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OTC Markets Group Welcomes Organic Garage Ltd. to OTCQX

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OTC Markets Group Inc. (OTCQX: OTCM), operator of financial markets for 11,000 U.S. and global securities, announced Organic Garage Ltd. (TSX-V: OG;OTCQX: OGGFF), one of Canada’s leading independent organic grocers, has qualified to trade on the OTCQX® Best Market. Organic Garage Ltd. upgraded to OTCQX from the Pink® market.

Organic Garage Ltd. begins trading on OTCQX under the symbol “OGGFF.”  U.S. investors can find current financial disclosure and Real-Time Level 2 quotes for the company on www.otcmarkets.com.

Upgrading to the OTCQX Market is an important step for companies seeking to provide transparent trading for their U.S. investors.  For companies listed on a qualified international exchange, streamlined market standards enable them to utilize their home market reporting to make their information available in the U.S. To qualify for OTCQX, companies must meet high financial standards, follow best practice corporate governance and demonstrate compliance with applicable securities laws.

“The commencement of trading on the OTCQX will provide a large U.S. investor base with the opportunity to participate directly in Organic Garage’s ongoing growth,” stated Matt Lurie, President and CEO of Organic Garage.  “Trading on OTCQX will enhance our share liquidity and widen the reach and awareness of our products and services.”

Securities Law USA, PLLC acted as the company’s OTCQX sponsor.

 

Why Canadian Grocers Need a Code of Conduct: Sylvain Charlebois

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Many Canadians are oblivious to the fact that in the food industry, suppliers need to pay grocers to conduct business. Fees were justified by merchandising costs, shelf space, things anyone would expect. Yet in recent years, things changed. Companies like Loblaw, Walmart and Metro were using infrastructure and capital projects to justify new fees. Fees were imposed quickly, unilaterally. Walmart’s latest $500 million dollar distribution center project is partially financed by suppliers.

Grocers were charging fees by mainly dictating how business should be conducted in food distribution. It was their way or the highway, plain and simple. As grocers requested, suppliers and food manufacturers complied. It was the same in the United Kingdom and in Australia where oligopolistic powers in the grocery space prevailed. That is until a code of practice was implemented. It seems Canada is now joining that club.

Indeed, a draft code of practice exists now in Canada between food manufacturers and grocers, well, one grocer. Our country’s number two grocer Sobeys, which recently acquired two key independent grocers in Longo’s and Farm Boy, felt it was time for a change. Number one grocer Loblaw and Metro, whose number three, have always stated a code was not necessary In Canada, and it’s highly doubtful they will join.

Agriculture Ministers in the country recently agreed to create a Working Group to study this important issue. Instead of waiting for a report to be presented sometime in July, both Food Health and Consumer Products Canada and Empire/Sobeys opted to go ahead and set a standard for the industry by presenting a new code of practice. The code includes 5 guiding principles which essentially get all parties to commit and act in good faith as they conduct regular business. No more unilateral decisions, no more last-minute ploys, just straight, honest business.

Current market conditions just made it more challenging for food processors in Canada. Food manufacturing contributed $26.5 billion to the Canadian GDP in 2020. In the U.S., it was $766 billion in 2020, which is 29 times larger. That’s right, 29 times. As it is in the U.S., a strong food processing sector can serve as a strategic anchor for the entire industry. The supply chain is not as vulnerable to macroeconomic shifts and can allow the industry to better support our farmers. The Mad Cow crisis and our latest spat with China are good examples.

Despite the last decade seeing few new food plants open while several closures were reported, food manufacturing was the second largest manufacturing sector in Canada after transportation equipment in 2020. Despite the financial heartaches, food manufacturing also still managed to grow its GDP contribution from 13.18 percent in 2010 to 13.47 percent in 2020. But the sector can do much better.

While food prices continue to climb in Canada, grocers’ fees, in addition to low margins, have not helped manufacturers benefit from these rising prices. In most cases, farmers did not benefit from recent food price hikes. Some may speculate that food prices may rise due to a code, forcing grocers to charge more to protect margins. The United Kingdom has had a code since 2009, and food inflation in the country has generally been lower than here in Canada over the last decade.

