Feds off-track courting foreign groceries

Forget Trader Joe's. Some observers say Canadian grocery co-ops are a better climate-friendly community alternative to big foreign chains.

News that federal officials eager to lower food prices are now courting foreign grocery chains to set up shop in Canada has left some questioning why the government isn't instead supporting a Canadian alternative: grocery co-operatives, or co-ops.

Unlike traditional grocers, co-ops are owned by community members or workers, a business model that requires either reinvestment of excess profits into the business or redistribution to members. Because each business is relatively small, they also have more freedom to purchase from sustainable producers and can invest more into making their business more sustainable.

There are roughly 450 grocery stores owned by their customers in Canada, from Tofino and Haida Gwaii in B.C., to Clarenville, Nfld., and Grise Fiord, Nunavut, estimates Jon Steinman, an author and expert on grocery co-ops.

Last month, François-Philippe Champagne, federal minister of innovation, science and industry, told reporters he is reaching out to international grocers, without specifying which ones, to reduce prices by increasing competition in Canada's grocery market. Only five companies control nearly 76 per cent of Canada's grocery market.

The push comes as months of price-reduction pressure from the government on Canada's largest grocers have been largely futile. Two major players — Loblaws and Walmart — are refusing to sign an industry-led code of conduct some hoped would help.

"It's important to identify that there is value in increasing competition," said Steinman. "Where does that competition want to come from? Does it want to come from, as you were alluding to, another national player? Or can it come from more independent grocers operating more locally and regionally?"

Champagne's comments reflect a "belief and assumption" that promoting global or countrywide retailers and their supply chains is inherently a good idea, said Steinman.

But the problem is, these long supply chains are "highly vulnerable" to climate disasters. This was evident during the 2021 atmospheric river crisis in B.C., when distribution hubs in the Lower Mainland were cut off from the rest of the province, leaving some rural grocers struggling to restock their shelves, he said.

Moreover, larger grocers typically impose strict requirements on the farmers and food processors supplying them. Their requirements determine how much product they provide, where they can deliver it and how consistently they need to keep it supplied. Recent years have also seen a growing trend of large grocers charging fees to put suppliers’ products on shelves, making it too expensive for smaller or more sustainability-minded companies to even get on the shelves.

Co-ops and independent grocery stores offer a way around these challenges, Steinman said. Because of their community ownership model, co-ops are well-suited to support smaller farmers or food processors or invest in climate-friendly initiatives. They also foster customers' trust that they are paying a fair price for their food because only co-op members can benefit from excess profits, he said.

"Co-ops can be incredibly powerful," said Amanda Verigin, marketing and sales manager for Nelson, B.C.'s Kootenay Co-op. "In small, rural areas where you can have a group of like-minded people come together and decide what kind of food they want to supply their community with — that is an incredibly powerful thing."

Unlike a conventional grocery chain where foods on the shelves are standardized across entire regions or countries, the Kootenay Co-op takes its cues from members about which products to stock. Since its inception decades ago as a hippie-led buyers club, the store has prioritized local farmers and producers and only organic produce, she said.

The store's independence and requirement to reinvest profits in the community or its members has also allowed it to find more sustainable methods that larger chains might overlook. For instance, the store keeps its food scraps and compost for farmers and members to pick up and feed their chickens or pigs. It also has its own butcher's shop and kitchen where staff prepare everything from broth to pork tenderloins and dog food, which drastically reduces food waste.

Food waste accounts for nearly 56.6 million tonnes of greenhouse gases (GHGs). Just under half of Canada's wasted food comes from grocery stores and food retailers. Often, this food is thrown out because it is cheaper for stores to trash it than to find alternate uses, Verigin said.

She added that the store invests in local community organizations, including groups advocating for more sustainable and climate-friendly policies. The store is also looking at supporting affordable housing, food charities and other social initiatives.

"The powerful thing about co-ops is that you have the opportunity to tackle some of these problems in your own backyard, which suddenly feels a lot more hopeful," she said.

"One store, are we going to do it on our own? Absolutely not. But can we do it in our region? Can we make an impact in our area? Absolutely."