Food Retail Canada 20.04.2020

FOOD RETAIL IN CANADA FLANDERS INVESTMENT & TRADE MARKET SURVEY Marktstudie

/////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// FOOD RETAIL CANADA 20.04.2020

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

www.flandersinvestmentandtrade.com INHOUD

1. Retail ...... 3 1.1 Gross Domestic Product (GDP) 3 1.2 Canada’s retail growth: Seasonally Adjusted Sales 3 1.3 Canada’s retail growth: Seasonally Unadjusted Sales 4 1.4 Gross and profit margin, Canada wide, by Retail sector 5 1.5 Retail Canada per province – Food & Beverage stores 5 2 Retailers ...... 6 Market share retailers 6 Visits food stores 6 2.1 Loblaw/Shoppers 7 2.2 Sobeys/Safeways 9 2.3 Costco 11 2.4 Metro 12 2.5 Walmart 14 2.6 alimentation Couche-Tard 15 2.7 Dollarama 16 3 Trends ...... 17 4 Enclosures ...... 22 4.1 Policies Loblaw 22 4.2 Supplier code of conduct Metro 27 5 Sources ...... 34

1. RETAIL

1.1 GROSS DOMESTIC PRODUCT (GDP) In August 2019, Canada’s GDP was around 1,973,258 million Canadian Dollar. Year over year, its GDP has grown by 1.3%. The Retail trade industry represents 5.2% of the national GDP, namely 101,793 million CAD.

1.2 CANADA’S RETAIL GROWTH: SEASONALLY ADJUSTED SALES When we have a closer look at the Retail trade, we can divide it into specific sectors. As we examine the food and beverage stores, we can split them up in three big categories: 1. grocery stores 2. specialty food stores 3. beer, wine and liquor stores

The Retail trade in general keeps growing year over year, and the same goes for the food and beverage sector. Actuals (in millions of $CAD) Percent Growth

Category April 2019 April 2018 MOM1: April 2019 YOY2: April 2018 Canada - Seasonally Adjusted Sales May 2019 April 2019 Total Retail Sales $51,470,797 $49,633,602 +0.2% +3.7% Motor vehicle and parts dealers $13,850,257 $13,100,373 -0.4% +5.7% Furniture & Home Furnishings $1,644,658 $1,571,201 +0.3% +4.7% Electronics & Appliances $1,169,793 $1,273,086 +0.2% -8.1% Building Mats. & Garden Equip $3,143,834 $3,032,085 -0.8% +3.7% Food & Beverage Stores $10,738,484 $10,427,228 +2.0% +3.0% Grocery store $8,016,312 $7,812,549 +1.9% +2.6% Specialty food stores $670,562 $646,645 +0.4% +3.7% Beer, wine and liquor stores $2,051,610 $1,968,035 +2.8% +4.2% Health & Personal Care $4,012,071 $3,886,880 -0.3% +3.2% (Including Pharmacy) Gasoline stores $5,550,853 $5,602,751 -2.7% -0.9% Clothing & Accessories $2,946,336 $2,832,151 +3.2% +4.0% Sporting, hobby, book & music $1,048,528 $1,038,471 +2.1% +1.0% General Merchandise $5,994,517 $5,622,969 +1.1% +6.6% Miscellaneous store retailers $1,371,465 $1,246,407 -1.9% +10%

1 MOM: Month over month 2 YOY: Year over year

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 3 van 34 When we focus on the food and beverage sector, we see that it represents 21% of the whole retail trade. In chapter 2 we will discuss the biggest retailers concerning food and beverages.

