UGI 40th Anniversary publication, Nov. 2012

I 4 0 t h A n n i v e r s a r y • U G I

u n i t e d g r o c e r s i n c .

3 4 0 t h A n n i v e r s a r y • U G I

4 4 0 t h A n n i v e r s A r y • U G i


oUr MIss Ion

to be a United national Procurement Organization of Food retailers

committed to work together and co-ordinate partnerships that will deliver

national and private brand opportunities in all departments.

Generate cost reductions and effi ciencies with maximum performance,

value, and commitment for mutual benefi ts of

members and suppliers.

Wo r K i n g t o g e t H e r = Wi n n i n g t o g e t H e r



H a p p y 40 t H

it’s time to celebrate – UGi is 40 years old! During all of these years, the

mission has always been the same: to serve our members’ needs the best

we can to generate benefits for all of them.

if today UGi represents over 23% of the food industry in Canada with

members and stores in all provinces, it’s not a coincidence. the recipe for

this success resides in very simple but essential ingredients:

• Members who are working in co-operation, and with respect and trust

for the same objectives.

• Partnerships with suppliers that generate programs, activities, and

positive results for all parties.

the market has evolved tremendously in the last 40 years, and the UGi

Board Members and Merchandising Committee always took care to make

sure UGi’s mandate was evolving at the same pace.

today, we celebrate the success of these past 40 years, and appreciate the

present with all it can offer to each of us.

But more importantly, we look to the future with confidence, with a

new and extended mission to make UGi even “Bigger and Better.” We will

continue to work closely with our current suppliers and all our new partners

who will join us in the coming years.

And we know that by Working Together, we will win together.

Happy Anniversary!

Denis Gendron

President

United Grocers inc.


Original United Grocers Wholesalers Ltd. logo

and charter document, 1972


Overwaitea, B.C.

Consolidated Grocers, B.C.

victoria Community Grocers

Co-operative Association, B.C.

United Grocers Wholesale, B.C.

slade & stewart, B.C.

Alberta Grocers, Alta.

Associated Grocers, Alta.

Merco Wholesalers, Alta.

newhouse Wholesale, Alta.

interprovincial Co-operatives, sask.

(which included Atlantic Co-op

and Federated Co-op)

Merchants Consolidated, Man.

Weidman Bros., Man.

the same decade, Woodward’s (1975),

A&P (1978), and sobeys (1979) joined.

THE FoUnders


CUrrent MeMbers &

shareholders

Canada safeway Limited – 2004

Colemans Food Centre (Focenco) – 1999

Co-op Atlantic – 1972

Federated Co-operatives Limited – 1972

London Drugs/h.y. Louie Co. Limited – 2011

Longo Brothers Fruit Markets inc. – 1999

Metro inc. and Metro Ontario Division – 1981

the north West Company – 2010

Overwaitea Food Group – 1972

representInG

34% market share food industry

23% all channel retail/food

Over $25 billion annual sales


the teaM behInd the MeMbers

Working alongside president Denis Gendron is a small but enthusiastic

team dedicated to working in the best interests of members.

Denis Gendron

Anna Wickens Administration manager

Kevin Hayes Director,

business development

Shay Baksh Executive secretary

Rocco Di Mascio Director,

business development

Anita Young Category analyst

Business development directors Kevin hayes

and rocco Di Mascio are “always looking at new

opportunities to generate benefits for the members.”

Anita young, he says, has

worked for UGi for nine years

“with passion and interest.”

if UGi is successful today, says Gendron,

the staff has played “a huge part” in that accomplishment.

“Anna Wickens and shay Baksh were with Mike [Marinangeli]

15 years ago at the start of the toronto operation, where they

were and still are an important asset to UGi,” says Gendron.



FoUr deCades oF CollaboratIon

& CoMMItMent

Over the past four decades, United Grocers inc. (UGi)

has grown from a small western group of wholesalers

into the largest food buying group in Canada. in the process,

it has evolved from a volume-rebate house into a national

procurement and marketing organization with representation

in every province and the northwest territories. • UGi now

co-ordinates national brand promotions, preferred supplier

arrangements, and private-label and seasonal procurement and

promotions, besides managing volume rebates from suppliers.


F orty years ago, 12 insightful western-based wholesalers banded together to pool their

buying and save money through volume rebates. And so was born what was then called

United Grocers Wholesalers Ltd.

the group chose George Deegan, formerly manager of food operations for interpro-

vincial Co-operatives, to lead them as president from their Calgary-based headquarters.

“George Deegan was hired and looking for an office in Calgary, as most of our

members at that time were western based,” recalls steve van der Leest, former president of

Overwaitea Food Group, who has been involved with UGi from “the early days,” as a board

member, chairman, and member of its merchandising committee. “One of the members was

the place where i worked, Associated Grocers. the president offered George the use of an

office until he found one for United Grocers – and he never left! George did a wonderful job

building relationships and helping our group earn respect in the food industry.”

