, many competitive products existed, some made by large international companies. Corporations such as Lays and Nabisco had the resources and ability to market their snack foods as “healthy” based on a variety of parameters, and they often had eye-catching advertisements to attract buyers.

DISTRIBUTION PLANS

After evaluating several distribution alternatives, Larson believed a strategic alliance with Loblaws Companies (Loblaws) would be most lucrative. Loblaws showed strong interest in the Nutrifusion product and was willing to work closely with HLG since it had exclusive distribution rights to the product. The agreement would use Nutrifusion in the production of several President’s Choice products. President’s Choice was Loblaws’ own private label brand and was distributed in over 1,700 stores throughout the provinces of Ontario and Quebec. President’s Choice offered a variety of grocery products, which were marketed as equal quality to brand name merchandise but at a lower price.

In its first year, HLG planned on infusing President’s Choice cookies, bagels and potato chips with Nutrifusion powder to improve the products’ nutritional values. Both Loblaws and HLG were excited to see the sales results of these test products and would consider adding Nutrifusion powder to more products if the test’s sales results were successful.

RUBRIC
Excellent Quality 95-100%	Introduction 45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.		Literature Support 91-84  points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.			Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score 50-85%	40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.		83-76  points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.			52-49  points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality 0-45%	37-1 points The background and/or significance are missing. No search history information is provided.		75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.			48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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