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Canadian Retail News From Around The Web For June 23rd, 2021

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Retail Insider
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Canadian Retail News From Around The Web

Top Stories: National

Central/Eastern Canada News

Western Canada News

St. John’s NL Retail Rebounding Amid Optimism Following Pandemic Struggles: Interview

By
Mario Toneguzzi
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Image: Destination St. John's

The pandemic over the past year or so has caused a great disruption for the retail sector across the country, but for the Avalon Mall in St. John’s, Newfoundland and Labrador, it has been a year of new store openings.

Nikki Poole, Associate Vice President for commercial real estate brokerage CBRE Limited, said 2020 was a “slug” for retail in Newfoundland like it was for the rest of the country.

Nikki Poole

“There certainly were some delays in store openings and deals that weren’t in the works before really just went on the backburner. The positive note is that 2021 is shaping up to be a whole more optimistic. Last year, I think it was just more of a status quo, shorter renewals, no one really wanted to rock the boat and stores were just being creative in trying to keep the lights on truthfully, just like anywhere else in Canada,” said Poole.

“Our landscape now is we’ve all been stuck here so disposable income is being spent on retail and renovations and there’s still a lot of money being pumped into the retail market here.

“The Avalon Mall for instance they still opened up H&M, the Gap, Old Navy, Levi’s, Tommy Hilfiger. They’ve opened up all these stores during the pandemic which in any other market would never happen. But the Avalon Mall is just a unique property. As everyone knows across Canada, the sales are phenomenal there and they’re in the middle of a multi-million dollar renovation. So maybe that has helped bring in some interest and Five Guys is opening in the Avalon Mall. That will be our first to the province. That’s promising.”

Image: Avalon Mall

Poole said there is a lot of activity with smaller health and wellness based businesses.

“They seem to be eating up a lot of our smaller retail openings in the suburbs. And then we have some businesses, who have been online based and thrived during the pandemic, online shopping, and some of these businesses are now opening up storefronts which is very positive and exciting because they’re growing and eating into that warehouse distribution space and having these cute little storefronts that are pop-ups that are legit lease spaces,” she said.

Like many other retail experts across the country, Poole also agreed that the feared ‘retail apocalypse’ that would result with many closures due to the pandemic just did not materialize.

“The national closures were out of our control and a lot of times when the national stores closed down the Newfoundland stores were told they were exceeding sales expectations but we all know those decisions are made much broader than in Newfoundland,” said Poole.

“Yes it certainly was a time where the doors were shut in some of these spaces and there was concern that they wouldn’t reopen but I think from a fatality perspective we certainly have I would speculate nationally a smaller percentage of those who didn’t reopen.

“We’re a small market. So tenants know landlords. Landlords know their tenants. They shop at their stores. They don’t want to lock the doors on people knowing that there’s not 50 other businesses lining up to go in those spots. So relationships are really important and what we’re seeing now that we’re sort of out of this dark tunnel a bit is a bit of a relocation happening. I do think people are now calling other landlords and dancing with them to see about relocating their businesses, particularly if their leases are up for renewal right now. They’re shopping around.”

How Canadian Brands Doing Business with the EU Must Comply with New Model Contracts

By
Ritchie Po
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What’s Changed?

The EU permits businesses to transport personal data of European data subjects outside of Europe as long as a company receiving that personal information uses the EU-approved Standard Contractual Clauses (“SCCs”) in their service agreement contracts. The SCCs were revised on June 4, 2021. Any brand that collects their EU customers’ personal information needs to ensure that their service agreements have SCCs in place, or they will no longer be able process their EU clients’ information or do business in the EU.

How Will This Affect My Brand?

