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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


How Canadian grocery chains are tapping a new market with Ďuglyí fruits and vegetables

Tuesday, September 01, 2015 > 09:56:37

(Financial Post)

They’re an unusual shape and they may have a blemish or two, but it’s what’s on the inside that counts, according to IGA Quebec’s campaign to sell a variety of odd-looking fruits and vegetables at all of the province’s 290 stores.

Loblaw launches Naturally Imperfect program to sell undersized, blemished produce

Loblaw Companies has launched a program to sell blemished, misshapen or undersized produce under the No Name Naturally Imperfect brand.

The six-week trial features locally grown fruits and vegetables that are normally not considered attractive enough for grocery store displays, and would otherwise be destined for food processing, animal feed or even just thrown back to the soil.

And though they may be called “les drôles de fruits et légumes” — funny fruits and vegetables — the company says there’s nothing funny about how they taste.

“They taste the same and have the same nutritional value, but normally if customers see produce on display that is misshapen, they won’t choose it first,” said Yvan Ouellet, VP of purchasing and merchandising for perishable products at Sobeys Quebec, which supplies IGA stores and is a subsidiary of Canada’s second-largest grocery conglomerate, Empire Co. Ltd.

The campaign, which began Aug. 12, features six varieties of produce — cucumbers, tomatoes, beats, carrots, peppers and apples — all sold at up to a 30 per cent discount. 

This is the first initiative of its kind to coincide with Quebec’s biggest harvest season, when there’s lots of produce to go around and not all of it looks pretty.

“North Americans have been quite spoiled with aesthetics. We walk into a store and we’re used to seeing filled shelves, pyramids of beautiful tomatoes and apples, and we don’t expect anything less,” said Sylvain Charlebois, a professor of food distribution and policy at the University of Guelph, who cites studies showing the true cost of wasted food in Canada to be close to $100 billion a year.

“Sobeys’ approach is interesting because it allows consumers to understand that there are some agricultural cycles.”

Loblaws was the first outlet in Canada to get on the ugly produce bandwagon when it began selling potatoes and apples at Ontario and Quebec stores in March under a “Naturally Imperfect” banner.

Dan Branson, senior director of produce at Loblaws, wouldn’t share the volume or value of sales, though he did say the campaign has been a hit with clients.

“It really blew us away in terms of what our expectations were,” he said.

The concept of selling imperfect produce at major grocery stores only really started gaining traction last year when France’s Intermarché began offering “les fruits et légumes moches” (ugly fruits and vegetables), which was helped along with a boost from an award-winning advertising campaign.

This is what inspired Castro Valley, Ca., resident Jordan Figueiredo to take consumers’ obsession with fruit and vegetable aesthetics and turn it on its head through a social-media project called @UglyFruitAndVeg, which celebrates unique produce with images that include a strawberry shaped like a hand giving a “thumbs up,” or two carrots grown intertwined like they are in the midst of an embrace.

“I realized [produce aesthetics] was way bigger that any other piece of the problem as far as how much food was being wasted and why,” said Figueiredo, whose more than 19,000 Twitter followers include Jamie Oliver, Michael Pollan and other foodie celebrities.

“The idea is to educate folks and try to bring people in to have fun with it in a different way than we are used to on any sort of environmental message.”

Figueirdo said in an interview his goal is to convince major North American giants such as Costco and Wal-Mart to take the lead on selling fruits and vegetables that look less than perfect.

Charlebois said that for the time being, only big chains will be able to participate in these ugly-produce campaigns because smaller independent stores don’t have the retail volume to negotiate good prices with farmers. Loblaws, for example, is the biggest in grocery chain in Canada with about 32 per cent of the market.

“There’s a bit of a paradox,” Charlebois said. “This ugly fruit and vegetable strategy is highly exclusive for now, given all the economics of how supply chains work.”

Both Ouellet and Branson said the growers themselves were initially reluctant to get onboard with selling a product that could potentially cut into their profits if consumers preferred buying ugly produce at a discount.

“I think they were a little bit nervous going, in but I think it’s worked very well for everybody involved,” Branson said.

Charlebois said farmers could have a reason to be concerned about competing for a limited food market, though they could also see greater profits by reducing wasted crops.

“It may actually become easier for farmers to sell their entire crop moving forward as a result of this paradigm shift,” he said.

“The biggest winners in the entire supply chain are likely farmers in the end. I do believe that they are going to be finding a market for products that were unwanted.”

Sending scorned fruits and vegetables to a food processing plant, while it may seem efficient, accounts for about 18 per cent of all waste, Charlebois said, adding that farmers make more money selling fresh produce, even if it’s at a discount.

Figueirdo said that although selling ugly produce for less can make a big difference — especially for lower-income customers — he hopes that eventually it will just become less important what the fruits and vegetables look like.

“This produce should cost the same as other produce at some point because it’s just as nutritious and tasty, but if we want to make this work and get people started, the incentive is huge to have a discount,” he said.

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