This code is meant to change the culture of an industry in which vertical coordination and collaboration barely exist. It is also very much about dealing with a broken supply-side economic model few people in Canada can appreciate. The code is obviously an unproven concept in Canada, and few know if it’s going to work without other major grocers participating. However, the current situation was no longer viable.

Strong supply chain collaboration could lead to more innovation and growth. When forced to work on issues, parties will need to share data and insights. As such, market gaps can be recognized more easily as the execution of developing and commercializing novel food products is more likely. The code can create opportunities if the group remains disciplined and committed as the code is not legally binding.

The benefits of organic agriculture

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Modern consumers have more choices than ever before. Whether they’re buying appliances, books, clothing or any of the myriad necessities of daily life, consumers have a wealth of products to choose from.

An abundance of options also is available at the grocery store. That’s especially true in the produce aisle, where many stores have expanded their fresh fruit and vegetable offerings. That expansion reflects a growing preference among consumers for fresh products, including fresh produce. A 2018 report from the market research firm IRI and the Food Marketing Institute found that sales of fresh foods comprised just under 31 percent of food industry sales in 2017.

Customers who prefer fresh fruits and vegetables to frozen alternatives may wonder if they should be even more selective when purchasing their favourite foods in the produce aisle. That decision may come down to whether or not to purchase organic produce.

Organic produce can be significantly more expensive than non-organic fruits and vegetables, so it’s understandable if budget-conscious consumers cannot afford to go entirely organic. However, it’s important that consumers recognize the many ways that organic agriculture is having a positive impact on the health of humans and the planet they call home.

• Organic produce reduces exposure to pesticides and antibiotics. UC Davis Health notes that organic produce has been proven to reduce consumers’ exposure to pesticides and antibiotics. That’s a significant benefit, as pesticide exposure has been shown to lead to neurodevelopmental issues and has been linked to higher cancer risk. Consumers shopping on budgets can pick and choose which organic foods they purchase, as UC Davis Health notes that certain foods have been shown to have higher pesticide residues than others. Apples, celery, grapes, spinach, strawberries and tomatoes have high levels of pesticide residues, so choosing organic versions of these foods may be a wise choice. Avocados, broccoli, cabbage, and cantaloupe are some of the foods that typically have low levels of pesticide residue.

• Organic agriculture reduces environmental degradation. The Organic Trade Association notes that synthetic pesticides and fertilizers used on some conventional farms can deplete the soil of valuable nutrients and increase environmental degradation. Organic farmers do not use such pesticides or fertilizers, instead of utilizing such practices as composting, cover cropping and crop rotation, each of which can have positive, long-term effects on soil quality.

• Organic agriculture benefits local wildlife. A 2015 study from researchers in Argentina that was published in the journal Agriculture, Ecosystems & Environment found that small mammals were more abundant around organic farms than conventional farms. That’s not just good for those mammals, but also for the farmers, as small mammals can feed on insects that would otherwise adversely affect crops.

Many grocery stores are increasing the availability of organic fruits and vegetables. Such foods can benefit human health, as well as the health of the planet.

Source: wvnews

Adults with obesity treated with semaglutide 2.4 mg achieved and maintained a significant amount of weight loss in a 68-week trial

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New results from the STEP phase 3a clinical trial programme demonstrated weight loss with the investigational treatment of once-weekly subcutaneous semaglutide 2.4 mg versus placebo. In the STEP 4 trial, study participants who reached the maintenance dose of semaglutide 2.4 mg during a 20-week run-in period were randomized to either continue treatment with semaglutide 2.4 mg or switch to placebo for 48 weeks. (1) The full results of the STEP 4 trial were presented today at the virtual Endocrine Society (ENDO) 2021 Annual Meeting and published in the Journal of the American Medical Association.

“For people with obesity, maintaining weight loss in the long term is challenging as both physiological and hormonal changes that occur following an initial weight loss can lead to weight regain. These changes, known as metabolic adaptation, result in lasting increased levels of hunger and desire to eat while reducing energy expenditure,” said Dr. Domenica Rubino, lead investigator of the STEP 4 trial and Director of Washington Center for Weight Management and Research. “Like any other chronic disease, obesity requires a long-term, individualized approach to care, inclusive of medication and lifestyle components.”

