The Food Professor

Calgary Co-op CEO Ken Keelor's winning strategy

Episode Summary

In this episode we chat with our special guest Ken Keelor , CEO of the amazing Calgary Co-op, one of the last remaining big indie grocers left in Canada and a solid, diversified business owned by its members. The coop model is really powerful, particularly in Western Canada, and we'll learn more from this retail and grocery industry veteran.

Episode Notes

Welcome to the The Food Professor podcast episode 23! 

The Food Professor is presented  by omNovos the digital customer engagement solution for grocery and restaurant marketers, helping you solve your customer’s most daunting questions:  what should I eat today? Find out how you can get personal and grow sales with omNovos at www.realcustomerengagement.com

In this episode we chat with our special guest Ken Keelor , CEO of the amazing Calgary Co-op, one of the last remaining big indie grocers left in Canada and a solid, diversified business owned by its members.  The coop model is really powerful, particularly in Western Canada, and we'll learn more from this retail and grocery industry veteran.
 

I ask Sylvain about his favourite donut?  Well if you had the chance a reminder to everyone to check out our bonus episode with Chris Schultz from Voodoo donuts….this indulgence is crazy…and do you see that Krispy Kreme is offering donuts for a vaccination!


We look at the Meat paradox, seafood DNA testing, Cannabis NB, and talk about upcoming research headed our way from the Dalhousie Agri-Foods lab!

******

Thanks again to the folks at omNovos for being our presenting sponsor!
 

If you liked what you heard you can follow or subscribe on Apple iTunes , Spotify or your favourite podcast platform, please rate and review, and be sure and recommend to a friend or colleague in the grocery, foodservice,  or restaurant industry.  


Have a safe week everyone!

Episode Transcription

Michael LeBlanc 

Welcome to The Food Professor podcast, episode 23. I'm Michael LeBlanc,

 

Sylvain Charlebois 

And I'm Sylvain Charlebois.

 

Michael LeBlanc 

The Food Professor is presented by omNovos, the digital customer engagement solution for grocery and restaurant marketers, helping you solve your customers most daunting question, 'What should I eat today?' Find out how you could get personal growth sales at omNovos at realcustomerengagement.com.

 

Well, great guests coming up for our listeners, Ken Keelor, CEO of the amazing Calgary Co-op. One of the last remaining big indie grocers left in Canada, but such a solid diversified business. I'm always so impressed when I talked to Ken. You know, I, and you'll hear in the interview, listeners will hear how we, the risk and opportunity of this consolidation we're seeing, for them to make that clarion statement that 'We're local, we're here to stay'. And I think what's interesting is their co-op structure is maybe the, the secret sauce to staying small, but staying successful. What do you think about that?

 

Sylvain Charlebois 

I think so, and I'm hoping that we'll be able to talk about that with, with Ken. I'm a bit of a fan of cooperatives, to be honest, especially in agrifood. They've done very well. I mean, some of them have survived for, for decades just because they were cooperatives. They tend to manage risks differently. The management is also very different. When you think of Gay Lea in Ontario, Desjardin in Quebec. And Desjardin is a big supporter of, of the agri food sector. The co-op Férdérée, also in Quebec, which is a multi-billion dollar business, Agropur, I mean, the, those are all cooperatives that have done fairly well. And often cooperatives tend to think about the supply chain. They think about processing. They think about farmers. They think most importantly about the community and their role, and the cooperatives role, in the community. How can they give back. And so, I've always admired cooperatives and I suspect that Ken will have a similar story to offer to us.

 

Michael LeBlanc 

Well, and I do business with, and have as a client actually, a cooperative in the financial space. And there's lots of wonderful co-ops that are available across Canada, coast to coast. And you're right, it's the role that they play in the community. Whether it's an ethnic based co-op, or whether, you know, whatever group of workers, whatever it is. 

 

I have another important question for you. 

 

Sylvain Charlebois 

Sure 

 

Michael LeBlanc 

What's your favorite doughnut?

 

Sylvain Charlebois 

My favorite doughnut.

 

Michael LeBlanc

If I were to offer you a doughnut.

 

Sylvain Charlebois 

I don't really eat a whole lot of doughnuts. But, I would guess, I mean, I'm, I love, I love apple fritters. 

 

Michael LeBlanc 

Oh, okay,

 

Sylvain Charlebois 

What about you?

 

Michael LeBlanc 

Well, I have a real passion for a maple with some bacon on it. Which sounds initially when I thought about it, kind of a little bit weird, if not odd. But just wanted to call attention to, for our listeners, that if they didn't check it out, we had a great interview, I had a great interview as a bonus episode with Chris Schultz, the CEO of Voodoo Doughnuts from Portland. 

 

Sylvain Charlebois 

That's right.

 

Michael LeBlanc 

And they've got, if you've never checked them out, maybe you haven't been to Portland, which I hadn't, check them out. Well, I've been to Portland, but I didn't know Voodoo Doughnuts. Check them out. Their doughnuts are so fun. And, it's a great interview and it reminded me, I wish I wish the time would have worked out so we could have both spoke to him. Because his focus on culture, right? That was the center of my conversation. It's, I get it if you get 3, 4, 5 stores to have a unique culture. And, it's not dissimilar than the conversation we'll have with Canada Calgary Co-op. How do you take that culture, keep it intact and be successful when you've got 10, 20, 30, 40, 50 stores? Like, how do you how do you keep it intact? So, that's the central conversation. So anyway, it's a great interview. Like I said, I've, you would have really enjoyed meeting him yourself. But next time we'll be in the same place at the same time. So,

 

Sylvain Charlebois 

Yeah, just for the record, Michael, maple and bacon can go together. 

 

Michael LeBlanc 

Yeah. 

 

Sylvain Charlebois 

Oh, I can tell you. Bacon, maple, come on?

