After four long years of the Trump administrations nationalistic economic agenda, we discuss the economic impacts #46 will have on Canada’s industries. From agriculture to oil and gas, Biden is set to shake up much of America’s economic policies that can have both negative and positive effects on us here at home. “…the fact that Biden is going to is going to commit to the Paris Agreement, it could actually give a chance to our own agriculture and get to become more competitive or at least relatively speaking to be as competitive as they are as American agriculture. That's so that that could help…” We discuss the some of the most pertinent issues facing the country, and the most important things to look for in the first few months of the Biden presidency.
Welcome to the The Food Professor podcast episode 18, I’m Michael LeBlanc, and I’m Sylvain Charlebois!
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
After four long years of the Trump administrations nationalistic economic agenda, we discuss the economic impacts #46 will have on Canada’s industries. From agriculture to oil and gas, Biden is set to shake up much of America’s economic policies that can have both negative and positive effects on us here at home.
“…the fact that Biden is going to is going to commit to the Paris Agreement, it could actually give a
chance to our own agriculture and get to become more competitive or at least relatively
speaking to be as competitive as they are as American agriculture. That's so that that could help…”
We discuss the some of the most pertinent issues facing the country, and the most important things to look for in the first few months of the Biden presidency.
In addition, we look at the ins and outs of the Alimentation Couche-Tard offer to buy France based global powerhouse grocer Carrefour group, Starbucks closing of 300 location and what opening in the wonderful town of Truro in Nova Scotia means, and a glimpse of upcoming research from the Lab.
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Thanks again to the folks at omNovos for being our presenting sponsor!
If you liked what you heard you can 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. I’m Michael LeBlanc, producer and host of The Voice of Retail podcast and a bunch of other stuff, and I’m Sylvain Charlebois!
Have a safe week everyone!
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks and The Food Professor with Dr. Sylvain Charlebois. You can learn more about Michael here or on LinkedIn.
Welcome to the food Professor podcast, Episode 18. I'm Michael LeBlanc. And I'm Savannah Shah, the food professor is presented to you 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 can get personal and grow sales if I'm nervous at www. Rear real customer engagement.com. Well, so today it is an important day we're recording here on Wednesday, we have a new president of the United States, I thought that'd be a great place to start. We literally are just recording right after the speech in the inauguration. I wanted to ask your thoughts on reflecting on the last four years of the Trump era just in the last have to reflect on but just on the on the food policy. You know what happened? We had this NAFTA we saw dairy being a bit of a punching bag. What do you if you had to sum up the past four years? Well, what you know what would what would jump out? What what jumps out at you? Yeah, so can can we breathe now? Can we breathe?
02:03
Not until like 1215. I tell you it was you know, I mean for for I feel for media, I mean media will will go back to their old ways of receiving documents under embargo and not learning things. First thing in the morning, reading Twitter, I mean, that really just became a mess after a while. That to me, that's a big one. I think. I think the Trump ministration was all about uncertainty and keeping everyone on their toes starting with media and, and frankly, it just got comfortable uncomfortable after a while and and I think the Trump ministration themselves are Donald Trump himself kind of lost control in the end there, which led to
02:52
the disastrous events of January 6. I just couldn't believe what was going on. But going back for years, I mean, that I think they are the Trump ministration is a story of two tail I guess, two tails one the first three years. Were very successful economically, I think. I mean, taxes went dropped, the economy was doing very well. markets were doing very well. The America first policy was embraced. It was very well supported.
03:29
But the last year with COVID. It really just changed everything. And the Trump administration had a hard time selling its agenda on how to fight the virus itself. And that's the one thing I never understood about the Trump administration is that Americans tend to politics in america do very well when fear is used. I hate to say this, but fear is a is a big thing in the US. And I never understood why the Trump assertion didn't
04:06
really tackle the virus as the new enemy. China was the new enemy. Of course, under Trump for four years, Trump was hitting on China quite a bit. In the last year, I thought that Trump would have would have shifted his attention and and define this virus as the new menace killing America, this virus coming from China, we need to make sure that we put Americans first we protect them as much as possible. The vaccine campaign was highly successful, which is not it, it got lost in the shuffle. But I mean, right now, there are four times more Americans that have been vaccinated and Canadians at this point per capita. I mean, that's that's that's a lot. So there's there's some success there. But overall, I think everyone is
05:00
happy that we're moving on. My concern, of course, is what does that mean?
05:07
Well, that was my I mean, that's exactly my follow up question. And, you know, it's funny i was i was reading one of the rare things that Trump actually did as he left office was to continue that tradition of leaving a note for the next president can imagine what's on that note?