You will need to make sure that you comply with the EU regulations and use these new contractual clauses in the following situations, even if you’re based in Canada or any other country outside the EU:

  • If you have a large European clientele and need to transport their personal information back and forth between Canada and the EU
  • If you use IT services based in the EU and regularly transfer personal information back and forth
  • If you have an office in the EU and EU-based employees

If your brand does business in the EU, your company is subject to the General Data Protection Regulation (GDPR) and likely rely on the SCCs which were enacted as part of the GDPR to transfer personal data across borders in the course of your business. This ensures that even if the laws differ where you are and where your customer resides, that their personal data is sufficiently protected. SCCs are often included in service agreements or contracts where personal data is transferred from an EU country to non-EU nation, and are almost always used within the EU to transfer personal data across borders. This has ramifications on the data that you can share with your supply chain. Here are some of the changes to the new set of SCCs.

Processing of Personal Data

The GDPR applies if you are “processing” – collecting, using, disclosing, and storing – personal data concerning identifiable individuals. In the words, any personal information you gather from your EU customers is subject to this law. Even if your European clientele does not comprise a large component of your customer base at this time, once your business expands into that market and beyond, you should be able to demonstrate compliance with the GDPR.

Any business that makes decisions on how personal data is to be processed is known as a “controller” for the purposes of the GDPR. Any sub-contractors who process personal data on the controller’s instructions are known as “processors”. The terminology is important, as the obligations differ according to a company’s role in any B2B arrangement where personal data is being transferred.

Transfer of Personal Data

Chances are, you are not only processing personal data from customers, but you are also using a number of contractors and third-party vendors to make your business run. The revised SCCs are intended to protect customer privacy in any B2B transfer of personal data. This may include, but is not limited to, the following:

  • Credit card payment processing
  • Market research data analysis
  • Customer profiling
  • Accounting, payroll, and other human resource-related functions (because GDPR also applies to your EU-based employees, too)

In other words, the GDPR applies not just to your business, but to your entire supply chain as well.

Territorial Scope

One of the growing pains in a business, particularly as the world has become increasingly virtual in terms of service delivery due to the Covid-19 pandemic, is that data privacy protection laws can vary amongst countries, and sometimes they even vary within the same country. For instance, in Canada, PIPEDA governs all privacy-sector entities, but provinces have their own versions of the same legislation that imposes stricter conditions on data transfer. But even with those laws in place, if a Canadian retailer processes personal data of EU customers, they must ensure that they and their service providers comply with the GDPR requirements. The challenge is in ensuring you comply with each applicable legislation.

Obligations: Module-based data transfers

The main change to the SCCs is that the new clauses are tailor-made and easily adaptable to B2B transfers of personal data. Although the previous version of the SCCs (which you may have right now with your third-party vendors) impose similar obligations, there are ambiguities in certain areas. The revised SCCs are intended to clarify these ambiguities and make the obligations easier for a business to understand and interpret.

The new module-based SCCs are actually more user-friendly and less ambiguous in terms of how data transfers take place and the safeguards for those transfers to take place. By using a scenario-based module, you and your privacy and legal teams can use the appropriate SCCs applicable to your business arrangement. Here are some examples of how the new scenarios apply to a company:

  • Module 1 – controller to controller transfer: you are a retailer transferring personal data on EU customers to another retailer, and both you and your retailing partner make decisions on how data is to be processed. An example is creating a customer database to whom you perform directed marketing in a joint effort with another business.
  • Module 2 – controller to processor transfer: you provide personal data to a third-party marketing firm to gather customer feedback and intel on an advertising campaign or a recent product launch. The marketing firm takes instructions from you on how to process the data.
  • Module 3 – processor to processor transfer: your third-party bookkeeping company provides your customer personal data to a third-party IT solution firm to crunch data.
  • Module 4 – processor to controller transfer: your third-party actuary has processed financial information relating to your workforce (on which you provided instructions) and provides you with a detailed financial report.

Because the revised SCCs are tailored specifically to outline the minimum legal requirements based on data transfer in a B2B relationship, they are intended to be more business-friendly than the original SCCs.

The revised SCCs also have considerable legal consequences. In the event of a privacy breach, a business characterized as a data controller may be held liable for any breaches caused by a processor, due to their position in the business relationship as a head contractor. The SCCs are intended to minimize risk by setting requirements for data protection to limit liability and to demonstrate due diligence. While the new SCCs have not yet been challenged in court, it is expected that they will more clearly outline contractual obligations in any transfer of personal data in a B2B relationship involving at least one EU-based party to that contract.

