In this episode war comes to the Ukraine and Sylvain and I discuss the global implications on the food system and supply chain of Europe's bread basket under attack, Lays versus Loblaws, and Trying Stuff featuring Viveau.
In this episode war comes to the Ukraine and Sylvain and I discuss the global implications on the food system and supply chain of Europe's bread basket under attack. Check out this article Sylvain wrote and published.
Next, we Lay(s) our chips on the table and talk about the high stakes negotiations happening between Lays Potato Chips and Loblaws.
Our Trying Stuff segment features viv eau real fruit flavoured sparking water from Nova Scotia.
Last but not least on this solo episode, we discuss the choices and the path forward for restaurants across Canada.
About Us
Dr. Sylvain Charlebois
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 adventure for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:05
Welcome to The Food Professor podcast episode 44. I'm Michael LeBlanc,
Sylvain Charlebois 00:10
And I'm Sylvain Charlebois.
Michael LeBlanc 00:12
Well Sylvain let me just take a bit of a snack here. I'm going to have a few Lay’s.
Sylvain Charlebois 00:18
Yes, I, I should have actually brought my own Lay's or Ruffles, Ruffles are my favorite.
Michael LeBlanc 00:23
Well, a few Lay's potato chips, our Trying Stuff segment is viv eau,
Sylvain Charlebois 00:29
(crossover talk) viv eau, from Halifax, yes.
Michael LeBlanc 00:33
A lightly sparkled and we got lots of flavours here we'll talk about in great detail. I'm very keen to have a drink. It's a lightly, a light, sparkling mineral water infused with real fruit. Great Canadian companies as you say, out of Halifax.
Sylvain Charlebois 00:46
No, no labs were involved in this. No rats were sacrificed.
Michael LeBlanc 00:51
You know, it's, it's funny when, when, when the founder Ted Grant sent these too, so thanks, Ted.
Sylvain Charlebois 00:55
Yeah,
Michael LeBlanc 00:56
He, he said, you know, I apologize for the label. It's still plastic. I mean, he's very committed to making an all-natural product. So, -
Sylvain Charlebois 01:03
Absolutely, yeah.
Michael LeBlanc 01:04
It's great packaging, you can see some of it, but anyway, we'll get, we'll get to Trying Stuff.
You know, on a more somber note, we should probably start with what is on most of our minds these days. The, the war in the Ukraine. Now, of course, we're not a political podcast, you have a unique perspective as, as a former military person. You probably studied tactics and strategies and battlefield histories. Of course, for our podcast, I wanted to hone in on, not the geopolitical implications, though they're never far from our minds.
Michael LeBlanc 01:33
Talk about your early thoughts around the implications of what's happening today on global food systems and, of course, implications back here, back home here in Canada. I, you wrote a great article I was reading it, it had some highlights around things about some big percentage numbers that would love for you to share those about what Ukraine, Russia, you know, fertilizer impact, I mean, supply chain, I mean, so let's get into it. So, what how are you thinking, in these early days, about the implications of the Ukraine war?
Sylvain Charlebois 02:06
Well, it, it reminded me of my days, when I was an officer at RMC, back in the 80's. I actually was in the service when the Berlin Wall fell in 89. And at the time, we were basically trying to figure out what it meant to, to NATO to the whole world, really, and democracy in general. And in, in our Russian studies, I mean, the, the one thing that, that stood out, while we were, you know, studying, the approach of the Bloc, and everything else was the element of surprise.
We often have learned over the of, over during history, when you look at the history of mankind, wars often start with, with an element of surprise. And the rationale is basically hidden a little bit. And, so Russia has positioned itself as being the victim as much as the Ukraine. But I think we all know what's happening with social media today with how media works, it's much more, it's much harder to, to present a, a false narrative, compared to say, 1939 when Adolf Hitler decided to invade Poland. For a long time, actually, people felt, thought that it was the other way around. Poland actually invaded or provoked Germany.
Michael LeBlanc 03:31
Listen, I think the Russians have been, have been working on this for five years. You mentioned social media, (crossover talk)
Sylvain Charlebois 03:37
Absolutely, and there is a reason why President Putin is moving now, I mean, I, I don't think people have talked a lot about that. But I mean, there's, there is, there is a, a-a world order that is, that is, that has been weakened, somewhat. And I must say that part of the blame has to fall on the White House. I mean, the White House left Afghanistan, it doesn't seem to be, doesn't seem to want to be as influential than say, under Trump, for example, on the world scale. And I think, I think that, that, that the Russians saw a window of opportunity here to move and,
Michael LeBlanc 04:21
Or crafted or crafted a window of opportunity.
Sylvain Charlebois 04:23
Oh, absolutely. And, and the Ukraine, of course, for Russia, they felt that Ukraine has always been part of Russia and the, the embarrassment that they had to go through when the Bloc fell is something that really has fueled their motivation to do something about it. And when it comes to food, I must say, when you understand Europe and Europe, by the way, is a super complicated place.