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Is it a loan application? Is it is it you know?
05:28
Pardon me? I mean, yeah, exactly. As you think about your pardons, maybe we should talk? Well, it's funny. I don't know if you've ever watched that show house of cards on Netflix. But one episode, when Kevin Spacey became the president, you know, the outgoing president handed him a letter and he kind of roll he looked at the camera, rolled his eyes and threw it in the fireplace, I can imagine Biden doing pretty much the same thing. Oh, absolutely. And but just back to the Trump ear, I mean, a lot of the a lot of the noise, there's so much noise, you couldn't parse out the real issues, it was hard to parse out the real issues, you know, were there justifiable, you know, border discussions or disagreements around import and export of food. And now that we're looking at the Biden near I mean, already, he's talking about 15, executive orders, reversing direction, is there any risk or opportunity in the food sector that that you can see, we see some things about the pipeline, for example, is it anything come to mind for you about risk opportunity? What do you what are your thoughts there? I'd say I'd say there are three elements that caught my attention.
06:33
Now, whether or not they're actually going to happen is the only time will tell the first one is immigration. I mean, obviously, the by demonstration will have a different approach to immigration. And immigration is a big deal in ag in America, and in Canada, of course, as well. But in America, it's a big deal. And so by opening up doors to to immigrants, I think it bodes well for ag in America. So you I do expect American agriculture to become more efficient, more productive under the by demonstration, notwithstanding what's going to happen to the farm bill, because the Farm Bill, I think the farm bill will remain as it is, it will remain as generous, overly generous, I would say then then under without it with Trump, but I would say the immigration is gonna be a big, big deal. The other thing is, is the carbon tax. Now today, the buyer ministration will sign rejoined Paris, right.
07:37
Yeah, so they'll commit to Americans are or the administration will commit to reducing greenhouse gases? By 2025, I think, by 25%, or something, I can't remember the percentage, but that commitment will likely force Americans to look into the carbon tax because the carbon tax I know it's not popular, and we talked about
08:01
her last toast. Exactly. And but it is it is a quick and dirty way to deal with, with polluters. I mean, it is and and urban centers tend to light the carbon tax, because it's an easy concept to understand, of course, most Canadians don't understand how it works, and how it impacts farmers. But when it comes to politics, that's that secondary. And so I actually do think that there, the fact that Biden is going to is going to commit to the Paris Paris Agreement, it could actually give a chance to our own agriculture and get to become more competitive or at least relatively speaking to be as competitive as they are as American agriculture. That's so that that could help the other thing that can actually help.
08:50
The the situation with the arrival of the Biden and Harris administration is the fact that they are looking at increasing corporate taxes from 21 to 28%, which would make America less interesting for I don't know RBI to move south or companies turn. So we've said we've seen a lot of offshoring going on last little while that maple leaf, plant based exactly plant was started in the us a couple years ago. Now since Biden's winner if you notice, Michael, but we've seen
09:28
some more onshoring into Canada with love bats with Kraft Heinz. So within a ketchup plant in Montreal, we're seeing more and more on shoring or near shoring as a result of what's happening in America. So I actually think that the buying decision could help Canada over over the long term, of course, the Keystone XL decision is going to be a disaster for the West. But when you talk to people in Alberta
09:58
Finally, you're starting
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To hear people thinking beyond oil and gas, and they're looking at agriculture agrifood as a as a porn sector to invest in, finally, and that sort of happened years ago. Yeah. I mean, it's interesting because you know, we talk about it's not really a politics podcast, podcast, we could talk about, you know, the does shutting down fracking help Western Canada or I mean, there's, there's some puts and takes there that one of the things that came up this morning, I was chatting with senior executive at fire and flower, Cannabis, and they were talking about, you know, they have a connection and investor in our friends a coup start. And part of that is about international expansion. I wonder under the Biden
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regime, if you're going to see more, more favorable rules towards cannabis, of course, this each individual state makes it legal, but it still is a schedule one narcotic. I wonder if there's going to be movement on that could be quite meaningful from a whole bunch of ways, right? I don't know if you looked at the list of pardons that Trump published
11:01
last last night, but sorry, pardon me? There's a peanut guy. Pardon me. There's a peanut guy who who's serving 28 years or something. Tell me about that. Like, oh,
11:14
oh, the peanut of America scandal. Yeah, that 100 cases of salmonella. And and he knew, so I had no idea this guy and somehow he winds up on a pardon list. But No, he didn't. He didn't. He didn't get pardon. No, he did not I was looking for it. You see, in 2008 2009, there was this peanuts of America scandal, many, many
11:39
containers of peanut butter were shipped out of the plant. And the CEO, knowingly, he knew that many many
11:52
products were contaminated with salmonella and eventually killed nine Americans and, and America in America, they actually take food fraud, and food safety quite seriously. And then I and then and there was there was strong evidence to suggest that he knew about the contamination.