The Timeline: When do I have to be compliant?

The current set of SCCs already in place can be used in new contracts until September 27, 2021. The advent of the revised SCCs does not invalidate any agreements you currently have with a third-party vendor that processes personal data on your company’s behalf. However, with the implementation of the revised SCCs, it may not be worthwhile to use the soon-to-be-obsolete versions and to renegotiate the deal.

There is a transition period to align your current SCCs with the revised version. The EU has given a deadline of December 22, 2022, for all companies using the SCCs to renegotiate their contracts and include the revised SCCs into agreements where there is a transfer of personal data across borders.

The effects of non-compliance are unknown at this time. However, a cautionary tale can be gleaned by the demise of the US-EU Privacy Shield, a legal framework that at one time permitted the transfer of personal data between the US and the EU. The Privacy Shield was struck down in the European Court of Justice in July 2020, effectively ending the transfer of personal data, except in cases where a company had used SCCs in their agreements with their service providers. Companies that did not use the SCCs had to scramble to renegotiate all of their agreements with service providers to comply with the GDPR.

How can Kobalt help?

Kobalt is an IT security services firm serving small to medium sized businesses (SMBs) based in Vancouver, BC, with services to the retail sector. As part of their service module, Kobalt offers data privacy gap analysis and compliance services to SMBs, with a focus on complying with applicable privacy laws such as the GDPR Kobalt’s Privacy Practice Lead, Ritchie Po, is a Certified Information Privacy Officer with both Canadian and EU (GDPR) designations. In January 2021, Mr. Po presented on the topic of Bill C-11 and how changes to Canadian federal data privacy laws can affect retailers in the future.

If you are interested in discussing GDPR compliance and other IT security-related services, contact Ritchie Po at:Ritchie.po@kobalt.io.

*Partner content. To work with Retail Insider, email craig@retail-insider.com

Canadian Local Product Search Engine ‘SokoLocal’ Surpasses 1.5 Million Products as it Supports Small Businesses: Interview

By
Mario Toneguzzi
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Image: SokoLocal

Calgary-based SokoLocal, a new local product search engine, has surpassed one million products in cities across North America.

“We started SokoLocal to help better connect shoppers with local businesses,” said Nikhil Sonpal, Founder, MQLabs. “The interest and growth we have seen in the last month, including cataloguing more than one million product listings on SokoLocal, is made possible because of the passion people have for supporting the communities in which they live, solidifying the need for this type of innovation. With SokoLocal, we have managed to streamline that process helping businesses and consumers alike, which is something we are very proud of.

Image: Nikhil Sonpal

“It’s a product search engine. I felt that there was this whole movement afoot for finding local businesses, supporting local businesses. But the challenge, at least for me, I don’t know that these local businesses exist. I personally don’t shop for businesses by name. I shop for products. So that’s where the idea came about – to create an interface like Amazon, to give users an Amazon-like experience but the convenience of what the underlying technology that Google has to catalogue and index content that is on these websites.

“What Google does for search in general, we’re trying to carve out a niche for searching for shopping for local products.”

SokoLocal, created and developed by MQLabs, a Calgary-based technology company, launched recently and has since grown a strong presence in Calgary, Edmonton, Winnipeg, Ottawa and Toronto, with additional cities across North America currently in development.

Image: SokoLocal

Sonpal said the search engine hit one million products on June 1 after launching March 1. As of June 18, it was 1.5 million products.

Featuring products from local vendors, SokoLocal allows consumers to search, browse, compare local prices and purchase their favourite products online directly from the retailers. Since launch, the online marketplace has seen significant growth and popularity in its Alberta markets and continues to offer their services to new cities as it expands its reach, most recently in Manitoba and Ontario and the United States with Austin, Texas. Now, with more than one million products available, there is no shortage of selection or accessibility to a wide variety of local products, explained Sonpal.