 

Michael LeBlanc 

They, on a doughnut, I was skeptical at first but then I had one, and I was a bit of a convert. So we got a wonderful, I mean, it does, it does on a you know as a comic in all seriousness, so to speak. And it does get to the point of indulgences, right. 

 

We're seeing a lot of consumers buying indulgences. I know my local bespoke doughnut store you got to line up early, they sell out, you know early on a Saturday morning. So it does seem that the consumers have got these paradoxes, right. 

 

You were talking just now about the online, about the meat paradox. Meat sales are going up but more people are health conscious slash plant based, protein, they're having more indulgent. Is this a COVID thing? These are people just indulging themselves because they, you know, these are tough days, right. We've, we've been through a long haul there's still more left. Is that what your, your senses?

 

Sylvain Charlebois 

Well, I think there's, no, I don't think it's a COVID thing, because it was happening actually before COVID. I think there's, there's some confusion in terms of how people see themselves as protein consumers per se. 

 

I think the whole protein category is being redefined by us all. I mean, you go into a grocery store now, about two years ago, you saw the beyond meat right next to the bloody stuff. And now, you're seeing separate sections. And, and often you'll, you'll find out that vegetable, unprocessed vegetable proteins are actually close to the meat counter. So, you'll have a bag of lentils, a bag of chickpeas and, and you see that there's a lot of, there's a lot of trial and error going on. Which, which really is reflective of where the consumer i. On the one side, people are eating, they're not giving up on meat and we see in our data. 

 

They still enjoy meat. They're not giving it up. Especially when it comes to the trifecta of meat, pork, chicken and, and beef. But, but they're becoming more curious. They're looking at plant based. They're looking at the 50, 50 hybrid. I was never a fan of the 50, 50. But it seems to be, you know, for some people, it seems to be doing, doing it for them. But overall, what I, what I really like with the marketplace right now is that there's more diversity, and more choice for consumers. And, as soon as you do that, you're allowed, you allow innovation to happen. And this is what we're seeing,

 

Michael LeBlanc 

Right, right, right, 

 

Right. So, one of the things I did eat a lot of and continue to do so is fish. Now, I saw some notes in the market that some testing of fish that actually was some DNA testing, seemed, I think it was 92, 93% of the fish tested, turned out to be the fish that you would expect it to be. I was actually glad of that. What did you think of that number? That 92%? I thought it was a good number. But what did what did you think?

 

Sylvain Charlebois 

Oh, it was higher than expected. Because in the past few years, we saw alarming results coming from groups like Oceana, for example. We suspected that perhaps 25 to 75% of all the fish eaten in food service is is counterfeited, or 

 

Michael LeBlanc 

Mislabeled, or

 

Sylvain Charlebois 

Not label, not, not labeled correctly. Now, this report looked at imported, unprocessed fish. And so, they just tested some samples as they were entering the Canadian market. So, 92% is, is actually not bad. Because, when you understand the fish and seafood industry, which is highly obscure, a lot of stuff happens out there in the middle of nowhere. It's, there are 1,000s and 1,000s of species and unless you're an expert, it's it can get confusing. So, 92% is actually not bad. And I was happy that CFI actually looked into it and, and most importantly, actually released results. Because, that's really the most important thing in my view, because Canadians will know. But, I think there's still a lot, a lot of work to be done at retail, because I think there are concerns within the supply chain, in processing. And, in particular, I think in food service, there's a lot of, you know, not so great stuff going on there, unfortunately.

 

Michael LeBlanc 

Well, let's, let's keep an eye on that. Now. Before we get to our interview with Ken Keelor, let's go back to Egypt, so to speak. I mentioned Egypt, who knew the supply chain globally would go sideways with us boat stuck in the Suez Canal? You know, it's just, it's just, it's just a note of the time that everybody's focused on 'Oh, my God, the supply chain, the supply chain', most people wouldn't even know what a supply chain was 12 months ago. Now, it's part of our, you know, part of our verbiage. But you said some things that were really insightful around the amount of foo, even from going through the Suez Canal, livestock, incredible amounts of food. And that's still, the boat was stuck for three, four days, but it created a log jam, like a cork so it can still impact our shelves in the next coming weeks and months, yeah?

 

Sylvain Charlebois 

Yeah, I think there's going to be a bit of an impact. Not, not too much, because, it, I mean, the blockage was, was, what? Six days or so. For your ships. I mean, I certainly was concerned for a while because it's basically 25% of, of containers, global traffic right there, in the Suez Canal, globally. So, it's a huge, it's a huge problem, it was a huge problem. 

 

In 2013, when the, when the ship actually sank along the coast of Italy. I don't know if you remember the, the cruise ship and there was a report that was actually written after the incident. And one of the suggestions that, that was made in a report was about infrastructure. It was about, okay, 'How do we deal with these massive ships, when they, when they're, when they are incidences like that?' And, and again, when I was looking at the Suez Canal, I think everything was attempted. I think I even saw Theodore's Tugboat there. Trying to pull that ship out. But, the obvious thing to do, in my view, was to unload cargo to make their ship lighter, so it can rise and we can actually, you know, on on, you can actually take, unlock it. But, they couldn't do that because they just didn't have the equipment. So, what is being suggested right now is to actually have a fee of 10 cents per container for these ships to create this fund, to buy infrastructure, global infrastructure, to accommodate some of these, some of these problems that do occur from time to time. Because it's not gonna it's not gonna be the last time.

 

Michael LeBlanc 

Anyway, just you know, it's 2021 it's the COVID era something weirds gonna happen like every week it seems. So, that's, last week's bit of weirdness. 

 

Speaking of happening, let's, let's take, let's take a break now, so to speak, and let's, let's bring on Ken Keelor. Let's have that great conversation with Ken from Calgary Co-op. Ken, welcome to The Food Professor podcast. How are you doing this afternoon?