Michael LeBlanc 04:24
Yeah.
Sylvain Charlebois 04:25
It's I mean people think that Canada's complicated. My God, when you live in, in, in Europe and I did in Austria, -
Michael LeBlanc 04:51
As you have.
Sylvain Charlebois 04:56
Yeah, it, it's just so complicated and, but when you look at that part, that region with Ukraine and Belarus and obviously Russia, there's a lot, a lot goes on there from an Agri-food perspective. I mean, Ukraine is ninth in the world when it comes to, to wheat exports. When you actually combine Russia, it's 25% of, of corn exports. And, already, early on, you saw, that futures were way up a bushel of wheat is now over $10 US. Can you imagine? It hasn't been, hasn't gone over $10 US since 20-, 2008, during the financial crisis, and so the barrel of oil is over 110 US dollars now.
Sylvain Charlebois 05:45
So, you can see that there's, there's a human induced commodity supercycle going on right now. And that's impacting the entire, entire world. And let's not forget, Belarus, along with the Ukraine, they produce a lot of fertilizers. And, when prices are up, farmer, farmers want to make more, they want to increase yields, and you do it with fertilizers. But fertilizers are super expensive, right now. They were expensive even before the conflict, now they're going to become more expensive. And I suspect that a lot of farmers will just, you know, not use fertilizers and agricultural output in Canada and elsewhere could be impacted.
Michael LeBlanc 06:24
That's a big statement, it's not what I thought you would say, because as I think, you know, globally around supply and let's say, you know, Russia begins to supply, who are they going to sell their product to now given sanction? That would be China, and China's, you know, a huge consumer of, of corn for, for their population and for their feed. So, is, is there not that sense that the rest of the world makes up for the production in the fr-, let's call it the free world that Russia is not producing?
Sylvain Charlebois 06:53
I, I actually because, Ukraine was, was invaded, I actually do see the rise of a new world order. I think we spoke on this podcast before that, that this is China's year. They're, they're going to be electing quote unquote, their president, President Jinping for a third mandate five years, and they've already made some bold statements.
And, and Russia cannot be influential globally, without the support of China. And, and, make no mistake, Michael, I know there's, there's, there's a lot out there diplomatically. China is staying away from the conflict and that and that's, that's China's style not to intervene, with other, other nation’s affairs. But economically, Russia and China are just one. I mean, essentially, when you look at the numbers, when you look at investments into China, and vice versa, they are one. So they will support each other economically. And, if you want to become influential around the world, and disrupt markets, one way to do it is, is, is with the Agri-food sector, and they can do it, they have a lot of power.
Michael LeBlanc 08:05
So, you see, you don't see a world so to speak in these early days where production of all these other commodities shifts to other places, oil and gas, but also food, food production. You talked about fertilizer. I mean, Saskatchewan is a great creator of potash and fertilizer does this, -
Sylvain Charlebois 08:21
Yeah.
Michael LeBlanc 08:22
Start to rewire how we think about producing food? I mean, for all the countries that will no longer buy potentially Ukrainian or Russian food, it creates a gap. I don't want to say an opportunity, but it does create a gap, no, for Canadian exporters.
Sylvain Charlebois 08:38
Oh, absolutely. You look at the Nutrien stocks this morning, they're skyrocketing. I mean, the, the, potash game potash is going to become very expensive,
Michael LeBlanc 08:46
Right.
Sylvain Charlebois 08:47
Canpotex, which is our potash sort of single desks model, is going to make a lot of money and make no mistake, because there's, there's, there's two regions of the world where fertilizers are, are important. Belarus, Ukraine and us, essentially. So, we'll benefit because the free world will want to do business with us.
But prices are going to go up for farmers regardless. I mean, potash you're looking at so, the record for potash for example, which comes out of Saskatchewan is $800 US a ton. I think we're going to get there this year again. And what happened 15 years ago when it did go to $800, nobody bought potash because it was too expensive, and then it went down again. And, and all, all of these contracts are private. It's not like weed where it's negotiated on wall markets, potash, you're looking at private contracts.
So, I, I'm just, I'm just hoping that production will increase to basically try to offset what's actually happening in Ukraine and Belarus and, and so companies like Nutrien can actually provide more affordable fertilizers for farmers around the world.
Michael LeBlanc 10:00
Well, I mean, and we may see more government intervention or more government action in the sector that, that helps to mitigate some of this for Canadian farmers to produce output. As, is there precedent for that? Where they say, well, -
Sylvain Charlebois 10:13
Oh yeah.
Michael LeBlanc 10:14
we might export at this price, but Canadian farmers price for buying fertilizer is capped, because we're making it here is, is do you see that happening?
Sylvain Charlebois 10:21
Oh, absolutely. And let's, let's not forget about the, -
Michael LeBlanc 10:24
A positive thing, though, in that context isn't it?
