Thank you for allowing me to be here today. My name is Brian Alger. I'm the CEO and brand owner of The Pop Shoppe.
I'd like to give you a little background on Poppe Shoppe. We're a niche-market company. The Poppe Shoppe originally started in 1969 in London, Ontario, with two young entrepreneurs who saw a need in the marketplace for affordably priced soft drinks. The idea was rather simple: a small satellite bottling operation located in a retail setting would allow them to produce on-site and sell directly to consumers.
The concept was an instant success. Pop Shoppe began to look at expansion immediately. Using a franchise system, Pop Shoppe's expansion was rapid. Within a few short years, Pop Shoppe outlets spanned Canada and ranged into parts of the U.S.
In 1977, the company went public. Pop Shoppe enjoyed success well into the eighties. At the height of the company's success, they were selling over a million bottles a day. But during that time, we began to see the introduction of competitively priced private-label soft drinks. Larger soft drink producers took notice and began what is now known as the “cola wars”. Pop Shoppe's model of stand-alone stores just selling soft drinks now became inconvenient for consumers to travel to. This, coupled with a losing price battle, made it impossible for Pop Shoppe to survive. However, what did remain was the truly iconic Canadian brand with a tremendous amount of brand equity.
As a serial entrepreneur, I saw an opportunity in 2005 to resurrect the iconic Canadian brand. After gaining an understanding of the soft drink market, I concluded that the area of the market in which Pop Shoppe could flourish was in the premium category. In 2006 I launched Pop Shoppe. We are a premium-positioned, single-served pop sold in glass bottles. Pop Shoppe can be found in big-box stores, convenient stores, and various types of food service operations all across Canada and parts of the U.S.
During the launch of Pop Shoppe, I encountered a number of challenges, as you would expect during the start-up of any new business. We've been able to overcome most of those challenges. However, in 2010, I began to see a shift in the consumer's attitudes towards processed foods, and I began to look at ways to make Pop Shoppe products healthier. In particular, we saw an ad campaign against the use of high-fructose corn syrup in soft drinks.
At that time I began to look at our current sweetener, high-fructose corn syrup. High-fructose corn syrup is a byproduct of corn, which contains more fructose than real sugar. Real sugar is made of sucrose, which comes from sugar cane or sugar beets. Sucrose contains equal amounts of fructose and glucose. High-fructose corn syrup does not. As a result, it's much sweeter than real sugar and so less is needed to sweeten products.
High-fructose corn syrup is widely used in the production of processed foods such as soft drinks, candies, condiments, and baked goods. High- fructose corn syrup is primarily used because of its low cost. Quite simply, it's more affordable because of the abundance of corn in North America, and it's also easier to blend and to transport, because it's a liquid. Its sweetness helps to stabilize processed foods. Currently, the U.S. has the world's highest consumption rate of high-fructose corn syrup, but Canada is close behind, along with Hungary, Slovakia, Bulgaria, and Belgium.
A closer look at high-fructose corn syrup revealed some alarming studies. One such study found evidence that the body struggles to metabolize large amounts of fructose that does not come from fruit, and there is a risk of Type 2 diabetes because fructose and sucrose are not metabolically equivalent.
Other studies suggest high-fructose corn syrup may play a role in contributing to hypertension and kidney disease. When high-fructose corn syrup is ingested, blood glucose levels spike faster and subsequently drop faster, making the body crave more sweetness. This is why some argue that high-fructose corn syrup contributes more to weight gain and appetite functions than real sugar.
Based on these findings, the decision was made to switch from high-fructose corn syrup to a more natural cane sugar. This became a challenge for a number of reasons. First was the reformulation of each flavour we produced. The conversion rate of high-fructose corn syrup to cane sugar was not equal. An outside agency was brought in to assist in the timely and expensive process. The larger cost, however, was the cane sugar itself. Our sweetener costs rose almost 50%. We know that in some cases consumers are willing to pay more for items that are better for them, but that doesn't seem to be the case when it comes to soft drinks, pop in particular.
In addition to the higher costs, availability can be an issue. Because there's a lack of producers using cane sugar, the supply isn't always available. This can create significant delays in production.
However, even in the face of supply chain issues and higher costs, I'm happy to say that today all Pop Shoppe products are made with cane sugar. I feel good about the change. I also feel that it's the responsibility of manufacturers, in partnership with the government, to make all reasonable attempts to manufacture their products in the healthiest possible manner. As a nation, we would all benefit from this initiative.
I feel that the government can play a significant role in the following ways: by providing incentives to brands, such as ours, that choose to eliminate high-fructose corn syrup from their products, or similar switches; by offering subsidies to manufacturers to help offset the higher cost of organic or healthier raw materials, which would be of tremendous help, especially to smaller companies such as ours; and by giving participating products access to feature-friendly, approved labels, such as "certified organic" icons, or perhaps even partner with national grocery stores to help promote these products, with specified shelf-space.
To conclude, I believe that it should be easier for brands who are trying to offer healthier choices for consumers, and that they should be rewarded for doing so,
Thank you.