In this episode, Sylvain and I discuss excess profits, how and why the Agri-Foods Analytics lab came up with the term and that number, and what Sylvain wants Canadians to take away from the exercise. Breaking news: we take on IT troubles in the food business in Canada…then more breaking news: lettuce pray for lettuce in trouble again. Michelin guide comes to Canada/Toronto/Vancouver - our last season guest Cory Mintz is not a fan. Cities invest big money to attract the Michelin guide
In this episode, Sylvain and I discuss excess profits, how and why the Agri-Foods Analytics lab came up with the term and that number, and what Sylvain wants Canadians to take away from the exercise.
Breaking news: we take on IT troubles in the food business in Canada…then more breaking news: lettuce pray for lettuce in trouble again.
Michelin guide comes to Canada/Toronto/Vancouver - our last season guest Cory Mintz is not a fan. Cities invest big money to attract the Michelin guide. https://guide.michelin.com/en/ca/restaurants/1-star-michelin/2-stars-michelin
The Craft Beer market in Ontario is not so frothy: is it a case of too many micros chasing too few draught taps in a tapped-out, quasi-post covid market? https://www.thestar.com/business/2022/11/04/future-of-ontarios-craft-brewery-industry-not-so-frothy.html
Read Greedflation 3 report here: https://www.dal.ca/sites/agri-fod/research/greedflation-3.html
Our guest this episode is David Carsley, Head of Industry, Google Marketing Platform, talking about the insight, work and services for the food and foodservice business that Google has to offer.
As a reminder to everyone in six sleeps, we will be podcasting live and interviewing a slate of guests at the upcoming Canadian Coffee Association Conference in Toronto at the Globe and Mail Centre on November 14. Get your tickets today and come by and say hello. Our guests will include Christine Cruz-Clarke, CEO of Balzac’s, Kate Burnett, CEO of Bridgehead coffee, and Benjamin Tal, Deputy Chief Economist from CIBC…
Links mentioned in the interview:
1. Digitalmaturitybenchmark.withgoogle.com -> A self-service tool for companies to measure their digital marketing maturity. The survey was built in partnership with the Boston Consulting Group.
2. ThinkwithGoogle.com -> Google's hub to see all kinds of case studies from companies that have grown their business using Google's technology.
3. Google Trends -> Explore what the world is searching in real time.
4. Google Analytics 4 -> Google's unified app and web analytics tool.
As Head of Industry at Google, David advises Canadian companies on how to leverage the best of Google's marketing technology to drive profitable growth and future-proof their businesses. David's guiding principles are Empathy, Honesty and Humility -- traits he believes are necessary to build meaningful connections both professionally and personally. He lives in Oakville with his wife Leora and two dogs Brella and Gilligan.
Dr. Sylvain Charlebois is a Professor in food distribution and policy in the Faculties of Management and Agriculture at Dalhousie University in Halifax. He is also the Senior Director of the Agri-food Analytics Lab, also located at Dalhousie University. Before joining Dalhousie, he was affiliated with the University of Guelph’s Arrell Food Institute, which he co-founded. Known as “The Food Professor”, his current research interest lies in the broad area of food distribution, security and safety. Google Scholar ranks him as one of the world's most cited scholars in food supply chain management, food value chains and traceability.
He has authored five books on global food systems, his most recent one published in 2017 by Wiley-Blackwell entitled “Food Safety, Risk Intelligence and Benchmarking”. He has also published over 500 peer-reviewed journal articles in several academic publications. Furthermore, his research has been featured in several newspapers and media groups, including The Lancet, The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Washington Post, BBC, NBC, ABC, Fox News, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.
Dr. Charlebois sits on a few company boards, and supports many organizations as a special advisor, including some publicly traded companies. Charlebois is also a member of the Scientific Council of the Business Scientific Institute, based in Luxemburg. Dr. Charlebois is a member of the Global Food Traceability Centre’s Advisory Board based in Washington DC, and a member of the National Scientific Committee of the Canadian Food Inspection Agency (CFIA) in Ottawa.
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 , The Food Professor with Dr. Sylvain Charlebois and now in its second season, Conversations with CommerceNext! You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:05
Welcome to The Food Professor podcast Season 3, Episode 5. I'm Michael LeBlanc.
Sylvain Charlebois 00:10
And I'm The Food Professor Sylvain Charlebois.
Michael LeBlanc 00:13
Well, Sylvain, I'm not sure, but I think you are officially off Galen Weston's Christmas card list this year. Let's, let's, let's start where we must, let's talk about this buzzy report that you issued, you call that Loblaws. Amongst the three saying they may have made or have made excess profits. And I really want to dive into that, about what that means. It's clear in the report. So, you know how it is. There's a lot of headlines about the report. But if you actually read the report, things are clearly articulated of what you mean and what your purpose was, but not everybody's read the report. So,
Sylvain Charlebois 00:29
Michael LeBlanc 00:30
This is an opportunity for us to talk about why you did that report. Talk about what excess is in your mind. And I think your co-authors mind as well, I think you drew in someone from the accounting folks to (crossover talk), tantalize,
Sylvain Charlebois 0:36
That's right, yeah.
Michael LeBlanc 03:38
And, and what do you want Canadians to take away from all this?
Sylvain Charlebois 01:03
So, this was Greedflation Report 3, we had number one, looking at financial statements between 2017 and 2021. Looking at all three grocers. I mean, the grocery business is the easiest sector to look at when it comes to margins, because everything is public, right? Except for Walmart and Costco. I mean, it's really easy to dive into the numbers.
Michael LeBlanc 01:29
And in Walmart and Costco. The business is so big, it's hard to analyze food in Walmart and,
Sylvain Charlebois 01:33
Michael LeBlanc 01:34
And food at Costco because there's a lot of other stuff happening in,
Sylvain Charlebois 01:36
Michael LeBlanc 01:37
You know, in and around other commodities, right?
Sylvain Charlebois 01:39
Absolutely. And we actually, to be honest, Mike, actually, we did look at processing. And it's been very difficult. We looked at companies like Maple Leaf, McCain, and we couldn't find anything really. In the US of course, companies like PepsiCo, Unilever, they basically put all revenues under one category for North America, sometimes it's global. So, it's almost impossible to understand what, what, what's going on with these companies in our own country. So, that's why groceries are an easy target to look at when it comes to measuring greed, quote, unquote. And basically, the way we define greed is we looked at historical data. So, Report number one was about 2017 to 2021, nothing. The second report was comparing Canada's grocers with American grocers, nothing, we did that in August.