Sylvain Charlebois 10:26
Oh, it is, a-absolutely, I, I think there's an opportunity there for sure. But I mean, I'm trying to, I'm always try to find a positive spin out of anything. And this one really is disappointing, and it's really hard to see any positive. Because as you know, Michael, the Agri-food sector was already reeling dealing with some problems with supply chains and, and commodity prices. This conflict with, with, with Russia, and Ukraine is, is likely happening at the worst time, really, for the Agri-food sector. And I think everyone knows it.
Michael LeBlanc 11:02
Yeah, I'd say it makes a complex supply chain even more complex, you know, you there's no fly out, I don't think we import a ton of food, for example, as a nation from, to food from, from Russia, or, or Ukraine, but it makes the global supply chain just very, very, very, much more complicated.
Sylvain Charlebois 11:17
Well, look at the Middle East, because of the situation, the, the, the blockage in the, in the Black Sea, I actually think that the Middle East is in trouble. Food access is going to be a problem for the Middle East. So, this is not about just Europe, or a Russia-Ukrainian thing. I actually see Ukraine as being the protector of, of democracy for the Western world. If, I mean, we're in 2022, how can we possibly allow a country to take over another country without, without any resistance? I actually don't think that anybody starting with the United States took Vladimir Putin seriously. And, and that's really dangerous and, and, and President Putin knew that.
Michael LeBlanc 11:37
Yeah.
Sylvain Charlebois 12:00
And so, it's a bit embarrassing, to be honest. And, of course -
Michael LeBlanc 12:05
Well, I think he architected it, again, not a political podcast, but I think it's been five years of non-stop use of things like the social media platforms. I'll give you an example. Mysteriously, all the hashtag, you know, Trudeau failed, Trudeau has suddenly stopped trending when Twitter shut down the Russian trolls. And maybe it's a random happening, but I think this has been a very, very long run plan.
Sylvain Charlebois 12:35
Probably. It's funny, because a few, a couple of weeks ago, we had many Canadians calling Trudeau a tyrant.
Michael LeBlanc 12:42
(crossover talk) You don't see that hashtag anymore, right? You-, you're like, I anyway.
Sylvain Charlebois 12:46
(crossover talk) Well, that's and I, I, and, frankly, when I lived in Saskatchewan with my family that we were surrounded by Ukrainian friends. As you know, we populated the west with Ukrainians.
Michael LeBlanc 12:58
Yeah.
Sylvain Charlebois 12:59
We gave away land, and they made a wonderful, they did a wonderful job, creating wealth for our Agri-food sector. And so, I, we, our thoughts and prayers are with the Ukrainians right now for sure.
Michael LeBlanc 13:10
And our, and of course, our great Deputy Prime Minister, Mrs. Freeland.
Sylvain Charlebois 13:14
That's correct.
Michael LeBlanc 13:15
Such an important role that she has and might have, as well, in the future.
So, la-, last question on this, and then we'll kind of move on, you know, I, I guess at this time of the year, you start thinking about your modeling for the Canada's Food Price Report. I guess this is another input into the algorithms, right? I, you know, history is still being written. But I guess that's present of your mind, because that'll start, as you said, (crossover talk), -
Sylvain Charlebois 13:39
Yeah, we're, we're still at 7%. But let me tell you, I mean, we're, we're starting to think about, you know, beyond 7%. So, it, it's going to be a hard year for sure and let's hope and to be honest, I, I actually think that the governments will have to start thinking about wages and food affordability. I mean, this is going to be a really big problem for many, many Canadians, unfortunately. And so, this is happening elsewhere around the world. But it's going impact many, many Canadian families, unfortunately.
Michael LeBlanc 14:13
Yeah, well, Bank of Canada raised their rate today, a few basis points trying to rein in inflation. I actually had the opportunity to interview for The Voice of Retail podcast, former Governor of the Bank of Canada, -
Sylvain Charlebois 14:14
Stephen Poloz, yeah? (crossover talk) How did a-, did you enjoy it?
Michael LeBlanc 14:25
Yeah, very much. I mean, if you're going to interview gentlemen like that, you got to kind of, up your game in terms of you know, they, you, you need to kind of match their intellectual curiosity, or they get pretty bored pretty quick. But, -
Sylvain Charlebois 14:33
Exactly.
Michael LeBlanc 14:37
You know, he shared my assumption for the economy. And I guess this the glass half full, is that there's a lot of dry powder in the Canadian economy with a record savings rate from Canadians. And he agrees that, you know, on the surface of things, not withstanding, whatever, that there's enough power in the economy to push through, not equally for everyone. I think we just got to be as you said, careful not to leave a lot of people behind as food prices go up and what goes in the gas tank goes up and all those things.
Sylvain Charlebois 15:03
Yeah, but tomorrow, I mean, it's going to be a bit of a wash in terms of the impact on our economy because tomorrow as you know, the Fed will make an announcement. Everyone expects the Fed to move up,
Michael LeBlanc 15:15
Yeah.