12:14
And so they went ahead, prosecuted him and so he's in jail. So he has a 28 year sentence, and I was actually looking
12:23
for his name when Trump was leaving the White House, but he wasn't there. But one one thing I did notice, though, is that of the 120 names that were on the list, many, many were prosecuted as a result of having marijuana marijuana on them. marijuana possession and and perhaps could, because perhaps this could actually point to what may happen down the road with Biden regulating or allowing marijuana to become legal cannabis to become illegal in America. Yeah, yeah. It's interesting. I mean, you know, there is some good things that Trump did I think by accident sometimes. But
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these people languishing in American prisons for possession or just you know, bad, bad luck for you know, life sentences. It's just, it's crazy, ya know, the tone is changing for sure. Yeah. All right. Let's see, speaking of couche tard, let's talk about this marriage of convenience, I think is one reporter described, which I thought was quite clever. Yeah. Going going after couche tard. I mean, the investors didn't think much of it as sort of going after car for now. Tell us about car for those listeners who may not know how big retailer that is? NACA, so capital is the number one seven food retailer in the world. Started in Paris based out of Paris.
13:49
What is less known is that the majority of their businesses outside of France now, it's about 60%. Yeah. 40% is, is in France. Now. cushaw it might that soccer star, which, to be honest, I think is probably one of the most misunderstood Kenyan companies out there. A lot of people don't understand that company. It's, it is worth $46 billion.
14:15
It's a giant it's a giant right it's a as they said they and they've they're around the world they're they're in you know, they get stored in Vietnam and they've got stored and they got investments in cannabis. They're quite impressive company.
14:31
You know, I don't know why they're so off the radar screen I think some of is on on purpose. Maybe some of it's just you know, they play in a different area. Yeah. And to buy a Cafu with with the debt that they carry with costs. So costar probably about 25 billion US dollars, and they could afford it. I mean, they're very good at m&a in the m&a space I mean month so Costco is very good. What really caught markets by surprise, I think is this is this pivot towards
15:00
groceries
15:02
cafo is a grocer and mouth. So Costco is a convenience store operator and a lot of people I think markets just didn't see
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that translation like how that could happen. I saw it, I actually understood the deal. When I saw the deal. I thought, wow, this is this is good. Because I think adding about that soccer style has come to realize that over time, as we see more electric cars, we're gonna see less fewer fewer people go to gas pumps, and then go into stores and buy stuff, whatever amount that says, I thought that's what costar is probably the best company in the world to convert fuel dollars into food dollars.
15:52
Because they make their store so attractive. You have to buy a sandwich here a slush puppy. They're
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fantastic operator. Oh, absolutely. And so and they understand and they're committed to supply chain management. They have very good relationship with with vendors. With ugi here in Canada, they buy through ugi. And I would say that any month so Cousteau is regarded as one of the best clients for vendors through ugi. Because they actually respect vendors, they innovate with their vendors, you could actually find products at an amount so close down you could never find in a grocery store in Canada.
16:33
Interesting. I mean, and it's you know what the the French government's reaction reminded me of the Quebec government's reaction when Lowe's first approached Rona to buy them. And, you know, it was just dismissed quickly out of hand. I mean, I don't think you know, the plane. The planes jets had cooled off when the president of
16:54
Broussard was in his in Paris, but it does seem to point towards a lot more strategic initiatives between the two parties now that they've kind of been left at the altar so to speak. What do you what do you think do you think that can that dialogue can continue? I mean, as you say, there's some there's a there there right that it does make sense. But the political reaction which I was expecting, caught me off guard, because it was really quick. Oh, my God. Yeah. Like, like the jet like the guy like the Jets weren't even
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at the airplane is enough. It's not and and it got caught.
