Loblaws chief: global trends will impact food

News articles – originally printed in , January 19, 2010

A series of global trends will change everything about the way we eat, says the head of Canada’s largest grocery chain. And that means both adjustment and opportunity for those involved in food, Galen Weston of Loblaw Companies Limited told attendees at the Agricultural Adaptation Council’s annual meeting in Guelph recently.

“We’ve been in the business of feeding Canadians for 126 years and we take a long term view of things,” he says. “We think of business in terms of decades, not quarters, which is why we are successful.”

The world’s population is growing – expected to hit nine billion by 2050 according to the United Nations – and will need to be fed. However, says Weston, the loss of farmland to industrial development, use of food acres for ethanol production and slowing yield growth will make that task a challenge.

Climate change is threatening the productivity of major agricultural areas such as California, says Weston, raising the question of what a changing environment might do to Canada’s agriculture. And what impact will a new cap and trade system for greenhouse gas emissions have on livestock production?

Food safety is also a growing concern, with Listeria, botulism and salmonella all having made headlines in recent years. Loblaws alone deals with over 360 food recalls a year, which equals almost one per day.

But according to Weston, the most significant impact may come from obesity and health. In Canada, 38 percent of the population is considered obese, which is only slightly less than in the United States, where 40 percent fall into that category. This puts an unsustainable burden on the government spending, he says, adding that US health care costs have risen to 18 percent of Gross Domestic Product (GDP) from only nine percent a decade ago.

“Seventy percent of our health care costs are derived from behaviour,” explains Weston. “The four big areas are cardiovascular disease, cancer, diabetes and obesity and diet affects all of these.”

pc_logoSo how can grocery stores play a role in helping society adjust to these global trends? Weston says that due to its size – Loblaws is a 30 billion dollar corporation and Canada’s largest private employer – the company has the ability to drive change and be flexible to respond to emerging trends. Through its President’s Choice line, Loblaws has introduced healthier foods, new organic options and products that are more environmentally friendly, like its popular phosphate free dishwashing detergent.

But the grocer is also committed to working with its stakeholders to look at innovative ways to effect change. This includes implementing a $0.05 charge for plastic bags this past April, which has led to a 75 percent decrease in the consumption of plastic bags. Loblaws also recently committed to sourcing all of its seafood from sustainable sources by 2013, but Weston says changes like these need to take place gradually.

“Farmed salmon is our single largest seafood item so we need to look at what we can do to make improvements over a period of time,” he explains. “We want to work with Canadian suppliers who are willing to invest in sustainability and in return, we can get an exclusive source of product that we can also increase as the market grows.”

But this stated preference for Canadian suppliers doesn’t necessarily mean Weston is a fan of the local food movement. He also thinks the 100 mile diet is a fad, but does admit that there is a disconnect between consumers and the farm.

“Consumers need to appreciate that farmers are businesses and are highly technical,” he says. “This needs to be married up with the romanticized view of farming that many consumers still have.”

At the right price point, Weston believes consumers will choose the sustainably produced product but admits that it can be hard for food producers to take production risks without a committed retail partner. What’s important in that regard is that the company listens to researchers, producers and most importantly, consumers.

“We bear an enormous responsibility to feed Canadians, but what we sell really is irrelevant as long as we sell enough,” Weston says. “What matters is how much and for how much. We care about giving the customer what they want so don’t underestimate your role as a farmer or as a consumer. Your influence and impact on what we do is profound.”

And with 13 million Canadians shopping at over 1000 Loblaws stores across the country every week, there are a lot of consumer demands for the company to meet.

The Loblaw supermarket chain includes No Frills, Zehrs, Superstore, Provigo, Fortinos, Loblaws, Your Independent Grocer, Maxi, Wholesale Club.

Loblaw brands and services: Joe Fresh, President’s Choice, President’s Choice Financia, No Name.