Sylvain Charlebois 15:16
As well, -
Michael LeBlanc 15:17
Interesting, well and, and not the last time we're going to talk about this as, as events unfold.
Let's, let's move into Canada. Let's talk about, let's put all our, let's put all our chips on the table (crossover talk) there, (inaudible) Charlebois, -
Sylvain Charlebois 15:30
Yeah.
Michael LeBlanc 15:31
You know what, just for the listeners, I don't know who may not have noticed. I can't imagine there's too many listening to this podcast, but Lay's Potato Chips, Pepsi, PepsiCo have elected to no longer ship to Loblaws, biggest grocer in the country. We had Cara Keating on as one of our early guests.
Sylvain Charlebois 15:49
Yes, we have,
Michael LeBlanc 15:50
Who is a, you know, a super smart executive. I do think it is a test trial balloon for our global thing. I mean, the fact that grocers are pressuring, and or maybe not accepting price increases is not a phenomenon limited to Canada, maybe this is a test balloon. We would know, you would know, that any decision of this magnitude would be taken and approved by the most senior levels of the global PepsiCo company.
Sylvain Charlebois 16:17
Oh, my goodness, absolutely, yeah, of course. (crossover talk)
Michael LeBlanc 16:18
This is, this is not a, regional division saying, hey, I'm just going to you know, it has big ramifications, (crossover talk),-
Sylvain Charlebois 16:24
Cut ties with my biggest customer.
Michael LeBlanc 16:27
Right, but you know, which is, you know, it's fascinating. So, share your thoughts about how you're viewing it. You've been quite, quite articulate and quite vocal about your perspective. So, share those,-
Sylvain Charlebois 16:37
First of all, I did wonder why the story got a lot of traction, to be honest. And how it came out, I mean, I, I was hearing rumblings about stop sales, -
Michael LeBlanc 16:48
Yeah.
Sylvain Charlebois 16:49
In the industry for months now. I mean, because of the inflation situation. I mean, it's putting just a lot of people don't, or can't, appreciate how much pressure the industry is, is under as a result of this. (crossover talk), -
Michael LeBlanc 17:03
Is it a coincidence that the Code of Conduct negotiations are coming to a deadline?
Sylvain Charlebois 17:07
I, I, I think there's a, there's a lot of that going on, too. I mean, we were supposed to hear about it in December, it got delayed. And so, I suspect there's, there's some of that. I mean, we wanted I think someone wanted to send a clear message to Ottawa saying, this is something we need, we need a place, a safe place to go to resolve these issues. Because, I mean, the last thing everyone wouldn’t want to see are things like what we saw last week between Frito-Lay and Loblaws, a public feud, empty shelves, I mean, it's just not good for business on, on both sides.
Michael LeBlanc 17:43
I mean it, it worked out pretty good for Peter Neal and his business, you know, (crossover talk) a lot of chip companies and private label.
Sylvain Charlebois 17:50
And (crossover talk) I don't think that Loblaws is going to lose sleep either. I mean, it's, it is going to be occupying its shelves with other products, including their own President's Choice, and No Name, -
Michael LeBlanc 17:53
Sure. I mean, you saw a lot of,
Sylvain Charlebois 18:01
You're seeing a lot of yellow and white in the chip section these days. So, I, I, I must say, I mean, right now, I'm, I'm quite concerned about, about the situation because this is not about chips. As you know, Michael, this is not just about chips, this is not just about multinationals. This is about Canadian owned businesses, family-owned businesses, smaller, much smaller than Frito-Lay, who are also having a hard time negotiating and, and protecting their margins as much as possible. So, what, what I mean, you're, you're often on the other side, of course, with retailers and I actually do appreciate, you know, we had Diane Brisebois on our show. And, and you work also with RCC, and I, I, and I truly respect RCC’s perspective on this. And so, and, and you are a retail expert so I would certainly would want to get your thoughts.
Michael LeBlanc 18:57
I mean, this is a very extreme step for any,
Sylvain Charlebois 19:00
It's, it's crazy, it's gutsy,
Michael LeBlanc 19:01
Well, it, it there's, you know, it is gutsy, and it is also, you know, listen, retailers of that size and scope of the Loblaws have no, in no, no, you know, no perspective other than what I can see from the outside, they have people who break down costs and say we're going to accept this cost, not that cost. I've been on those negotiations, I've been on both sides of those negotiations, both as a vendor and as a retailer. And you know, it's funny when I looked at the empty shelf, there's lots of these pictures that were posted of empty shelves at Loblaws, I thought, my God they have a big share of that shelf. How does anybody even crack that code? Like, suddenly the shelves are empty, I'm like, that's all one company? But it creates opportunity and it, you know, -
Sylvain Charlebois 19:40
Yeah.
