Culinary and family traditions make Montreal a fresh produce melting pot.

Originally printed in the April 2023 issue of Produce Business.

Montreal, the largest city in Canada’s Québec province, is a dynamic place where cultures, ideas and fashions intermingle, and the food culture is strong.

Although the city retains many French Canadian roots, the opening of a new supermarket in 2022 demonstrates it also has a diverse culture.

Last year, the first Quebec T&T Supermarket opened in Montreal, which gave the city a food concept from a major supermarket chain specifically tailored to the city’s Asian population. Originally founded in British Columbia by Cindy Lee, an immigrant from Taiwan, T&T is now a division of Loblaw Cos., which acquired it in 2009.

The T&T addition isn’t the only significant supermarket news emerging from Montreal over the past year or so. The IGA banner, operated by Empire Co., Stellarton, Nova Scotia, launched the Voilà delivery service in March of last year. Although Montreal is central to the rollout, a customer fulfillment center, located in Pointe-Claire, Quebec, serves the southern portion of the province from Gatineau, a suburb of Ottawa, to Montreal to Quebec City.

Although making progress in a number of ways, Montreal is still emerging from the stormy days of the pandemic that generated choppy waters in the form of inflation. That being said, things are, on the whole, looking up for produce wholesalers in the city.

POST-COVID WORLD

Chris Botsis, president of Botsis Fruits and Vegetables, Saint-Laurent, Quebec, says the wholesale produce business has been great since the pandemic waned. “When COVID restrictions eased, business picked up tremendously.”

The pandemic took out some weak operations in the Montreal market, but the effects varied depending on clientele. Botsis says foodservice operators who were having a hard time before the pandemic did not survive, and many restaurants shut down. Even those that did survive have had to scramble to deal with market conditions.

“It seems the foodservice sector is one that lost a fair bit of personnel, as the market for general and skilled labor instantly increased significantly,” he says. “I think COVID created a temporary boom in some sectors, shifting the workforce accordingly. As for retail, the big box stores fared better than the smaller ones that could not circulate as many people in stores.”

The pandemic wasn’t a pleasant experience, but Montreal-based and Fair Trade-focused Equifruit made the best of it.

“While scary at the outset, COVID actually gave us a pause we didn’t know we needed to address our branding and communications strategy,” says Jennie Coleman, president, Equifruit. “We worked with a creative agency, found a new voice, redesigned our packaging and point-of-sale material, as well as our website and social media strategy, and we’ve been on fire ever since. We’re bold, we’re unapologetic in our mission to achieve global fair trade banana domination.”

The pandemic generated change for Botsis, too, and he also turned to social media to drive new initiatives.

“During the initial onset of COVID, for the first time in our history, we offered what we called a ‘Rainbow Box’ to the general public,” he says. “This was basically various fruits and vegetables of our choice in a $100 box we offered initially on Facebook, which quickly turned into something significant.”

Coleman says Equifruit has recovered from pandemic lows, and “same-store retail is back to pre-pandemic norms,” she says. “What has changed for us is an increase to our overall retail customer base with the tremendous volume, which Costco has brought Equifruit.”

ECONOMIC UNCERTAINTY

Then, inflationary pressures hit the food industry, along with all economic sectors.

“Inflation has affected the end user more than anyone else,” Botsos says. “Rising costs have increased our average selling prices significantly, forcing the consumer to pay more. As costs increase, we have little choice but to raise prices.”

But while inflation has had its effects, Montreal consumers are sympathetic to social concerns, and that affects how they think about shopping.

“About 75% of our sales are organic, fair trade bananas, and we know that we’re not immune from consumers sometimes downgrading to conventional produce choices,” Coleman says. “However, our conventional fair trade bananas remain strong. Even with respecting fair trade minimum prices and social premiums, they remain the cheapest fruit in your basket.”

“Economic concerns are the greatest right now,” says Alex Zenebisis, president, Eagle Exports, St. Remi, Quebec. “With transport costs increasing and overall produce prices increasing rapidly against the value of the dollar, fresh produce is becoming a bit of a luxury. We are managing to maintain our professional standards of quality, variety and service, but profit margin does become squeezed.”

He says the pandemic didn’t dent consumer desire for fresh produce, but that doesn’t mean the marketplace emerged unscathed.

“Demand for fresh produce remained high during the pandemic and remains high now,” Zenebisis says. “Price and profit margin have been the major impacts of the pandemic. A few of the smaller businesses we worked with previously are no longer in business due to the pandemic, and this had some amount of negative impact. It’s sad to see a long-term customer go under, but for the most part, our business has remained healthy.”

As such, Zenebisis says, he and his employees have to work harder and longer to find new customers and suppliers to fill any gaps in the operations, while continuing to maintain the company’s quality reputation. Still, Eagle Exports has a certain advantage of position that works to its benefit.

“We are located in the heart of the agricultural district south of Montreal,” Zenebisis says. “Our close relationships with our local suppliers gives us first pick of local fresh produce. Ninety-percent of our export business goes to the U.S., and the current exchange rate has made Canadian ‘local produce’ (in the U.S.).”

Satisfying Montreal consumers can be demanding, yet rewarding. The strong traditions of the French-speaking community and the region’s diverse residents often have cooking as a core activity.

“Montreal remains a very ethnic community in which families are larger than the average, and they love to cook,” Botsis says. “There is, no doubt, year after year, an increase in the overall consumption of fresh fruits and vegetables. The main challenges include procuring quality products from around the world in a year that saw extreme adverse weather patterns. It was a year like no other. Montrealers remain sharp and hard to please, always keeping us on the hunt for the best available produce.”

Zenebisis says that, with all of the other challenges present in the market, consumers have come through a period that has given them an appreciation of wellness and the value of nutrition. For many, wellness extends beyond themselves to the community and environment.

“People are definitely gravitating to healthy choices when it comes to food,” he says. “They are eating less processed foods, less modified foods, and less canned or packaged foods. They want to make their meals themselves at home to make sure they know exactly what is in the meal they are putting in their bodies.”

“Because of this, people are choosing more than ever to eat fresh fruits and vegetables with the least amount of plastic packaging as possible,” Zenebisis adds. “Also, people are more aware of the global environmental challenges we are facing, and they want to do their part.”

TOWARD THE FUTURE

Today, the Montreal market is evolving to deal with opportunities and challenges.

“Online purchasing and/or purchasing with an app and getting home delivery are taking over the retail market,” Zenebisis says. “People are so busy, they don’t have the time or energy to make it to the grocery store. This new way of buying your groceries is becoming more and more appealing to more and more people everywhere.”

Convenience remains important, and, even if plastic has its naysayers, retailers are using forms of packaging to deal with internal challenges.

“Packaging has become a retail favorite as labor issues still plague many,” he says.

Fuel prices, transportation costs, labor costs and inflation, which are being felt across North America, are all factors Montreal wholesalers are managing. Still, Montreal’s own economic development is changing market conditions.

“The industrial sector has ballooned,” Botsis says, adding he’s not sure it’s here to stay, “but rising rents could prove significant for some whose leases may be expiring soon.”

Logistics is an ongoing, if brightening, consideration, Colemen says. “This winter has been so much easier than last year, that we’d be hard pressed to complain. Of course, we wish prices were lower, but we also wish there was no war in Ukraine causing ongoing fuel price spikes. It’s a little like the logistics version of the serenity prayer: Sometimes you have to accept that there are elements beyond our control and keep working to optimize those which are.”