Deegan, who remained in that position for the next 25 years, remembers some early

growing pains. the biggest challenge in those days, he recalls, is the fact that there were

“quite a few volume discount programs in the marketplace, and some of the larger food

manufacturers would not recognize buying groups.” One supplier accused the new organi-

zation of claiming to represent members in many locations, but not having bank accounts

in those places. “Forty-eight hours later, i had set up bank accounts in all our shareholders’

cities,” says Deegan. he notified the supplier, who, he chuckles, “finally ran out of excuses

and ended up recognizing us.”

it even took the threat of delisting the products of one major national company for

it to recognize the fledgling buying group. But, in a theme that has carried throughout the

40 years, the members stuck together and stood their ground. “We couldn’t have been

successful had we not had the complete co-operation of all our shareholders,” says Deegan.

“they all believed in the company, and they knew we had to stand together in order to try to

buy competitively with the big guys. so what really gave us credibility and turned it around

is when our people started acting as one.”

success breeds success; just a few years later, the group started getting inquiries from

some of the larger food organizations in eastern Canada, says Deegan, with Woodward’s,

A&P, and sobeys joining later that decade.

p r o u d p a s t 1972 : t h e b I r t h o F a b U y I n G G r o U p

Paul Henderson scored the “goal of the century” to give Canada the win in the first Canada–Soviet Union hockey Summit Series.

Pierre Trudeau’s Liberals won a minority government in the federal election.

Associates of the Nixon admin-istration broke into the Democratic

National Committee headquarters at the Watergate office complex in Washington, D.C., precipitating one of the biggest political scandals of the century.

A small band of Western Canada wholesalers founded United Grocers Wholesalers Ltd., now United Grocers Inc.

1972 The way it was


United Grocers Wholesalers scored a coup in 1981 with the addition of Metro inc. in

just nine years, it had blossomed into a truly national organization with significant

market share.

Over the decade, membership fluctuated, however, as four of the original members

went into receivership. But in a classic case of making lemonade from lemons, the group paid

the suppliers in full, and earned a great deal of respect – and new business – as a result. “UGi

paid all of our suppliers 100 cents on the dollar within their published terms of sale, whereas

non-UGi members got what was left over from the liquidators,” says Deegan. “so that gave us

a lot of credibility, and i think that’s what attracted the larger eastern chains.”

“the industry learned UGi was a good place to do business – they could trust us,”

adds van der Leest. “And it’s still that way today.”

And so was cemented a mutually beneficial partnership that endures to this day. “We

had excellent relations with our suppliers, and they were a big part of our success,” notes Deegan.

the organization also forged a unique relationship among the members, several of

whom – in the western provinces particularly – were direct competitors. “UGi deserves credit

for creating an organization that is truly national with very little competitive friction among

its members,” says John harvie, retired president of founding member Co-op Atlantic.

terry Bell, recently retired from several senior executive positions at Federated Co-

operatives Limited, cites the harmonious working relationships as one of the greatest ac-

complishments of UGi. “One of the [most] satisfying things to watch evolve was the working

relationships to benefit all members, even though some competed with each other,” says Bell,

whose involvement with UGi spanned 1987 to 2011. “this is a tricky thing to do, and at the

same time not talk about pricing at a retail level due to competition rules.”

Bell, who served on both the merchandising committee and the board, including

two years as chairman, notes that when he became affiliated with the merchandising com-

mittee in 1987, its main role was to support those suppliers that recognized UGi. “We would

purchase as much product as we could from those suppliers to enhance our volume rebates

and improve our buying power in order to be competitive with the larger players in the in-

dustry.” that role would expand considerably over the subsequent decades.

A harbinger of this evolution was the organization’s name change in 1987 to United

Grocers inc., to reflect the retail focus of its members and usher in a new era.

t H e 1980 s a n a t I o n a l p r e s e n C e

Terry Fox, humanitarian, athlete and cancer treatment activist, died nine months after ending his historic cross-Canada run outside of Thunder Bay, Ont.

The Canadarm, designed for maneuvering massive payloads in space, was first deployed aboard the Space Shuttle Columbia.

The IBM Personal Computer was introduced.

Metro Inc. joined UGI, making it a truly national organization.

The way it was1981


the final decade of the 20th century marked a period of growth and innovation, but also

turmoil, for UGi.

By the mid-’90s, UGi accounted for more than 30% of the supermarket volume

in Canada, with dominant market share in every province. As a group, it ranked number

one in volume across the country in many grocery categories, and enjoyed significant

buying power.

With UGi on firm footing, George Deegan took a well-earned retirement in 1997,

and Michael Marinangeli, who had most recently been vice-president merchandising at

Oshawa Foods, stepped in as the second president.

With the change in leadership came a new mandate for the 25-year-old organiza-

tion. Whereas UGi had been founded to consolidate purchases to earn volume rebates, it now

set its sights on becoming a national procurement organization.

in the mid-’90s, recalls Bell, “we started to negotiate specific products to get the best

price we could for the group.”

