Microsoft Canada laying low

Spin control. That's what software giant Microsoft has been busy doing in the U.S. market over the past several weeks, in the wake of a widely publicized antitrust ruling. When it comes to the Canadian market, however, analysts argue that a...

Spin control. That’s what software giant Microsoft has been busy doing in the U.S. market over the past several weeks, in the wake of a widely publicized antitrust ruling. When it comes to the Canadian market, however, analysts argue that a "business-as-usual" strategy may well be the best way to go.

On the whole, Canadian consumers probably couldn’t care less about Microsoft’s legal troubles, says Kevin Restivo, software analyst with Toronto-based International Data Corporation (Canada).

"Their image hasn’t been damaged in the consumer’s eye," he says. "Certainly a lot of attention has been turned toward the case, but as long as consumers’ software is working and it’s on their desktops, I would have to say that [Microsoft's] image is just fine."

On April 3, a U.S. District Court ruled that the Redmond, Wash.-based company had used its monopoly power to block rivals from marketing operating systems or emerging technologies that threatened its market dominance.

The ruling sent shares tumbling, and left Microsoft officials south of the border scrambling to minimize the fallout. A corporate image-building campaign featuring chairman Bill Gates hit U.S. airwaves in the aftermath, as part of the company’s effort to muster public support.

Not a word, however, has been heard from the Mississauga, Ont.-based offices of Microsoft Canada (whose representatives, Strategy was told, were unavailable for comment).

That silence isn’t actually surprising, Restivo says.

"This is still a U.S.-driven issue – it’s important to remember that," he says. "On the Canadian side, I’m not sure they would do anything to counter it. It’s simply a matter of all systems go."

Microsoft’s Canadian operation is currently gearing up for the launch of the Windows 2000 operating system, as well as the database product SQL Server 2000, and the groupware product Exchange 2000.

While the recent legal turmoil hasn’t yet translated into a loss of sales, there’s no question that the company’s overall image has been tarnished, says Richard Morochove, president of Toronto-based computer consulting firm Morochove & Associates. And in the long run, this may have a direct bottom-line impact.

Indeed, he says, there are many people now who refuse even to consider a Microsoft product as long as there’s an alternative.

"There’s a growing ‘anybody-but-Microsoft’ attitude," he says.

Meat and plant-based sales are both strong at Maple Leaf

Both priority areas performed well in the company's full-year results, helped by a boost in marketing for new products.
Maples Leaf All Natural 4

Maple Leaf Foods reported higher Q4 and full-year 2020 sales, driven by its sustainable meats and plant-based proteins. 

The CPG co. reported quarterly sales of $1.13 billion, up from $1.02 billion for Q4 2019, as well as net earnings of $25.4 million, compared to $17.5 million for the same period the year prior (an increase of 45.2%).

For full fiscal 2020, the company reported a total increase of 9.2% in sales, driven by what it says is “strong growth in both the meat and plant protein groups.”

“We have repositioned our portfolio towards two high-growth categories now representing 20% of our annual sales generating a compounded growth rate in excess of 25% over the last three years,” says Michael McCain, the company’s president and CEO.

Meat protein group sales  comprised of prepared meats, ready-to-cook and ready-to-serve meals, snack kits, value-added fresh pork and poultry products that are sold to retail, foodservice and industrial channels, and agricultural operations  grew 11.3% for the quarter. 

Meanwhile, sales of plant protein products  refrigerated plant protein brands such as Lightlife and Field Roast, premium grain-based protein, and vegan cheese products sold to retail, foodservice and industrial channels  was up 5.5% over the same period. 

Sales growth for its meat portfolio was driven by “a favourable mix-shift towards sustainable meats and branded products,” but also growth in exports to Asian markets, and pricing actions implemented to mitigate inflation and other structural cost increases, according to the company. Strong demand in the retail channel was offset by lower volume in foodservice as a result of COVID-19.

For its plant-based offerings, sales for 2020 were $210.8 million compared to $176.4 million last year, representing a growth of 19.5%, or 18.1% after excluding the impacts of foreign exchange. The segment was driven by expanded distribution of new products, continued volume increases in its existing portfolio, and pricing actions implemented to mitigate inflation and other structural cost increases.

SG&A expenses totalled $144 million for the plant group alone in 2020, with investments focused on advertising, promotion and marketing to build awareness, as well as supporting brand renovation and new product innovation. SG&A for meat proteins were $346.6 million for the full year, and the company says it expects SG&A levels and marketing investment in 2021 to be largely in line with where they were in 2020.

The company, which in 2019 announced it had gone carbon neutral, says it’s amplifying this commitment while “focusing on eliminating waste in any resources it consumes, including food, energy, water, packaging, and time.”