Following the 20-week run-in period, people who continued treatment with semaglutide 2.4 mg for an additional 48 weeks continued to lose weight with a statistically significant additional mean weight loss of 7.9% (1) (8.8% for the trial product estimand (2)) from week 20 to week 68. People who were switched to placebo following the 20-week run-in period regained 6.9% (1) of their body weight from week 20 to 68 (6.5% for the trial product estimand (2)). The estimated treatment difference [ETD] for the treatment policy estimand was -14.8% (95% confidence interval [CI]: -16.0, -13.5; p<0.0001). People who stayed on semaglutide 2.4 mg throughout the entire 68-week trial achieved a total weight loss of 17.4% (1) (18.2% for the trial product estimand (2)). Both treatment groups followed a reduced-calorie diet and increased physical activity programme throughout the study.(1)

“Obesity is a chronic disease that requires ongoing management and the results from STEP 4 trial strengthens the evidence around the potential of semaglutide 2.4 mg to transform the medical management of obesity,” said Martin Holst Lange, executive vice president, Development at Novo Nordisk. “Millions of people living with obesity are in need of additional treatment options to help them lose weight and keep it off. The results from STEP 4 show that to sustain weight loss it is important to maintain treatment and that semaglutide 2.4 mg has the potential to offer sustained weight loss of more than 17% after 68 weeks of treatment.”

The semaglutide 2.4 mg safety profile is in line with observations seen previously with GLP-1 receptor agonists. It is generally well-tolerated, and the most common adverse events among people treated with semaglutide 2.4 mg were gastrointestinal events.(1)

About STEP 4 and the STEP clinical trial programme

STEP 4 was a 68-week phase 3a randomised, double-blind, multicentre, placebo-controlled trial that compared the safety and efficacy of once-weekly subcutaneous semaglutide 2.4 mg versus placebo on change in body weight. The trial was designed to assess the effect of continuing versus discontinuing semaglutide 2.4 mg in adults with obesity (BMI 30 kg/m2), or overweight (BMI 27 kg/m2) with at least one weight-related comorbidity and without type 2 diabetes (HbA1c <6.5%). During the 20-week run-in period (Week 0 to Week 20), participants were treated with semaglutide (16 weeks escalation, followed by 4 weeks at the target dose) as an adjunct to lifestyle intervention (–500 kcal/day diet together with 150 minutes/week of physical activity). Following the run-in period, the 803 people who reached the maintenance dose of semaglutide (2.4 mg) reduced their mean body weight from 107.2 kg (Week 0) to 96.1 kg (Week 20) and were randomized (in a 2:1 ratio) to continue treatment with semaglutide 2.4 mg or switch to placebo for a further 48 weeks (Week 20 to Week 68) with lifestyle intervention.(2)

The primary endpoint of the trial was the percentage change in body weight from randomization (Week 20) to the end of treatment (Week 68). Confirmatory secondary endpoints included change in waist circumference, systolic blood pressure, and physical functioning score on the 36-item Short Form Survey (SF-36), assessed from randomization (Week 20) to the end of treatment (Week 68). Supportive secondary endpoints included percent change in body weight from baseline (Week 0) to the end of treatment (Week 68).(2)

STEP (Semaglutide Treatment Effect in People with obesity) is a phase 3 clinical development programme with once-weekly subcutaneous semaglutide 2.4 mg in obesity. The global clinical phase 3a programme consists of four trials and has enrolled approximately 4,500 adults with overweight or obesity.(3)

About subcutaneous semaglutide 2.4 mg for weight management

Once-weekly semaglutide 2.4 mg is under investigation for chronic weight management and not yet approved for people with obesity. It is currently under regulatory review in several countries, including the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA).