“It’s a fully automated system. We’ve built it using the latest and greatest technology with all the abbreviations that everyone uses in tech. So it has machine learning, it has AI capability into it,” said Sonpal, adding that there’s very little human intervention in the system. “The idea for us is to grow this globally. We are trying to make sure that local is not a fad and we can provide the convenience of finding local and by doing so we feel Soko fills that niche.”

Supporting local businesses is a vital step in creating new opportunities within local communities. Over the last year in particular, small businesses have been met with unprecedented challenges and have been struggling to stay afloat among giant competitors with international backing. By offering a platform that allows small businesses to increase their visibility and connect with shoppers in their area and around North America, SokoLocal aims to revitalise local economies and direct sales to those who need it most, explained Sonpal.

The impetus for the venture was an injury he received from cycling one day earlier this year. He broke two ribs cycling. He wanted to find local products but was having a hard time doing that.

“I’ve been in tech now for 22 years . . . The motivation for me is I really want to help small businesses be able to run their businesses efficiently and I think the biggest challenge that small businesses have is how do you get the word out to consumers that you exist. I am saddened by the state of ecommerce in the last year and a half being perceived as the next gold rush and I don’t want small business owners to feel helpless and to be taken for a ride where they feel they have to spend in some cases an unbelievable amount of money to get the word out to get consumers to come in because traditional advertising or marketing doesn’t work. Because it’s digital,” he said.

While shopping in physical stores is starting to open up more and more, the convenience of curbside pickup and the movement for buying local should remain.

“The messaging I’m trying to get out there is there is an alternative. That you don’t have to spend in some cases some businesses are being told I hear $2500 a month in Google ads and Facebook advertising to just get the word out and that’s preposterous to have to do that. I know $2500 a month is nothing for large brands but that is significant to a small business owner that’s an owner/operator.

“I wouldn’t say this is a philanthropic initiative because this is a for profit business and we have monetization paths in place that we will be releasing over the next couple of months but our focus has really been my focus predominantly to give business owners the tools to be able to get their products marketed. And consumers shop for products. They don’t shop for (businesses). And that’s the niche we’re trying to fulfill.”

The SokoLocal app is available for Apple iOS and Android Devices.

For more information, to browse local products, or have a local business added to the directory, visit sokolocal.com.

Impact Kitchen to Open 5th Location in Toronto’s Liberty Village

By
Dustin Fuhs
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Impact Kitchen in Liberty Village - Photo by Dustin Fuhs

Impact Kitchen, a Toronto-based healthy fast-casual brand will be expanding their footprint in the city with their fifth location, which is confirmed to be opening in Liberty Village this summer.

Retail Insider reported on the expansion of the brand’s second location for to 444 Adelaide Street West (King West) back in 2018, with subsequent openings at 1222 Yonge Street (at Summerhill) and 88 Queens Quay West by the Waterfront. This joins the original location at 573 King Street East (Corktown), which opened in 2015.

The new cafe will be located at 99 Atlantic, which is the corner of Liberty Street and Atlantic Avenue. The Kevric-owned building broke ground in 2018 and has seen their 8-story availability fully-leased, including offices for Red Bull. Colliers International is the leasing partner for this property.

Click for Interactive Map
Impact Kitchen in Liberty Village – Photo by Dustin Fuhs
Ground Floor Plans at 99 Atlantic – Image via 99atlantic.com

We’ll be following up with Impact Kitchen as they continue to expand during a pandemic that has decimated the restaurant industry and will have long-lasting effects on the viability of community-driven businesses.

Related Retail Insider Article

Canadian Retail News From Around The Web For June 22nd, 2021

By
Retail Insider
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Canadian Retail News From Around The Web

Top Stories: National

Central/Eastern Canada News

Western Canada News

Oxford Properties Launches Outdoor Patios at All Enclosed Shopping Mall Properties in Canada: Interviews/Photos

By
Mario Toneguzzi
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Yorkdale Patio (Photo: Oxford)

Major Canadian shopping centre owner Oxford Properties Group has launched outdoor dining patios in all its enclosed malls across Canada.