17:30
By by surprise, obviously, I mean, and frankly, caught me by surprise, and the argument was, well, this could actually pose a threat a food security threat to the French people, which to me is a lot of you know what, you Yeah, a government a state has to care about farming, farmers, you can't create farmland, I get it and even in processing. I I do believe that some companies or some states, some governments have to be careful. In Canada. By the way, we did see the Harper government back in 2011. Block the BHP Billiton deal with potash Corp. And it was potash it's not even edible, but it is very much related to food security, fertilizer that powers it, right? So it's very normal to see states get get nervous. But when you're looking at a distributor, I'm not sure I mean, in Canada, for example, we have Walmart and Costco, two non Canadian grocers, I guess non traditional grocers. Both of them combined, they sell for about $30 billion worth of food. And a lot of it is Canadian. I mean, a lot of it is Canadian now, because people want it people are expecting those two retailers to sell Canadian products. So the the argument was was quite weak, as far as I'm concerned. Because what's ironic is that I go poo, which is a a jewel of a company in Quebec, just sold its yogurt division to a French company.
19:09
And nobody said anything just before the holidays, which I thought was was interesting. And we actually gonna have Mark Taylor, join us in a few weeks from now on this podcast to talk more about the deal. Yeah, that's a great, I'm looking forward to that. Because it's a business that I consume literally, all the time. It's such a basket of products that would be familiar to all our listeners. And I want to move on and talk about grand ambitions. So Starbucks, closing down 300 locations opening up in Halifax is this and the 300 locations
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in rural it.
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People in journal
19:52
is that pointing us in a direction because I the last number I saw from Starbucks was 200 not 300. Are they now saying listen
20:00
We think this work from home movement is here to stay post COVID. And we want to be closer to people. Are you reading the tea leaves of the coffee beans around this that way? Or is it just they had they had just too many locations? And they're just, it's a big consolidation of the fleet. But what are your thoughts on this? Well, the market is changing. So stats can came out last week with some numbers showing that. I mean, that was a bit shocking to be honest, Montreal, Toronto and Vancouver, their population is dropping. Imagine like Toronto minus 55,000. That's incredible. I mean,
20:37
I know but, you know, I looked at that. And I said, is that just a point in time? I mean, what what has happened over history has been people leave cities.
20:46
And then the young people, it makes them more affordable, young people move into big cities, the, the peripheral cities will struggle, but Montreal, you know, the big, the big, wonderful cities, Montreal, Toronto, Vancouver, you know, Ottawa, you know, you know, all those big cities, they, I don't know. So I will continue to exist, of course, I think humans will want to congregate. And cities are designed to allow people to get together, of course.
21:15
But numbers in occupancy rates in in urban centers are pretty are are very high right now, Toronto, it's at 5.7%, which is the highest and 50 years, five, zero. I mean, those numbers are pretty scary. And there are going to be some exceptions here and there. But I, but I think the market is recalibrating, and a lot of people are going to be moving out doesn't mean that people that that Toronto will become smaller, I don't think but new people will come in, and they will consume very differently. And suburbs and rural Canada will be occupied very, very differently, which really, I think is forcing food service food retail to reconsider how to manage their portfolio of stores, and outlets moving forward coming out of COVID, I think because I mean, Starbucks itself, each store will generate about $500,000 worth of revenue, multiplied by by that by 300. That's $180 million of business that's going you know, somewhere.
22:23
Some of them may be disappearing forever, but somebody will go elsewhere. It will be
22:29
I mean, if you got you know, and it is the case, in some parts of Toronto, for example, that you've got five Starbucks with an easy walking distance. So I guess that, you know, that that money doesn't leave the table necessarily. There's some home consumption. And and that's interesting, right? I mean, I mean, you know, Starbucks wouldn't be giving away market share, that's for sure. They wouldn't be closing restaurants if they thought it would cost them market share losses, right? No, but I actually do expect them to open up new shops here and there. Like the Troy example is pretty shocking. I mean, it's a city that never had a Starbucks ever. And now they have their first Starbucks, which I opened a month ago. I mean, who would have thought in the middle of a pandemic so you can see it really right now. And often media will cover stories about closures, but they never cover stories about about openings and and we are seeing so yes, Starbucks is closing 300 stores by the end of March. But I actually do see openings elsewhere as well because they want to they want to treat people in suburbia and and even rural communities different land. And I would say that Turo is pretty much roll. Mm hmm. Oh, yeah.
23:40
Yeah, it's, it's, it's fascinating. And I want to talk about a couple other things. The wrap up one is this you you put up a chart with fruit and veggie sales and a couple of things jumped out at me when I looked at that I mean, get your fruits and nutrition and all that but a couple things jumped out like bagged vegetables were up What is it? 19% which makes sense to me, I guess in a, in a pandemic, but celery at 18% mangoes at 15%. Do you see any? You know, this is just data. Do you see anything amongst this noise? Anything that that you would remark upon that that you would see as a trend? Or is this just the coming and going of pricing and food and commodities and different things when you read anything from this? So So first of all, we got the data from Nielsen IQ and and they were so generous that they gave us all the numbers for 2020 up to January 2, so off the press, not that data wasn't even released and they allowed us to look into the data. And I was looking for for a couple of things one, volume and $2 and both will tell you a very different story.