Sylvain Charlebois 02:01
This time around, we start to look at 2022. So, the first couple of quarters of 2022. So, all three grocers have reported. And so we basically looked at the last six years we looked at, we looked at historical data, and set some sort of a benchmark based on historical highs. Both Metro and Empire were fine, they were below historical high. So, when people are saying record profits, record profits, it doesn't necessarily apply to Metro and Sobeys.
Sylvain Charlebois 02:19
However, Loblaws is a bit of a liar, now it actually is making more money than its historical high. However, and this is the big however, you can't really say whether or not food sales are pushing profits higher, it's impossible. So, anybody out there, accusing Loblaws of using food to, to gouge consumers is out to lunch, because there is no evidence of anything like that. Because my guess, when you look at sales, when you talk to Loblaws people at Loblaws, my guess is that they're actually making more money selling, selling lipsticks, perfume and T-shirts. And from a moral perspective, I mean it's a completely different equation compared (crossover talk), to selling food, per se.
Michael LeBlanc 03:54
Yeah, yeah, there's of course, there's different, different margins, as they would say,
Sylvain Charlebois 03:58
Michael LeBlanc 03:59
Prestige beauty than there is in lettuce. We'll talk about lettuce later. I guess there's, there's a couple things that work because often, you know, when, when presented in a chart, I remember back to your CBC interview, they put up a chart with bar charts and say that, you know, the dollar amount has gone up. Well, of course, there's inflation, the dollar amount is going to go up. Like, even if they (crossover talk),
Sylvain Charlebois 04:16
Dollars are not timeless, that's the problem. So, if we always look at margins, percentages, can be compared not amounts and that's why I would say when you look at amounts, it can be dramatic. But then again, I mean Loblaws is making a million dollars more a day right now.
Michael LeBlanc 04:31
Than they were previously, (crossover talk),
Sylvain Charlebois 04:39
Based on their cycle high they're making $1 million a day but still Michael, a million dollars a day when you have to generate 12, 13, $14 billion a quarter. It's not a whole lot.
Michael LeBlanc 04:51
But of course, that became the headline in the news that picked up the reports, (crossover talk). So, it is, did you accomplish what you wanted to accomplish? I mean, you set out with a goal and that is to continue to delve into the idea of grocers, three grocers in Canada making too much money, whatever that means, or, or taking too much skim off the top. But in your idea, did you accomplish what you wanted both in the report and in the public domain? If we can put it that way?
Sylvain Charlebois 05:19
I think we did actually, and I spoke to Sam, Sam Taylor, the Accounting Prof is also behind the numbers. And, and I, I must say, I think we're, I mean, the whole idea is, is to educate people on numbers and what they're saying, really, and, and, and we're not defending the industry, we're defending numbers, the data, because a lot of people are accusing grocers of gouging. But I have to say, Michael, I haven't heard one politician or analyst since last week, basically pointing fingers at grocers. I've actually heard comments from all banks and other companies, but I think people are a little bit more careful now with grocers. Have you heard anything? Have you heard of any comments related to grocers in particular?
Michael LeBlanc 06:06
Well, I mean, there's two things going on, of course, the media cycle, where I am in Ontario now has moved on, it's now about strikes and labor. So, you know, the idea it was, you know, greed-flation was the headline news, when the report came out for a few hours and then they moved on, I got a question for you. And I've heard some of this talk about, you know, they're, of course, as we've talked about in prior episodes, they're not the only step in the value chain in the food chain, so to speak.
Sylvain Charlebois 06:25
Michael LeBlanc 06:26
So, you know, there's been some comments from some of the major CPG brands that, you know, we continue to take price with our, in their vernacular,
Sylvain Charlebois 06:32
That's very true,
Michael LeBlanc 06:34
You know, pass price along to the retailers, and we're not participating in, you know, what you've called before shrink-flation. So, I think there's an interesting opportunity, I wonder if, if you have the appetite for it, to turn the power of the lab towards looking at that part of the value chain, get Michael Gradin mad at you for a little while. So, you know, look at the CPG companies and see how they can unpack. You mentioned that earlier on, it's pretty hard to unpack any of that stuff. But is there any work you guys can do to, to finagle some kind of position, (crossover talk),
Sylvain Charlebois 07:15
We have looked at numbers, and we have an op-ed coming out this week, pointing, pointing towards processing in general. And I actually agree with you, Michael, there have been some comments from certain CPG companies, alluding to the fact that they're actually pushing prices higher,
Michael LeBlanc 07:22
Sylvain Charlebois 07:25
Up the food chain, forcing grocers to increase prices as well. And I think, I mean, the bottom line is that most Canadians just don't understand the food industry. And when you politicize food inflation, people will go to a place they understand. And the grocery business is the one place they un-, and most people understand. And so,
Michael LeBlanc 07:37
Sure, you walk in everyday, (crossover talk),
Sylvain Charlebois 07:41
So, our job, our job is to and so that's why in our report, we don't necessarily point fingers at anyone because the data is not there. But we do, we do actually provide question marks in relation to how the data is reported for CPG companies and grocers. And secondly, the Competition Bureau. I mean, the Competition Bureau has now launched a study, we talked about this during our last episode.
Michael LeBlanc 08:22
Yeah, it was kind of late breaking news when you and I were together in Toronto, and, and we didn't really unpack that for our listeners. So,
Sylvain Charlebois 08:29
Michael LeBlanc 08:30
It's not a full invest- (inaudible) let's spend a minute on that. It's a study versus an investigation. So, let's (inaudible) clearly if you, if you're able to articulate the difference between those two,
Sylvain Charlebois 08:39
An investigation is basically a mandate related to a situation or a context. When you actually read the memo that was actually released a couple of weeks ago, from the Competition Bureau it's really the way I see it is that it's really a study about itself, about the Bureau itself. Because they're going to be looking at benchmarking and certain practices outside the country. And frankly, I actually think that the Bureau is just not there. The reason why Canadians are so angered right now is that they feel unprotected. It has nothing to do with the grocery business. Grocers are just getting hit by that anger because people need a scapegoat. I think that's really what's going on because right now, a lot of people are looking at, you know, the bread price investigation. It's still ongoing after seven years.
