Buy-local push prompts Ontario grocers to go independent

Dale Kropf calls it Independence Day: On July 3, his five grocery stores in southwestern Ontario ceased to be Sobeys franchises. Corporate policies prevented him from buying local products, he says, so he joined forces with four other former Sobeys franchisees and formed the independent Hometown Grocers Co-Op.
July 15, 2009

Buy-local push prompts Ontario grocers to go independent
Local produce
Alison Crawford

Dale Kropf calls it Independence Day: On July 3, his five grocery stores in southwestern Ontario ceased to be Sobeys franchises.

Corporate policies prevented him from buying local products, he says, so he joined forces with four other former Sobeys franchisees and formed the independent Hometown Grocers Co-Op.

"We feel that local food, local presence is huge in our market and we wanted to take advantage of that," Kropf says.

Canadians are increasingly subscribing to the "buy local" and "100 mile diet" philosophies due to concerns over imported food, Kropf adds. "The pressure was always mounting — the more recalls, the more bad press from China or wherever the product was coming from. I know that in our case, our private label pickles are made in Indonesia. I couldn't believe that."

As a franchisee for a large grocery chain, Kropf says, corporate policies stipulating that he only buy federally inspected meat prevented him from stocking local products. Most federally inspected meat in Canada comes from large corporations such as Maple Leaf, Cargill and Tyson.

"Most of our beef was Alberta beef. Chicken and pork could be U.S., so to me, that was a concern that, you know, we've got all these farmers in our back yard," Kropf says.

The nine stores have retained their wholesale relationship with Sobeys for items such as dog food, spices and breakfast cereals, but the chilled meat section of Kropf's store in Elora, Ont., is now stacked high with fresh pork, chicken and beef that comes from no farther than 60 kilometres away.

The stores are located in southern Ontario communities such as Arthur, Durham, Lucknow and Palmerston.

Co-op member Peter Knipfel owns The Chesley Grocery Store in Chesley, Ont., and is part-owner of a provincially inspected local beef processing facility 10 kilometres from his supermarket. Sobeys' corporate policy meant he couldn't stock his shelves with his own beef.
Meat processors frustrated

"We actually put it on our shelves because we felt it very necessary for it to be in our community, and that prompted that we get away from the franchise system, because it was not making them [Sobeys] happy," Knipfel says. "I didn't want to ruffle any more feathers, so we just decided to part company."

The big grocery chains' insistence on buying federally inspected meat has long annoyed Ontario Independent Meat Processors, a group that represents Ontario's meat and poultry processors, retailers and wholesalers.

"We've strived to harmonize to a standard food safety level," executive director Laurie Nicol says. "We've implemented HACCP [hazard analysis and critical control points] programs to meet the needs of the retailers to ensure the integrity and safety of the product. It doesn't seem to be enough."

Lee-Ann Walker, general manager of the Ontario government's meat inspection program, says she can't comment on why the big-three grocery chains — Metro, Loblaws and Sobeys — don't buy provincial meat. "But certainly we feel that we have a system that is equivalent to the federal system."

Keith Warriner, who teaches in the department of food science at the University of Guelph's Ontario Agricultural College, says large grocery chains have good reason for insisting on federally inspected meat. Warriner says federally inspected meat processors, "can produce the volumes, the consistency, the price and the level of safety."

He adds the federal system is backed by reams of paperwork. "So when an outbreak occurs and the CFIA comes knocking on their door, they can say, 'Yes I got this product from this plant at this time,' and they can trace it [all the] way back.'"

Kropf and Knipfel say they have full confidence in the quality of the provincial meat inspection system, and they take comfort in knowing exactly where their meat is coming from.

Leaving the franchise nest hasn't been easy, though. The Chesley Grocery Store's Knipfel says putting together and publishing weekly flyers, for example, has been a challenge.

"[Sobeys] has a complete advertising department that assists you in building your advertising and your weekly flyers, so that all is the growing pains. It's a lot of work, and we're learning every day," Knifel says.

Kropf agrees that the franchisor provided a lot of expertise in promotion and human resources.

"You wake up, the prices are in your system. If there is a problem, you pick up the phone and they fix it. Now if there's a problem, we fix it. Now that comfort level has gone away and we're truly back to being an independent business again."

However, he says there are benefits to his newfound independence in the produce aisles. Kropf says Sobeys did permit franchisees to buy local fruit and vegetables, but items that don't grow in Canada or were out-of-season came in big boxes from a centralized distribution point. He says co-op members can now control the quality of their produce, and the group has hired a buyer to hand-pick fresh fruit and vegetables at the food terminal in Toronto.

"He actually looks at the quality. If the quality isn't good, we don't have it [in our store]. So before we would just get it. We'd put it out and it would either sell or it wouldn't sell," says Kropf. "Green beans is a prime example where we're now selling more green beans than we've ever sold before because they are No. 1 quality."
'Support our farmers'

For his part, Peter Knipfel says he's discovering more about what's growing locally. At his store, he says grape tomato sales have tripled since the switch to a local producer.

Mary Copp has shopped at Kropf's store in Elora for 30 years. She says she noticed the changes immediately. "I think it's great because we look for local, and you can get it here. You can't get it at [chain-store rival] Zehrs … well, sometimes you can, but not as much."

Shopper Linda Tompkins of Chesley agrees, "I don't want food from some place else when we've got food right here. Support our farmers."

Still, Warriner predicts that while that more consumers are asking for local produce, they will always be the minority. The University of Guelph professor says like organic produce, local will always be a niche market because mass production generally leads to cheaper prices.

Co-op members concede some of their wares are more expensive than those of the competition, but add that on average they are competitive. "We're not saying we're the cheapest but we're certainly not the most expensive either," says Knipfel.

Kropf adds that the ability to offer locally produced food is ultimately about quality first, price second.

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