24:52
Retail so describe it.
24:54
Tomatoes tomatoes is obviously the most popular produce out there.
25:00
Sales unit sales went up 6% in 2020. So more business.
25:08
Does it mean that Canadians are actually eating more tomatoes because of with food service closing for a while lock downs and everything 6% to me appeared to be a little bit low. But when you look at dollars, and 28% Wow. So So in other words, inflation, drove business drove sales. And and you you saw that in many in many cases in produce, and I was expecting that. But that ratio was pretty high, pretty high. And there are some exceptions, though. Yeah, I mean, you've been in the news. Again, it's a story that keeps on going. Some pretty big news stories about the, you know, the the food inflation, I think described it as causing havoc or wreaking havoc. So it is a story that keeps going out. Are you concerned, you are concerned about food inflation? Our last guest cherylin said, Well, you know, the price of food is actually pretty good in Canada, where do you square off on that? I mean, she, you know, she rightly points out that, you know, Canada is a fantastic nation, and food prices overall are good. And how do you see that? How do you how do you put that in a global framework? Well, it certainly was, right. I mean, we do have access to an affordable food basket. But things are shifting, though. And and they are gaps. I would say that farmers are doing very well financially. But this civc actually just published this week a report on on on these income gaps. A lot. A lot of people are being left behind people with part time jobs people,
26:47
or under the age of 25 are being in the service sector, right? The service sector economy has been hit. Deloitte calls the K the K recovery, not the not the V recovered, right? Some people are doing better than ever, because they've got you know, they're writing down household debt, they're not traveling and others are really, really struggling. Right. Exactly. And so and I, when I think about produce 2021 being being the International Year of fruits and vegetables, you got to think well, is that section of the grocery store becoming more affordable and less affordable? And the answer is obviously, it's it's less affordable. And and that section of the grocery store, we've been talking a lot about immune systems with the vaccine rollout and everything, all the best, the best medicine that we can get to build our immune system is, is obviously good nutrition. And you can't do it, you can achieve that without without consuming fruits or vegetables. And so I'm very concerned about about about that for sure. Just because really, over time, people will just walk away, but there is there is frozen, there are frozen foods that are bet getting better. And so if people are looking for deals, they should actually go to their freezer aisle. So there's at least there's that but on. But in fresh. It's getting complicated out there except for salary. By the way, salary is
28:15
cheaper, because in 2019, some ridiculous fad game up saying you eat salary, you lose weight, and prices went way up. By the point 20 salary was dirt cheap. So there you go. Food recalls also affected sales for lettuce, peaches and onions. Yeah. And last question for you. What's on the docket from the lab? What's up in the slab on the lab, as they would say in the Rocky Horror Picture Show? What kind of research you're planning for the for the first half of this year? What do you what do you got mapped out? Give us a glimpse of the of the insights to come? Yeah, so we're looking at food literacy. Right now. We're trying to understand whether or not Kenyans are more food literate as a result of COVID? Oh, number of recipes they know that the greens are using. So we're doing that right now. We're going to release that study probably for our next podcast. So the result? Yeah, we should have some results there. We're also looking at establishing a Global Food Innovation index. And so we're working with industry on that we should be releasing that in the spring. And also we're working on
29:29
a new project related to labor. There's been some issues in Ontario, specifically with migrant workers on farms and we're trying to evaluate their economic impact being in rural Ontario. What's the economic impact of having migrant workers working, they're living, they're doing different things for many, many years. So we're trying to measure that impact. Essentially do
30:00
to, to, to give a positive spin to, to that particular farming practice, which is recruit abroad. Well, and you've said very often and I know how crucial that is to our farmers saralyn said it as well. And you know that that labor pool is essential. So very important to understand. Well, that's great. That's great. And well that's it. You know, it's been a great solo episode. We've got lots of great guests lined up for our future episodes. Very interesting group, group people. So looking forward to that, but for now, let's, let's put a wrap on this episode. If you liked what you heard, you can subscribe 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, host of The Voice of retail podcast, a bunch of other things. And I'm Sylvain shala blah. Alright, so then I have a great weekend, everyone have a safe week as well and we'll talk to you the next episode. All right, buh bye.
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All right.