Michael LeBlanc 09:02
Yeah, I know.
Sylvain Charlebois 09:04
I mean, what is going on there? And we've seen many independents disappear over the last several years and what are we doing to actually protect independence in this country? So, those, I think those are big question marks that people have, and they wonder Okay, so what, what are we doing here?''
Michael LeBlanc 09:16
Sylvain Charlebois 09:17
By June 2023 we are expecting a report from the Competition Bureau. My expectation is to see perhaps a roadmap for, for significant changes at the Bureau and not necessarily for the industry as a whole. Interesting, interesting. I mean, and, and I know something of the Competition Bureau they've been, I've had a couple of their senior enforcement officials on my, The Voice of Retail podcast actually explaining what they do and, and who they are. And to be clear, again, to the listeners, when the Competition Bureau dives in. Sometimes they dive in as an, either criminal or civil investigation. I mean, they're, you know, they are a civil and criminal investigatory board. This is not the case with this report, (crossover talk),
Michael LeBlanc 09:39
And I think Canadians again, you know, I think they muddy the water a little bit saying the Competition Bureau is involved, but they're not involved in the ways that they are with, you know, the Toronto Board, Real Estate Board where they got in and then six years they did a settlement,
Sylvain Charlebois 09;55
Michael LeBlanc 09:58
Or even bread fixing right there. They're just doing an investigation. Your comments are very interesting, (crossover talk), about it. There's a lot of unfinished business in Canada. In the United States, it doesn't work that way. I mean, within months, Biden actually asked for an investigation on meatpacking. JBS wrote a $56 million check a few months later to avoid a lawsuit. Look at what's going on between Kroger and Albertsons. Washington is all over that one and we're talking 50% of the market share. And Kroger may be forced to actually create a rival to itself.
Michael LeBlanc 11:20
Well, or sell I mean, we talked about,
Sylvain Charlebois 11:23
Or sell, yeah.
Michael LeBlanc 11:25
Anybody who wants a deep dive in that just check out our last episode. And there's a fascinating site. I don't know if you've seen it, krogeralbertsons.com. So, they actually launched a whole website to articulate,
Sylvain Charlebois 11:31
Michael LeBlanc 11:32
Benefits to the public. It's, and probably policymakers as well. And they're probably going to spin 500, 600, 700 stores off.
Sylvain Charlebois 11:44
(Crossover talk). But do you remember when Safeway was bought by Sobeys? Or when Metro bought A&P in 2005, like nobody raised an eyebrow in Canada?
Michael LeBlanc 11:53
(Crossover talk). They're, they're different markets for sure. Well, let's move on. And a reminder, let's move on. A reminder to everyone in six sleeps, we will be podcasting live,
Sylvain Charlebois 12:04
Michael LeBlanc 12:05
And interviewing a whole slate of guests at the upcoming Canadian Coffee Association Conference in Toronto at the Globe and Mail Centre, on November 14, get your tickets today. I think (inaudible) if you're listening to this on Thursday, which we're recording on Tuesday. If you're going to be there, come by and say hello. Our guests will include Christine Cruz-Clarke, CEO of Balzac's Coffee,
Sylvain Charlebois 12:22
Michael LeBlanc 12:23
Kate Burnett, CEO of Bridgehead Coffee, Benjamin Tal, Deputy Chief Economist at CIBC and a few players to be named later,
Sylvain Charlebois 12:27
Michael LeBlanc 12:29
You and I are going to have a great time, we're going to be doing some great interviews that will generate some great coffee focused, (crossover talk),
Sylvain Charlebois 12:43
Michael LeBlanc 12:44
And some bonus episodes and stuff. So, super, super looking forward to that. Now, now in terms of late breaking news. IT troubles in the food business in Canada.
Sylvain Charlebois 12:55
Oh my God, yeah, I know, (crossover talk),
Michael LeBlanc 12:58
What do we, what are we? You've been tweeting about this? So, take us through what you know today.
Sylvain Charlebois 13:00
Do you know what's going on, Michael?
Michael LeBlanc 13:02
Well, I know from you. I know that what was it? Maple Leaf was having some issues. Now, you seem concerned that Sobeys isn't making a public pronouncement about what's going on, I'm feeling that two things, I'm feeling that whatever is going on may, or may not, have something to do with, you know, cyber-attacks, or ransomware, which happened to one of the big producers. You know, they're obligated, if, if customer data has been, has been somehow compromised, they certainly have an obligation. Otherwise, I think they just need to handle it and sometimes I have to say being, having done one of these things. Less is better, because maybe there's some guys hunting around that want to learn more about what's happening, that you don't want them to learn more, because they're the bad guys to the (inaudible).
Sylvain Charlebois 13:23
Michael LeBlanc 13:24
So, I think there's a lot, there may or may not be a lot going on. If there's something that's happened, and there's some, actually some laws coming into place that have compromised customer data, then you've got to be very clear about it. But other stuff behind is just the workings, you know, if the cash register doesn't work, you know, you just kind of like gotta go fix it. But what, what are you hearing?
Sylvain Charlebois 14:08
Well, I mean, over the weekend, I got concerned, because I was receiving internal letters. Sobeys is very active internally, communicating to its staff, and rightly so and, and, and some, some of the letters and I can't disclose the content, but it's pretty detailed. It's pretty detailed. And so I think, I mean, right now, what people are experiencing, are, are, are people going to Lawton's going to grocery stores and self-checkouts aren't working, Scene+ points can't be redeemed, you can't get your prescription, they're being asked to go elsewhere. I mean, there's, from a consumer perspective, the consumer experience is being disrupted by whatever's going on. And so you want to send a statement, that is, let's say longer than 100 words here. Maple Leaf got hacked, within two hours, it sent out a statement acknowledging that they were hacked. And to me, that's the right thing to do. Because if you don't, if you don't get ahead of it, social media will take over. And that's kind of, after four days right now. It's been lingering, it's out there. What's really interesting is that I spoke to a few reporters about this. Reporters are trying to get some information and they can't. The only major outlet that has reported, well, I guess was the CBC, (crossover talk),
Michael LeBlanc 15:38
I'm going to, I’m going to draw a line here, which you may disagree with or may not think is a, is a line, and it may not be a line. But with all this news around greed-flation, it does grab the attention of hackers who take up social justice issues. Is it a coincidence that food companies are being attacked right now?