 

Ken Keelor 

I'm doing great, Michael. Thanks for having me on the show.

 

Michael LeBlanc 

Well, it's great to hear your voice again. You were my guests on The Voice of Retail, a while ago and I learned more about the wonderful business that you run and I thought, Sylvain and I were talking, I said, 'Sylvain, we got to get Calgary Co-op. We've got to get Ken on the podcast'. 

 

Sylvain Charlebois 

Absolutely, 

 

Michael LeBlanc 

So, thank you for making time.

 

Sylvain Charlebois 

Yeah, no, thank you for joining us Ken today. It's great.

 

Ken Keelor 

No, it's wonderful and nice to meet you.

 

Sylvain Charlebois 

Yes, absolutely.

 

Michael LeBlanc 

Well., let's jump in Ken, tell us about yourself for the listeners who may not know about you, and the listeners around Canada, in fact around the world, who may not know about Calgary Co-op. But let's start with a bit about you, and your role a Calgary Co-op, and then take us through the wonderful business that is Calgary Co-op.

 

Ken Keelor 

Sure, I have been at Calgary Co-op, this is my seventh year at Calgary Co-op. I started out in India with Procter & Gamble, and moved to Canada in 95. Worked on the west coast and then moved to Toronto, and worked there with Sobey's for over 10 years. Worked for Rexall with a few, for a few years. Went back to Sobey's when they bought Safeway. And a year into that, I actually took on this role. 

 

So, really thrilled to be at the helm of an organization that is, has an amazing culture. Very committed team members, as well as engaged members. To tell you a little about Calgary Co-op, we're owned by 440,000 members, and we're one of the largest retail cooperatives in North America at $1.2 billion. We have locations in a tight geography Calgary, Airdrie, Cochrane, High River, Okotoks, and Strathmore for those who know this area. And, we are retailers focused on food, pharmacy, petroleum, with convenience stores, car washes and gas bars, and commercial card locks. And then of course, we have a home healthcare business, which is very devoted to customers in terms of scooters and crutches and all of those things. And then we have a recreational business which is wine, spirits and beer, as well as cannabis. Calgary Co-op has 3850 team members, or employees. We are assets of 627 million bucks. And, we are very proud to have been recognized as one of Alberta's top 70 employers for now five years in a row.

 

Sylvain Charlebois 

Wow, that's great. 

 

Ken Keelor 

And yeah, and our number one focus, our mantra, if you like, is delivering exceptional customer experiences through inspired team members.

 

Michael LeBlanc 

Well, it's such a diversified business and that's one thing I didn't know as much about Calgary Co-op. I knew you as the grocer. But it's such an interesting business because you, you're playing in all different areas of both the economy and consumers lives, right. You have a real a real lens on the customer journey and the modern retail consumer, yeah.

 

Ken Keelor 

For sure, for sure. And, you know, our focus has very much been on retail and perhaps, you know, based on our strategy, we use the book called 'Good to Great' from Jim Collins. And, one of his, one of his thoughts was, in its, I think he called it the 'porcupine principle' was the focus on what you do really well, what you're passionate about, and when makes money for the company. And so, you know, those three things have kept us very focused on retail. However, what a lot of people don't realize is we also own a huge chunk of our properties, almost 80% of our land and properties. And, so we're one of the top five property taxpayers in Calgary.

 

Sylvain Charlebois 

Really, wow.

 

Ken Keelor 

And have a lot of, a lot of businesses that operate on our (inaudible) that supplement our members lifestyles. But a lot of them are small, small businesses. You know, little barbershops and nail salons and things like that, that we don't own, but, but they rent from us, and they take advantage of our traffic. And we take advantage of the fact that they can serve our members lifestyles. 

 

Sylvain Charlebois 

Mm, interesting. Well, we know that with what's going on with Loblaws and George Weston, the company is actually going to value real estate way more moving forward. And, it seems like you're, you already have done that as a cooperative.

 

Ken Keelor 

Yeah, it's an interesting situation, you know, years ago, many, many generations of management before me, and many generations of board members before our current board, you know, very astute investing in real estate. And, and so assets play a very important role. We have some amazing locations. And typically, for those of you who don't know, Calgary Co-op, typically when you go to what we call the Calgary Co-op pad, it's a food store with a pharmacy, alongside there's a gas bar with a carwash, and a convenience store. And then we have a liquor store, and recently we've been adding the cannabis store alongside it as well. And then of course, some of those pads have home health care, as well. And then a business that we operate separate of Calgary Co-op is, Community Natural Foods, which we acquired just over a year ago. Very pleased with that business as well. And, we've been continuing to grow in areas like pharmacy, home health care, organics, etc. So, Community Natural Foods was, was a great fit for us.

 

Sylvain Charlebois 

That's great. Now, you've been President of Calgary Co-op for more than six years now. So what has changed the most since you've been President of Calgary Co-op?

 

Ken Keelor 

Yeah, so CEO is the official title. 

 

Sylvain Charlebois 

Oh, sorry. 

 

Ken Keelor 

You know, no, that's okay, don't sweat it. That's, that's okay. A lot of people do call me president or General Manager or whatever. But really, the other day our focus, in the last six years has been very interesting. I moved to Calgary Co-op in November of 2014. And if you look back at the oil prices, that's when there was, you know, catastrophic change in oil price. 

 

So, it's interesting, what we did is we, one of the first things I did at Calgary Co-op was work with the board, who is elected from our 440,000 members. And you know, they are elected by the membership, actually. So, they really represent the members in everything that they do. And we worked together with the management team and the board's oversight to build a long-term strategy. And so we built a vision, mission and values. We built five key strategic imperatives for the organization. And that held us really in great stead, when, when we were going through the initial strife of oil price decline, multiple minimum wage increases, there was three wage increases here. And then of course, recently, the big as I say, 'The big kahuna them all', which is COVID-19, which is, has been very challenging. 

