Sobeys

Lea Dunn started her career with Sobeys 15 years ago, after graduating from Memorial University with a bachelor of commerce degree. She had risen in the ranks and now found herself managing a team of buyers at the company head office. One of her young buyers had just emailed her a report on the profitability potential of a trend in food consumption called farm-to-table, which had become popular in the restaurant industry. The central aspect of this food trend was the utilization of locally sourced food ingredients in the preparation of meals and other food sales. While Sobeys had made it a goal to source some of its product locally, there was some question about whether the growth in this cultural food trend would translate into profitability in the grocery market. Lea hoped this initial report would provide the information she needed to make the appropriate decision on how much effort should be directed toward the issue.

The Company

Sobeys is the second-largest food retailer in Canada, with over 1300 supermarkets operating under different brand names (e.g., Sobeys, IGA, FreshCo, Foodland, Thrifty Foods) across all 10 provinces. Founded in 1907 by John Sobey, the company is headquartered in Stellarton, Nova Scotia, and is part of the Empire Company family of businesses (which also includes Empire theatres and Genstar real estate). Annual sales have approached $15 billion in recent years, and the company employs approximately 97 000 people.

In an effort to differentiate itself from its largest competitor, Loblaws, which focused on low pricing, Sobeys had decided to focus on building customer relationships through improved service. An initiative entitled "Ready to Serve" concentrated on improving customer service and involved changes to uniforms, marketing communications, and store environment. Employees were trained to be more customer-oriented and were required to greet, converse with, and assist customers whenever possible. This focus on the customer also led to improved product quality and selectionSobeys sought to be positioned as upscale compared to its competitors. Greater product selection, a premium private-label brand named Compliments, and organic produce were all examples of how the company had sought to improve the customer experience with respect to the products offered.

Farm-to-Table

As part of this product and service focus, Sobeys had been mindful to keep current with food culture across the country. For example, the increasing demand for quality ready-to-eat meals made fresh that busy families could pick up after work or school led to an expansion of the types of meals offered in store. It was this type of trend and change in eating culture that Lea had asked her team to keep their eye out for. Indeed, Lea knew that if Sobeys were to maintain its customer-focused positioning in the marketplace, it needed to be a first mover on any new food trend that gained momentum.

The emailed report she had received that morning identified one such trend. "Farm-to-table" (or "farm-to-fork") is to a movement concerned with producing food locally and delivering that food to local consumers. This movement had developed in conjunction with changes in attitudes among consumers with respect to food safety, food freshness, sustainability, and community support. Advocates of the food trend pointed to the scarcity of fresh ingredients, the poor flavour of food shipped from afar, the increase of genetically modified foods, the disappearance of small farms, and the dangers of a highly centralized food growing and distribution system as strong motivations for their support of the movement. Restaurants supporting the farm-to-table idea would buy their food ingredients directly from farmers, usually locally. In some instances the restaurants and the farms would be owned and operated by the same people. It was argued that restaurants that chose to buy from local food producers regularly provided healthier, better-quality meals. In the past few years, the number of farm-to-table food providers had grown substantially.

Making a Decision

Reading about this cultural trend, Lea wondered how it would impact the food grocery marketplace. While the company hadalways allocated some of its buying attention to local producers, it had not been an imperative that the company had marketed on. Would the farm-to-table idea transfer to the grocery store? Certainly, in the past few years there had been a demand from consumers for free-range, organic, and environmentally friendly food options. This need had translated into a profitable market segment that most supermarkets had pursued. Was this new trend an evolution in ideology for this segment?

Lea could see some benefits in the idea, but she was also mindful of the cost trade-offs that pursuing farm-to-table would necessitate. Currently, the company was able to buy large quantities of food products from industrial producers in California, Florida, and other jurisdictions. A move to farm-to-table in buying behaviour would mean losing the cost advantage the company had developed over the past decade. What would that mean in the competitive marketplace? How best to balance the changing food trends and competencies the company had worked hard to develop? Lea realized that this was going to be a complex decision with important implications for her team and the company as a whole.

• How would you describe food culture in Canada? How does it vary across different geographic areas? How does it differ across ethnic groups? Does it differ across different eating occasionsthat is, eating in a restaurant versus eating home-cooked meals?
• What do you think of the farm-to-table food trend? Is this a meaningful change in food culture in Canada?
• What would you do if you were Lea? Would you seek to exploit this new trend and introduce the notion of farm-to-table into the supermarket? How would you do so?
• Do you think certain subcultures or types of consumers might be more inclined to jump on the farm-to-table trend? How might the trend be positioned differently to appeal to different subcultural groups?