Under Marinangeli’s direction, UGi progressed over time “from a volume rebate

house to one of much more partnering with suppliers on new initiatives, targeted growth

categories, and looking for new opportunities where there is a win–win between UGi and

the supplier,” says Brad Bauml, vice-president consumer products, Federated Co-operatives

Limited, who joined the merchandising committee in 1992.

As Marinangeli explains, “we evolved from volume rebates into consolidating our

purchases to get better costs on store supplies, meeting with grocery manufacturers and

putting together programs to earn more money as we grew our business.”

to facilitate this mandate and gain greater visibility with suppliers, Marinangeli’s

first order of business was to transfer UGi headquarters from Calgary to toronto.

t H e 1990 s M o M e n t U M a n d C h a l l e n G e s

The 13-kilometer Confederation Bridge, the world’s longest bridge spanning ice-covered waters, opened between Prince Edward Island and New Brunswick.

Jean Chrétien’s Liberal Party won a second consecutive majority in a federal election; the Reform Party became the official opposition.

The F.W. Woolworth Company closed after 117 years in business.

Michael Marinangeli became the second president of UGI upon the retirement of George Deegan.

The way it was1997


MercHandising coMMittee sets tHe pace

at the heart of the evolution was the merchandising committee, which Marinangeli

calls “the nuts and bolts of UGi.” Although the committee had been in existence

for many years, it now took on a new significance. From the outset, Marinangeli met with

the committee every 90 days, and undertook a series of projects suggested by its members,

initially two or three. “it set the stage for me to get things going,” he notes.

Comprising the merchandising representatives from each member company, the

committee decides which areas and programs UGi could improve upon by acting as a group,

explains van der Leest.

“the role of the merchandising committee is to agree or disagree on the opportuni-

ties and on the participation, and then we give the mandate to UGi,” says Pierre Charron,

vice-president national procurement, Metro inc. From there, UGi staff work tirelessly to

bring the suggested programs to fruition. “UGi, through the merchandising committee,

brings national brand programs and private-label opportunities that we would not have

access to without being a member of UGi,” says Al hollman, food marketing manager,

Federated Co-operatives Limited.

“it’s fun to watch [the merchandising committee] meeting in action,” enthuses

van der Leest. “you have a group of very smart and savvy grocers, all fiercely competitive

– sometimes with other member companies – but trying to see what can be done collec-

tively better. And the bonus is that a great fellowship develops between merchandising group

members, making it even more creative.”

even though several members in the western provinces are direct competitors, they

function as a team on the merchandising committee, respecting one another’s differences

and leveraging their commonalities. “With the assistance of the UGi team, we are able to set

aside our competitive differences and work together on co-ordinated product procurement,

private label, store supplies, and co-ordinated merchandising promotions,” says Albert Lum,

director of merchandising at Buy-Low Foods.

“it takes an open mind to do what we did,” agrees Marinangeli. “you’re getting,

especially in Western Canada, people who basically compete with each other working

together, without divulging confidential information. We never talked about pricing; we

never talked about margin. When i started my meetings, i always made it clear that we

were there to level the playing field in the marketplace so that we can buy better to compete.

everybody bought into it.”


collaborative effort pays off

Collaboration – with fellow members and suppliers – has long been the watchword

of UGi. “Working collaboratively, we can achieve better results than we can individu-

ally,” notes rob Felix, general manager and business unit manager, general merchandise,

at London Drugs.

For suppliers, the merchandising committee provides the opportunity to present

their programs in a single meeting where the retailers have coast-to-coast representation –

a sort of one-stop sales presentation.

For example, the group buys confectionery together for halloween. “When the

suppliers talk to us, instead of individual members, they talk to the whole country,” says

Marinangeli. “so usually, you can get better programs.”

A case in point is nestlé Canada inc., which has been working with UGi since

its inception. “On halloween, for instance, we have built a very effective program together

over the years,” says Daniel rhéaume, vice-president customer development, eastern Cana-

da. “every year, we thoroughly review the trends and results together. And following each

season, we review the results to identify the best strategy and packs, and create a compelling

program and target for the following year.”

Participation in each program is voluntary for members. “We all respected their

individuality,” says Marinangeli. Once making a commitment to participate in a program,

however, members honoured that agreement.

“Over the years, the group has done well because we lived up to our commitments,”

adds van der Leest. “We did what we said we would do, and acted as one while doing so.”

Bill sexsmith, vice-president sales and marketing, Canada safeway, and current

chairman of UGi, agrees. “the concept is so successful because of the ability of the group to

stay united,” he says. “that’s the heart of it. if the group wasn’t united, and if the group did

not perform and execute against the commitments that it made, it wouldn’t be successful. so

it’s the unity; it’s the execution; and it’s the delivery of the commitment.”


private-label procureMent

it wasn’t long before UGi extended its procurement mandate to private-label products.

“UGi also began to play a significant role in the co-ordination and procurement of member

private labels, which has been of great value to the members,” says Bauml.

