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Sobeys – Merchandising Matters

Jana Sobey, vice president of merchandising and Sobeys Inc.’s local development program, talks merchandising innovation and the importance of nurturing local businesses in Canada.

by Marjo Johne

Jana Sobey went into her first job like any 14-year-old, not really thinking about her long-term career. She was still in high school, and working as a cashier for the company her great grandfather John William Sobey started 114 years ago as a meat delivery business in Stellarton, N.S.

“I didn’t love the job initially, even though I felt a lot of pride walking through the doors of a Sobeys store,” recalls Sobey. “But then I started to enjoy dealing with the people—started to love turning a grumpy customer around and started to love the power of customer service. I eventually became a store manager, and I really thrived in that role.”

Fast-forward three decades and Sobey is still working in the family business—just as her own father and his father had done before her—and she still loves her job. From that initial stint as part-time cashier, Sobey has moved up and around the business over the years, taking on increasingly senior roles in area management, employee and customer engagement, operations and field merchandising.

Almost two-and-a-half years ago, she became vice president of merchandising and Sobeys Inc.’s local development program for all banners.

“I really enjoy being in merchandising and being able to influence the product assortment that we offer our customers,” she says. “I equally love the operations side of the business but ultimately I want to be anywhere I can continue to add value and contribute to the business at a high level. And right now, I’m so excited to be leading this team.”

Nurturing local businesses

There is a lot to be excited about. As a homegrown retailer with deep roots in the communities it serves, Sobeys and its banners have always nurtured partnerships with local suppliers. But in recent years, under Sobey’s leadership, the company has not only increased local sourcing, it’s actually helping food entrepreneurs build and grow their business.

Today, Sobey Inc.’s portfolio of banners boasts more than 3,000 local business partners whose aggregate sales are growing exponentially faster and greater than the rest of the supplier base, says Sobey.

“There are so many benefits to supporting local—it builds a circular economy with a positive impact on our communities, and creating a strong network of local suppliers fosters sustainability in our supply chain,” she says. “But for us, the most important reason for building local capacity is customer demand. Canadians are passionate about supporting local and that’s only been intensified by the pandemic.”

Sobey points to a survey conducted this year by debit payments company Interac, which found 75 per cent of Canadians consider it more important to support businesses in their community because of the pandemic, and more than half are shopping closer to home.

More than 80 per cent of Canadians are even willing to pay between $5 to $10 for products from local businesses, according to the survey.

“The business case is definitely there,” says Sobey. “And the real proof is in the repeat purchases of our local suppliers’ products.”

How does a national retailer with a wellestablished network of large-scale suppliers become a prodigious purveyor of unique, local products produced at smaller scales? About four years ago, Sobeys launched a program whose mandate was to bring community-based vendors into the company’s supply chain.

“As part of this program, we have local development managers—a team of very talented merchants, each regionally based, who are advocates of the local food movement—to identify and support great Canadian growers and producers and to help these folks get into our doors,” explains Sobey.

Each of these development managers works directly with a local supplier to provide guidance on a range of pre-listing issues—from packaging to preparing for launch—and to help onboard the supplier and product.

Sarah Davies, founder of Toronto-based More Eats Inc., remembers how the development mentor assigned to her “took me by the hand through the entire onboarding process” when she was getting ready to launch her product line More Granola at Sobeys.

“She was there to help me get into their system,” says Davies, whose love for granola inspired her to make her own bakery-style, chunky granolas that are gluten- and dairy-free and vegetarian-friendly. “But she also did a lot of other things—some of which are probably outside her job description—like helping me ensure my product packaging is up to standard, setting me up with a distributor and giving me feedback on my marketing strategy for launch.”

Having met Sobey during a pitch session at Toronto business accelerator Venturepark Labs, Davies already knew she would be dealing with a genuine advocate of small local food businesses. Still, she was surprised by the level of support extended by her development mentor and by the managers of the stores that had agreed to carry her products.

“What can be really intimidating when you sign on with bigger retailers is they have this checklist of things they want you to do and as a small brand, you want to say ‘yes’ because you just want to get on their shelves,” says Davies. “But then you add up all those things and they start eating away at your profit margin.”

That was not the case with Sobeys—far from it, she adds.

“I’m really blown away by how much they worked with me to make sure my margins are sustainable,” says Davies. “To me, it feels like I’m a priority and they want me to succeed and grow into a sustainable business.”

To give new local suppliers even more of a leg up, Sobeys waives its listing fee and applies it only once the supplier has reached a certain level, says Sobey.

“We want to lower the barriers to entry, and waiving the listing fee really helps,” she says. “It’s not a pass forever, just until the brand is established and has scaled to a certain size.”