1.3 CANADA’S RETAIL GROWTH: SEASONALLY UNADJUSTED SALES

Actuals (in millions of $CAD) Percent Growth

Category April 2019 April 2018 MOM3: April 2019 YOY4: April 2018 Canada - Seasonally Adjusted Sales May 2019 April 2019 Total Retail Sales $50,994,131 $48,611,472 -11.8% +4.9% Motor vehicle and parts dealers $15,392,240 $14,430,270 -11.3% +6.7% Furniture & Home Furnishings $1,549,625 $1,492,534 -8.5% +3.8% Electronics & Appliances $1,031,193 $1,127,511 -0.7% -8.5% Building Mats. & Garden Equip $3,037,463 $2,958,899 -29.5% +2.7% Food & Beverage Stores $10,140,316 $9,558,987 -9.5% +6.1% Grocery store $7,671,692 $7,321,722 -8.3% +4.8% Specialty food stores $654,397 $586,387 -3.5% +11.6% Beer, wine and liquor stores $1,814,227 $1,650,879 -16.3% -+9.9% Health & Personal Care $3,949,444 $3,786,167 -0.3% +4.3% (Including Pharmacy) Gasoline stores $5,327,892 $5,394,148 -1.2% Clothing & Accessories $2,618,427 $2,503,699 +3.2% +4.6% Sporting, hobby, book & music $931,692 $911,378 +2.1% +2.2% General Merchandise $5,801,336 $5,349,682 +1.1% +8.4% Miscellaneous store retailers $1,214,505 $1,098,196 -22.5% +10.6%

3 MOM: Month over month 4 YOY: Year over year

1.4 GROSS AND PROFIT MARGIN, CANADA WIDE, BY RETAIL SECTOR

1.5 RETAIL CANADA PER PROVINCE – FOOD & BEVERAGE STORES

Actuals (in millions of $CAD) Percent Growth Category April 2019 April 2018 MOM: April 2019 YOY: April 2018 Canada - Seasonally Unadjusted May 2019 April 2019 Sales Canada $10,140,316 $9,558,987 -9,5% 6,1% Newfoundland and Labrador $150,370 $168,369 -9,8% -10,7% Prince Edward Island $40,304 $36,673 -12,0% 9,9% Nova Scotia $275,505 $253,813 -10,4% 8,5% New Brunswick $188,761 $184,661 -11,5% 2,2% Quebec $2,345,236 $2,149,861 -8,8% 9,1% Ontario $3,654,848 $3,450,833 -9,3% 5,9% Manitoba $366,237 $343,214 -8,4% 6,7% Saskatchewan $292,188 $276,705 -8,3% 5,6% Alberta $1,196,788 $1,134,140 -10,4% 5,5% British Columbia $1,553,653 $1,487,796 -10,6% 4,4% Northwest Territories $25,105 $23,390 -9,8% 7,3%

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 5 van 34 2 RETAILERS

MARKET SHARE RETAILERS

When we examine the market and its different players, we see that Loblaw is by far the biggest. It has a market share of 29% percent, which is 8% more than Sobeys. Together they own half of the retail market.

VISITS FOOD STORES

This statistic displays how often consumers visit food stores in Canada as of October 2018. Some 62.3 percent of survey respondents stated that they visit a store to purchase food weekly, and 1.4 percent of respondents said they visited daily.

2.1 LOBLAW/SHOPPERS 2.1.1 Financials Millions of Canadian Dollar except where otherwise indicated. Retail Results of Operations 2018 2017 Sales $45,836 $45,867 Operating Income $1,717 $1,843 Adjusted gross profit $13,459 $13,053 Adjusted gross profit % 29,4% 28,5% Adjusted EBITDA $3,332 $3,329 Adjusted EBITDA margin 7,3% 7,3% Depreciation and amortization $1,487 $1,444 Retail Operating Statistics 2018 2017 Food retail same-store sales growth 1.1% 0.6% Drug retail same-store sales growth 2.4% 3.0% Drug retail same-store pharmacy sales growth 1.2% 3.1% Drug retail same-store front store sales growth 3.5% 2.9% Total retail square footage (in millions) 70.4 70.3 Number of corporate stores 550 559 Number of franchise stores 535 534 Number of Associate-owned drug stores 1,337 1,334

Retail Results of Operations 16 weeks 2019 16 weeks 2018 Sales $14,420 $14,105 Operating Income $655 $551 Adjusted gross profit $4,262 $4,108 Adjusted gross profit % 29.6% 29,1% Adjusted EBITDA $1,452 $1,017 Adjusted EBITDA margin 10.1% 7.2% Depreciation and amortization $711 $457 Retail Operating Statistics 16 weeks 2019 16 weeks 2018 Food retail same-store sales growth 0.1% 0.9% Drug retail same-store sales growth 4.1% 2.5% Total retail square footage (in millions) 70.6 70.2 Number of corporate stores 548 550 Number of franchise stores 539 532 Number of Associate-owned drug stores 1,341 1,335

