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Posted Thursday March 14, 2019


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Trends

A lonely Canada can pay off for the food industry

The number of households in Canada with just one person has never been higher. And the food industry is taking notice - By Sylvain Charlebois

The number of households in Canada with just one person has never been higher. And the food industry is taking notice.

More than 28 per cent of Canadian households have just one person. That's almost four million households. That number could reach five million in few years - a little less than the combined population of Alberta and Saskatchewan.

It's one of the fastest growing demographics in our country. It appears Canada is catching up to the rest of the western world.

Having ignored this trend for a long time, many industries are now adapting to it, including the food industry.

Notice how much grocery store ready-to-eat counters have expanded in recent years. In some cases, the space has doubled, as many grocery stores turn into small cafeterias.

Grocers are increasingly mastering this merging of food retailing and food service, also known as the 'grocerant' concept.

In many communities, grocery stores have become a sort of community centre. You find solo shoppers chatting in a grocery store. Some grocers have even placed park benches between aisles so people can sit and visit, if briefly. The grocery store is becoming a place where you can meet and interact with other people over coffee or even lunch, and without paying too much for your food.

Selling single servings can generate more profits for grocers and the food industry. Instead of losing money on shrinking package sizes while retail prices remain idle ('shrinkflation'), the wide assortment of single-serving food products can increase profits per unit sold

In the bakery section, for example, the single-serve economy can help grocers increase margins. Whole cakes are typically sold from $18 to $25 and offer eight servings. A single serving of cake often retails at $3.99, which is 30 to 100 per cent higher than selling the entire cake.

With single servings, food waste for single dwellers is less of an issue. Buying only what's needed is a sound strategy.

That said, single servings can increase plastic usage and, of course, waste. This is something the industry will need to address as more people move to single servings. Green and compostable packaging solutions are being sought by grocers as substitutes for the plastics that are required to keep food safe while increasing convenience.

On the other end of the demographic continuum, given our car-centric economy, many of us are obsessed with buying food in bulk. Walmart and particularly Costco have benefited from this phenomenon. Walmart and Costco combined now sell more food products to Canadians than Sobeys, the country's number two grocer. But the growth rate is nowhere near what it is with the single economy.

Other than trying to serve singles, what's pushing the industry to offer more individualized meals and food solutions is a highly fragmented marketplace. Valuing customizable solutions and the individualization of food requirements is ever more critical. Every one of us is different, with different needs.

Don't be surprised if you see the food industry trying to capitalize even more on the single-driven food economy. As a result, our dinner tables and restaurants may become lonely places, or places where lonely people congregate.

Either way, there's more money to be made and the food retailing sector desperately needs it. In 2018, the food retailing industry only grew by 0.8 per cent, which is really next to nothing.

A recent survey suggests that 64 per cent of customers are comfortable with retailers identifying their characteristics in an effort to individualize their experiences. In fact, customers expect this more and more from grocers and restaurants. The digitalization of our food economy will only help the sector gain the ability to customize their offerings, based on each customer's interests and needs.

So a lonely Canada can pay off for the food industry. But what could get overlooked is the power of food to bring people together. This should never be forgotten.

Sylvain Charlebois is scientific director of the Canadian Agrifood Foresight Institute, a professor in food distribution and policy at Dalhousie University, and a senior fellow with the Atlantic Institute for Market Studies.











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