 

So, our strategy is really something that we then communicate to our team members. In fact, if you go into any Calgary Co-op location, in any line of business, you'll see what we call the commitment board, which has a vision mission values, and is signed by every team member. And we refresh, refresh that annually. So, when your new team member, you sign off on the commitment to that. 

 

And so, you know, we've had to really bob and weave through that timeframe. But we've put much more focus on efficiency in these last six years, while making sure that that doesn't result in, you know, significant layoffs and so on, like many of our competitors. Because for us, our social purpose is really important. And we define our social purpose as enriching our member communities. So, social purpose means we're not here just to make money. Bu, we're also here to support community in what they need. And that is jobs, that's being able to manage their budgets better, that's being able to shop healthier. 

 

Sylvain Charlebois 

Exactly, 

 

Ken Keelor 

and so on. And also being able to support causes, like the Food Bank, Calgary Women's Emergency Shelter, etc. So, we've continued that focus, and we've even pushed harder in the areas of social focus, as well as making sure that health and safety has stayed number one. 

 

So, it was tough, because if you go back to before 2014, Calgary's economy was just booming. And, so when I got here, everyone was, you know, very buoyant. And so we had to break. And this is, so this was really about cultural change. But it wasn't a revolution. It was an evolution. And, so it was explaining to team members how the company makes money and that social purpose that we serve, and then engaging them in committing to that and driving, 

 

Sylvain Charlebois 

That's very interesting. I mean as CEO of a cooperative, I suspect that you've noticed that cooperatives tend to really survive economic cycles very well over time. I mean, cooperatives have actually played a very important economic role in in agrifood across the country over the last century, and more. 

 

In food distribution, in particular, because you are the CEO of Calgary Co-op, how do you see the cooperative movement in food distribution, per se?

 

Ken Keelor 

Yeah, it's a great question and great comments by you Sylvain, on cooperatives in general. You know, really, we're founded on the idea that people can work together to achieve a better future for the community. And so, for Calgary Co-op, it's fantastic. Because our community lives and works around and in our retail locations, and we hear from them every day. Our board members shop in our stores every day. You know, there are different kinds of board, They're a corporate board that knows what's going on. I'll get messages that are very strategic sometimes, and then other times, I will get, 'Hey, I couldn't find this item in the store, what's going on?' You know, and, and both are very important for us. 

 

So, you know, when you choose to support a cooperative, you're really choosing for your money to stay local, and for job creation, and for investing in your local economy. And that's the beauty of this. So our primary duty as a cooperative organization is to serve our Calgary and area members. And, we act in their best interests at all times. And we look to each cooperative, I guess, to do the same for the members. 

 

And so, you know, an example recently, after very careful review, strong oversight and approval and tons of rigor from our elected board of directors, we made a decision to position our food business for the future by selecting a new food distribution partner. And, you know, in doing that, we created and launched our own private brands, called Cal & Gary's, named after the city. We don't think our competitors (inaudible). And Founders & Farmers, we launched Founders & Farmers, another private brand, which goes back to producers, ranchers, you know, local farmers. We launched our own flyer. And really, we made that change in our food business to ensure its long term sustainability financially, for our member owned corporate. 

 

You know, our food business is operating in a very challenging economic environment. And in Calgary, you know, having lived in Toronto and Vancouver, I can tell you, this is getting to be increasingly challenging, because the city is going from being a booming city to one where, you know, there's significant unemployment, multiple issues, social and economic. And it's becoming more competitive in urban retailing, because Calgary was all about, you know, full-service stores, and a few big box stores. And now, more discount is beginning to move into this marketplace. So, positioning our food business model for unique differentiation, which allows us to reflect our members needs was really important. So, in other words, we are a cooperative, but there's the cooperative lens and the financial lens. And, and we needed to check off both boxes. And so that that's why the recent board move.

 

Sylvain Charlebois 

I'm just curious, how is your private label coming along?

 

Ken Keelor 

It's very exciting. You know, I have, over the years in various companies done so much work on private brands. In that, I you know, I just love that, that focus because it does a few things. One, it inspires our team members, because it creates excitement in the team across all stores as they build displays, they sample the product, we've done a lot of tastings with our team members. We are up to over 800 items now. So man, like, 

 

Sylvain Charlebois 

Wow, 

 

Ken Keelor 

I'm very proud of that. A year ago, we had, a year ago, we had zero. We had 

 

Michael LeBlanc 

Incredible. 

 

Ken Keelor 

Been using a different brand and the brand did not stand out in our research, the brand did not stand out. And we needed to make a change and reflect, reflect the city more, reflect the appetite of the city and create that sense of pride. It creates, of course, loyalty from our customers as they hear it's a private brand. And it's named after their city. 

 

And, on our products, we have what we call Calgaryisms. So, I don't know if you've seen any of our Cal & Gary's items, but we have, for example, the eggs that say, 'Ready to crack like your windshield.' The windshield cracks at least two or three times a year, if you live in Calgary, because of how we manage our roads and the salt situation unlike other cities. So if you're Calgarian, you'll get it and you laugh. Other cities may not. But, so there's a host of products like this that we that we're launching, you know, we have a, I'm looking at a steak burger in my office right now. and it says 'Calling Calgary's carnivore.'  Calgary is all about beef, right? It's really about beef. 

 

Sylvain Charlebois 

That's interesting.

 

Ken Keelor 

So, you know, so there's, so that, so the idea with these brands, as an example is to really target the heartstrings, not just the purse strings, so that you and then we're trying to get as much of this as we can produced as locally as possible. It's not always possible. And obviously, one of our challenges is our size. We have 23 food stores, Sylvain, so we don't have you know, the 1000 plus stores.