“Mike eventually took it to a new level, starting in the late ’90s when he hired some

additional staff to negotiate private-label products for the group, along with national brand

labels,” adds Bell. “this took off in the early 2000s.”

van der Leest recalls that era with some amusement. “the early days of this venture

were interesting,” he notes. “every grocer in the world thinks they are the best buyers around,

so agreeing on one standard of private label would come down to deep agreements among

members – for example, how many chocolate chips our private-label cookies should have! it’s

sort of comical looking back on it now, but as always in UGi, all members would find a way

for the greater good.”

in addition to working with the merchandising committee and board members,

Marinangeli visited member offices once a year to meet with category managers about past,

present, and future programs. “We complimented them on their support because once we

agreed on a project, those people had to execute the programs. so we made the category

managers part of the process.”

With UGi negotiating national deals, “it allows our category managers to focus

on other initiatives,” says Pat Pessotto, vice-president, grocery merchandising, for Longo

Brothers Fruit Markets inc.

to cement relationships with its supplier partners, UGi launched the annual

supplier appreciation dinner in 1998. “it’s our way of saying thank you,” says Marinangeli.

the tradition has continued over the years, and will be celebrated this year as a special 40th

anniversary celebration for valued suppliers. “it brings a group feeling to the industry,” says

scott MacLaughlin, national sales manager, the Clorox Company of Canada Ltd. “there’s a

lot of work and effort to bring the entire vendor community together to these meetings. you

feel the word ‘United’ in ‘UGi’ is definitely brought forward.”

As the century drew to a close, UGi encountered a major hurdle: industry consolidation

took its toll on the organization, resulting in the loss of two major members in 1999. sobeys

bought the Oshawa Group and resigned from UGi to join Oshawa’s buying group, iGA

Canada. Meanwhile, A&P decided to ally with its U.s. group, and resigned from UGi shortly

thereafter. “in the span of four weeks, we lost 42% of our business,” recalls Marinangeli.

Although he now had a head office in Ontario, he had no members in that province.

But out of the ashes arose a new and revitalized organization.


MeMorIes are Made oF thIs . . .

(as told by John Harvie, retired president of Co-op Atlantic)

One year, at the UGi board and merchandising committee annual

dinner, an event always attended by spouses, we were in a hotel

restaurant, and everyone was in a good mood.

it was my first experience with this event, and perhaps i hadn’t

learned how to behave yet, or maybe it was the wine, but i like to sing;

and so i started singing. to my pleasure, many people at my end of the

room joined in.

On the other side of the room, Alex Campbell’s wife, Jo (from

thrifty Foods), started singing in competition with us. they sang a song

and then we sang a song. it was quite hilarious, and then Jo delivered

the winning tune.

she actually paid a trumpet player from the hotel band to

accompany her side in singing When the saints Go Marching in.

We had a great time and it demonstrates the human side of

UGi, which i hope is never lost.

Parmalat, Smuckers,

Ralston


1997 biggest sales increase – HersHey canada

UGI reCoGnIzes exCellenCe

in 1998, UGi established a vendor awards program to recognize excellence in merchandising

and sales performance. the premier awards (presented in 1998 for 1997 achievement) were

scott Paper for “Best Merchandising support”. hershey’s Canada for “Best sales increase”.

From left to right: Michael Marinangeli - UGi, John McClelland - scott Paper Ltd.,

Gerald tremblay - Metro inc., Len Bosgoed - scott Paper Ltd., David erskine - scott Paper Ltd.,

Joseph Kruger - Chairman and CeO Kruger inc., Bill Clark - sobeys

From left to right: Michael Marinangeli - UGi, John Dunne - A&P, Duncan reith - A&P,

Gerard tremblay - Metro inc., richard Meyers - hershey, ross robertson - hershey,

Mike LeBlanc - hershey, Bill Macisaac - hershey

1997 best MercHandising support – scott paper (Kruger inc.)


t H e 2000 s n e w M e M b e r s , M o r e o p p o r t U n I t I e s

thanks to the ceaseless efforts of Marinangeli, it didn’t take long for UGi to recoup the

losses it had suffered from the resignation of sobeys and A&P. even before the dawn

of the 21st century, the organization had recruited independents Longo’s from the Greater

toronto Area, and newfoundland-based Colemans. the same year, Metro bought Loeb, and

Overwaitea acquired Coopers Foods. UGi was once again a powerful national entity!

“the remaining membership stayed strong when the organization was at its lowest

ebb, and ended up stronger than ever in the evolving marketplace,” says harvie.

For Colemans, with a dozen grocery stores across newfoundland, it gave the

smaller independent the chance to be part of a focused purchasing and sourcing group,

says Frank Coleman, president and CeO. “it exposed us to the thinking of the bigger players

in the field. it allowed us to focus on common problems facing the members and solve them

in a unified way.”