Michael LeBlanc 19:41
For this whole entrepreneur who would you know, have a great deal of difficulty breaking into that category with such an entrenched powerful global company creates opportunities. So, (crossover talk),
Sylvain Charlebois 19:50
I, I just hope it will, it will move the needle on the on the Code discussion, because I, I actually think that Frito-Lay is, is going to lose. I mean, it's, it's going to be bad for Frito-Lay I think it's going to, to, to basically forfeit its, its connection with Loblaw, the number one grocer in the country is, (crossover talk),
Michael LeBlanc 20:12
But it sends a signal to Kroger's and everyone else that they deal with around the world that they, (crossover talk), -
Sylvain Charlebois 20:16
Exactly.
Michael LeBlanc 20:17
Around their price increases, right? So, -
Sylvain Charlebois 20:18
Yeah, absolutely. So, they, they you're I think you're absolutely right that Canada is a case study in this globally for PepsiCo and, and PepsiCo America supports, supports PepsiCo Canada, for sure. And, so let's, let's hope that this was something positive will come out of this so, (inaudible) And you're right, it, it will open up opportunities for other smaller players in the chip section for sure. And, and like many companies, all of these companies are Canadian owned, Canadian managed and, (crossover talk), -
Michael LeBlanc 20:49
And, and we say about Frito-Lay to make because we, we talked to Cara, the, the potatoes are grown here, they're made here, so they import Canadian. So, I would say last, I'd say in this is there is precedent for this. So, if you cast your mind back a couple of years in a slightly different sector, Walmart got into a fight with Visa and said no more Visa cards in Walmart.
Sylvain Charlebois 21:06
Yeah.
Michael LeBlanc 21:07
And that lasted for quite a while. But, then eventually they reconciled, and now you can pay with your Visa again in Walmart.
Sylvain Charlebois 21:11
That's right.
Michael LeBlanc 21:12
There is precedent for these kind of high stakes negotiations when you know, like-minded people disagree fundamentally and decide. The question is, you know, do we need to Code for that? That is the question on the table, right. So,-
Sylvain Charlebois 21:27
The oth-, the other thing from a, from a public perspective, I think it confused a lot of people. Because, you know, they say well, so other, other retailers will be selling Frito-Lay chips, and am I not, am I, am I going to stop going to Loblaws? Because it's, -
Michael LeBlanc 21:45
Yeah. How important is that category? I mean, that's, that's, you know, that is such an important question, right? At the end of the day, is the category so important with the brand that people will make a decision about where they shop differently?
Sylvain Charlebois 21:56
Exactly. And of course, they did decide to do it right after the Super Bowl, which was a huge, -
Michael LeBlanc 22:00
Right, right,
Sylvain Charlebois 22:03
Lucrative weekend for PepsiCo. (crossover talk), -
Michael LeBlanc 22:05
It wasn't a coinc-, it wasn't a coincidence you know, -
Sylvain Charlebois 22:07
Yeah.
Michael LeBlanc 22:08
After let's all get that sales, and then we cut it anyway. Let's keep a close eye on it. There's all kinds of ranges of a, of opinions and let's keep a close eye on that one.
Now, one element of that, and I want to, we'll talk about this for a second then we'll get to our Trying Stuff segment is the Go Direct idea, right? This the, the brands can then okay, so if I lose my distribution, I'm going to Go Direct. Many of these companies including Viv eau sell direct, I say you and I got, we exchanged a few Twitter messages, you know, what if what if Frito-Lay goes direct? And I said never, never, never, never ever will they be successful at that. And your, my point is you're starting to see a lot of these digital native vertical brands trying, (crossover talk), -
Sylvain Charlebois 22:46
You're, you're saying never, right?
Michael LeBlanc 22:48
Never. Not, never,
Sylvain Charlebois 22:49
I, I would, I would believe you. I'm, I'm just throwing out a hypothesis here.
Michael LeBlanc 22:55
Yeah. I think there are some instan-,
Sylvain Charlebois 22:57
It's, it's, it's, it's a tough pivot, absolutely.
Michael LeBlanc 23:01
It's tough. The unit economics don't work. We're starting to see that on all these underwater digital native brands. I'll give you an example. Allbirds, which is a shoe company, very, you know, very, you know, just did an IPO for millions. They, they basically said, ‘Uncle’ and they signed a deal to go into 500 Kroger's or not Kroger's, but Kohl’s in the States, right? It’s what we call traditional wholesale, I think the magic is and this is for anyone listening who's in the food business, the magic is figuring out both, right? How do you do one plus one equals three? How do you take market share? How do you both sell direct to consumers who are passionate about your product and get nice wide distribution? And you know, everybody wins. So, I mean, that's that, the secret sauce, the magic, right? So, we're going to have the president of Dainty, which is a great rice, Canadian rice company, is going to be one of our guests. And, on their site, they've got a very fulsome offering,
Sylvain Charlebois 23:51
They do.
Michael LeBlanc 23:52
Of their product, but at the same time, a very fulsome offering of other types of their product around so that's the,
Sylvain Charlebois 23:56
They sell rice cookers.
