As we continue with our 2025 trends it is another example of how much things have changed. When we created these in the 4th quarter of 2024, we did not predict the huge shift in U.S. policies. Our thought process was consumers were focused on price due to inflation. Things have changed which is impacting our industry in so many ways. Here is what we wrote only 3 months ago:
Sustainability and local fall in importance
Consumers only have capacity to consider so many attributes when they make the decision to buy. With the rise in awareness and focus on price, sustainability and product origin have been pushed aside a bit. They continue to be on the radar, but just less important. The challenge for suppliers is that regulators continue to demand change in packaging and other initiatives and that all costs money. These can be a point of differentiation but if you can tie it to value there will be a better response from customers and consumers.
We need to edit this to read:
Made in Canada rises and Sustainability falls in importance
Consumers only have capacity to consider so many attributes when they make the decision to buy. The threat of tariffs and national pride in Canada has impacted consumer’s decisions at the shelf. We experienced an increased focus on price and sustainability has been pushed aside. The challenge for suppliers is that regulators continue to demand change in packaging and other initiatives and that all costs money. Made in Canada is a point of differentiation that does make a difference right now. Note we said Made in Canada, not local.
A reminder about how fast consumers can change in our industry
Consumers are creatures of habit. Once they start buying a brand, they will stick with it as long as they believe it delivers the value and attributes they are looking for. It is easier to just keep buying the same products-until there is incentive to change.
As we have seen, the threat of tariffs and attack on our sovereignty is a big incentive for consumers to change their buying habits. This is probably the swiftest and most dramatic change I have seen in my time in this industry. People buy food and beverage weekly and they have the ability to change what they buy every time they are in the store. Other purchases like furniture or clothes or cars are much less frequent. Canadian consumers might be trying to find Canadian made furniture, but we probably are not going to go out next week to find a couch to support Canadian. In food and beverage, they can look at the label next week and change brands.
Make it easy for them
We know they are willing to change to support Canadian. Do not assume they know your products are made in Canada. Be nimble, if you can and add a maple leaf or other communication on the front of your package. You also need to be clear to your customers, the retailer that your products are made here. You can communicate to your contacts at the office and in the stores where your products are made. You should also check to ensure they are labelling your products correctly with the signage and programs.
Explore opportunities to sticker your master case with Canadian stickers. I am sure many people in stores are being asked “where is this made?” or “Is this Canadian?” If you have a big Canada flag on your case pack it will be obvious to them when stocking the shelf.
Retailers responding as fast as we have seen them
Retailers respond to consumers. Right now consumers are demanding change and retailers are making it happen. Loblaw has implemented a swap feature on their online shopping app to give consumers the option to switch to a Canadian made alternative. They have also announced they will identify products subject to tariffs on their shelf labels. This will do two things for them; put the blame for a price increase on tariffs and also help consumers identify US made products.
Sobeys have been doing more advertising and identifying products on shelf with a maple leaf. They also say they are trying to shift from US sourcing to alternatives. They did get called out for some mistakes but this is easier said than done.
Retailers do not always know where a product is manufactured. A large company like Kraft Heinz or Procter & Gamble would manufacture some products in Canada and some in US or other countries. Canadian retailers buy the products from the Canadian subsidiary. In other words, Metro issues a purchase order to Kraft Heinz Canada. They will fill the order. If the product is manufactured in Ohio or Ontario it is ordered through the Canadian subsidiary and delivered to the warehouse. Kraft Heinz will bring it across the border. Metro would have the Canadian subsidiary as vendor of record. They might request food safety information about production, but the information in their system is related to the Canadian subsidiary. All this to say it is a challenge to know where every product is actually manufactured.
Now is the time to build relationships
We find it interesting to see how consumers will react to products manufactured in Canada by large US based companies. Yes Hostess chips are made in Canada with Canadian potatoes but reality is any profit goes to a US based company. There are more Canadian options such as Old Dutch or Covered Bridge or Hardbite or Humble Chips. They would all get the maple leaf flag but some are more Canadian.
It is a challenge right now, but it is also the time to invest to make it clear to consumers and customers. The big companies are not going to give up share easily so you might have to spend some money to reinforce the differences online, in store and in mass media. We often remind people the power pf public relations. Being part of a story about the shift to Canadian will probably surprise you in the power of reach and awareness.
Be ready to respond with inventory and wow your customers with your ability to meet or exceed service level targets. Communicate with them and make sure you are on the same page with regards to how much inventory they will need.
Sustainability is still thereIn Canada we are about to go through some changes in leadership, with a new cabinet being sworn in today. The environment minister will be changing which could impact the regulatory environment. Given the challenges to our economy on the horizon it is likely the pace of change for sustainable initiatives will be altered. Watch for the messages coming and how it will impact our industry. We need to continue to improve and innovation is still important in this area. There are still some consumers who will be looking for this and support brands who are leaders. Made in Canada, good value and good for the environment is a home run.
Peter
SKUFood Recipes for Success Podcast
In this episode, we’re excited to feature Carzan Local Meats, a family-owned business from Southey, Saskatchewan, dedicated to producing premium grass-fed beef and jerky products. Founded on the principles of sustainability and regenerative ranching, Carzan has become known for its locally raised meats and innovative flavour offerings in their growing jerky business.
Join us as we delve into their journey with Carter and Carmen, from their family roots to their commitment to providing top-tier products that reflect their passion for sustainability and community.
Get ready to hear the inspiring story behind Carzan Local Meats.
Labelling is not simple
Overnight, everyone is reading labels. It is true the regulations can be confusing and a challenge for consumers to understand. When Campbells puts a maple leaf on the label with the words ‘designed in Canada’ it probably hurts them more now than helps them. They have not made the products in Ontario since 2018 and someone developed a recipe several years ago. Consumers are ‘on it’ and social media is full of it.
Loblaw working to identify items impacted by tariffs
Consumers want to know so Loblaw are responding with a T symbol on products impacted by tariffs. They are also probably looking to avoid people blaming them for higher prices. This symbol will be on products sourced directly from US.
One thing they have not discussed is how they will identify products impacted by tariffs that are imported by the manufacturer. If Campbells import their soup from a US facility it will be subject to tariff but Loblaw buys it from Campbells Canada. Stay tuned.
I do have travel coming up to Toronto so if you want to connect or have an event in any of these locations give me a call or send me an email.