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 7 van 34 2.1.2 Stores Loblaws stores can be split up into three types: corporate stores, franchises and associated owned drug stores. Most of these stores are based in Ontario, Quebec and Nova Scotia. - Corporate: 548 - Franchise: 539 - Associate owned drug stores: 1,341 - Total: 2,428

2.1.3 Total surface of stores The total surface of all stores amounts to 70.6 million square feet (approx. 6.5 million m2) - Corporate: 35.6 million sq ft - Franchise: 16.4 million sq ft - Associate owned drug stores: 18.6 million sq ft

2.1.4 Divisions - Loblaw market The 400 Market stores including Loblaws®, Provigo®, Zehrs® and others, offer customers a huge selection of quality products and unique food experiences. Several private labels, such as President’s Choice, No Name and Life, are available in all or several Loblaw divisions.

- Shoppers Drug Mart As Canada’s largest retail pharmacy network of 1,300 locations, Shoppers Drug Mart® and Pharmaprix® in Quebec deliver personalized service and convenience through pharmacy, health, beauty and grocery offerings.

- Discount With 500 locations across Canada, the Discount stores including No Frills®, Real Canadian Superstore® and Maxi® in Quebec, focus on fresh food at unbeatable prices. Customers shop them for the best deal in town or for authentic, multicultural foods and household staples under one roof.

- Financial PC Financial® has Canadians’ financial needs covered with a growing range of services including daily banking, mortgages, credit, insurance and investments.

- Joe Fresh Joe Fresh offers everyday wardrobe favorites infused with easy polish and thoughtful details.

2.1.5 Policies See enclosure 1

2.2 SOBEYS/SAFEWAYS 2.2.1 Financials Millions of Canadian Dollar except where otherwise indicated. Results May 2018 May 2017 Sales $24,214.6 $23,806.2 Gross profit $5,900.5 $5,707.2 Operating income $346.5 $333.0 Adjusted operating income $601.7 $378.5 EBITDA $785.7 $777.2 Adjusted EBITDA $1,014.7 $796.9 Net earnings (loss) $159.5 $158.5 Adjusted net earnings $344.3 $191.3

Food Retailing May 2018 May 2017 Sales $24,214.6 $23,806.2 Gross profit $5,900.5 $5,707.2 Operating income $273.6 $259.3 Adjusted operating income $528.8 $304.8 EBITDA $712.5 $703.2 Adjusted EBITDA $941.5 $722.9 Net earnings (loss) $116.5 $112.7 Adjusted net earnings $301.3 $145.5

2.2.2 Stores 1547 stores across Canada are active under one of the group’s brands, as well as more than 350 retail fuel stations. 918 are corporate stores, 1015 are franchise stores.

2.2.3 Total surface The total surface of all stores amounts to 39 million square feet (approx. 3.6 million m2).

2.2.4 Divisions - Full service Total food shopping experience with the broadest assortment. Sobeys in Western Canada, Ontario and Atlantic Canada, IGA Extra in Québec and Safeway in Western Canada and Ontario.

- Fresh service Ready-to-serve and ready-to-cook, fresh fill-in and “today’s meal” market. IGA and IGA Express in Québec, Sobeys Urban Fresh in urban Ontario.

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 9 van 34 - Community Service 'Routine and fill-in' shopping in rural and one-store communities. Thrifty Foods in Western Canada, Foodland in Ontario and Atlantic Canada, Marché Bonichoix and Les Marchés Tradition in Québec.

- Discount Service Everyday food needs in price driven markets. Fresh Co in Western Canada and Ontario, Price Chopper in Ontario.

- Convenience Service On the go convenience needs. Needs in Atlantic Canada

- Other Meeting other specialized customer needs, such as health care, beauty and cosmetics, health food, fuel, wine and liquor and wholesale.