 

Sylvain Charlebois 

That's right.

 

Ken Keelor 

Some of our competitors, so it's it's trickier. It's harder for us to get, get the suppliers that can do this economically and efficiently. You know, the financial equation has to work for them as well. But, it's been very thrilling, it's coming along really well. We're very excited, we're adding items by the day. I just so I new cream pies that are launching. And, you know, my VP of Food, sent a note to everybody saying, literally, I mean, everyone, saying, you know, 'You have to try these, they will change your life.' So, that's the level of passion among the team.

 

Michael LeBlanc 

That's fantastic. Well, and speaking of passion, I mean, right back to the time, when you and I first chatted for The Voice of Retail podcast, you clearly both have a depth of experience, and a passion for private label. So, you went through, you in the organization went through, you know, talk about everything happening at once. You went through the development of what you say? 800 private label brands. You went through COVID at the same time. I think of you now is in that second phase of development, you know, the big, heavy lift of, of launching the brands, creating the brands, great team that created the brands. Now you're at that second phase, give me a bit of insight, and think you've already hinted at it, as to how you think about developing private label brands? I mean, you can go in a lot of different directions, you've got two different kind of brands, a holders, containers, so to speak. But you know, what, what, from your experience is the best next step of developing private label brands to, you know, to meet that competitive force in the market?

 

Ken Keelor 

Yeah, I think I think you have to decide what you want to do with the program. Right. And we were very clear that we wanted to have a program that was, was simple, not complicated. So are Founders & Farmers products are all about being the best price and being equal quality to the national brand. So, you know, the simple proposition means that we look to categories and generic items that customers want to buy. They're not so particular about which brand it is, but it better save the money. So, Founders & Farmers does the heavy lifting of saving you money. 

 

Michael LeBlanc 

Value, that's your value brand. 

 

Ken Keelor 

Exactly, the Cal & Gary's is really the brand. You know, where there's a difference between a brand and a label, and Cal & Gary's is meant to really differentiate Calgary Co-op. So, when we were developing these brands, and this is would be my suggestion to anyone on this path, is we listened very carefully to our customers and our members. And we listened to what we'd heard from them over the years. And they said, 'Look, we want a unique assortment, we want quality and value for money, and we want something we can identify with'. 

 

So, you know, we work hard to raise that bar. And our theory is, when in doubt, leave it out. In other words, if you don't have the right financial equation, or it's not going to be different, or the quality isn't, like don't launch it. You know, instead use national brands, use second tier national brands or off brands, as some people call them. And of course, allow for a role, very importantly, and differentiation, through our local products and local brands. 

 

So, the assortment that we have has not just our private brands, it's got local brands, its secondary national brands, etc. So, in doing that, we offer a wide, you know, a wide variety. So, in our private brands, we have meat, we have produce, we have bread, we have cleaning products, and much more.

 

And, you know, this focus on, you know, those two things very distinctly of meeting people's budgets and then also providing unique differentiation is really important. Because I liken it to the polarization of wanting to eat something healthy, but also wanting from time to time to indulge yourself with portion control, you know. So, so people will come into our stores, and they want to buy the healthier stuff, but they also want something to have to splurge with every now and then but it can't be too many calories. 

 

So, we look at Founders & Farmers, it's a different kind of example, but that's the one that's gonna save you the money. Cal & Gary's also saves you money, but there's some fun to be had with it. You know, and I looked at people out of other parts of Canada visiting our stores, just to pick up a Cal & Gary's item because it's not available elsewhere and taking it home, just like they do with Trader Joe's.

 

Sylvain Charlebois 

Interesting. You did mention the 'big kahuna', the pandemic. As CEO, walk us through the, your experience as CEO of Calgary Co-op, how did you manage? What, what are, what are, what are your thoughts about what we went through the last 12 months as the head of a major cooperative?

 

Ken Keelor 

Yeah, thank you for that question. You know, it's been I would say about three specific areas. One focus, so you know, and when I say focus, I mean prioritization of your focus. In other words, we had to do an essential service while keeping everyone safe and healthy, and moving the organization forward. So, we couldn't stall our business. We couldn't stall our people's development, but we had to make health and safety, our number one focus area for our team members and our members and our community. So, that was a number one focus, but it was really a prioritization. People would come to me and say, 'You know, we got to put in plexiglass, it's gonna cost X amount', and we're going, 'Put it in', right. So, there was no, we didn't have a lot of debating it was very, very, very clear what the number one priority was. And it wasn't money. It was health and safety. So focus was the most important thing. 

 

Within health and safety, the second area that you know, which, which drove from the focus, we really just placed a very high emphasis on it. We had daily, sometimes hourly, daily, for sure meetings, with our emergency planning team. We rolled out measures right away. We had you know, things like PPE, Plexiglas barrier, sanitizing high touch areas, social distancing. And we were coordinating these calls across all lines of business, including Community Natural Foods. So, you can imagine on the call, we had representatives from liquor, cannabis, home health care, pharmacy, food, petroleum, you know, the whole works, plus the supporting departments. 

 

And we made calls rapidly and made sure that the third piece, which was communications, came out really clearly with a high emphasis on commuting, communicating regularly, both with Alberta Health and our health officials. So, that we were going, 'Hey, we're going to do this. Does that make sense?'  And the health officials would say, 'Yeah, that's really good'. We made sure we were leading the pack, to be honest, they told us this, oftentimes we'd ask and they go, 'Wow, you're way ahead. Thank you so much'. 

 

So, people were visiting our stores to copy, we rolled out measures that really, you know, needed quick communication, and we needed to make sure each line of business was reflective of our brand. In other words, we didn't want something different completely happening in the liquor stores, to the food business, because the commonality was health and safety of the team. We communicate a lot with our team members, of course, across the lines of business with our members, like personal communications from me, which they got right on their phones. 