Sylvain Charlebois 16:00
Well, so JBS was attacked last year, and they actually did pay a ransom of a million dollars. And did, (crossover talk)
Michael LeBlanc 16:08
That feels like extortion to me. That's just extor-, I mean, there's no social justice issues going on there.
Sylvain Charlebois 16:13
That's what ransomware is all about, yeah. And so,
Michael LeBlanc 16:16
Sylvain Charlebois 16:17
I'm concerned about that because, obviously, and I suspect that other grocers have been, have been, attacked as well. I mean, why only Sobeys? My, my, my assumption is that others have actually been attacked as well.
Michael LeBlanc 16:30
I think it happens every I mean, listen, it happens every day. Like,
Sylvain Charlebois 16:33
Michael LeBlanc 16:34
A, 100 times a day,
Sylvain Charlebois 16:35
Michael LeBlanc 16:36
Everybody is under attack all the time from, both from, from bad actors and from, (crossover talk), And from nation states who want to disrupt I mean, there's a lot of bad stuff that happens. And mostly, you know, there's a lot of people who work very hard in these companies to make sure bad things don't happen.
Sylvain Charlebois 16:40
Universities get attacked all the time. I mean, (crossover talk),
Michael LeBlanc 16:52
They don't want to talk about it. Oh, no, (crossover talk),
Sylvain Charlebois 16:55
They don't want to talk about it, you know.
Michael LeBlanc 16:58
They, they, they don't want to talk about, but they don't want to talk about it, because they don't want to give any clues to somebody who's listening, is their perspective, right?
Sylvain Charlebois 17:02
But my biggest concern, Michael and I, you go to conferences, I go to conferences. You know, I can't remember the last time I actually heard a speaker talk about cybersecurity, in the food industry, (crossover talk), Exactly. And so we'll at least invite people to talk about best practices or something like that. It's like food fraud a few years ago, nobody,
Michael LeBlanc 17:28
Yeah, yeah, yeah.
Sylvain Charlebois 17:31
Nobody wants to talk about food fraud. But now people are talking about food fraud, because they acknowledge it's a problem.
Michael LeBlanc 17:37
Sylvain Charlebois 17:39
And I think with cybersecurity, we're going to go through the same process. And I find it unfortunate that Sobeys is not forthcoming about what's actually going on after four days. I think Maple Leaf did the right thing. And nobody's after them, they're dealing with whatever they have to deal with right now. JBS did the same thing last year in May of 2021. I think that Sobeys may have, should have actually said something instead of just saying, you know what, we're, we're having some technical difficulties, we'll get back to you, sort of thing. And (crossover talk),
Michael LeBlanc 18:05
So, you think, do you think that's both a consumer communications opportunity and a reputational management opportunity that's perhaps been missed?
Sylvain Charlebois 18:16
Yeah, I think so. I mean, when you look at social media right now, Reddit, or Twitter or a lot of people are unkind to Sobeys right now, and I'd be concerned about that.
Michael LeBlanc 18:27
All right. Well, listen, speaking of technology in a positive sense, not a negative sense. Let's get to our interview with David Carsley Head of,
Sylvain Charlebois 18:35
Michael LeBlanc 18:37
Industry at Google. And you two, you two ran across each other, so to speak at different food conferences. So, this is a very food industry kind of interview with, with a, you know, a technology powerhouse, and David's pretty savvy,
Sylvain Charlebois 18:48
Michael LeBlanc 18:49
At bringing, bringing those tools to use. So, let's hear from David. David, welcome to The Food Professor podcast. How are you doing this morning?
David Carsley 18:58
I'm wonderful. Thanks, Michael, for having me. And, hi Sylvain.
Sylvain Charlebois 19:01
Hey, David, how's it going?
David Carsley 19;02
Michael LeBlanc 19:03
How do you two know each other? Sylvain, do you or did you just cross paths in the speaker's circuit? Or is there another connection?
Sylvain Charlebois 19:09
Sort of, yeah. Actually, David and I met at an event. I can't remember which one, but it was a delightful event. David is an outstanding speaker. I gotta say. I mean, seriously, he's one of the best speakers I've seen. And I was also very intrigued to see Google in, at, at a foodie event. And, and, and I got intrigued. So, both David and I spoke about Google's interest in the food space. And yeah, here we are. So I, I, I thought David would be a great guest on our podcast.
Michael LeBlanc 19:45
And, and like, you say, here we are. So, David, let's jump right in. Tell us about what you do for a living at Google. And then of course, you know, everybody knows Google so really about your interest in the food business and dive into that for us?
David Carsley 19:58
Yeah, for sure. Michael. So, I've been at Google for eight amazing years, I have been very fortunate to hold a variety of roles, learn new things and learn categories, like the food and beverage space. My current role is actually the Head of Industry for Google Marketing Platform in Canada. And Google Marketing Platform is Google's enterprise level marketing tech, which in simple terms, you know, it's a series of tools designed to help marketers solve their business objectives and challenges with a focus on technology, automation and data. To Sylvain's earlier point, you know, we met at an FHCP Conference back, (crossover talk).
Sylvain Charlebois 20:40
That's right. That's right.
David Carsley 20:43
But, but yeah, I mean, at that point, I was leading Google's Food, Beverage and Restaurants team. That's where we connected. And I think that was really, you know, one of the great things about Google, like I mentioned earlier, is the fact that you get to learn so many things, try out stuff, learn new categories. And, and this was one that I really was fascinated in for so many reasons.
Michael LeBlanc 20:55
Now, we'll, we'll unpack that a little bit more in the questions to follow. But what have you guys got to do with that industry specifically? So, I would get, you know, there's, you know, let's start at a very basic level, there's a set of tools, and you can do search. But where did you spend your time? Where would you spend most of your time in the food and beverage industry trying to help them be successful?