2.3 COSTCO 2.3.1 Financials Millions of Canadian ollDar except where otherwise indicated. Results of operations Sept 2018 Sept 2017 Net sales $138,434 $126,172 Membership fees $3,142 $2,853 Gross margin qs perc of net sales 11.04% 11.33% Selling gen. and adm. Expenses as percentage of 10.02% 10.26% net sales Operating income $4,480 $4,111 Net income attributable to Costco $3,134 $2,679 Net income per diluted common share $7.09 $6.08 attributable to Costco Cash dividends declared per common share $2.14 $8.90 Changes in comparable sales (Canada) 9% 5%

Canada represents 28% of the net sales and 38% of the operating income; Results via Canada 2018 Net sales $38,761.5 Operating income $1,702.4

2.3.2 Stores Costco operates 100 warehouses in Canada.

2.3.3 Square feet The amount of stores represent 13.9 million feet.

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 11 van 34 2.4 METRO 2.4.1 Financials Millions of Canadian Dollar except where otherwise indicated. Operating results 2018 2017 Change % Sales $3,736.2 $3,228.4 15.7 Operating income before $266.5 $236.1 12.9 depreciation and amortization and associate’s earnings Net earnings $145.0 $154.9 (6.4) Adjusted net earnings $161.0 $131.1 22.8 Fully diluted net earnings 0.56 0.66 (15.2) per share Adjusted fully diluted net 0.63 0.56 12.5 earnings per share Cash flows from: - Operating act. $250.9 $236.8 - Investing act. $207.1 $(112.0) - Financing act. $(350.8) $(37.80

2.4.2 Stores The Metro Group operates a network of some 950 food stores under several banners, including Metro, Metro Plus, Super C and Food Basics) and some 650 drugstores, primarily under the Jean Coutu, Brunet, Metro Pharmacy and Food Basics Pharmacy banners.

Québec Ontario New Brunswick Total Supermarkets Metro plus 199 Metro plus 134 333 Adonis 10 Adonis 2 12

Discount stores Super C 97 Food basics 131 228 Neighborhood Marché Richelieu 57 stores Marché Ami 250 Marché Extra 40

Partner Première Moisson 26 Première Moisson 1 Total food 679 268 947

Québec Ontario New Brunswick Total Drugstores Brunet Brunet Plus Metro Brunet Clinique Pharmacy Clini Plus 180 Drug Basics 72 252

PJC Jean Coutu PJC Jean PJC Jean Coutu PJC Health Coutu PJC Health PJC Health & 380 PJC Health 9 PJC Health & Beauty 28 417 Beauty Total 560 81 28 669 drugstores

2.4.3 RangeMe https://app.rangeme.com/suppliers/register/metro 1) Create a product profile 2) Your product will be matched with the right category buyer 3) Buyers review your product

2.4.4 Supplier code of conduct See enclosure 2

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 13 van 34 2.5 WALMART 2.5.1 Financials Millions of Canadian Dollar except where otherwise indicated. Walmart International net sales by market January 2019 Mexico and Central America $31,790 United Kingdom $30,547 Canada $18,613 China $10,702 Other $29,172 Total $120,824

2.5.2 Stores Walmart has 410 stores spread over Canada.

2.5.3 Square feet The 410 stores equal 53,082,000 square feet.

2.5.4 Become a supplier https://corporate.walmart.com/suppliers/apply-to-be-a-supplier

2.6 ALIMENTATION COUCHE-TARD 2.6.1 Financials Millions of Canadian Dollar except where otherwise indicated. Statement of Operations Data 2019 2018 Merchandise and service revenues $2,172.7 $2,053.5 Road transportation fuel revenues $4,957.9 $4,819.9 Other revenues $24.5 $27.6 Total revenues $7,155.1 $6,901.0 Merchandise and service gross profit $729.7 $707.7 Road transportation fuel gross profit $392.8 $424.9 Other revenues gross profit $24.5 $27.6 Total gross profit $1,147.0 $1,160.2

2.6.2 Stores - Corporate stores: 1794 - CODO5: 2 - DODO6: 0 - Affiliated stores: 354

5 CODO: Sites for which the real estate is controlled by Couche-Tard (through ownership or lease agreements) and for which the stores (and/or the service-stations) are operated by an independent operator in exchange for rent and to which Couche- Tard supplies road transportation fuel though supply contracts. Some of these sites are subject to a franchise agreement, licensing or other similar agreement under one of our main or secondary banners.

6 DODO: Sites controlled and operated by independent operators to which Couche-Tard supplies road transportation fuel through supply contracts. Some of these sites are subject to a franchise agreement, licensing or other similar agreement under one of our main or secondary banners.