 

And then, of course, with our vendors and our community partners. Because vendors were going through struggles with product supply. and community partners were going through, and continue to go through, a very tough, maybe the toughest time ever, because there's not enough resources to go around. So, you know, the Food Bank, and, you know, a lot of these organizations, you know, had a hard time with support through these unprecedented times. So, I will tell you very impressed with how agile this organization has been, and the support from our suppliers and the community. You know, the focus was appreciated. Of course, we had some people, sometimes that would complain, 'Why do you have to wear a mask?' 

 

Michael LeBlanc 

Of course,

 

Ken Keelor 

Or someone's walking in the opposite direction to the arrow. Through all of this, don't forget that the organization also successfully did something unprecedented. In switching food suppliers, rolling out a new flyer, we didn't have resources that knew how to build a flyer or private brands program. And we found and hire those resources

 

Sylvain Charlebois 

It's kind of weird you know, all these changes during that, like this yea. Of all years, you went through a lot of changes. Fundamental changes, as you, as your company was dealing with the, with the pandemic, it's quite amazing.

 

Ken Keelor 

Yes, well, it's all I can tell you, it comes back to that strategy I talked about, and three values service, caring and excellence. And the vision, which is really to be being respected as the most trustworthy place to shop every day. And so, when you think about trustworthiness and you think about health and safety, they go hand in glove. And you know, service, caring excellence, like these things aligned so well, you know, through the pandemic, with being compassionate, with being caring, you know, and knowing you know, there may be some costs we'll get to that later. You know, if this is not the time to, 

 

Sylvain Charlebois 

We have to we have to ask you about, about the industry itself. There's been more consolidation of late. You were at Safeway before you join Calgary Co-op and that was bought by Sobeys, I believe in 2013. 

 

Ken Keelor 

Yeah, I was with Sobeys actually. I was, I was with Sobeys for 10 years. And then I came back to Sobeys when (inaudible).

 

Sylvain Charlebois 

Full disclosure, Marc Poulin is a friend of mine. So, I've known him. No, he's a great guy and he was heading Sobeys before Michael Medline. But in recent years, of course, we've been, at least, I've been concerned about the faith of independent grocers, like your organization. Farm Boy was bought in Ontario in 2018. Just recently, we just learned that an amazing independent grocer Longo's was just bought again, by Sobeys. What, how do you see the the food distribution landscape and in particular, in relation to independent grocers?

 

Ken Keelor 

Yeah, great, great point there. And, by the way, Marc, I had known for years from the time he was President of Sobeys Quebec. And one of the most intelligent people I've ever known. And it was actually, Marc and I had lunch one day, and that's when I went back to Sobeys after having worked for them for 10 years and gone of to Rexall. So, and then I joined them the day they bought Safeway and did a lot of work on integration with suppliers especially. 

 

But, you know, I have, my job at Sobeys, when I was there, was all about national procurement, national merchandising, private brands, and then running the discount banner as well as working on the grocery at Sobeys and IGA. So, I've certainly been in the industry a long time and Save-On-Foods before that on the west coast. 

 

So, you know, I know about buying groups and all of the retail landscape here. And it's a stark contrast to, for example, the US or other parts of the world, right. Our challenges are smaller population. You know, Canada's population isn't that large. And so, a lot of our businesses and industries in Canada are very, very consolidated. I'm not terribly excited, because often that doesn't spell good news for the customer. And when it comes to independence, of course, you know, our relative size becomes smaller and smaller, when we look at, you know, the Sobeys, Loblaws, Walmart, Costco of the world. 

 

However, we have a role to play. And, I think role to play is getting more and more valued by customers. You know, and no more, no, no place, does it reflect more than when you look at our trust ratings versus our competition. You know, whether it's the fact we are cooperative, or the fact we're independent, the reality is localized geography and community focus is very much something that customers identify with, and our members, trust us for that. 

 

And I'll give you an example of you know, the pride in that. We have, when our members come into our stores, they step to the checkout, and the cashier will say, member number, please. And our members just rattle off the number. And sometimes it's a six-digit number 235895. And, they all know their numbers, they don't even pull out a card, or key chain, or key fob, or anything. It blows my mind, I couldn't believe it the first time I walked into Calgary Co-op store, and I saw this, I was like, 'Wow, maybe that's an unusual situation'. No, that's the regular norm. And some people have a smaller number, like two or three digits, and you should see the pride there they go, 'I'm 1855'. How are, like I'm 9,000,900 and something 1000. And they go well, 'It's my great grandmother's, and we handed down the generations'. So, there's a lot of pride. 

 

And I think our role, therefore, is to be unique, to reflect the local geography and local appetite of customers, as well as to focus on those local causes, socially, that are very, very near and dear. Recently, our communications team, which engages our members, by the way, regularly, through phone calls, emails and personally. You know, reached out and we asked members about their top social focus areas. You know, 'Where do you want to see your money invested that you donate?' And they actually picked the organizations they wanted. So, you know, we play a very role, important role, I think, socially and economically. And I think, again, emphasizes why managing your economics is equally important to managing your social focus as a small organization, especially a co-op.

 

Sylvain Charlebois 

Absolutely.

 

Michael LeBlanc 

Well, it's, it's really a blend of risk and opportunity, right? The consolidation allows you to create even more, you know, even a deeper connection locally, because you're truly look, you know, you're truly both in your structure and your location and your approach, you know, part of the community, right.

 

Ken Keelor 

We certainly are, you know, the difference versus, I would say some bigger players, is that, you know, when our cost goes down, or when we improve our profitability, it's only going into a couple of places. One, it's being reinvested right back into the local community, either for causes or to renovate and upgrade assets to give a better shopping experience. Or, it's going back to our members in what we call patronage. So our members, depending on how much they shop, each line of business on (inaudible) patronage every year, and they all earned at the same rate. So last year, we just declared our patronage over 24 million bucks. And, you know, everyone got 2%. in retail lines of business, everyone got four cents a liter on fuel. 