Michael LeBlanc 23:58
I looked at that rice cooker, it was so cool. It was a very cool rice cooker. I had no idea I, I ordered some by the way, (crossover talk).
Sylvain Charlebois 24:05
The unfortunate thing about this debate is that we both agree, that's the problem. I, I, I'm an academic. I'm allowed to, you know, send out weather balloons here and there and provoke conversations about all sorts of things that don't exist.
Michael LeBlanc 24:20
Such and it's such a valuable discourse, right? I mean, it's a wonderful opportunity to just talk these things out and, and have a great discourse, right? Different people.
Sylvain Charlebois 24:29
Exactly.
Michael LeBlanc 24:30
(inaudible) thought it was, thought it was a great discourse. All right,
Sylvain Charlebois 24:32
But I, but I think Frito-Lay in the, at the end of the day Frito-Lay needs Loblaw and vice-versa. I mean, that's basically it. Yeah.
Michael LeBlanc 24:37
Yeah, well, we'll see, what see what happens. And no doubt they're both listening. So, good luck to you both.
Sylvain Charlebois 24:43
Yes, absolutely.
Michael LeBlanc 24:45
All right. Well, let's get to our Trying Stuff segment. All right. This is our Trying Stuff segment, and this is Viv eau. Am I pronouncing that right? Viv eau?
Sylvain Charlebois 24:54
Viv eau, Viv eau yes, (crossover talk), -
Michael LeBlanc 24:59
Ted, Viv eau was very generous. They gave us four flavors to try. Here's the packaging, which is just wonderful packaging.
Sylvain Charlebois 25:03
That's right. Yeah, and,
Michael LeBlanc 25:05
(crossover talk) wonderful four pack, four pack.
Sylvain Charlebois 25:07
Oh yeah, very lovely and we got beautiful boxes from Ted. And by the way, Ted Grant is full of energy. I've actually had lunch with him a couple of times in Halifax, full of energy, true entrepreneur, -
Michael LeBlanc 25:19
Yeah.
Sylvain Charlebois 25:20
And, he is a firm believer in sustainability and, and, and, and this product shows his commitment to sustainability for sure.
Michael LeBlanc 25:29
Well let's a, let's try. See what his, his commitment is to, (crossover talk)
Sylvain Charlebois 25:31
Which one are you trying first?
Michael LeBlanc 25:33
I'm going to try the blueberry one. It's been on my shelf the longest so I'm going to crack open, (crossover talk)
Sylvain Charlebois 25:36
I'm going to try the Pressed Tart Cherries.
Michael LeBlanc 25:40
Cheers, cheers to that.
Sylvain Charlebois 25:42
Cheers, cheers to Eau, Viv eau.
Michael LeBlanc 25:44
Oh, that's really nice. Like it's a, bright, what do you think?
Sylvain Charlebois 25:50
Oh, wow. Well, Pressed Tart Cherries. It's not overpowering, just really if you're thirsty, it's a small can you'll get, it will get rid of your thirst.
Michael LeBlanc 26:02
This is delicious.
Sylvain Charlebois 26:03
Yeah.
Michael LeBlanc 26:04
All right. That's (crossover talk)
Sylvain Charlebois 26:04
Very natural. I mean you can taste the, the, the natural aspect of the product.
Michael LeBlanc 26:09
Yeah, you know, you don't have that, that aftertaste you know that you sometimes get that,
Sylvain Charlebois 26:14
I know. I know. Some, some of the products out there they, they have so-, all sorts of unnatural ingredients you have no idea what you're drinking but this is absolutely very natural, it's 35 calories per can.
Michael LeBlanc 26:28
Yeah.
Sylvain Charlebois 26:29
And a, it's, it's, it's all natural.
Michael LeBlanc 26:33
It's made from real pressed wild berries,
Sylvain Charlebois 26:35
Carbon natural mineral water, non-alcoholic cherry cider, and non-alcoholic apple cider. And that's it. That is it.
Michael LeBlanc 26:43
All right, I'm going to try the Ripe Strawberry.
Sylvain Charlebois 26:47
I'm going to try the Pressed Crisp Apples.
Michael LeBlanc 26:50
Mmm, delicious. Boy, this is really good, and I do have to say you did mention the, the word alcohol. This would be a wonderful mixer.
Sylvain Charlebois 27:00
I was actually thinking of the same thing. You could actually, where's my vodka? We, actually we've had vodka on this show before. So, yeah, this is a good mixer so,
Michael LeBlanc 27:12
Gin, gin on, on the show before we had our gin, but we'd love some vodka, you know if anyone (inaudible), -
Sylvain Charlebois 27:17
So, for Eau, Viv eau Pressed Crisp Apples, two ingredients. That's it. It's so carbonated natural mineral water, non-alcoholic apple cider.
Michael LeBlanc 27:27
Talk about, let's talk about the ca-, talk about a tough category, so to speak, to break into.