“Dining is an important part of the shopping centre experience, and we are deeply invested in the success of all restaurants and food tenants,” said L.A. Glassford, VP Restaurant, Entertainment, Urban Retail, Oxford Properties.

LORIANNE (LA) GLASSFORD

“A number of the food and beverage establishments in our shopping centres have weathered prolonged mall closures. These outdoor dining areas are designed to provide an opportunity for our customers to enjoy food from these businesses in a pleasant environment that adheres to provincial safety measures. These patios also support our restaurants with much-needed additional seating as consumer demand has exceeded expectations.”

Glassford said one thing the company thought about quite early with all the closures due to the COVID-19 pandemic was how it was going to support its food and beverage businesses in general in their enclosed malls.

“When you’ve got a food court, how are we going to support these businesses? And what about restaurants without exterior patios? How do we support these businesses who are already spending a large percentage of their businesses on third-party delivery services? How are we going to help them?,” she said.

  • Southcentre Outdoor Patio (Image: Oxford)
  • Southcentre Outdoor Patio (Image: Oxford)

“We spent a lot of time – the operations teams, the site teams, and the marketing teams – very creative on how can we not only support but what is the experience we want to create for the customer. Now the customer being the customer who is going to eat at these establishments, the customers that work at these establishments, our own staff that needs somewhere to eat. What we did is we decided to introduce outdoor dining patios across all of our shopping centres with not just an outdoor patio. But a dining experience.

“So we’re deeply invested in all of these locations. What we did first off it has to address the additional seating we need. It has to meet the expectations of COVID, the safety protocols. We wanted to make it accessible. So we’re open 11 a.m. to 8 p.m. daily. We’re going to be open the entire summer and if we need to licence it we can look at it then. Most of our outdoor experiences can accommodate up to 100 different diners. That’s huge.”

Glassford said they are not just patios.

“You can have an al fresco experience at the terrace at Yorkdale with a chandelier and high end furniture. The grass feels good underneath your feet. You can have a shaded area with an umbrella or you can sit under a pergola. You can have full sun and sit in some bean bag chairs. We have different curated seating options,” she said.

Image: Quartier DIX30

“Palms. Different trees. Landscaping. The lighting. It really feels special. That’s the best way I can describe it. It feels special. When you are underneath the tent or the pergola or you’re sitting around a great high top, you’re transported. That was the goal and I think we delivered.”

Glassford said each outdoor dining patio at a shopping centre is going to be specific to the actual asset and for each one Oxford looked very carefully at where to position them within the property.

“We’ve launched them all and they’re quite special,” she said. “I’m most pleased with the experience it is going to provide because we all right now need an experience. We do. We’re craving it.”

Galeries de la Capitale – Image: Oxford

Oxford Properties Group was established in 1960 and today manages approximately C$60 billion of assets across the globe on behalf of its co-owners and investment partners. Oxford’s portfolio encompasses office, retail, industrial, hotels and multifamily residential and spans more than 100 million square feet in global gateway cities and hubs across four continents. With its global headquarters in Toronto, Oxford operates out of 17 regional offices including London, Luxembourg, New York, Singapore and Sydney. Oxford is owned by OMERS, the defined benefit pension plan for Ontario’s municipal employees.

In Canada, its retail properties include: Arbora1Retail (Montreal); DIX-30-6000 Boulevard de Rome (Brossard, Quebec); Hillcrest Mall (Richmond Hill, Ontario); Kingsway Mall (Edmonton); Les Galeries de la Capitale (Quebec City); Les Promenades Gatineau (Gatineau, Quebec); Metro Centre (Toronto). One 70 Bloor Retail (Toronto); Royal Bank Plaza (Toronto); Scarborough Town Centre (Scarborough, Ontario); Southcentre Mall (Calgary); Square One Shopping Centre (Mississauga, Ontario); Upper Canada Mall (Newmarket, Ontario); and Yorkdale Shopping Centre (Toronto).