 

Michael LeBlanc 

That's great.

 

Ken Keelor 

So, and to get an inch check, you know, cash and shares. Now, if you look at corporations and these larger companies, that investment could be flowing from one province to another, depending on where they choose to make their investments. We choose to make all our investments locally.

 

Michael LeBlanc 

Well, it's a, it's a powerful model. And it brings us to our last question. Thanks, you've been very generous with your time as always, such great insights and so great of you to join us. And that's a look to the future. You know, when I talked to retail executives, you know, their minds are on, on mental health for their people. You know, as we get into this long haul of the COVID era. They're thinking about a supply chain that maybe was too rigid and couldn't respond quick enough to the shocks of the COVID era. What do you, what are your priorities as you think through the next years ahead?

 

Ken Keelor 

Yeah, thanks for that question. We have very clear, you know, five specific priorities over the next few years. One of them of course, is the food positioning. So, switching food distributor was one thing. But now, begins the work of making sure we drive out that differentiation. And, you know, make sure that we we stand out from the pack with our product assortment, our private brands, our fliers, community focus and reflected in our communications, all of those things. So, continued efforts and our food positioning. You know, despite having just 23 stores and being only in a small geography, we think we can be very unique and have more work to do. 

 

The second area is real estate, with redeveloping, renovating and building new stores, where appropriate across all our lines of business, that's a big focus. And it has to be with the amount of, you know, asset value we have locked up in real estate. 

 

The third area of focus is the growth of whole health. And I mentioned this earlier with pharmacies, Community Natural Foods, home health care, and more. Clearly, that is an area that is resonating with Calgary Co-op's customer. And, you know, we see that as very important strategically. And it goes hand in hand with the fact that our customers trust us so much, our members give us the highest trust rating. 

 

Fourth area is evolution of petroleum, as we've seen demand disruption, and we believe that some of it is COVID related, but some of it is going to perpetuate and continue to because of alternative sources of energy, people working from home. And let's continue.

 

Yeah, and we are a major pumper in Calgary. We have a significant market share in petroleum, and 38 gas bars, many of them very, very new. So, we have to really think about the next 20, 30 years where we want to be on petroleum? and energy in general. 

 

Michael LeBlanc 

Electric cars, or whatever.

 

Ken Keelor 

And the last area is one that, as you can tell from my comments over the last few minutes that I'm really focused on, which is deeper relationships. And three key stakeholders, our customers or members, our community, and then our suppliers. And so that those are five areas of focus, and it's strategically, you know, they're built off of our mantra of 'Exceptional experience, Inspired team members, Focused on asset optimization, Efficiency, and of course, differentiated products'.

 

Michael LeBlanc 

Well, congratulations on, on your success. I mean, as Sylvain was saying, you know, launching new branch, switching distributors, going through COVID. I mean, it would have, you know, I think it would have, would have hoddled less well run, less successful businesses.

 

Sylvain Charlebois 

And we thought we were busy.

 

Michael LeBlanc 

And you know, a business with less focus, I think would really would have struggled to do all that and and, you know, and come out the other side, as you clearly have. We're not quite out the other side of the COVID crisis. But after listening to you have a you know, so much faith that what a great business you're running and and I really want to thank you again for joining us on The Food Professor podcast, spending some time with us. It was really great to share lessons and learnings and what's happening in Calgary.

 

Ken Keelor 

Know, you're very welcome. And thank you. And, you know, you always hear I'm sure, from leaders how wonderful that team is. And, you know, unfortunately, I have to add that plug. But but mine is very authentic. You know, it's really the secret ingredient is the people.

 

Sylvain Charlebois 

That's great. Well, thank you very much again for joining us. And, next time I'm in Calgary, if we're ever allowed to travel again, I certainly will try to stop in and now look around your beautiful stores. 

 

Ken Keelor 

Please do, and to give me a shout. And it would be a pleasure to host you Sylvain and certainly would love to hear your thoughts when you visit our stores.

 

Sylvain Charlebois 

It's a deal, take care. 

 

Ken Keelor 

You too. Bye bye.

 

Michael LeBlanc 

All right, what a, you know, what a great conversation with Ken. And, and again, we talked about the beginning of the podcast, this co-op model. You know, he's got a depth of experience. He's brought in an amazing team. I know several of them. But the co-op model, I think could be the secret sauc, and the philosophies around it, and the way they treat customers. And as you said, the way they participate in the community could be that, that thing that keeps them strong, and in addition to all the great success they've had and great initiatives that got underway that focus, right.

 

Sylvain Charlebois 

Yeah, no, absolutely. And, honestly, I don't know how he was able to implement all of these changes in the last 12 months. That's, that's amazing. And, but yeah, kudos to him. I mean, in relative terms, he has a small organization compared to Sobeys, Loblaws and Metro. But he does have 5,000 employees, I mean, and he operates a very regionalize operation, but still lots of changes. And, I do admire independence, especially nowadays. given what's going on with, with the competition. It's getting tougher out there, but I do believe that he's doing the right things and for the right reasons, and I think they're gonna do well for the next several years.

 

Michael LeBlanc 

Well, thanks again to Ken Keelor, CEO of Calgary Co-op, for joining us. Last couple of quick things. Speaking of cannabis, because we just didn't speak a cannabis, but Calgary Co-op also has a cannabis retailer, I noticed in your backyard,

 

Sylvain Charlebois 

You gotta love Alberta, you gotta love Alberta for that, though. I mean, it's different.