Sylvain Charlebois 27:32
Yeah.
Michael LeBlanc 27:33
I mean, the beverage category is, you know, not unlike the chip category. There's, there's some very, very, very, very big players. What do you think the chances are of a product like this making it? Is this, I mean it used to be I, you know, it my sense is, 20 years ago, this would be I want to say relegated to health food stores, which was,
Sylvain Charlebois 27:42
Yeah.
Michael LeBlanc 27:53
Would of been a shame. But now, you know, health food stores and health food grocery stores are getting smaller, going away, because it's such a big category in mainstream stores. So, I feel like it's the timing is good for Ted and, and putting a product like this out, yeah?
Sylvain Charlebois 28:07
So, he's, so he's selling direct, I, I think for the simplest reason that it is competitive. And, and actually, you know, I've mentored startups in the beverage sector in the past, and they've all ended up on Facebook selling direct, only to be listed after. So, companies like Sobey's would notice them on Facebook and they do get a lot of traction because they're selling something unique, something different, which is, -
Michael LeBlanc 28:08
Everybody's looking for it.
Sylvain Charlebois 28:14
Exactly what viv eau does, right?
Michael LeBlanc 28:19
Looking for something different, right? Something different, -
Sylvain Charlebois 28:26
And a, so once, once you actually see a nice product, you give a call to the company. So, listen, I'd like to carry your product for a while. That's how it goes, and, and that's how these companies do well. But you're right, Michael, this is a highly, highly competitive environment for sure.
Michael LeBlanc 28:56
Well, good luck to Ted. I mean, it's a really wonderful product. I'll put a link in the show notes. You can buy it direct, and it's also distributed in a number of different places. They'll ship you in the wonderful case and again, he's got apples, tart cherry, blueberry. What's your favourite? Have you tried them all?
Sylvain Charlebois 29:13
So, so far, I'm just going to try another one if I, if you don't mind?
Michael LeBlanc 29:16
No, no, I'm (inaudible) going to
Sylvain Charlebois 29:17
The blueberry one, which is the one that you tried first.
Michael LeBlanc 29:20
I'm going to try the apple. I haven't done that one yet.
Sylvain Charlebois 29:23
You tried the blueberry one, right?
Michael LeBlanc 29:24
Yes.
Sylvain Charlebois 29:25
Did you taste the blueberry?
Michael LeBlanc 29:26
A little bit, subtle.
Sylvain Charlebois 29:28
A little, yeah. But I think the apple one is my favourite. You actually taste apple, like the apple (crossover talk) is poppy, (crossover talk)
Michael LeBlanc 29:36
It's very apple (crossover talk), yeah.
Sylvain Charlebois 29:37
The blueberry is a little bit more modest. The taste you, you don't taste the blueberry as much but,-
Michael LeBlanc 29:43
Now, -
Sylvain Charlebois 29:44
Good.
Michael LeBlanc 29:45
To be fair, you've, you've had I think there's a bit of a difference because I started with blueberry. If you would have started with blueberry, (crossover talk), your palette may have been a bit clean?
Sylvain Charlebois 29:51
Maybe? Yeah, maybe.
Michael LeBlanc 29:52
You, you, I bet you would taste it.
Sylvain Charlebois 29:54
Sorry, mister, I'm not a sommelier, of cider.
Michael LeBlanc 29:59
Yeah, well anyway, listen. This, this is a wonder-, a wonderful product. So, I, I encourage everybody to try it. We'll put it, (crossover talk)
Sylvain Charlebois 30:05
Viv eau from Halifax. Great job, Mr. Ted Grant.
Michael LeBlanc 30:10
Congratulations. And that's our Trying Stuff segment for this episode.
Alright, let's finish off on one quick thing. In here in Ontario, they are reroute, removing, and it's happening across the country, the Vax-Pass access to restaurants. Now, this is interesting, because on the one hand, restaurants, some restaurants are saying I'm going to continue and putting a stake in the ground now they're getting attacked by the nut, nut cases on the other side of the anti-vaxed on social media. So, they got to fight back that. But it's, it's I think it's interesting, because there's a number of people would say, listen, I only want to go to restaurants that accept or screen with the Vax-Pass, others are just wide open. What do you, how do you think this is going to flow out? I mean, this could be for the rest of the year, do you think it's a, a good strategy that restaurants say these kinds of things? Or I mean, you have a unique perspective living in a place where there's no limitations? How, how are you thinking?
Sylvain Charlebois 31:05
No, there's no limitation. And frankly, I, I wore a mask for the first time in two months visiting NASA last weekend, because masks are mandatory there. (crossover talk)
You know, in, in Canada, yeah, because it's science based I mean, I told, I told my wife and kids, I'm not surprised that they're making this mandatory, because it's science based. And so, for, for restaurant operators, I think it's important for them to recognize who their clients are. It's every case I think, is different. And you have to make a call in terms of what's going to be best for them. Are passports making people feel safer? For a lot of people, they do. For others, it doesn't. And so, it depends where you are, where you're located, what kind of business you're running, who's your clientele. I think it boils down to that and re-, regard-, so based on that, you just have to make a call. So, I'm, I'm expecting a lot of variations here. What about you, Michael?
