Winnipeg Free Press

Winnipeg Free Press (Newspaper) - December 31, 2020, Winnipeg, Manitoba C M Y K PAGE A7 THINK TANK PERSPECTIVES EDITOR: BRAD OSWALD 204-697-7269 ? BRAD.OSWALD@FREEPRESS.MB.CA ? WINNIPEGFREEPRESS.COM A7 THURSDAY DECEMBER 31, 2020 Ideas, Issues, Insights THE ASSOCIATED PRESS FILES Shoppers in Larchmont, N.Y, browse shelves in March 2020 that were empty due to panic-buying during the first wave of the coronavirus pandemic. Such consumer behaviour was usually unnecessary, and often ridiculous, but the iconic im- age of bare grocery shelves changed the habits of shoppers. Top 10 food-related stories of 2020 T HE year 2020 was as unusual as they get, with no shortage of news stories. Some flew under the radar because of the pandemic, but this list is based on how some food-related stories will probably have long-term implications, whether they were related to COVID-19 or not. At No. 10, the apparent end of Tim Hortons' identity crisis. For a few years, the iconic Canadian chain had clearly lost its bearings. The restaurant chain still has a long way to go, but 2020 may have been the first year of a turnaround story. Alex Macedo, the former president, left in March with barely anyone noticing. For years, the company's marketing and product development groups were simply out of touch with what was happening out in the field and in stores. But that changed this year. Should be interesting how things unfold in a hopefully calmer 2021. At No. 9, Singapore became the first country to allow lab-grown meat to be commercialized. This may seem like a far-fetched idea right now for Canadians, but it's likely just a matter of time before these products come to Canada. How they will be regulated is still a mystery. But the cost to produce synthetic meat in labs now is probably lower than doing it convention- ally, and without the slaughter and the massive environmental footprint. This is going to pose a challenge for the livestock industry. At No. 8, the hero-pay debacle in the spring wasn't handled well by grocers. Increasing wages early in the year, only to cancel those raises in June, pointed to how ill- designed these programs were. Canadians came to realize that essential jobs in the food sector are occupied by under-appreciated, underpaid personnel. But food retailing is all about high sales vol- umes with very low margins. A 10 per cent salary base increase will make many stores unprofit- able. Recognizing the hard work of front-line employees is critical but it can't be done perma- nently with current business models. Sobeys, Walmart and other chains have opted to bring back "lockdown bonuses," which was the appropriate language to use. A good comeback. At No. 7, the apparent divorce between McDon- ald's and Beyond Meat, the darling of plant-based diets. While McDonald's recently announced its new McPlant products to be rolled out in 2021, Beyond Meat, which had been working with the fast-food chain for a while, wasn't even mentioned in the release. McDonald's underscored its commitment to the fundamentals of agriculture and that's a big deal for our farming community. Beyond Meat learned the hard way that its "bet- ter than beef" rhetoric makes the company a liabil- ity. McDonald's made that crystal clear this year. At No. 6, the sudden rise of e-commerce in the food industry. Online shopping has made the entire supply chain more democratic and accessible to consum- ers. Everyone can sell to consumers now, includ- ing farmers, processors and farmers' markets. In 2020, we've seen the food industry commit to the incredible sum of more than $12 billion in investments over five years to support online strategies. When the year started, barely 1.7 per cent of food sales in Canada were conducted online. By the time we've finished with 2020, that number will have more than doubled - and almost half of Canadians intend to buy food online regularly after the pandemic. At No. 5, the collapse of the food service indus- try and consequent pivoting due to successive lockdowns was extremely painful to watch. We started the year spending about 36 per cent of our food budget on food consumed outside the home. In April, that percentage went down to nine per cent. By mid-summer, it went back up to about 25 or 26 per cent. But most restaurant operators are realistic. It won't go back up to 26 per cent any time soon. At No. 4, farmgate waste. Because of disruptions created by the pan- demic, millions of litres of milk were dumped, millions of perfectly healthy farm animals were euthanized, and lettuce and mushrooms were disposed of across the country, owing to lack of labour. The waste was unbearable and incomprehen- sible. Most Canadians were confused and had no idea what to think of the waste. Farmers weren't to blame, but our lack of focus on processing as a country was. Because of what happened this year, as the social contract be- tween the food industry and consumers is being redesigned, farmers need to be ready. At No. 3, telecommuting, cooking, gardening and how we became more domesticated as a society. Getting people to stay home created a tsunami of changes. Working from home got us closer to our own kitchens, which in turn changed our relationship with food. Most of us cooked and almost 20 per cent of Canadians started a garden this year. Many got to experience life without restau- rants, if only for a while. Only time will tell if our new habits stick. At No. 2, amid the massive Black Lives Matter movement ignited by George Floyd's dreadful death, PepsiCo changed the name and brand im- age of its Aunt Jemima pancake mix and syrup. Other food companies followed suit during the summer. As in many other sectors, food market- ing clearly ended a racist-charged chapter in 2020 and how food will be marketed will change. And the No. 1 food story of the year: the sudden and unnecessary panic-buying of food during the first wave of the pandemic in the spring is an easy pick for the top spot. Beyond the ridiculousness of hoarding toilet paper, the impact of empty shelves was immense. Many Canadians would have experienced the emotions of food insecurity for the first time. Since then, behaviours and policy have been af- fected by the powerful images of bare grocery store shelves. It was truly a moment in time. It's always difficult to make such a list, and anyone can add to or remove any of these stories. But this year's list was one of the easiest to write in decades. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University. - Troy Media Lavish executive bonuses unjustifiable in hard times FOR those of us who operate outside the corpor- ate world, it's hard to get our heads around the idea of bonuses paid to executive offi cers, particu- larly when the organization has done poorly. Turn to the business pages, and we're assailed with the news of what CEOs are taking home in bonuses and stock options. In May, for example, we were told that Air Can- ada CEO Calin Rovinescu had his annual compen- sation, which included bonuses, cut in half, owing to COVID-19, to just $5.8 million after being on track to receive $12.9 million. Falling stock prices apparently were to blame for that drop. At the same time, the air carrier laid off about half of its workers and the federal government has been asked to step in and help the beleaguered air transportation industry, including Air Canada. I'm sorry, what? But it's not just those who are CEOs of trans- portation companies laying off people and looking for government help with one hand while tak- ing in huge bonuses. Postmedia's Paul Godfrey and his board also made a pretty penny this year, despite the fact that newspapers have been complaining about falling circulation rates and advertising revenues, particularly during the COVID-19 pandemic. According to Postmedia's management circu- lar, filed earlier this month, Godfrey, as executive chair, made almost $2.3 million in total compen- sation in 2020, including a bonus of $960,000. Andrew MacLeod, the CEO, made $1.95 million including both long- and short-term bonuses. Oth- ers on the board also made short-term bonuses in the six-figure range. According to the filing, the bonuses were paid out if the board met the strate- gic plan and budget goals. Before anyone tells me this is how it's always been, and the board is just following its mandate, two things come to mind. First, after almost a year of being told we now have a "new normal" - how I hate that phrase - maybe it's time for the new normal to hit corporate Canada, too. And sec- ond, these corporate bonuses that are so breath- takingly tone-deaf have long been under fire. According to Dutch business ethics professors Ans Kolk and Paolo Perego, "executive bonuses and corporate incentives have been strongly criticized for encouraging excessive risk-taking and cost-cutting that created the conditions for the global financial crisis and the subsequent economic recession." Kolk and Perego say "bonuses have become a symbol of 'irresponsible' behaviour and gover- nance failure, in view of their in-built mechanism to reward short-term egoistic practices that go against broader often long-term societal goals." Indeed, some CEOs have turned down bonuses because they know it would be a public-relations nightmare. In 2008, for example, Goldman Sachs Chief Executive Lloyd Blankfein and six other se- nior executives said they would forgo all bonuses, including both cash payouts and equity awards or options, because it was the right thing to do. Not so at Postmedia. In August, the larg- est newspaper company in Canada shut down newspapers in six small towns and cut print publication of four newspapers while slashing 10 per cent of its total salary outlay through layoffs and voluntary buyouts. One of the papers was the Graphic in Portage La Prairie. In April, it closed 15 community newspapers in Manitoba and On- tario's Windsor-Essex area for good because the publications were "not financially sustainable." Godfrey's compensation package is by no means extravagant - certainly not when com- pared to other CEOs. But the newspaper industry is not the same as an airline. Newspapers are also about democracy. Our need to hold truth to power. And if 2020 has taught us anything, we need our newspapers, especially our local ones, now more than ever. Over the past year, because of newspapers, we've come to understand the full impact of the pan- demic, Black Lives Matter and systemic racism, the ongoing issues of sexual assault and domestic violence for women and the importance of voting, as we watched the U.S. citizens exercise their democratic rights in their election. By taking those large bonuses, Godfrey and his executives may be addressing the goals of the stockholders of Postmedia, but not the stakehold- ers. That's what we need to do differently in busi- ness, moving forward. Kolk and Perego write that stakeholders in a company go beyond those who make money off of it, in its stocks, but those who benefit from it because they are its customers and its employees as well. There's a moral respon- sibility that goes beyond just meeting a financial duty. Instead, companies need to meet the needs of its stakeholders as well. For a company that is responsible for the pub- lication of newspapers, that moral responsibility includes the fulfilment of democracy. No small thing as we move on to another year. Shannon Sampert is a political scientist: www.mediadiva.ca.; shan- non@mediadiva.ca; Twitter:@CdnMediadiva SYLVAIN CHARLEBOIS SHANNON SAMPERT A_07_Dec-31-20_FP_01.indd A7 2020-12-30 4:25 PM ;