Semaglutide is an analogue of the human glucagon-like peptide-1 (GLP-1) hormone, with 94% similarity to the native human GLP-1 molecule. (4,5)  It induces weight loss by reducing hunger, increasing feelings of fullness and thereby helping people eat less and reduce their food cravings.(4)

References:

  1. Domenica R, Abrahamsson N, et al. Weight loss maintenance with once-weekly semaglutide 2.4 mg in adults with overweight or obesity reaching maintenance dose. Presented at ENDO Annual Meeting. March 20-23, 2021.
  2. Warkentin LM, Das D, Majumdar SR, et al. The effect of weight loss on health-related quality of life: systematic review and meta-analysis of randomized trials. Obes Rev. 2014; 15:169–182.
  3. Kushner RF, Calanna S, Davies M, et al. Semaglutide 2.4 mg for the Treatment of Obesity: Key Elements of the STEP Trials 1 to 5. Obesity. 2020; 28:1050-1061.
  4. Blundell J, Finlayson G, Axelsen M, et al. Effects of once-weekly semaglutide on appetite, energy intake, control of eating, food preference and body weight in subjects with obesity. Diabetes Obes Metab. 2017; 19:1242-1251.
  5. Lau J, Bloch P, Schaffer L, et al. Discovery of the Once-Weekly Glucagon-Like Peptide-1 (GLP-1) Analogue Semaglutide. J Med Chem. 2015; 58:7370-7380.
  6. Wadden TA, et al. Intensive Behavioral Therapy for Obesity Combined with Liraglutide 3.0 mg: A Randomized Controlled Trial. Obesity 2019;21:75–86.

Plant–based diets are growing, with innovative solutions popping up to meet demand

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55% of UK consumers claim they’re actively reducing or considering reducing their meat intake. Many are motivated by the perception that these diets are healthier (46%), more ethical (45%) or better for the environment (38%)1.

This is not a passing fad. Tesco has recently announced its intention to increase sales of plant-based meat alternatives by 300% by 2025 and since January, Asda has featured dedicated bays for plant-based ambient products in store. My local even has a large Vegan butcher.

One challenge that comes with wide appeal is the struggle to define a target audience. Our Appetite for Change research2 shows people of all ages and demographics are interested in plant-based alternatives but have different motivators and barriers to purchasing these products. This can make product placement challenging.

Our research uncovered that vegetarian shoppers often find it uncomfortable to shop the meat aisle for plant-based meat alternatives, and in contrast, flexitarians are frequently deterred by vegetarian or vegan bays- not associating themselves with these labels and linking these products with poor taste.

So, where might plant-based products fair best in-store, on the go and when eating out?

In-Store

Within our Appetite for Change research, we used reaction time testing to check the likely effectiveness of interventions. This technique asks people if they would consider an intervention and the speed at which they answer indicates whether they would act in real life.

In our research, 88% of people agreed that ranging meat-free in the meat aisle would help them choose healthier and more sustainable foods. 57% of respondents gave a fast yes, suggesting this would be a genuinely effective approach (Sample of 1000 UK consumers, Nov 2019)2.

Spotlight on Tesco

Prior to the Covid-19 pandemic, Tesco ran a trial to investigate the sales impact of moving meat alternatives into the meat aisle.

Placement is a known lever to drive behaviour change and so the trial was promising. Click here to learn more about behaviour levers.

Ten meat alternative products were moved from a chilled, plant-based aisle into the meat, fish and poultry aisle in large stores. The initial results included 21 weeks of data to 23rd February 2020 and compared sales results of the trial stores with 10 matched control stores.

Some customers struggled to find their usual products, which was an initial barrier, but informing store colleagues of changes and having shelf call-outs helped to resolve the issue. If you are considering trialling this in your business, the use of signage like floor stickers and shelf barkers may help to inform customers of the change.

The trial was a success, with sales being positively impacted during the trial. It will be interesting to see if it prompts longer-term shifts to plant-based meat alternatives.

Spotlight on Kroger

There are also lessons from across the pond. Pre-Covid, the Plant-Based Foods Association (a trade association that represents 170 plant-based food companies in the USA) conducted a study with Kroger3 – one of the largest grocery retailers in the US.