Upscale Calgary-Based Retailer O’Connors Looks to Future Growth Post-Pandemic: Interview

By
Mario Toneguzzi
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O'Connors Mens and Womens Clothing and Footwear - Photo by Mario Toneguzzi

For decades fine clothing and footwear independent retailer O’Connors has weathered all the economic storms Calgary has suffered through including the current one brought on by the COVID-19 pandemic.

The retailer has lived through a number of recessions and economic downturns over those years and has survived, and thrived, while many other retailers had to close their doors.

One thing has been consistent over that period of time and a key to the family owned and operated retailer – consistently delivering a quality product with exceptional customer service.

Greg Smith (Left) and Myles O’Connor (Right) – Photo by Mario Toneguzzi

Myles O’Connor, owner, said the past year has been very challenging with everything going on.

“I do count ourselves fortunate and thankful that we were basically able to open in May of 2020. We closed for the initial two months, March to early May, and we’ve been open since. It’s been obviously very challenging. Business isn’t what it was but the fact we were able to keep our doors open has been huge for us and for all retailers,” said O’Connor.

“I think things will start opening up come September. As far as business going forward, I think we’re going to be aggressive. There may be issues with lack of product and the supply chain to get product in. But we’re taking deliveries of fall goods as soon as we possibly can. We feel the country is going to be open for business come September. It’s going to be slow opening but we’re going to be there.”

“I think when we’re really going to see downtown come back by September.”

When asked why O’Connors has been so successful for decades, Myles replied: “I think the big thing is we’re a local business and we have boots on the ground so to speak. I’m here every day. My father, Graham, is part of the community and has been in the business for 60 plus years. He still comes into the store. He was an integral part of the business and service. We’ve got long-standing people who have worked with us. That’s been our biggest strength. People come in and see familiar faces. We’ve been able to evolve with the times. We haven’t stood still. We’ve been aggressive in our buying, products and lines, merchandising. We’re different than a major so to speak – the Nordstrom, Saks, Harry Rosen kind of thing which are all good retailers – but we are a local store and I think that has been our strength.”

Greg Smith, managing partner for Shoes by O’Connors, said the company will be launching in the future an e-commerce site, that isn’t a traditional platform, but something that is interactive between customers and staff at O’Connors.

“I don’t think we’ve ever stood still. We’re constantly trying to always be better, and change, and do things differently,” said Smith.

O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi

In 1958, Ed O’Connor, Myles’ grandfather, and business partner Ed Bourque opened a menswear store O’Connors & Bourque. Myles’ father, Graham, went to work for them. In 1961, Graham O’Connor opened his own store The Stag Shop featuring clothing designed for “the button-down professional young man.”

In 1971, O’Connors & Bourque and The Stag Shop amalgamated and simply became known as O’Connors.

In the 1970s, Graham also opened The Pant Pocket which was the first designer jeans store in Alberta.

All the stores were on 7th Avenue S.W. near the Hudson’s Bay flagship.

Under Graham’s leadership, O’Connors successfully expanded through the economic turbulence of the 1970s and 1980s adding both a men’s shoe store and Lady O’Connor, an upscale establishment featuring women’s designer collections.

O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi

In 2002, O’Connors commissioned a custom-built freestanding store just outside the downtown core in the old Valentine Volvo car dealership. O’Connors, one of the largest independent retailers in Canada, moved into 12,000 square feet of space. Initially the store had a women’s section but in 2007 O’Connors opened a new standalone women’s store across the street. The women’s store is about 3,100 square feet.

The current store is enhanced with historical items and paintings, including posters and pictures of the Calgary Stampede. The family has a strong connection to Calgary’s iconic annual event. Ed O’Connor was President of the Calgary Stampede and Graham O’Connor was a director at the Stampede for many years. Myles’ brother Stuart O’Connor is on the Stampede board.