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 15 van 34 2.7 DOLLARAMA 2.7.1 Financials Thousands of Canadian Dollar except where otherwise indicated. Earnings Data August 4 2019 July 29 2018 Sales $1,774,441 $1,624,522 Cost of sales $1,012,307 $902,935 Gross profit $762,134 $721,587 SG&A $253,774 $231,417 Depreciation and amortization $118,164 $111,776 Operating income $390,196 $378,394 Financing costs $50,176 $44,999 Earnings before income taxes $340,020 $333,395 Income taxes $93,325 $91,508 Net earnings $246,695 $241,887

Other data August 4 2019 July 29 2018 Year-over-year sales growth 9.2% 7.1% Comparable store sales growth 5.2% 2.6% Gross margin 43.0% 44.4% SG&A as a % of sales 14.3% 14.2% EBITDA $508,360 $490,170 Operating margin 22.0% 23.3% Capital expenditures 61,042 91,108 Number of stores 1,250 1,178 Average store size(square feet) 10,262 10,164

2.7.2 Stores Dollarama has 1250 locations in Canada. It is present in all provinces.

2.7.3 Square feet The 1250 stores equal 12,827,500 square feet.

3 TRENDS According to Whole Food Market and George Brown College.

Aging Canadians The Canadian population will continue to age, with more seniors than ever before and actually fewer children projected in real numbers in 2020 than there were in 2004. This finding will have implications for the type and quantity of food demanded as well as where it will be consumed.

An Evolving Society Other socio-demographic drivers that will affect food choices include the shrinking household size, participation in the workforce, globalization, environmental awareness, and media fragmentation. Brands will become less of a status symbol and more an expression of individualization.

Changing Meal Patterns Consumers will become even more disconnected from food preparation. Shopping and eating habits will be sporadic; meal planning cycles will be shorter, snacking will replace courses as well as whole meals, and food will become even more portable. These trends will have implications for both food and package waste.

Shifting Expenditures The move to spending less of our disposable income on food will continue. Retail food purchases will still dominate, while food service will see only modest growth in expenditures. The real shift will be in prepared meals and takeout.

Food for Health The most significant health driver will be obesity, with its associated medical conditions, such as cardiovascular disease and diabetes. One in two adults and one in three children were considered overweight or obese in 2001. The move to adopt healthier lifestyles will be slow. Adults faced with serious health concerns related to their weight may be motivated to change their diet and activity patterns, but it may take a concerted effort to educate this, and the next generation of children, in order to achieve significant lifestyle and diet improvements within the population.

The Educated Consumer By raising a generation of label readers, we will become more conscious of nutrition and food ingredients than ever before, with a focus on zero trans-fats, low sodium, healthy/high fiber carbohydrates (the low carb fad is near dead), reduced sugar, allergen identification, fortification, and

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 17 van 34 health claims. Foods with a function beyond just energy will be in demand, as consumers seek to manage their health and prevent disease.

The New Face of Canada Immigration will be driven from regions off the Pacific Ocean, especially in larger urban centers where visible minorities will make up to 50% of the population, and the British and European roots of longer term residents diffuses. Hispanic influences from the South will also be felt. The resulting food trends, diversification, fusion and blended cuisines, will mean a host of unfamiliar food ingredients, cooking methods and presentation styles. Travel, job mobility and religious influences will also shape the ethnic mix of the new Canadian cuisine.

No Trade-off for Convenience Food marketeers are forever trying to find the magic balance between taste, quality, nutrition, convenience, variety, and value for the dollar. The fact is, consumers want it all. The next wave of product differentiation will be to provide fresher, more nutritious, great tasting and/or ethnic foods in the most convenient forms possible.

Veggies True vegetarianism may not grow dramatically, but consumption of meatless meals will continue to increase. This will be fueled by perceptions of healthfulness, an emphasis on quick-to prepare meals, and ethnic food options, among other drivers.

Organic Foods Organics, at a modest price premium, will continue to rise, especially as quality and availability match these of conventionally produced foods.

Small Indulgences Gourmet food represents a small indulgence, an affordable luxury, and a reward. Adult Canadians will embrace gourmet foods and boutique brands. Slow foods, high quality, smaller portions, and nutritious foods will gradually replace demand for fast, big and cheap foods.

Food Safety and Production Issues Consumer confidence in foods tends to shift with the news story of the day. At the time of writing, trans-fats and animal diseases were issues at the forefront of consumer minds. Others included: “safe” food production (including genetically engineered foods), food borne illness, additives, contaminants, tampering and bioterrorism, the ethical treatment of animals, country of origin and traceability, and to a lesser extent, acrylamides and irradiation. Lack of consumer confidence, for which ever reason, will lead to avoidance of the offending food.