 

Michael LeBlanc 

It's a game. Well, I was gonna bring up New Brunswick because recently it was announced that even though they put an RFP on the table to privatized. New Brunswick has stayed with and, and my good friend, Lara Wood, who is GM of Cannabis NB, they've turned that business around, it's now making them money and looks like they're gonna stay with the public sector model, right.

 

Sylvain Charlebois 

Yeah, they are. And, I think they just needed to be a little bit patient. I mean, cannabis has been legalized, was legalized in Canada for about three years now. 

 

Michael LeBlanc 

Almos, yeah. 

 

Sylvain Charlebois 

So I think, I thought that, that the New Brunswick government was a little impatient when they actually decided to sell. I think they got, I think, I believe they got seven proposals. And I suspect that all of the proposal were not very interesting. And, I believe one of them were actually came from Couche Tard. But, all of them were unsuccessful, and the, and the New Brunswick government decided to keep it. Which is, I think, a good thing. And, and I, because I mean, first of all, the government needs the revenue. They need, they really need the revenue. So, I don't think it was a bad idea to keep it.

 

Michael LeBlanc 

Well, I like your idea about patience because, you know, the foundation of the business was strong and everywhere, it had to settle out, like, you know, you, you couldn't get the right supply the demand. Now, there's an overabundance of supply, there's more skus. You know, I talked to a lot of cannabis retailers, who are, are more and more happy with the choices they can actually make now versus, you know, buying the same stuff that everybody else bought. So, we wish our friends at Cannabis New Brunswick continued success.

 

Sylvain Charlebois 

When you look at all the stocks in the last 12 months, how they perform, I mean, that in the top 20, you basically have three cannabis companies right there. And they've done very well, why? Because, well, the market is being recalibrated, there was too much supply. Now, of course, because there was a bit of a cannabis bubble, I mean, markets tend to be very powerful, they correct themselves. And that's kind of what happened just before COVID and COVID, kind of allowed the demand side to actually pick up. 

 

And we're actually going to be conducting a new study on cannabis in the spring. And we're going to be looking at how people have responded to COVID. And, and if their cannabis consumption have gone up, and if they're actually making more edibles at home. Because we all know, we and we've talked about this before, the edible market is is a bit of a challenge for the processing industry.

 

Michael LeBlanc 

Well, it's a, I'll be keen to read the study, because the difference between increased consumption in the legal market versus overall, right. So, we see more legal consumption, but you know, does is that truly just moving it from the black market to legal consumption? So, is net consumption up down or sideways? So that'd be a great report. I look forward to reading it. When abouts would you have the results from that? 

 

Sylvain Charlebois 

Oh, probably I'd say in May or June. We're going through ethics right now. So, we shouldn't get the results back soon. And once we have approval, the will, will get out there.

 

Michael LeBlanc 

So, Sylvain, what else have you got in the hopper from the lab? What else is on the, in the, in the works?

 

Sylvain Charlebois 

Prior to the cannabis study, we're actually about to go to field for two other studies. One is about weight management and stress. We've been talking a lot about, you know, the COVID 15, or the other COVID-19. People, you know, gaining pounds. There was a study recently in the US, organized by the, the American Psychology Association. And they figured out that more than 60% of Americans have actually gained weight in the last 12 months. So, we're gonna, we're going to kind of replicate that study and see whether or not in Canada is the same thing. 

 

And the other study is on allergens, allergies and intolerances. Which we've done in the past a few years ago. We wanted to see if things have changed, because our notion of risks as a society has probably changed as a result of COVID. Are people more anxious? Less anxious? Has it led, has it gotten more people to think about allergies? Or, and we're working with a few groups on that project as well.

 

Michael LeBlanc 

Well, I tell you it's, it's anxiety for me because, is it my allergies, acting up? Or is it, do I have COVID? I mean, oh my god, it's, it's, you know, the good news is I wear a mask all the time. So, I actually think my allergies, which aren't too bad, they're seasonal, might be actually better. One, of the benefits of wearing a mask, I don't mind wearing a mask. So, you know, no flu, no allergies, you know, perfect. 

 

Sylvain Charlebois 

By the way, Michael, I looked at some Nielsen IQ data recently. We did talk a lot about toilet paper, and sales were up because people were home and spending more time at home. Obviously, they're up 19% from last year. But tissues, Kleenex sales are down. Because while apparently we were less sick. We weren't sneezing as much. So, there you go. 

 

Michael LeBlanc 

Like, you know, the good news is, I guess it's kind of a good example of like when your toast falls off the kitchen table and lands butter side up. There's less, there's less flu right? There's, there's you can count the flu in the dozens in this country. It's really quite,

 

Sylvain Charlebois 

Exactly.

 

Michael LeBlanc 

Quite phenomenal. Toilet paper, I think that's just a shift from, from offices to homes, right. So, net consumption is probably not gone up. I would assume, though who knows? Who knows, it's COVID. But, Kleenex is one of those net things. Anyway, so we'll look forward to maybe talking about those on the next episode or the episode after that.

 

Sylvain Charlebois 

Probably in about a month, we'll be ready to talk about those things. 

 

Michael LeBlanc 

That's fantastic. All right. Well, excellent. 

 

Sylvain Charlebois 

Yep. 

 

Michael LeBlanc 

All right. Well, thanks again to the folks at omNovos, for being our presenting sponsor. If you liked what you heard, you can subscribe or follow us on Apple iTunes, Spotify, or your favorite podcast platform. Please rate and review, be sure to recommend to a friend or colleague in the grocery, food service or restaurant industry. I'm Michael LeBlanc, Producer and Host of The Voice of Retail podcast, and a bunch of other stuff. 

 

Sylvain Charlebois 

And I'm Sylvain Charlebois. 

 

Michael LeBlanc 

Alright, everyone out there, have a great week Sylvain, talk to you again soon.

 

Sylvain Charlebois 

Take care.