Michael LeBlanc 32:10
Well, you know, I, I was, there's an article on a local, local favorite diner in Toronto and, basically they said, listen, we, they have a lot of regulars. And this is one of the things like if you're in a, I think location and your, your value proposition has a lot to do with it. If you have a lot of regulars and you ask the regulars, what do you think? And they all want X, you do X, basically. And in that case, they said no, we still want the Vax-Pass, and then you're going to lose, you're going to lose customers, but you're going to, are you going to gain from it. And their assessment was that they were. I went out to, it was, it was March break or February break, reading week, my wife, my daughter, and I went to a, a restaurant, which is actually in a private club, the club you and I were in, Clio.
Sylvain Charlebois 32:50
Yep.
Michael LeBlanc 32:51
And we went there, we went there for food, there's nobody there, because they're just kind of getting back up to speed. But what struck me on a similar note, this was pre-, the release, or the, you know, the reduction (inaudible), the Vax-Pass. Boy, it was not an inexpensive meal. And my, my wife (crossover talk), and daughter were like, oh my goodness, now they've got some decisions around what they're serving. The quality, by the way, was outstanding, like the quality of the food, top notch. But, so was the price, and I was reflecting, and we were chatting about it over lunch. This is the new reality where restaurants,
Sylvain Charlebois 33:25
Oh yeah.
Michael LeBlanc 33:26
Need to charge, you know, more than you've ever imagined, for food. It's fantastic food. You know, listen, I think for a lot of restaurants, this could be a distinct, an extinction level event at the lower level, we (crossover talk), -
Sylvain Charlebois 33:38
The one thing that, that the restaurateurs will never say is that we've seen a lot of restaurants disappear as a result of COVID. And some would believe well, maybe we saw some restaurants disappear that should have disappeared a long time ago. So, maybe the quality is going to increase with fewer players and, and the fact that you're charging more, expectation will also change as well.
Michael LeBlanc 33:48
Well, I think it's a great, it's a great way to leave the podcast because I think the industry is, is really going to shake out. I mean, it could be like, -
Sylvain Charlebois 34:08
Yeah.
Michael LeBlanc 34:11
You know the US pre-pandemic, there were just too many stores. They were just over stored, some would argue they're over restauranted, not everyone's going to survive. And, you know, we, we wish everyone the best. But I think this will be a very interesting year of, you know, do you have, where do you want to go? And you know, I, I, I guess last, last, I think I'm a little baffled. And maybe if there's policy makers listening, what's going to take restaurants at the mid to high level to come back is business dining, right?
Sylvain Charlebois 34:38
Yeah.
Michael LeBlanc 34:39
That's got to happen. I'm not sure why they don't, to encourage the industry, make it such that you could write-off 100% of that as an expense, because right now (crossover talk), 50% , -
Sylvain Charlebois 34:48
I know, 50% yeah.
Michael LeBlanc 34:50
That would be a good thing to do. I mean, you've got to get business diners back out. Those are the folks who can afford to pay the two to three hundred dollars for a meal because it's a business expense. I mean that, that, -
Sylvain Charlebois 35:01
I'm all for it. By the way, the other day I brought my family out to dinner in Florida, it was about $100. Do you know how much tax I paid on that $100 at a restaurant?... $3.
Michael LeBlanc 35:14
Different world, different world.
Sylvain Charlebois 35:16
Different world and, and there's no income tax in this state, as you know. So, yeah, I mean, I, I at some point, you know, to encourage businesses, to get people out again, fiscal powers can go a long way.
Michael LeBlanc 35:32
Yeah, yeah. All right. Well, listen, let's leave it there. Great episode, great discussion. We've got a fantastic guest by the way, I'll just say to our listeners coming up on our next episode, where we have the President of St-Hubert chicken joining us, which is a personal favorite of mine, and really looking, -
Sylvain Charlebois 35:47
Yes.
Michael LeBlanc 35:48
To have that discussion. So, we, we, we will be back. We got lots of guests, fun guests coming up. But, for now, this is The Food Professor podcast, I'm Michael LeBlanc.
Sylvain Charlebois 35:59
And I'm Sylvain Charlebois.
Michael LeBlanc 36:01
Thank you all for joining us, find this. If you're listening to us, you're probably listening on a podcast platform today. You can find us on Apple, Spotify, and encourage your friends, colleagues in the industry to give us a listen. And thanks for joining us.
Sylvain Charlebois 36:14
Take care.
SUMMARY KEYWORDS
crossover, Ukraine, Loblaws, food, world, restaurants, edit, Russia, talk, Canadian, Canada, people, podcast, potash, product, big, Ted, absolutely, fertilizers