Anthony Longo, president of 25-store – and counting – Longo Brothers Fruit Markets

inc., cites as one of the informal benefits of UGi membership “just being with other retailers

from across the country, and sharing best practices and getting ideas from each other in terms

of how we can better serve the community and the Canadian consumer.”

throughout the first decade of the new century, the rebuilding process continued.

in 2004, Canada safeway joined, and A&P rejoined, UGi. While Metro’s subsequent purchase

of A&P in 2005 had a neutral impact on the organization, the addition of A&P and safeway

increased its size by a whopping 40%. “We rocked the marketplace when we added A&P and

safeway,” Marinangeli recalls. “that was huge.”

in 2010, the northwest Company joined, giving UGi a presence in northern

Canada. Dave Chatyrbok, the northwest Company’s vice-president, Canadian procurement

and marketing, says the retailer benefited from working with UGi on the development of

some of its Best value private-label line. “With the Best value label, we were able to work

with the different members of UGi and with the suppliers, and as a result, we were able to

add value into that product for us,” says Chatyrbok. UGi offers the northwest Company the

ability to continue to run separate private-label brands while helping it look at different

avenues to meet minimum quantities and ship dates, he adds.

For its part, Canada safeway has multiple manufacturing plants that give the

retailer “an opportunity to share our knowledge and our ability of what we can produce in our

different plants that we have available for the membership,” says hanif Mohamed, director,


grocery operations. “so if there’s something they’re looking for, they can align with safeway

in our plants. the membership is very open to looking at what safeway plants manufacture

and to seeing if there’s a fit for them.”

UGi members frequently collaborate on private-label products, says robert Lemoine,

vice-president food wholesale, Co-op Atlantic. Previously, he explains, several of the mem-

bers had their own private-label formula for, say, ketchup, necessitating smaller and more

costly production runs. Members were able to agree on a common formula and bottle, so that

when the supplier had completed each production run, it needed only to change the label,

rather than having to retool. Otherwise, “you could be down for a day or two just gearing

up for somebody else’s production,” says Lemoine. By joining forces and working together,

members can save large amounts on their private-label products. Lemoine says all of Co-op

Atlantic’s organics programs are handled that way.

One of the accomplishments of which Marinangeli is most proud was the launch of

a UGi national brand called simply Kids in 2005. UGi worked with the private-label teams

from Metro and A&P – then separate companies – to develop the line, which includes such

products as baby food, wipes, baby powder, and diapers. “it was a tremendous success,” he

says. “During my tenure, that was a major highlight.”

the year 2011 brought the newest member of UGi: h.y. Louie Co. Limited/London

Drugs Limited. “UGi is an organization that is constantly on the hunt for value to bring to

its members,” says Laird Miller, corporate secretary, h.y. Louie, of the retailer’s decision to

join the group.

According to John Macnichol, vice-president merchandising, for h.y. Louie, UGi

has afforded the company many opportunities over the past year around “speed to market.”

For instance, when General Mills came out with some new products, it presented h.y. Louie

incentives to get the products to shelves faster than usual. “this benefits everyone, because

when General Mills marketing efforts hit Canadian airwaves and newspapers, we have the

product available,” says Macnichol.

Mark Zuckerberg and three fellow students launched Facebook as a social networking site open only to Harvard University students.

The Liberal Party, led by Paul Martin, won a minority government – Canada’s first since 1979 – of 135 seats in the federal election. The Conservative Party, led by newly elected leader Stephen Harper,

became the official opposition with 99 seats.

Canada Safeway joined UGI, and A&P rejoined, increasing the group by 40%.

Tommy Douglas was voted “The Greatest Canadian” in a CBC television series poll.

The way it was2004


the General Mills product launches to which Macnichol refers are part of a speed-

to-market program called “innovation,” one of two types of campaigns the supplier runs

with its UGi partners. “We have a plan with each member of UGi to drive efficiencies and

gain speed to market,” explains Pascal Beauchemin, director of sales, General Mills. the

program helps members get new products on the shelf quickly, “which is good for both

parties,” he adds.

A case in point: the launch of the company’s Chocolate Cheerios, which Canada

safeway’s Mohamed says was particularly successful. “General Mills presented the mem-

bership with an opportunity,” he explains. “the membership pulled together, agreed on

what we were able to do, and we had a really fantastic promotion. We were first to market on

the Chocolate Cheerios, exceeded the sales expectations, and grew share. it was a win–win.

General Mills was extremely pleased with the results. it’s a great example of how UGi works

together to deliver bigger results”.

reflecting on the highlights of his 14-year tenure as president of UGi, Marinangeli

cites, in addition to the launch of the simply Kids line, transforming the organization from a

pure buying group into a national procurement organization, as well as recovering the loss of

40% of the business. “i guess for me personally, a highlight was watching the members grow

and be successful over the 14 years i was there,” he recalls. “We never had a rift or a fight in

the group. everybody got along, and everybody worked together.”

in 2011, as Marinangeli made way for a new president, UGi, once again with

representation in every province, continued to reinvent itself.