Regenerative Agriculture Farmers, producers, academics, government agencies, retailers and more are taking a closer look at how to use land and animal management practices to improve soil health and sequester carbon. While the term “regenerative agriculture” can have many definitions, in general it describes farming and grazing

//////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// pagina 18 van 34 Food Retail Canada 20.04.2020 practices that restore degraded soil, improve biodiversity and increase carbon capture to create long- lasting environmental benefits, such as positively impacting climate change. You can help by seeking out brands that support regenerative practices.

Flour Power As seasoned and amateur bakers alike look to scratch a creative itch in the kitchen, an array of interesting flours are entering the market making baking more inclusive and adventurous. Consumers on the baking bandwagon are seeking out ingredients used in traditional dishes, like teff flour used for Ethiopian injera. 2020 will bring more interesting fruit and vegetable flours (like banana!) into home pantries, with products like cauliflower flour in bulk and baking aisles, rather than already baked into crusts and snack products. Consumer packaged goods are getting in on the trend by replacing traditional alternative flours with tiger nut flour in chips and snack foods, and tasty pastries made with seed flour blends. As consumers look for more ways to boost their bake, “super” flours delivering protein and fiber join the trend.

Foods from West Africa From indigenous superfoods to rich, earthy dishes, traditional West African flavors are popping up everywhere in food and beverage. The trio of tomatoes, onions and chili peppers form a base for many West African dishes, and peanuts, ginger and lemongrass are all common additions. The 16 nations within West Africa share similar foods, but each have their own specialties based on subtle influences from the Middle East and Western Europe. Brands are looking to West Africa for its superfoods too like moringa and tamarind, and lesser-known cereal grains sorghum, fonio, teff and millet.

Out-of-the-Box, Into-the-Fridge Snacking Life isn’t slowing down, but snack options are more than keeping up. The keyword is “fresh” in this new generation of grabbing and going. Gone are the days when the only options were granola bars and mini pretzel bags. The refrigerated section is filling up with the kind of wholesome, fresh snacks typically prepared and portioned in advance at home: hard-boiled eggs with savory toppings, pickled vegetables, drinkable soups and mini dips and dippers of all kinds, all perfectly portioned and in convenient single- serve packaging. Even nutrition bars have made their way from the shelves to the chiller, thanks to the addition of fresh fruits and vegetables. These snacking innovations mean ingredients lists are shrinking and there’s a lot less guesswork in picking up a quick snack you can feel better about.

Plant-Based, Beyond Soy Tofu scrambles may always have a place at the vegan breakfast table, but in 2020 the trendiest brands are slowing down on soy, which has traditionally dominated the plant-based protein space. Some of the products touting “no soy” in the next year will be replacing it instead with innovative blends (like grains and mung beans) to mimic the creamy textures of yogurts and other dairy products. In the supplement aisle, brands are swapping soy for mung

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 19 van 34 bean, hempseed, pumpkin, avocado, watermelon seed and golden chlorella, maintaining the smooth textures in vegan protein powders and bringing a spectrum of plant-based amino acids to the table. As the plant-based movement gains traction with flexitarian eaters, brands are looking to avoid as many of the top allergens as possible, so look for plant-based prepared foods (especially meat alternatives) and traditionally soy-based condiments going soy-less!

Everything Butters and Spreads Has (insert nut, seed, snack) been made into a butter yet? It’s likely to happen in 2020. Think seed butters beyond tahini – like watermelon seed butter – and seasonal products like pumpkin butter year- round. Nut butters beyond cashew, almond, and peanut (hello, macadamia) and even chickpea butters (no, it’s not a new name for hummus). Look for creamy vegan spreads perfect for toast, crackers, bagels and celery sticks that get their full flavors from trending superfoods like pili. It helps the trend that spreads and butters are touting paleo- and keto-friendly attributes, but transparency is also a key player in this trend. Many brands are looking to either eliminate the use of palm oil or promote a Responsibly Sourced Palm Oil certification and use nuts that are grown in ways with less likelihood for environmental impact.