David Carsley 21:17
Yeah, for sure. It's a great question. So, when I was leading that team, our primary focus was helping large food and beverage manufacturers, as well as quick service restaurants grow using the best of Google. And like you mentioned earlier, there is a focus on Google's key ad services like search and YouTube. But part of the opportunity was really finding ways to leverage data and technology for these partners to really stay ahead of the competition and be future proofed. And that was really key. But what does that even mean? So, it could be bringing key insights and consumer trends to help unlock new opportunities for these companies. And, and some of these brands included, you know, like Tim's, McDonald's, Kellogg's, Nestle, and many others. It was also ensuring tech systems speak to each other to make it easy to activate some of the insights that I mentioned earlier. So, let's just use an example. Imagine a case where a quick service restaurant, whether it's Tim's, McDonald's, A&W or whatnot, but they were able to determine that they're known diners who spend $10 a day on breakfast are more likely to come back for lunch.
David Carsley 22:03
What we try to do is make it as easy as possible to speak to those people wherever they are on the internet. And technology is the foundation for making that happen. And anytime there's a loose connector there, it's almost as if you cannot actually speak to that person because something is missing. And we want to make sure that all of those obstacles go away. But I think the most important thing, and that is probably most relevant out of anything going on right now is making sure that the return on investment that these folks, these brands, I should say are using is really meaningful. And I think like, and we all know very well that over the por-, over the past year when price pressure from inflation and supply chain was probably more exacerbated than ever. This gained extreme importance to make sure that every dollar that they were trying to use to acquire new customers or build their brand was being spent as efficiently as possible.
Sylvain Charlebois 23:10
How do you see, how do you see the food industry's ability to use technologies and data right now from using a scale from one, zero to 10, 10 being the best from, from your standpoint, and you've interacted with many companies? How do you see the situation right now?
David Carsley 23:28
Yeah, Sylvain, that's a great question. And to be really honest, it's hard to rank an entire category because there's such a huge variance, right? I mean, we think of brands like Tim's, McDonald's and PepsiCo Foods, who have made really significant investments, I should say, and rewards programs to acquire their own data. And there are others who really haven't taken this step yet. And there are some who are probably somewhere in the middle. So, one of the things that we've done over the past few years is that we've actually partnered with the Boston Consulting Group to help companies benchmark and measure their own digital maturity. This is through a questionnaire that,
Sylvain Charlebois 24:04
Digital maturity, can, can you explain to us what that means?
David Carsley 24:09
So, digital maturity, so it's a whole series of topics like how well are you using your data? How well are you using technology? How well are you doing all of these digital tools that are meant to go ahead and really augment your business from a digital standpoint? And it's a pretty expansive questionnaire that is, frankly, self-reported. So, companies have an opportunity to assess themselves. And then they are effectively bucketed with a score that puts them in one of four groups: either a nascent marketer, an emerging marketer, a connected marketer, or a modern marketer. And a modern marketer is, quite frankly, the Nirvana where you're pretty much doing it all. And what this survey actually spits out is a legitimate action plan for the areas that you need to go ahead and focus on in order to improve yourselves. And what we're seeing, like I mentioned earlier, is that there are so many variants not just in this category, but in every single category that we see across the entire landscape.
Sylvain Charlebois 25:06
How do you see Google work with the food industry over the next several years? How do you see your relationship mature with the sector in both service and retail?
David Carsley 25:18
Yeah, great question. So, you know, Google has a lot of solutions. I think some folks have different views of like of what certain things that Google can do. And I think that's really similar to how different companies have attempted many ways to win consumers lately, and we'll go through a few quick examples. You know, there's whether it's going public about freezing private label prices, like Loblaws, as we all know, or it could be the case of like, doubling down on affordable value, like some of the quick service restaurants, and I think Tim's in their recent earnings call really pointed to this as being a, an enabler of their growth. Or it's changing consumer perceptions. So, their products become what we call affordable luxuries. Or as Mondelēz's CEO put it, consumers are saying chocolate is something they cannot live without. That's probably true. So,
Sylvain Charlebois 26:07
Exactly. And coffee,
David Carsley 26:09
And probably coffee as well. But,
Sylvain Charlebois 26:11
David Carsley 26:12
But I would say that the fact that this individual pointed to chocolate is something that they cannot live without, is really fascinating. And it's not something that I personally would have ever thought was an affordable luxury. But clearly, I know nothing. But you know, that's how it goes sometimes. But all that being said, is that I kind of see Google's way of supporting these unique customer experiences through three focal points.
David Carsley 26:26
And, and the first one is, Google's technology truly reduces friction. So, what does that mean? I really don't know when the current supply chain challenges we're facing are going to end and I don't think anybody truly does. I mean, we can make predictions and I know Sylvain's that you've, you've really put a lot of effort into getting to at least some degree of hypothesis. But there's so many things going on in the world that we're just not totally sure yet.
Sylvain Charlebois 26:44
David Carsley 26:45
But here's what I do know, at this point, companies should have enough historicals to build models to help with demand forecasting. And where Google steps in is through its cloud technology, because what Cloud can do is supplement those models with machine learning. So, what does that really mean? Imagine you're a confectionery CPG, whether it's Mondelēz, Nestle or whatnot, Halloween just came and went. And now you can actually build multiple models to predict what demand will look like if supply changes remain the same, get worse or improve, which should position you well heading into 2023 for the next big Halloween season, which we'll call it confectionery season. That kind of machine learning and automation, really, is how, like I said earlier, is going to reduce friction.
David Carsley 27:30
I think the second thing is that Google will never stop innovating. And what does that mean? There are really a lot of ways to order food these days, you know, whether it's delivery apps, mobile orders, eCommerce, and you know, storefronts. I mean, I guess we can't forget about that as well. But all of these ordering options come with questions for quick service restaurants. So, let's just say I'm A&W. How do I know that someone who ordered from my website on Saturday is the same person who ordered from my app on Monday? And how can I analyze their ordering patterns? And this is where Google Analytics 4 comes in. Because this tool is designed to deduplicate app and web behaviors, solving this challenge for literally any marketer, who can now recognize that their app might be their best employee, and be able to harmonize that with website activity all in one. So, now that you can really understand your consumer journey from end-to-end, which I think is really cool.