Plant-based meat products were placed in the meat aisle of 60 grocery stores in Colorado, Indiana, and Illinois. This 12-week intervention ran from December 2019 through to February 2020.

In Denver, the study found plant-based meat sales were up by 13 percent. In Indiana and Illinois, plant-based meat sales surged 32 percent and a survey found there was a growing number of people following flexitarian diets in this region – suggesting ranging vegan products in the meat aisle appeals more to flexitarians than vegans specifically.

An analysis of all 60 stores showed that on average the sale of vegan meat alternatives increased by 23 percent when sold in the meat aisle. This reinforces how important product placement is in shifting consumers towards healthier and more sustainable diets.

Why does this work?

When changing diets, research shows that people consider easy solutions the most. They don’t want to hunt down a new product but may pick it up if it interrupts their usual shopping trip. Many shoppers who buy plant-based proteins have also been shown to consume meat, therefore thinking of the ‘meat aisle’ as the protein aisle may be a way to bring plant-based meat alternatives into the mainstream. Doing this could encourage the first trial for those who already eat meat and reduces the sense of loss and risk when picking up a meat alternative for the first time.

However, it’s important to highlight our Appetite for Change research shows that cost is the biggest barrier to healthy, sustainable diets so care must be taken to list plant-based products at the right price point2.

Out of Home

The concept of integrating rather than segregating also applies out of home (with a few exceptions). In Menu for change4, the Behaviour Insights team highlighted this as an opportunity that could have a positive impact but was highly feasible.

Don’t put vegetarian options in separate aisles or in boxes on menus, but integrate them with the meat options. This means cafes and retailers should integrate meat and non-meat products by product category, putting veggie burgers with the burgers, and soy/oat milk with the cows’ milk, etc. Restaurants should discard the separate ‘vegetarian’ sections of menus. – Menu for Change

Why does this work?

Studies have shown that placing vegetarian items in a separate box on menus can reduce ordering rates by 56%5 and that having “veggie only” refrigerators in Pret reduced sales compared to integrating products6.

Separating these items makes them feel different. It reinforces that they are ‘designed for vegans and vegetarians’ – a label many don’t associate with. Additionally, when we enter a café or restaurant, we have to make a choice what to eat, often from a large variety of options. Our brain naturally seeks shortcuts and can easily exclude a whole section of products as irrelevant.

Mixing in plant-based options and giving them prime positioning allows the meal to shine rather than a vegan categorization and would encourage more browsing for those who do not typically eat this type of food. Gregg’s vegan range is a great example of how this can be executed with excitement!

The exception to this is where plant-based becomes an exclusive offering and the key pull. Whilst having segregated veggie fridges in Pret may not have worked, Veggie Pret stores seem to buck the trend. The first Veggie Pret opened as a pop-up experiment back in 2016 and there are now 10 Veggie Pret stores – and an ambition to convert as many as 90 EAT sites into Veggie Prets7. It seems that a store dedicated to segregation can help to create excitement and relevance – especially in London and Manchester, where plant-based diets are popular. Does this fit the trend bucket more than normalizing plant-based diets? – it’s hard to know…

Original article: https://www.igd.com/articles/article-viewer/t/segregation-or-integration-ranging-plant-based-products-to-drive-sales/i/27924

Source IDG

GreenSpace Closes Private Placement

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GreenSpace Brands Inc. is pleased to announce that it has closed its previously announced private placement financing of 49,285,714 units (the “Units“) of the Company at a price of $0.07 per unit (the “Offering Price“) for gross proceeds of $3,449,999.98 (the “Offering“). This includes the exercise by the Agents of their over-allotment option.  The Company intends to use the net proceeds of the Offering for working capital and general corporate purposes.

Each Unit consists of one common share in the capital of the Company (“Common Share“) and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant“). Each Warrant will entitle the holder of the Warrant to purchase one Common Share for $0.10 (the “Exercise Price“) for up to 24 months from the date of issuance thereof (the “Expiry Date“), provided that if at any time between the date that is four months and one day from the date of issuance thereof and the Expiry Date, the daily volume-weighted average price of the Common Shares on the TSX Venture Exchange is greater than $0.20 for ten consecutive trading days, then the Company shall have the option to accelerate the expiry of the Warrants by delivering notice to holders of the Warrants (the “Acceleration Notice“). In such instance, the Warrants will be exercisable only until the 30th day following the delivery of the Acceleration Notice.

