Brigitte Roy, president, DANESCO
Canadian Market Demographics
Brigitte Roy, president of the Canadian distributor Danesco, began her presentation on the Canadian market by outlining key differences between U.S. and Canadian culture. Canada is composed of 10 provinces and three territories. The metric system is used for measurements.
It is a bilingual country—both English and French are official languages. While 75% of Canada’s residents primarily use English and 23% consider French their primary language, for 85% of residents in the province of Québec, French is the primary language. Also, in Québec, 45% of residents are bilingual compared to 18% of most residents. Canadian English is similar to British usage and spelling. Product labeling must appear in both languages, complicated by the differences in Canadian and Québec laws.
Although the two nations are similar in total land area, the U.S. population is 10 times larger and population density is nine times greater than Canada’s. Nearly 90% of Canadian residents live within 100 miles of the U.S. border. With 39% of the total, Ontario has the largest population and Québec is home to 23%. Their key cities, Toronto and Montreal respectively, are the largest urban markets and have distinct retail preferences. Ontario’s high-indexing store types are factory outlet malls, bulk food stores and natural/health food stores; in Québec, kitchen stores, stand-alone boutiques and fashion accessories stores are strong.
The Canadian dollar is volatile and can vary 5-10% on a trading day, causing variable commodity prices and impacting the cost of goods sourced in USD.
Roy presented helpful visual charts to illustrate how a few store-based conglomerates control a large portion of non-auto retail sales. She outlined estimated market shares by retailer and number of stores per chain. Smaller independents continue to play a significant role. Specialty stores and regional multi-door retailers in Canada account for 25-30% of housewares sales. Québec is particularly strong in independents, and overrepresented in proportion to its population.
Housewares Market Overview
Roy described the two primary trade associations: Canadian Gift Association and CHHMA—the Canadian Hardware and Housewares Association. The CHHMA publishes a bi-weekly newsletter that is circulated to 2,500 key retailers in the country.
Roy also provided details about the Canadian housewares market and the annual growth of the fastest growing products within several home and housewares categories. Roy gave special attention to the growth in materials that are perceived as healthy and sustainable, with a dramatic increase in sales of reusable straws, followed by glass food storage and glass portable beverageware.
Danesco is a leading distributor and marketer of international houseware brands in Canada for more than 50 years. It is known for its customer service and ability to achieve depth and breadth of distribution in all trade channels, from high-end specialty to mass merchandisers. Currently, Danesco has 55 employees. Its 9,300 square meter (100,000 sq. ft) warehouse and office facility is conveniently located on the Trans-Canada Highway, west of Montreal in Kirkland, Québec.
Danesco’s portfolio of leading brands, such as Joseph Joseph, OXO, Full Circle, BIA Cordon Bleu, PackIt, Artland, Stasher, Soma, Fusion Brands and Café Culture, creates a significant competitive advantage in developing partnerships with retailers looking to consolidate suppliers and form valuable partnerships in category management.
Sales Team Structure
Roy outlined the allocation of sales staff according to regions and key customers. Two national account managers in Toronto manage national retailers in food, drug, mass and specialty department stores, supported by a head office team specialized in EDI, sales administration and trade marketing coordination. Two sales reps specialized in food service have established relationships with key dealers across Canada to capture sales opportunities in all sectors.
Eight regional sales reps service the independent retail market across Canada. This market comprises more than 900 active independent accounts and regional multi-door chains. The majority of the reps are exclusive to Danesco.
Additional key accounts are managed directly at the head office by the national sales director and ecommerce specialist. Customer service reps at the head office support the regional sales reps and their customers as well as the “house accounts” managed from the head office.
Marketing & Merchandising
The marketing and merchandising team is multi-faceted. It coordinates brand management and inventory management, including purchasing and supply chain logistics. Trade and consumer marketing staff engage in the coordination of trade shows, catalog, website, new product launch materials and programs, seasonal promotions, temporary seasonal displays, customized permanent displays, public relations, social media and advertising and in-house graphics.
Danesco’s in-depth knowledge of the Canadian housewares industry, consumers, retailers and the Canadian regulatory environment are valuable assets for their retail customers and partner brands. Creativity, flexibility and speed drive success. The collaboration of the national account managers and the sales team results in customized programs that meet retailers’ needs for merchandising efficiency, innovation and speed to market. Staying true to the brand Image by working closely with vendors ensures that brand equity is always at the forefront of all decisions.
Specialized in housewares for more than 50 years, Danesco has in-depth knowledge of customer requirements and expertise in customized solutions. Danesco’s WMS is robust and purpose-built for its ERP system. It enables the flow of real-time information and provides valuable visibility and controls for key business functions. Its fast order turnaround time of 48 to 72 hours provides a strong competitive advantage in the Canadian marketplace. Speed and flexibility are derived from all departments working under one roof. Communication flow between marketing, sales, customer service and operations is at the center of Danesco’s success.
Roy answered audience questions about current issues such as delays at the border getting products into Canada. She explained they receive many products directly from China and that has gone smoothly. Canada currently does not allow travelers to cross the U.S. border inbound or outbound and citizens must quarantine upon arrival.
Essential retail remained open the entire time during the coronavirus pandemic, and many other stores operated curbside pickups. Retail did not fully close in the western provinces. Stores have been operating normally since May 25. Some retailers that were having difficulties before Covid-19 did not survive and are now under restructuring. Conditions are generally better than expected. Government programs have been helpful. Small business loans were readily available, with 25% of a loan excused from repayment until 2022. The government supported retail rent subsidies if landlords agreed to participate. Many retailers also benefitted from salary subsidies.
For a U.S. brand without a 3PO or a distributor, it can be challenging to make connections and handle logistics. It can be more difficult to work with smaller retailers who need reassurance on reliable deliveries from the U.S. and possible currency fluctuation if they are billed in USD. Also, majors are focused on inventory turn and order small quantities, so be sure to learn about their minimums. This approach won’t drive volume but will allow a supplier to enter the market.
Canadians order regularly from U.S. websites. Goods are flowing well. Canadian customers must examine the small print to be sure that they are not hit with duties. Roy shared Danesco team contacts with the audience to enable suppliers to make connections.
For more information on the Global Forum presenters, contact Lori Szudarek, IHA senior manager, member and international buyer relations, at +1.847.692.016 or email Lszudarek@housewares.org.