Rethinking the Kids’ Menu Are the days of picky eaters numbered? Judging from the number of kids’ cooking and baking competitions on TV, kids are kitchen-savvier than ever. By 2026, 80% of millennials will have children, and many parents are introducing their kids to more adventurous foods — with great results. (Seeing kids chowing down alongside parents at the Whole Foods Market sushi bar is a common sight.) Food brands are taking notes for the next generation – possibly our first true “foodies” – expanding the menu beyond nostalgic foods with better-for-you ingredients and organic chicken nuggets. They’re bridging the gap from old-school basic kids’ menus and taking more sophisticated younger palates into consideration. Think non-breaded salmon fish sticks. Foods that are fermented, spiced or rich in umami flavors. Colorful pastas in fun shapes made from alternative flours. Maybe it’s time adults start taking some cues from the kids’ menu.

Not-So-Simple Sugars Sure, there’s sugar. But for those seeking sweetness outside of the usual suspects like sugar, stevia, honey and maple syrup, there’s lots more to choose from for your cooking, baking and tea- or coffee- stirring needs. Syrupy reductions from fruit sources like monk fruit, pomegranates, coconut and dates are one way to add concentrated, unique flavors into recipes for desserts, meat glazes and marinades. Sweet syrups made from starches like sorghum and sweet potato can be compared to the deep flavors of molasses or honey, and can be used for baking and sweetening beverages. Swerve, a cup-for-cup zero-calorie non-glycemic replacement for sugar, combines erythritol with ingredients from fruit and starchy root vegetables to produce a sweetener that’s available in granular, confectioners’ and brown versions.

Zero-Proof Drinks With so many consumers seeking out alternatives to alcohol, unique non-alcoholic options are popping up everywhere, from menus at the world’s most acclaimed bars to specialty stores. Many of these

//////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// pagina 20 van 34 Food Retail Canada 20.04.2020 beverages seek to re-create classic cocktail flavors using distilling methods typically reserved for alcohol, creating an alternative to liquor meant to be used with a mixer rather than a drink on its own. Think alt-gin for gin and tonics and botanical-infused faux spirits for a faux martini. Add to that options enjoyed straight from the bottle or can, like hops-infused sparkling waters and zero-proof aperitifs, and you can be sure guests avoiding the bar cart will never get bored.

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 21 van 34 4 ENCLOSURES 4.1 POLICIES LOBLAW

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 23 van 34

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 25 van 34

4.2 SUPPLIER CODE OF CONDUCT METRO

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 27 van 34

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 29 van 34 //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// pagina 30 van 34 Food Retail Canada 20.04.2020

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 31 van 34 //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// pagina 32 van 34 Food Retail Canada 20.04.2020

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20.04.2020 Food Retail Canada pagina 33 van 34 5 SOURCES - www.sobeys.com - https://www.loblaw.ca/en.html - https://www.costco.com/vendor-inquiries.html - https://corpo.couche-tard.com/en/business-units/canada/ - https://www.dollarama.com/en-CA/corp/investor-relations - https://stock.walmart.com/investors/financial-information/annual-reports-and- proxies/default.aspx - https://corpo.metro.ca/en/investor-relations/financial-information/annual-reports.html - https://www.retailcouncil.org/wp- content/uploads/2018/08/Retail_by_the_Numbers_September_2019.pdf - https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Retail%2 0Foods_Ottawa_Canada_6-26-2018.pdf - https://www.georgebrown.ca/chca/news/top-10-food-trends-for-2019/ - https://static1.squarespace.com/static/5a4fc47f1f318d07aef77163/t/5c1aa6d5562fa7dc1e9ecc54/15452 50520830/the2019trendreport-nourish-digital.pdf - https://becomingvegan.ca/canadian-food-trends-to-2020/ - https://www.chowhound.com/food-news/243610/whole-foods-2020-food-trends-report/ - https://www.wholefoodsmarket.com/top-10-food-trends-2020 - https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2010000801 - https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=2010000801#timeframe - https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610043402

The information in this publication is provided for background information that should enable you to get a picture of the subject treated in this document. It is collected with the greatest care based on all data and documentation available at the moment of publication. Thus this publication was never intended to be the perfect and correct answer to your specific situation. Consequently it can never be considered a legal, financial or other specialized advice. Flanders Investment & Trade (FIT) accepts no liability for any errors, omissions or incompleteness, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organization mentioned.