The Offering was made through a syndicate of agents led by Canaccord Genuity Corp. and including PI Financial Corp. and Richardson Wealth Limited (collectively, the “Agents“). In connection with the Offering, the Agents received, as compensation: (i) cash commission of $217,500; and (ii) non-transferrable broker warrants exercisable at $0.07 per Common Share until the day that is 18 months from the closing date to acquire an aggregate of 3,107,143 Common Shares.

All securities issued or issuable under the Offering will be subject to a statutory hold period of four months plus one day from the closing date in accordance with applicable securities legislation

New Wave Subsidiary, Way of Will Inc., Launches Functional Mushroom Capsules and Functional Mushroom Powder

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Way of Will, a natural wellness brand under New Wave and known for its aromatherapy-based products, revealed earlier this year that it will be introducing a new line of functional mushroom products in the upcoming months. Further to the announcement, the company is releasing the Functional Mushroom Powder and the Functional Mushroom Capsules from the collection to the U.S. market. Paving the way to a larger collection of specialty mushroom products, the mushroom powder and capsules will be the first step in Way of Will’s journey into the psychedelics space.

The product launch, featuring a house blend of five functional mushrooms and fungi available in both capsule and powder format, aims to naturally boost immunity. They are loaded with vitamins, nutrients, and antioxidants that support a healthy immune system. The capsules are designed with ease of consumption and convenience in mind, while the powder allows for versatile use by mixing and incorporating it into foods and beverages.

“Mushrooms are gaining popularity rapidly right now, but they’re not a new phenomenon in food and medicine. They have been used in certain regions of the world for centuries for a plethora of health and wellness purposes,” said Willie Tsang, founder and CEO of Way of Will. “Mushrooms are chock-full of nutrients that our bodies love and need to function at its best. Our goal here is to source the best-quality mushrooms possible and maximize their benefits through well-researched formulations developed by our team. We are excited to introduce these capsules and powders to the U.S. market. We’re working tirelessly to roll out the rest of the products as we’ve got a lot of customers and buyers who are eager to see our entire functional mushroom collection available in stores and online.”

Canada-Denmark Plant-Based Opportunity Webinar

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Food and protein ingredients are currently the biggest growth segments in the Danish food industry. Denmark, like Canada, is an export-oriented agrifood manufacturer that offers great potential for partnerships with a global market orientation.

Learn more about that opportunity by attending a Canada-Denmark webinar, organized in collaboration with our partners at Food & Bio Cluster Denmark. Representing more than 250 Danish and international agrifood organizations, including Danish companies Chr. Hansen, Novozymes and Sicca Dania, Food & Bio Cluster Denmark is a great starting point for growing your business connections in Denmark and the EU, whether for innovation collaboration, business development or other purposes.

Join us on April 15, 8:00 am CST, to hear from speakers in the public and private sectors in Denmark and Canada about their work in plant-based food and connect with speakers and other webinar participants to explore collaboration opportunities.

Note: Participants will receive a link to the TEAMS-invitation two days prior to the webinar.

REGISTER HERE

Empire reaches an agreement to purchase 51 percent of Longo’s and Grocery Gateway accelerates growing presence in Ontario

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  • 36 Longo’s locations to join Empire’s growing store network in Ontario
  • Grocery Gateway adds 70,000 long-standing online customers to Empire’s e-commerce business
  • Longo’s and Grocery Gateway will continue to be operated by the successful Longo’s leadership team, led by President and CEO, Anthony Longo
  • Empire and Longo’s will together unlock non-customer facing synergies and other benefits
  • The acquisition price of $357 million for 51% is based on an enterprise value of $700 million
  • Expected to be accretive to earnings per share in the first full fiscal year after closing

Empire Company Limited announced today that it has signed an agreement to purchase 51% of Longo’s, a long-standing, family-built network of specialty grocery stores in the GTA of Ontario, and the Grocery Gateway e-commerce business.