2012 F o C U s o n t h e F U t U r e

after 40 years of service to its members, UGi today is a national procurement organiza-

tion that represents key retailers across the country with a combined share of 34% of the

Canadian grocery industry. now led by president Denis Gendron, the organization is focused

on a future that will reap even more benefits for its members.

that optimistic outlook is reflected in a new logo, website, and mission.

Under its new mission, UGi is forging partnerships beyond its existing grocery activi-

ties to include suppliers of all business areas, fresh departments, and other store operation

services. in other words, “any areas of activities where we can leverage the group volume to

generate synergies, like equipment, both purchases and contract services, and operational

expenses, such as mobile, courier, freight, and other costs,” says Gendron, a 30-year veteran

of the industry.

“in the past, most of the activities were focused on the grocery categories,” explains

Gendron, who became president in July 2011. “When i was hired, there was a specific request

from the members to expand what we were currently doing. now we’re looking at other areas

of business where we can use the group size and volume, and to make agreements as we’ve

done with the grocery products.”

UGi recently welcomed five new suppliers of equipment and services – DiGi Canada

inc., hewitt Material handling, nimbus Water systems inc., Plain and simple uniform program,

and ronco Canada safety equipment and furniture – and continues to negotiate with others.

“We are starting negotiations for courier costs, credit- and debit-card fees, and several

other areas of business,” says Gendron. “if we can help the members reduce their operations

costs, and at the same time, provide them new benefits on the other side with better costs and

rebates on the fresh products, it will be beneficial for them.”

“UGi continues to evolve by broadening the scope of the programs it builds,” notes

Canada safeway’s sexsmith. “entering new areas of opportunity – like supplies, and fresh

goods and perishables – are two very good examples.”

“Denis and the senior management are always looking for additional ways to

add value to the membership,” says h.y. Louie’s Miller. “this could evidence itself in new

programs for products that currently flow through the group, but could also mean entirely

new products and services. We see that list, and we encourage him to poke at it all the time.

What else can you do? What else can you add? he is doing great things by reaching out and

trying to hit new areas. Denis is a go-getter. he’s a great addition to the team, and he’s a great

leader from an organizational perspective. ”

“We’re doing a lot more things,” agrees Co-op Atlantic’s Lemoine. “We’re negotiating

different programs. We’re negotiating different commodities. We’re into services, where we

weren’t two years ago. We’re into private label, which we weren’t four or five years ago. We’re


doing more fresh, which we weren’t doing three years ago. And just by Denis coming in as

the new president, that’s an evolution in itself,” as it opens the door for new ideas.

“Mike [Marinangeli] is seen as a leader in the industry,” adds Lemoine. “Mike is very

knowledgeable and Denis is proving to follow very much in his footsteps. Denis has some new

ideas, and those new ideas are going to take us even further.”

“We have been very fortunate to have found outstanding presidents to lead UGi over

the years,” says van der Leest. “Denis Gendron took over when Michael retired, and kept the

tradition of operating with a small, effi cient team dealing with respect and integrity with the

supplier community, while at the same time, he’s been advancing UGi in modern ways and

new areas of group buying opportunities.”

vendors are also enthusiastic about the prospects for the group. “i’m excited about

the new vision of UGi and the new look that Denis has brought to it, not only from a

logo change, but trying to take it to the next level,” says Bill Dunne, president of broker

Acosta and longtime UGi vendor partner. “Acosta is excited about being part of that future as

we continue to work with our current clients who recognize UGi, along with new client

opportunities down the road.”

Acosta even hosted a UGi Day in July, so its clients could fi nd out more from UGi

executives about the group’s new look and future plans. “We’re committed to working with

UGi,” adds Dunne. “We’re excited about what the future holds with UGi, and they obviously

occupy a very important position in the Canadian marketplace with the members that they

represent.”

Marinangeli is also a solid supporter of UGi’s evolutionary direction under Gendron.

“i think Denis was the right choice,” he says. “he seems to ‘get it,’ and he knows the business

because he has a very solid background in retail. he knows how to negotiate, and he’s got the

right personality.”

But as many will attest, the road ahead will be fraught with pitfalls. “the grocery

business is very competitive, and there are now many alternative channels,” says Michael

Coleman, vice-president, merchandising, procurement, and distribution, Colemans. “Our

challenge is continuing to remain relevant to consumers as they shop these various channels.”

UGi, as always, is up to the task. While the organization may have a new mission, its

focus remains unchanged. “the UGi team has a dedicated group of people with one common

goal: to generate benefi ts for its members,” says Gendron. “it has been our goal for the last

40 years, and will remain for the next 40.” he is quick to give full credit to the staff. “some of

them have been working since day one with Mike. if things are going well at UGi, they are a

huge part of that success.”

Although founding president George Deegan retired in 1997, he watches the con-

tinuing success of the organization from his base in Calgary with great interest and satisfac-

tion. “i still feel really close to the company, and i’m just so pleased that it has carried on and

been taken to another level.”


a Win–Win proposition

today, UGi is responsible for about one-third of the national brand grocery sales in

Canada, an accomplishment that wouldn’t have been possible without the co-operation

of retailers and suppliers to the benefi t of both parties.