David Carsley 28:00
And there's other types of innovation, you know, our advertising tools, which are hyper-focused on bidding towards outcomes that matter to the brands. And something that I think everyone should go ahead and search for these days is a new Alphabet's, "moon shot" called Wing, which is a platform that has been tested in markets outside of Canada, to actually remove friction from delivery using drones. And what does that mean? Imagine you were to go ahead and order food from a company. And this company goes ahead and actually attaches your order to a drone and drops that off in your front lawn. That's what we're up to. And I think that's really like the kind of innovation that really makes Google unique. And there's so many examples of this, but I'll probably move on, because I can just literally go on forever.
Michael LeBlanc 29:21
We, there's so much going on at Google. I mean,
Sylvain Charlebois 29:24
Michael LeBlanc 29:26
Let's, let's, let's wrap with a, a, a big question, which is, what are the big brains at Google thinking about the future of the industry? I mean, what you've, what you've articulated so well, is there's a whole lot of tools that the folks who are listening, some are free, some are paid, some or whatever. But as you sit back, as you know, what was the original idea, the encyclopedia of the internet, ordering everything, what do you see? What one, two or three things, if you could summarize that, that Google can see in terms of almost seeing the future because you have so much access to data that you'd share with the listeners? What, what are the trends that you see, just the way people are searching, and the way people are acting? So, get beyond tools and talk about what you're divining through those, those big powerful servers of yours.
David Carsley 30:09
Yeah, so it's a great question. So, I think, you know, it's really hard to predict that far down the road. But I think there are a few focus areas that are truly can't miss at this point. The first is that digital transactions will continue to accelerate. And it's really up to industry players to find more ways to make their products very accessible. And I think one of the things that we have seen is that there's also been a huge change in consumer expectations. And that's, that's kind of the Amazon effect, where we expect things to arrive on our doorstep within a really short period of time, with little friction. And this doesn't necessarily mean that every single, you know, large manufacturer, whether it's Mondelēz, Nestle, Kellogg's needs to go out and build an eCommerce platform. But what it is important to do is have an explore mindset and be willing to test and ultimately, you know, being willing to occasionally fail and learn, I suppose. And, and give like PepsiCo Foods, a lot of credit for actually building an eCommerce division and a subsequent rewards program. Because what they've done is that they've really built that one-to-one connection with their customers through tasty rewards. And that was kind of like segue to my next point, (crossover talk),
Michael LeBlanc 31:18
Do you see that as a risk or opportunity for Google? I mean, there's a big, big push for the brands to have first party data, go direct, understand the consumers, there's a big, big push, again, retail media network. So, how do you see those two things happening in concurrent-, concurrently with what you're working on?
David Carsley 31:34
Yeah, it's a great question. And I think, I think more so concurrently than ever, is that Google will help supply technology to enable a lot of these great ideas, you know, whether it's a case of making that first party data work better, throughout, you know, our analytics platforms that you could speak to folks and understand what they're doing within your own environments, whether it's this technology to allow you to even execute a retail media division, or whether it's the case of just you know, a company like PepsiCo Foods, who has this new eCommerce division of their own, where they just want to go ahead and really activate. How can they do this in a way that is scalable, is not going to have any, like additional technology overhead, that they're going to have to go ahead and stand up on their own. This is really where we can help, you know, augment the industry and actually help them get there a lot faster. And getting there faster is really critical, because truthfully, you know, with so much competition is that you don't really have time to waste building and standing up your own tech. At least that's my opinion.
Michael LeBlanc 32:32
So last, second, last question, just before I pass the mic back to Sylvain, as you know, I guess it's a bit of a redundant question, where can we find this stuff? I guess you Google for it. But you know that you've talked about a lot of tools, and we want to be clear, there's a lot of people, a lot of our listeners are from small, medium, and large. So, is there, is there and maybe we could put some links in the show notes. But is there one place to go? Or do you want to give us some links that will put in the show notes, because you know, not everybody is looking to buy cloud computing, some are just looking to get better at people finding their restaurant in, you know, on a map, right. So, what can you quickly share with us?
David Carsley 33:10
Yeah, for sure. I mean, I'm going to give you a couple of ideas for some free tools that are available. And we could also point them in the, in the actual show link. But the survey that I mentioned earlier is a digital maturity benchmark with google.com. There's also think, with google.com, which is an easy access website for folks to actually get inspired with case studies. But there's also you know, Google Trends, which is probably one of the most underutilized free tools available, where you can actually see search trends in real time, whether it's category specific, or anything else that's going on, or Google Analytics 4, which is that app and web user journey analytics tool, which is free for any small, medium, or even large size business to use. And (inaudible) these are all free, these are all easily accessible. And it's quite frankly, a wasted opportunity if folks are not using that on a regular basis.
Sylvain Charlebois 34:03
I'm ac-, I'm just on Google Trends right now. And top trending topics, Taylor Swift, Kim Kardashian and the World Cup, there you go. But nothing about food. Well, I guess, somewhat related, there's some you can find food somewhere, but it's not specific to food.
David Carsley 34:24
Those are three really important topics, Sylvain. I mean,
Sylvain Charlebois 34:27
Yeah, exactly. That's true.
David Carsley 34:30
Maybe the World Cup might be a little bit more interesting for me, but it's great that folks are talking around, but around here, it's like what has it, it has been since 1986 since Canada hasn't had a team in the World Cup. So, it's exciting. I'll, I'll ho-, I'll reserve judgment on the other two.
Sylvain Charlebois 34:44
Exactly. I just, I just used, I just googled food on goo-, on using the Google Trends platform and the number one, the number one search topic is The Food Professor Podcast. I'm just kidding.
Michael LeBlanc 35:00
Well, David, if we could put the fix in, so that would happen.
Sylvain Charlebois 35:03
Exactly, exactly. We've got the right guy to do that. Listen David, thank you so much for joining us today. I know, I mean, Google, everyone knows Google, but few people actually know how Google is involved with the food industry. So, thank you so much for your comments and visiting us today.
David Carsley 35:20
Yeah, thanks for having me. It's been, it's been an absolute pleasure. And really, both of you keep up the great work that you're doing. I know, all of the stuff that you're doing is really meant to be consumer centric, and helping ordinary folks who, quite frankly, are having just a hard time making ends meet at this time, this unprecedented time of food inflation and supply challenges and all that. So, thanks again and keep it up.