The transaction immediately adds two high-quality banners to Empire’s growing grocery store and
e-commerce businesses in Ontario. Longo’s and Grocery Gateway are powerful strategic additions to Empire’s family of brands in the province – Sobeys, Foodland, FreshCo, Farm Boy and Voilà. Longo’s operates an excellent business with a very strong brand in the GTA and Southwestern Ontario, the largest grocery market in Canada, and furthers Empire’s strategic goal of growing its market presence in Ontario.

“Empire has strong momentum and we are laser-focused on our Project Horizon growth plans in key markets like the GTA, both in bricks and mortar and e-commerce,” said Michael Medline, President and CEO, Empire. “Longo’s has built one of the most successful and sought-after brands in the GTA and Southwestern Ontario. Longo’s is a crown jewel of grocery and as a values-driven company, Longo’s culture aligns closely with Empire. We couldn’t be happier to be partnering with Anthony and the Longo’s team.”

Empire’s success with the Farm Boy acquisition has set a strong foundation to welcome the Longo’s and Grocery Gateway businesses into its family of banners. The Company will continue to grow the Longo’s and Grocery Gateway businesses while unlocking benefits through non-customer-facing synergies. Longo’s and Grocery Gateway customers will see no changes to their experience. Longo’s plans to open several new stores over the next five years.

“With strong alignment to our family values and purpose, we look forward to working together with Empire to bring the Longo’s experience to even more Canadian families,” said Anthony Longo, President and CEO, Longo’s. “The more we learned about Empire, the clearer it became that this was the right team to partner with to support our next chapter of growth. And of course, we will continue to offer the same high-quality service and fresh products, exceptional private-label offering and the convenience of e-commerce that our guests have come to know and love.”

Grocery Gateway, which currently serves 70,000 loyal customers, will continue as a stand-alone business. Empire will continue to invest in the growth of Grocery Gateway’s customer base while seeking efficiencies through collaboration with Empire’s fast-growing Voilà online business.

Longo’s will continue to be led by President and CEO, Anthony Longo, and his team of talented food retail executives. Although managed separately, Longo’s will benefit from Empire’s infrastructure and capabilities, in areas such as Sourcing, Logistics and Real Estate. The Longo’s commitment to community and philanthropy through the Longo’s Family Charitable Foundation will continue and, with Empire’s support, is expected to grow over time.

Founded in 1956, the first Longo’s store was opened by three brothers, Tommy, Joe and Gus Longo. Today the business has grown to 36 locations in the GTA, including 10 new stores in the last 5 years and the Grocery Gateway e-commerce business. Sales were approximately $1.1 billion for the year ended February 28, 2021. Longo’s has developed strong customer loyalty by focusing on providing guests (customers) in their stores with fresh, high-quality products, including a variety of prepared foods, and an exceptional assortment of private label products, all paired with remarkable service from their team members.

The Longo family has expressed their intentions to remain as long-term shareholders of Longo’s.

TRANSACTION TERMS

Empire will initially acquire 51% of Longo’s issued and outstanding shares based on a total enterprise value of $700 million.

The transaction structure allows Empire to achieve 100% ownership of Longo’s overtime. After the fifth anniversary of the transaction, Longo’s shareholders have an option to sell up to a 12.25% interest to Empire per annum, at a multiple applied to the last twelve months EBITDA, which will vary depending on the achievement of certain business results. If Longo’s shareholders exercise an option to sell, Empire will have a corresponding call option for the same percentage in the following year. After the tenth anniversary of the transaction, both Empire and Longo’s have mutual put and call options for any remaining minority shares outstanding. Empire intends to finance the transaction through the issuance of up to $125 million non-voting Class A shares (“Class A shares”) to the vendors, subject to TSX approval, cash of approximately $197 million and acquired debt of approximately $35 million.  Following the completion of the current normal course issuer bid (“NCIB”), Empire intends to apply to renew its NCIB with the TSX, for several shares higher than those issued through this transaction.

The transaction is subject to customary closing conditions and is expected to close in the first quarter of fiscal 2022.