“UGi attempts to create real partnerships in driving the business between retailers

and suppliers,” notes Frank Coleman. “Colemans has benefi ted from that exposure, and

especially the thinking that UGi management brings to the process.”

vendors are equally enthusiastic about the relationship. “the UGi members represent

34% of the Canadian CPG landscape,” says Matt Blixt, regional vice-president, Kruger Products

L.P. “this is signifi cant and benefi cial for vendors when presenting and implementing programs.

it would be much more challenging to execute the scale of programs we do working with the

members individually.”

the UGi member–vendor partnership is a powerful concept, says Longo. “Packaged-

goods companies, branded, even private label, can come to us and get a signifi cant block of

business if they’re successful, with one stop to UGi and working with our merchandising

committee, which really sets the agenda for the categories we’re going to focus our efforts

on. And then i think the key thing is, when UGi says we’re going to do something and every

member signs off saying that they’re going to support certain categories, UGi can go to the

packaged-goods companies with full confi dence that all of the members that have signed up

will execute that program. so if 70% of the members say they’re going to do something, that

70% is committed. the other 30% aren’t committed, and the vendor knows that right up

front. so there are no games played.”

the relationship is clear-cut and straightforward. “Our goal is to provide service

and quality at competitive prices, and we look for customers to commit their volume to us,”

says Cary Weiss, sales executive, hymopack (rosenbloom). “And so we work hand in hand as

partners.”

“UGi used to be a buying group, but increasingly we are now becoming a market-

ing group,” says Michael Coleman. “shrewd vendors know they can get national penetration

through this group. More vendors are approaching UGi as a way to get speed to market on new

product launches.”

Among those vendors is Acosta, which has several clients working with UGi on

various programs. “UGi is very collaborative, very engaging, and very open to new ideas on

driving profi table business growth, says Dunne. “i think what attracts us to them, obviously,

is the breadth and size and scale that they bring in the representation of such strong members

to do business with.”

“in these times of mega-national and international retailers, sometimes being very

demanding of suppliers, it’s healthy for the food industry to have the UGi group as an alterna-

tive – a place of integrity where together everyone is trying to grow business in unique and

creative ways,” says van der Leest.


ugi prograMs and proMotions

When UGi works with suppliers, “it really tries to come up with programs that are a

win–win,” notes Marinangeli. And there have been many over the years.

Kraft Canada inc. has been supplying UGi members, and building strong rela-

tionships, since the buying group’s inception. “UGi helps provide scale to the consumer

programs that we execute, such as hockeyville,” says Dino Bianco, president. “UGi provides

one voice to the members, helping us gain member support and consistent, solid execution.

We work with UGi each year on mutually beneficial volume-building programs designed to

leverage our growth categories and create consumer excitement in-store.” Once members

commit to a program, he adds, UGi works with them to achieve results.

Bianco cites the example of a program in which Kraft collaborates with UGi to

promote sustainability, either through reusable grocery bags or by highlighting sustainable

packaging. the program allows Kraft to promote its sustainability programs and products,

while helping drive awareness of UGi and member sustainability initiatives, thereby boost-

ing sales for both parties. special customer business teams focus on UGi members, exploring

opportunities to grow one another’s businesses and develop categories profitably.

Metro’s Charron recalls another promotion with Kraft, for the launch of MiO Liquid

Water enhancer. “there was a price that was available for the group if we put displays in our

stores,” he says. “then we also got a rebate at the end, based on our purchases.”

in general, explains Charron, many of the programs are based on growth. “if we

grow the category to the level we agree with the supplier, there’s a payout. And if we go and

achieve a different level of volume, then that rebate goes up based on the target we have.”

With Metro being one of the largest members of the group, it sometimes has

programs that UGi will try to leverage for the whole group. in that case, says Charron,

“i win, too, because the rebate is based on volume, and the more partners we have, the better

it is for Metro.” sometimes the deals involve an additional rebate on some of the supplies, for

instance, while others represent a saving on the cost of goods.

Longtime supplier Old Dutch Foods ran a successful promotion with UGi members,

whereby customers who purchased four bags of Old Dutch potato chips received a free bag

of M&Ms. “this was offered to all the UGi members, and was executed by nearly all the

members,” says steve Maddeaux, national director of key accounts. During the year, he adds,

“we present any opportunities for similar extra-value promotions that we can run to bring

more value to the UGi members’ customers with no additional cost to the members.”


One promotion that was particularly memorable for tom Mainville, director, grocery

category management, Co-op Atlantic, was General Mills’ World Junior hockey program.

For two years running, the retailer partnered with the supplier to create in-store excite-

ment and generate increased sales. the promotion included many in-store events, product

displays, and the chance to send the winning consumers to see the championships,

which were held one year in Buffalo and the next in Calgary. “it was regionally set up and

account-specific, and each account had its own prizes,” says Mainville, who calls UGi

“critical” to Co-op Atlantic. “it gives us a voice that we would not have, whatsoever.”