Myles O’Connor played a few seasons in the National Hockey League and his son Logan is now with the Colorado Avalanche.

Additional photos below are courtesy of Mario Toneguzzi

O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi
O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi
O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi
O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi
O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi
O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi
O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi
O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi
O’Connors Mens and Womens Clothing and Footwear – Photo by Mario Toneguzzi

The “Tylenol” Moment the Food Industry Needed Amid Ransom Cyber Attacks in Canada: Sylvain Charlebois

By
Sylvain Charlebois
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The JBS facility in Brooks (Dan McGarvey/CBC)

Meat processing giant JBS paid out an $11 million ransom following a cyber attack, according to reports. Most of its meat packing facilities, including the one in Alberta, remained idle for a few days. For years, most of us linked the concept of cyber attacks with IT companies, governments, and media. Experts have been warning the food industry for years about the threat of becoming an active target for hackers. What was once purely academic has now become a reality.

Until now, efforts to counter cyber attacks in the industry have been timid, at best. At the very least, it was not an openly discussed topic amongst industry leaders. The fact that the world’s largest processor of beef and pork was targeted by hackers earlier this month is certainly a cause for concern and can serve as a major wake-up call. We can easily imagine that other companies like Cargill, Olymel, Maple Ridge Farms, McCain, Maple Leaf, Lassonde, Sysco, Loblaw’s, Sobeys, Metro, and other major players could also become a target.

Managing systemic risks is not new to the food industry – far from it. Threats related to food safety, food fraud and of course, pandemics have been considered critical issues for years. The focus has always been on the integrity and quality of ingredients and products coming in and out of facilities. The pandemic made companies focus more on worker safety and how humans play a role in manufacturing the food we consume every day. It has always been about keeping everyone safe, starting with consumers. Cybersecurity goes to the core of the operational nature of a company as it goes beyond the food we eat. Ransoms aren’t intuitively compatible with how food companies manage risks.

The food industry is a critical piece of our economy, and changes in the industry are making it a more likely target in the future. Operations are adopting high-tech innovations like drones, GPS mapping, soil sensors, autonomous tractors, artificial intelligence and more. These changes in the industry are needed, but they can also make it a primary target. As the industry becomes more data-driven, it will also become more vulnerable to cyber attacks. On the other side of the digital spectrum, many food operations still use outdated operating systems like Windows 98. One can only hope that most management teams in the food industry are reviewing their IT systems and figuring out how vulnerable they are to cyber attacks.

For consumers, the potential consequences of these attacks are not trivial. Disruptions can lead to food shortages and higher prices at retail. Or worse, cybersecurity breaches could lead to procurement issues and inadvertent alterations to ingredients put into the food sold at retail. Ransom requests are just the beginning. Evil has no shame, no limits and it can harm a great number of consumers within days, perhaps even hours. The fact that JBS did pay a ransom signaled to perpetrators that it can work. We should expect more attacks to occur in the future.

Virtually no mandatory cybersecurity rules govern the many agri-food businesses that account for close to 20% of the Canadian economy. Some trade groups may have voluntary guidelines, but that would be the extent of it. The Canadian Food Inspection Agency (CFIA) has no material on cybersecurity – not a single mention of this on its website. Its world is often exclusively about pathogens and allergens. Its focus requires a broader view, now more than ever. For the industry to protect itself, more information sharing mechanisms would be required, and our federal agency should be playing a more active role.

In essence, with the attack on JBS, the food industry has just experienced its own “Tylenol” moment. In 1982, some people tampered with bottles of Tylenol in Chicago-area retail stores and poisoned several people, killing at least seven. Many bottles were laced with potassium cyanide. At the time, bottle packaging practices were not the same and the murderers took the industry completely by surprise. That incident led to significant changes in how bottles were sealed and secured. Hopefully, the JBS incident will also lead to increased security and protection.

Canadian Retail News From Around The Web For June 21st, 2021

By
Retail Insider
-
Canadian Retail News From Around The Web

Top Stories: National

Central/Eastern Canada News

Western Canada News

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