Loblaw Companies announces senior management changes as President, Sarah Davis, retires, and Galen G. Weston returns as Chairman and President

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George Weston Limited (“GWL” or “George Weston”) (TSX: WN) and Loblaw Companies Limited (“Loblaw”) (TSX: L) jointly announced today the upcoming retirement of Loblaw President, Sarah Davis, on May 6, 2021. She will be succeeded by Executive Chairman, Galen G. Weston, who will become Chairman and President in addition to his current role as Chairman and CEO at GWL. The companies also announced that Robert Sawyer will join Loblaw as Chief Operating Officer (“COO”) and that Richard Dufresne, President and Chief Financial Officer (“CFO”) of GWL, will expand his responsibilities to include becoming CFO of Loblaw on May 6, 2021.

“In light of George Weston’s strategic decision to focus on retail and real estate which was announced today, Sarah and I agreed that now is the right time for her to pursue her plans for an early retirement, which she first shared with me upon becoming President in 2017,” said Galen G. Weston. “Sarah has made an invaluable contribution to the company and I appreciate her leadership over the last 14 years. Her authentic, understated style, and commitment to the potential of others, have been hallmarks of her time with Loblaw. She has been an advisor and friend to many, especially to me. We wish her well.”

Sarah Davis has been with Loblaw in positions of increasing responsibility since 2007, including both CFO and CAO, during which time she played a crucial role in transforming the company from a regionally managed grocer into an omni-channel food, health, and wellness retailer with $52.7 billion in revenue. As President, Sarah led the company to reduce costs by over $1 billion through innovative productivity improvements. She established the company’s leadership in data and analytics, including the creation of Canada’s most loved loyalty program, PC Optimum.  Her tenure included Loblaw’s bold expansion in financial services through the growth of PC Financial’s MasterCard, and the launch of the PC Money Account. Most significantly Sarah championed an approach to leadership and culture that put colleagues and customers first in pursuit of helping Canadians live life well.

“After 14 years at Loblaw, I am immensely proud of what the company has accomplished during my time here and look forward to the next chapter,” said Ms. Davis.

In returning to the role of Chairman and President, a position he held from 2014 to 2017, Mr. Weston said, “The sale of Weston Foods will allow me to dedicate renewed time and energy at Loblaw as we increase our momentum in both our bricks-and-mortar network, and our leadership in digital and data.”

Regarding Mr. Sawyer’s appointment as COO at Loblaw where he will have responsibility for the company’s retail divisions, supply chain, and procurement, Mr. Weston said, “I am delighted that Robert has made the decision to join the team at Loblaw. He brings a keen understanding of our business and an extensive track record of success. I look forward to Robert’s contributions including his commitment to developing the next generation of talent in the organization.”

Robert has spent over 40 years as a Canadian retail executive including an extensive career at Metro where he was COO, as well as a highly successful tenure as President and Chief Executive Officer of Rona. He has served as a Director on the Board of GWL since 2016.

“Loblaw is Canada’s leading retailer with some of the most exciting assets in the industry, including its loyalty and private label programs,” said Mr. Sawyer. “I am very much looking forward to joining the team.”

As Mr. Dufresne expands his responsibilities to include CFO of Loblaw, Mr. Weston said, “Richard is an exceptional executive with extensive experience as a CFO. With George Weston’s decision to divest the bakery business, he now has the capacity to return to the dual CFO role which he held between 2014 and 2017. I look forward to working with Richard as we accelerate Loblaw’s momentum in its core business and strategic growth areas while increasing speed and agility in both organizations.”

As part of this transition, Darren Myers will be leaving Loblaw after its Annual General Meeting on May 6, 2021. “During his tenure, Darren has been a financial steward of the organization, actively worked to improve capital discipline across the company, and contributed to Loblaw’s enormous progress against its process and efficiency agenda. He is a key member of the Management Board and his collaborative leadership style drove improvements to the finance function and the company’s management system. I would like to thank Darren for his contributions to the company as CFO over the last three and a half years and to express appreciation for his support over the coming weeks,” said Mr. Weston.

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