Meanwhile, on the West coast, Buy Low Foods’ Lum also cites the 2011 iihF World

Junior hockey Championships, calling it “one of the best merchandising opportunities that

was offered exclusive to UGi members.” he says programs were customized and tailored to

each member, and had strong consumer impact and excellent feedback. “We repeated the

program in 2012, and had even better results, as [the Championships] were held in Alberta.”

Customer marketing events, such as the World Junior hockey promotion, represent

the second type of program – along with speed-to-market support for new product launches

– that General Mills runs with UGi members. Last March, in a similar vein, the company

partnered with members in a promotion called Free Frenzy Grocery, whereby consumers

could win a $50 gift certificate every hour during three weekends. “it was well implemented

and accepted by most of the banners,” says General Mills’ Beauchemin. “We try to find ways

to have customized promotions that are exclusive to each member across the country.”

in another initiative, UGi developed a pizza program with nestlé Canada that,

according to Charron, “is working very well.” he says UGi members have more than 40

projects on the table there, with most members participating in the various opportunities.

Whereas previously, the programs represented a volume-rebate type of approach, Charron

estimates that about 25% of the current projects are what he calls “merchandising opportu-

nities.” he adds that “there is no limitation on the type of category of products, or the size,

if the opportunity is a good one for the group.”

“UGi provides suppliers access to a group representing over 34% market share in

Canada, and gives the opportunity to develop national partnerships, on branded or private

label,” says Josianne Légaré, vice-president sales Western Canada, Lassonde sales Group. “it

supports suppliers by co-ordinating different initiatives and communicating to the members

on an ongoing basis.”


in 2008, Lassonde put together a branded program in collaboration with UGi,

“providing an incentive to the members, a solution to grow the category with innovative

items and improved profitability,” she says. “this program has been in place for several years,

and Lassonde has significantly grown its market share nationally, allowing the members to

benefit from incremental sales and revenue.”

Clorox’s MacLaughlin says his company has shifted its efforts this year away from

traditional volume targets to focus on execution of merchandising events at the store level.

“What that does is really focus on execution, because execution can drive consumer results

and get people into the stores. it’s having the retailer drive key themed events, such as back

to school, or cough-and-cold season, or spring cleaning. it’s a totally different twist from just

chasing a volume target.”

in April, Clorox ran a successful earth Month promotion in which UGi members

advertised the company’s Green Works line and Brita water-filtration products to tie in with

the environmental/sustainability theme. “that’s the kind of thing they all participated in,

and we want more of those events to run across the country,” says MacLaughlin. “We like to

get that common theme.” Clorox ran a summer hydration program to promote Brita water

filters, followed by a cough-and-cold flyer theme in the fall.

since 2006, Kruger Products L.P. – an original supplier to UGi – has run a variety

of merchandising programs with UGi, including its highly successful enviroCare and

Canadian Breast Cancer Foundation promotions. “Both focused on a base volume incentive with

additional opportunities to enhance revenue by supporting a specific line of products, in

these cases, our line of enviroCare environmental products – i.e., Cashmere and Purex bath-

room tissue, spongetowels paper towels, and scotties facial tissue – or products in support

of the Canadian Breast Cancer Foundation,” says Blixt. “Both of these programs resulted in

incremental sales and revenue for UGi members, as well as Kruger Products L.P.”

h.y. Louie’s Macnichol cites the Canadian Breast Cancer Foundation as a particu-

larly notable campaign, because it was in support of such a worthy cause. “not the run-

of-the-mill type of thing.” Macnichol says the past year-and-a-half as a member of UGi has

been very successful for both his company and the manufacturers overall. “everybody has

to win – manufacturers and retailers – or you don’t want to be playing. And i think it’s been

a win–win situation for both sides.”


Besides providing a forum to communicate and interact with a wide base of

independent retailers, UGi enables suppliers to gain valuable feedback on key business

initiatives, says Derril Wiebe, of Kimberly-Clark inc. the company worked with UGi

members on a recent program to support the launch of new products.

“i think the following quote by Charles Darwin very much describes and recognizes

UGi for its 40 years of success and commitment to growth: ‘It is not the strongest of the species

that survive, nor the most intelligent, but the one most responsive to change,’” says Wiebe. “After

all, i believe it is because of UGi’s continued ability to evolve with marketplace dynamics

and the changing times that they have continued to grow even stronger than they were

40 years ago.”

Perhaps Jamie nelson, vice-president operations, save On Foods, sums up the

partnership best when he says: “UGi supplier partners benefit from the relationships they

establish with UGi retailers, both in terms of deals we can put together and also because

of the strong network that exists for collaboration and idea sharing to grow our businesses

together. “it’s truly a win–win for everyone – especially our customers.”

And in the end, that’s what it’s all about.

UGI 40th Anniversary publication, Nov. 2012

Documents

Transcript of UGI 40th Anniversary publication, Nov. 2012