Doing Business in Canada: A Buyer’s Perspective 6/16/2021
Canada presents a great opportunity for suppliers looking to expand into new markets. The country has a population of more than 40 million, several major retail chains, and many similarities to the U.S. market. However, there are some key differences between doing business in the U.S. and doing business in Canada that are important for suppliers to understand before going into a buyer meeting.
To discuss some of these differences, I spoke with Gerry Bes, General Manager for Little Short Stop Stores, a locally owned chain of 30 convenience stores located in Kitchener, Waterloo, Cambridge, Guelph and surrounding areas in Ontario, Canada that has been serving its customers for over 50 years.
Bes is a veteran of more than a dozen ECRM programs across several categories, and has met with hundreds of brands during that time, so he is well-positioned to provide advice to suppliers eager to enter the Canadian market (see the video below for the full interview).
“If you've got the United States covered and you're looking to find a new opportunity, Canada is probably your easiest choice because we do have many similarities when it comes to culture and business practices,” says Bes. “In addition, distribution is quite similar. We have some of the same players, such as Core-Mark, Walmart and Costco. But the major difference, especially if you're looking at the food or the drug side, is that we have Canadian retailers that are quite large such as the Loblaws and Sobey's.”
Here are some of the key things suppliers need to consider when gearing up for the Canadian market.
Are your products allowed?
Perhaps the first thing to find out is if your products or their ingredients are allowed in the first place. CBD is an example. While CBD products are legal in Canada, it can only be sold in stores that sell cannabis. This includes products such as tinctures and lotions, as well as beverages, chocolates, gummies, and so on. If CBD is an ingredient, it cannot be sold in traditional retail stores.
“We get approached all the time by companies who believe that the regulations are the same as they are in the U.S., says Bes. “So that's one of the starting points is to ask yourself, what is the market for my particular product within the Canadian marketplace?”
Does your product have the right certifications and ingredients?
When it comes to food, while nutritional labeling may be similar to that of the U.S. there are some additional certifications required to sell products in Canada, and some restrictions on ingredients. “There are some food colors and agents that are not allowed in Canada, even though they are allowed in the United States,” says Bes. “So it’s important to research this in advance.”
Is your packaging dual-language (French & English)?
There are two official languages in Canada, French and English, and regulations require that all packaging information must be in both languages. For brands that sell in Europe, this one should be a piece of cake, as they are used to including multiple languages on their packaging. But U.S.-based brands must ensure that both French and English are on the packaging of products slated for Canada. “The regulations are quite easy to understand,” says Bes. “You don't have to change your brand or change your descriptions for the French language.”
However, he does caution that you research your brand and product names to see what they may mean in the French language to avoid any cross-language Faux Pas. (We’ve all heard the tale of the Chevy Nova in Mexico).
Prepare to pay customs duties on samples
Suppliers must understand that, when it comes to sending samples, there are customs tariffs that need to be paid before they ship the samples to avoid their package getting stuck at the border or returned, delaying the process or requiring them to start it over again.
Prepping to meet with a Canadian buyer
When setting up a meeting with a Canadian buyer, it’s important that prior to the meeting that you are very clear on whether or not you are able to enter the Canadian market. (If you are a CBD supplier, don’t even bother setting up the meeting, as it would be a waste of both of your time, for the reasons noted above).
This is not to say that it’s a dealbreaker if you are not currently ready, but it just helps to set expectations going into the meeting. “I don't mind meeting with suppliers who might not be sure whether or not they can enter the Canadian market,” says Bes. “We can have a discussion and take it from there. But they should be very clear from the start whether or not they are ready to go to Canada or if they are just exploring the opportunity.”
For those suppliers exploring opportunities, most buyers are happy to help point them in the right direction in terms of acquiring the needed certifications and other requirements, particularly if the product has some promise. “We've had many discussions with people who need assistance doing this and we give them some direction on how to get it accomplished,” says Bes. “We understand that sometimes you just don't have the expertise, and that's fine.”
Ultimately, it all comes down to is preparation, doing your research ahead of time, and being upfront and transparent with the buyers about your products, capabilities and interest related to the Canadian market. There are great opportunities with our neighbors up north, but to take advantage of them, you’ll have to put in a little work in advance!
You'll find Canadian buyers at most of ECRM's category-specific programs. Click here to find the right program for your business!