It has certainly been a tremendous help for Lola Adeyemi, founder of It’s Souper, a Toronto-based brand that features Afro-fusion gourmet soups and sauces. Adeyemi, who immigrated to Canada from Nigeria—where soup is a main part of a meal all year ong—was nervous about launching her brand in March, when soup season in Canada was pretty much ending.

“Not having to pay the listing fee really made a difference,” she says. “It wasn’t just the timing of the launch, but also the fact that my brand is unique so I needed to test the temperature of the market.”

The temperature, it turned out, was more than warm, says Adeyemi. It’s Souper is now in about 30 Sobeys stores in Ontario and is set to expand from four SKUs to six.

Local beginnings

When John William Sobey decided to go into the food business in 1907, he travelled in his horse-drawn cart to local farms in Stellarton, N.S., and bought their lambs and pigs, which he butchered and sold. Over the next two decades, Sobey expanded the family business to include local vegetables and eventually a full line of groceries.

By 1939, Sobeys had grown into a chain of six stores and has kept right on growing. Today, the company that started as a one-man butcher and vendor of local meat is a $25.1-billion business with more than 1,500 corporate and franchise stores across the country.

“The stores have been so great in supporting the brand,” she says. “They have this local supplier feature where they’ll spotlight you and your story in their flyer and in the stores, and this gets people’s attention. I can’t even tell you what it’s really like— the pride of sharing my culture with other people and the joy of a customer picking up your product and telling you it’s the best sauce they’ve ever had.”

Supporting diversity, equity and inclusion

Sobey says the local supplier program is a logical progression of the company’s journey towards greater diversity, equity and inclusion within its workforce.

“Now we’re starting to work towards making sure our supplier base is also diverse and equitable, and our local supplier program is an important step in that direction,” she says. “And as a result, our product assortment is also becoming even more diverse.”

Cedar Valley Selections is another example of this product diversity. The brand started out with a salad dressing made from a recipe by Surria Fadel, a first-generation Lebanese living in Lakeshore, Ont., just outside Windsor.

Five years ago, Fadel’s son Ameen, who was 16 years old at the time, came home excited because his high school was offering $3,000 in seed funding to students who wanted to start a business.

“A friend suggested we bottle my mom’s Fattoush salad [dressing] and at first I didn’t think much of that idea,” recalls Ameen, founder and president of Cedar Valley Selections. “But I couldn’t think of anything else, so we went ahead with it and when we did our first farmers’ market in 2017, we sold 81 bottles of dressing and we were like ‘wow, we didn’t know it was going to be that good of a day.’”

In November of that year, Ameen walked into a Sobeys store in his community and spoke to the manager about his new product. The manager asked him to come back in the New Year after the holiday rush was over.

After meeting with Ameen in February 2018, the store manager told other store managers about the new salad dressing. They were all interested.

“They asked me if they could get it, and then a development manager reached out to me and invited me to join the local vendors program,” says Ameen. “We initially started in 10 stores in Windsor, London and Toronto and were demoing as much as we could and visiting as many stores as we possibly could to talk to their managers.”

Since launching at Sobeys, Cedar Valley Selections has seen year-over-year growth of more than 200 per cent, he adds. The brand has also grown, from one product to 10, with seven SKUs for salad dressing and three for pita chips. In October, Cedar Valley expanded nationally in Sobeys, Safeway, Thrifty and IGA.

“Sobeys has been amazing,” says Ameen. “They set you up for success, and each store really does a great job in placing your brand in front of customers and calling it out with signage that lets customers know it’s local.”

Inside-the-box thinking

Sobeys recently introduced “local boxes”—curated selections of products from local suppliers, packaged in rectangular boxes. Some of these boxes are themed by geography, for example, a Manitoba box or Alberta box, with the latter soon to see a third version.

One box, out of Ontario, was built around women-owned businesses and featured 17 products from 12 female food entrepreneurs.

“We’re trying different versions of the box with the end goal of getting our customers to try local and new products,” says Sobey. “For entrepreneurs and local suppliers, it’s a great way to get their products into the hands of different customers.”

This constant push to innovate in support of local suppliers is not lost on Davies at More Eats. What impresses her the most, though, is the pervasiveness of this support. It isn’t just the teams in the local supplier program that are always keen to help, she notes. Managers at the store level are also clear champions of the local cause.

“Each one I’ve approached has been immediately receptive and open to speaking with me, and that is a little bit rare because grocery managers are incredibly pressed for time and they get approached by vendors all the time,” says Davies. “I think the culture of embracing and supporting local is engrained throughout the organization. I think it starts from the top, with Jana.”

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