Sylvain Charlebois 35:40
All right, take care David.
David Carsley 35:43
All right, have a good one.
Michael LeBlanc 35:45
We also, you know, had a great interview with David. And there'll be some links in the show notes with all those tools that he mentioned. So, we want to put that, put that out there. So, there'll be some links there. Now let's move on to the back half of the show. More, more breaking news. Let us pray for lettuce. What's going on with the, with the green leaf, the popular green lettuce? Seems like you're in trouble again.
Sylvain Charlebois 36:09
We're running out of lettuce in this country. Michael, are you? Are you sad? Are you crying? Are you sad?
Michael LeBlanc 36:15
I'm not actually but you know, that's probably why I should be eating more. But anyway, (crossover talk), I am afraid of you know what I am afraid of a little bit of lettuce in these things. Because there's so often, they're pulled back. Now, what I have confidence in is the groceries I shop from, and the process of how fast they're pulled off the shelf when there's even a hint of trouble. So, I'm not worried about it, I'm not worried about it. And we've talked about this on different shows, sometimes it's overkill, in a, not overkill, bad word in terms of (inaudible) a recall. But sometimes, you know, it may be one brand, not all brands that everything comes off the shelf. So, there's some wastage issues, some stuff. But anyway, what's going on with lettuce?
Sylvain Charlebois 36:54
Well, essentially, in the Salinas region in California, there was a virus affecting crops and, frankly, they had a really super dry October, which is something that is happening more and more often in California. I think we all know that. So, they have a few products to sell. They have less, less lettuce to trade and to sell to, to Canada, that's basically what's going on. So, on the food service side,
Michael LeBlanc 37:08
Sylvain Charlebois 37:09
You're seeing companies like Subway, for example, not offering lettuce, or they're reducing portions because they can't actually play around with menu prices. So, they're managing costs. On the retail side while you're seeing heads of lettuce at six, $7. And it's an, so they're just basically cranking prices up until we get to December when the Arizona cycle takes over. And so, this is, this is temporary. We are expecting to see plenty of lettuce for the holidays. But it is a bit of an annoying thing right now in November. There is a shortage. And it's funny because three years ago, nobody wanted to say the word shortage because people were scared of triggering some sort of panic. But nowadays, I think people are much more aware that these things do happen from time to time.
Michael LeBlanc 38:13
Well, (crossover talk) so, you know, we and we've talked about it before that part of the problem is as the water gets harder to find they bring it in from different places. Sometimes,
Sylvain Charlebois 38:19
Michael LeBlanc 38:20
That water has gone through a cattle field that brings E. coli,
Sylvain Charlebois 38:23
Michael LeBlanc 38:24
This is what's happening, right, (crossover talk),
Sylvain Charlebois 38:26
Remember a few years ago, during the holidays, there was a recall,
Michael LeBlanc 38:29
Sylvain Charlebois 28:31
A romaine lettuce recall. And they were brands that were not impacted by the recall, but nobody wanted to touch romaine lettuce. People just (inaudible) there were brands out of California. And people just didn't want to hear about brands, they just heard romaine lettuce and he's just walked away. It cost millions and millions of dollars in sales.
Michael LeBlanc 38:51
Yeah and lots of food waste. And it was,
Sylvain Charlebois 38:53
Michael LeBlanc 38:55
It was almost, it was almost, the end of the Romaine Empire, ba-dum, boom. Come on, you gotta like that one, come on, (crossover talk).
Sylvain Charlebois 38:59
Let's ro-, let's romaine calm. Let's romaine, calm.
Michael LeBlanc 39:03
All right. We're full of sound effects today. We're full of sound effects. Let's, let's wrap up a couple of quick things. Twitter, so you don't, you know, I noticed you don't have for someone of your caliber and your prominence you don't have a blue check, which sometimes are just assigned. There's an idea and we could spend a whole episode talking about Twitter, but we're not all about that. Would you ever pay for a blue check? Would you ever do that?
Sylvain Charlebois 29:26
No, (crossover talk).
Michael LeBlanc 29:27
Are you ever afraid of someone impersonating you though?
Sylvain Charlebois 39:31
Well, the rea-, the reason why I don't have a blue check is because my name on Twitter is The Food Professor not Sylvain Charlebois. So, they can't really veri-, they can't really verify my name.
Michael LeBlanc 39:44
I guess you could, now you could buy your way into it now. Would you, would you think about that. (Crossover talk), you must, you must think about impersonation. I mean, you know, somebody, (crossover talk),
Sylvain Charlebois 39:54
There are people out there, impersonating, there are trolls out there for sure. Every time I tweet something, there's always a couple of people just countering what I'm saying.
Michael LeBlanc 40:05
Sylvain Charlebois 40:06
For one reason or another. It does. I mean, if, if something that needs to be done with Twitter is to get rid of those bots. I mean, those bots are annoying. But the, but the verified thing is, to me is non-sequential. I don't see them as an important thing. Well, what about you?
Michael LeBlanc 40:27
Yeah, I'm, I'm not a public figure the way you are. So, I wouldn't, you know, I'm a hold and see. I'd love a blue check in the old world, you know, because it seems to elevate the status more than the validation. I don't think anybody's going to try and pretend to be me. I can barely be me, some days. So, you know, wait and see. And then, you know, Twitter and Elon, you know, that's a whole other topic. So, it's fine,
Sylvain Charlebois 40:50
So, we had David on from Google and we heard what's going on with Twitter and layoffs. And, and we're hearing from, from Meta as well, that we're expecting some major layoffs. I mean, that whole space is, is going to be redefined I think, over the next couple of years and,
Michael LeBlanc 41:09
Good for the grocers. You know why it's good for the grocers.
Sylvain Charlebois 41:14
Michael LeBlanc 41:15
Because, because there's a lot of talent out there that is being funded by VC firms, by very rich firms that are being cut loose that will find a wonderful home in the IT shops of groceries who, like they, have a hard time hiring people.
Sylvain Charlebois 41:22
So, that's a very good point actually.
