Program helps Sobeys boost local products
National chain encourages, supports smaller suppliers
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Hey there, time traveller!
This article was published 04/03/2019 (1436 days ago), so information in it may no longer be current.
James Aitkenhead, the CEO of Perfect Pierogies out of Garson, had no problem being singled out by Sobeys Inc. as a shining example of potential success in the chain’s efforts to formalize its local suppliers network.
Over the past year, the old-fashioned perogy maker (the company uses the old Ukrainian-Polish spelling for perogy in its name) has more than doubled the number of Sobeys/Safeway/IGA/Thrifty Foods locations its perogies are in to 45.
And it was over the course of this past year that Sobeys has built a whole new system to encourage and support more local products across its retail network.
Company officials are currently on a cross-country tour — Aitkenhead spoke at Sobeys’ 2019 Local Supplier Roadshow stop in Winnipeg.
The company is holding 15 such events across the country, meeting with more than 1,500 suppliers. It’s the second annual roadshow that is effectively a how-to seminar for local food producers to get their products in Sobeys’ stores.
“This event really helped me last year,” Aitkenhead said. “They asked me to speak and I was glad to. We have a shared passion.”
Perfect Pierogies now has 12 different products in the stores, the only national chain that carry the products.
Sobeys, the second-largest food retailer in the country, has been in business for 111 years and it has always had local products in its stores. But since launching its “Look for Local” program a year ago, the company now has an organized way for local, independent suppliers to get their products into the stores. It also allows Sobeys to enhance the merchandising of the successful products, and a way for store managers and regional offices and the national business to support and develop local products into something even bigger.
“Some stores are definitely more aggressive than others when it comes to local,” said Gary Hughes, Sobeys’ local business development manager for Alberta, Saskatchewan, Manitoba and northwestern Ontario.
And while it continues to be up to store managers and franchisees to decide to carry local products or not — Sobeys does not force any store to carry any particular local product — both suppliers and the corporate entity now have a more systemic way of controlling products that may only be in a couple of stores.
“It gives us the opportunity to put an item in one or two stores where we did not have a process like that before that was set up properly through the system,” Hughes said. “Our customers have clearly made the decision for us. They want local products in our stores. They tell us they’d rather support a local supplier, than buy something from the U.S. or China.”
During the past year, the Look for Local program has placed 1,100 products from the Prairies into the company’s stores, including 400 from Manitoba.
Hughes said that some of those had already been carried in some of the stores, but now there is so much more exposure.
Clearly, one of the elements of the program is better data capture all around. Company officials told about 150 Manitoba food product producers on Monday that the company will keep track of weekly sales of their products, and will share all sorts of sales data with the supplier.
One of the messages that Hughes and his staff emphasized in the content-rich morning presentation was that the suppliers themselves have a lot to do with how well the products sell in the 50 stores the chain has in Manitoba and northwestern Ontario.
That means participation in promotions, community events and actual on-site demonstrations.
“You have to have the passion and willingness to put the effort in,” he said.
It’s one of the reasons Aitkenhead and Perfect Pierogies is like the poster child for the program — Aitkenhead has the passion and, among other things, he loves doing in-store demonstrations, something that Sobeys officials encourage all local suppliers to participate in.
“It is a great way to hear directly from the consumer,” Aitkenhead said.
The partnership between the little rural producer and the multibillion-dollar national chain has benefited both parties.
Sobeys now accounts for more than 30 per cent of Perfect Pierogies’ sales, and the company is in the process of building a new plant that will double its size and allow them to quadruple production.
“We’re now starting to move into Saskatchewan and even further,” Aitkenhead said.
The local supplier program means the smaller food companies must show they have cleared all the regulatory requirements when it comes to safety. While that may be a burden to some, it prepares the companies to be able to distribute to other national retailers.
The program has been a big hit in Manitoba, accounting for more than this province’s fair share of local products in Sobeys’ operations in the Prairies.
One of the reasons for that is that Food and Beverage Manitoba, the food processing industry association, acts as a bit of a liaison with Sobeys, running intake sessions to make sure the companies have checked all the regulatory boxes to qualify as a supplier.
Hughes said Manitoba has a leg up because of that.
And as for Sobeys, its efforts to encourage more local suppliers was substantial enough to receive the local favourite retailer award in Food and Beverage Manitoba’s 2018 industry excellence awards.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.