Michael LeBlanc 41:25
Give and take here, right? All these VC firms that are laying off their releasing people. You and I both know there are 1000s of jobs in IT, in the food business unfilled and,
Sylvain Charlebois 41:41
That's a good point. Yeah, some re-calibrate some, from some digital know how basically flowing into the grocery business,
Michael LeBlanc 41:46
Sylvain Charlebois 41:48
The food business will be, will be very good, yeah.
Michael LeBlanc 41:53
They could be better off, could be better off.
Sylvain Charlebois 41:57
Michael LeBlanc 41:58
Let's see, I'm bringing it home. I got a couple of other quick issues. So, the Michelin Guide, I want to do the actual whole episode on this. In early next year, the Michelin Guide comes to Canada, it comes to Toronto and Vancouver. Now we've had guests on the show, Cory Mintz, who's not a fan of the Michelin Guide. It is actually somewhat controversial about what and how an impact it has on the resta-, restaurant industry. Cities attract, you know, the city has spent a lot of money to attract Michelin. (
Sylvain Charlebois 42:14
Michael LeBlanc 42:15
Cory has said, I don't want to put words in his mouth, because he's so articulate about this, that to get there. Sometimes there's too much bad stuff that happens behind the scenes to get a restaurant to that level with (inaudible) and all that stuff. What do you think, (crossover talk),
Sylvain Charlebois 42:33
I can see that, yeah,
Michael LeBlanc 42:33
What do you think should we get, should we do an episode (crossover talk)?
Sylvain Charlebois 42:37
As you know, I was in Muskoka a couple of weeks ago, talking about the Ontario Tourism Association and it came up. I mean, they (crossover talk) they see that. They see it as a plus. A definite plus, so perhaps, and I actually didn't meet the person behind the campaign to get Michelin into Toronto. So, I think it would be good. It'll be a good guest for our show. For sure. Yeah.
Michael LeBlanc 43:03
Interesting. And we've actually got a Michelin chef coming up. A Michelin starred chef from Ireland coming up in, in the new year, JP McMahon, who's the Irish Ambassador and wonderful, you know, a renaissance man. You're going to love; I've met him a couple of times. You're going to love talking with them? He just got his PhD. (Inaudible). You know, his restaurant closed over COVID. So, he went and did it and finished his PhD in philosophy and like he is a cool cat, (crossover talk) and an amazing chef.
Sylvain Charlebois 43:27
Michelin essentially is good for tourism, (crossover talk),
Michael LeBlanc 43:31
Yeah, I want to ask him, maybe we should set up some kind of a debate you know, some, some kind of debate about good, because there's two schools of thought. So,
Sylvain Charlebois 43:38
We should have debates; we should have debates on our show. That's (crossover talk), a good idea.
Michael LeBlanc 43:42
I think we should do, (crossover talk), we'll call it.
Sylvain Charlebois 43:44
We'll agree too much, you and I. That's the problem.
Michael LeBlanc 43:47
We'll call it the Food Fight Club. How about that? We'll talk about that.
Sylvain Charlebois 43:52
Some virtual jello.
Michael LeBlanc 43:53
A Quick one at the end. The beer market and the bespoke beer market in Ontario is not so frothy. I know you spoke I believe at the, at the Beer Association, not too long ago. We're seeing some real consolidation happening. You know, one of my favorite breweries, Amsterdam, was just sold to a Dutch brewery. There's been some consolidation, Steam Whistle bought up Beau's and there's another couple of ones, a couple of things happening. Muskoka, I think got sold. So, there's some consolidation, and it feels like, and you would know. I wanted to get your opinion, it feels like a lot of bespoke beer companies started and two things happened. One, there's 1000s of bespoke beers, like almost too many. And two, of course, you know, there's less draft beer being consumed. And because there's, you know, restaurants are still not back up to speed.
Sylvain Charlebois 44:38
MIchael LeBlanc 44:39
What do you think about from what you know, what do you think about the beer market in general? Are you, are you concerned about availability, or you just think it's a natural settlement of, of pushing, a push and pull in capitalism?
Sylvain Charlebois 44:51
Well things are in flux. They aren't great to be honest, sales are down compared to a few years ago, which would explain some of the consolidation going on. But frankly, it was an industry in many provinces. Provinces actually did subsidize many of the micro-breweries. So, there's, I think there's oversupply to be honest.
Michael LeBlanc 45:03
Sylvain Charlebois 45:04
So, I think we're I mean the industry is just going through a normal cycle right now. And the market for beer drinking outside the home is not great and, and, and that market was big. You know, you got people into bars to watch hockey games and football games. There aren't as many people as before. So, the beer market is impacted by that for sure.
Michael LeBlanc 45:40
Well let's think of our, let's think of our I love the bespoke, bespoke and I keep saying that word. But I love the draft breweries. I drink it all the time and maybe let's hope for a little up draft during, during the World Cup. Because the World Cup is coming up real soon.
Sylvain Charlebois 45:52
Coming up, yeah.
Michael LeBlanc 45:55
It tends to increase. beverage consumption it gets, people get together to I don't know four o'clock in the morning or three o'clock in the morning to watch these games, (crossover talk),
Sylvain Charlebois 46:04
Yeah, my goodness, (crossover talk), crazy. Anyway, well
Michael LeBlanc 46:06
Anyway, well listen, it's a great episode. Let's leave it there. I'm looking forward to seeing you in-person. If you're listening to this episode on Thursday, you'll, if you're still trying to get tickets for the Canadian Coffee Association Conference. If you're into coffee.
Sylvain Charlebois 46:25
That's a great crowd, (crossover talk).
Michael LeBlanc 46:29
It's a great crowd and we'll have lots of great episodes and bonus content coming out of there. So, but that doesn't mean don't go because you get to see these people live. So, we'll be there together. So, I'm looking forward to that. And if you're listening to this podcast, you're probably listening on your favorite podcasting platform. Be sure and tell your friends and colleagues in the grocery, food service and restaurant business. I'm Michael LeBlanc, Growth Consultant, podcaster, food, (crossover talk) chef on YouTube or whatever that means. And you are?
Sylvain Charlebois 46:52
I'm The Food Professor, Sylvain Charlebois.
Michael LeBlanc 46:55
Sylvain I will look forward to seeing you real soon and we'll be together. In, back on in two weeks with our normal episode. So, I look forward to seeing you there. Have a great rest of your day.
Sylvain Charlebois 47:00
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