Market SizeVancouver Montreal Calgary/Edmonton Toronto Canada’s Urban Population = 23.5 Million 15 million of these are represented by five major cities
Market Size Cont’d Calgary/Edmonton, Alberta 15%Vancouver, British Columbia Toronto, Ontario 15% 42% Montreal, Quebec 28%
Market Sectors• Military and RCMP• First Responders, Law Enforcement and Government Ministries• Corporate Image Wear• Work Wear• Healthcare• School Uniforms• Executive Wear
Market Sectors Cont’dEstimated Market Values CDN Dollars Percent ofGroup Annual Total MarketGovernment (Justice and other Ministries) $40 M 20%Corporate Image Wear (Hospitality/RetailService) $85 M 40%Work Wear $50 M 24%Healthcare (12,000 hospitals in Canada plusclinics, offices labs) $30 M 14%School (385 private schools each avg. 400students) $5 M 2%
Market Sectors Cont’dAdditional Data• Statistic total employment by industry (only a percentage of each are in uniform)http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ40-eng.htm• Detailed North America “work wear” (or uniform) analysis with trends, challenges, growth forecast, and more at:http://www.researchandmarkets.com/reports/888585/north_american_workwear_and_uniforms_markets – Cost for report is about $6,050 USD
Market Sectors Cont’d DISTRIBUTION Corporate Image WearPolice Fire EMS other Ministries Corporate Image Wear (Hospitality) 5% (Service/Retail Chains) Quotes 15 % Retail 35 % Retail 95 % 65 % Contract Quotes 85 % Quotes Work Wear (Corporate Paid Hospital and Individuals industrial) Note: Corporate 15 % Retail Security and School 25 % Retail Uniforms are 100% quotes. 85 % 75 % Quotes Quotes
Military and RCMPDescription:• All branches of the military and the Royal Canadian Mounted Police (RCMP), purchase almost exclusively from Canadian domestic manufacturers
First Responders, Law Enforcement and Government MinistriesDescription:• Police, Firefighters and Paramedics – E.g. Approximately 50, 000 Police in Canada: 40% in Ontario, 23% in Quebec and 10% Manitoba• Correctional Services and Canadian Border Services Agency (CBSA)• Natural Resources, Parks and Forestry• Maintenance/MechanicsWhat they Wear:• Military style shirts with epaulettes• Cargo-type pants and shorts• Unlined seasonal jackets (may or may not have reflective tape) and outerwear• Fabrication is a combination of poly cotton or poly wool• With printing, embroidery, cresting, reflective• Maintenance/mechanics wear work wear
First Responders, Law Enforcement and Government Ministries Cont’dHow they Buy:• Government administered tendering, bidding and contract award process – Including detailed specifications, costly product sampling (testing), slow payment terms, demanding delivery schedule, unreliable volumes etc. – Lowest price, highest quality, strict labelling and shipping details – Penalties for non-complianceLeaders:• R. Nicholls• Uniform Group• Outdoor Outfits
Corporate Image WearDescription:• Private Security Companies• Hospitality (kitchen staff, housekeeping)• Service Industry (retail, courier, restaurant, postal, transit, liquor stores, entertainment etc.)• Canadian bank employees to do not wear uniforms• Over 40,000 employees in service industry: 60% in Ontario and QuebecWhat they Wear:• Private Security Companies: as per first responders, law enforcement• Hospitality: chef jackets, aprons, dresses, tunics etc.• Service Industry: variety of polo shirts, slacks, skirts, denim, acrylic sweaters, caps and outerwear• Embroidery, unique colourations and styling
Corporate Image WearHow they Buy:• Direct from manufacturer or distributors• Quotation or bidding process for term contractLeaders:• Unisync• Mark’s (formerly Mark’s Work Wearhouse)• Utility Garments• R. Nicholls
Work WearDescription:• Maintenance, mechanics, warehousing• Construction, manufacturing• Public Works (sanitation, hydro, nuclear power)• Transit Workers• Natural Resources Industries (oil, mining, forestry)What they Wear:• Denim, cotton, poly-cotton, canvas “duck” cotton• Shirts, pants, overalls, outerwear• Reflective and embellishments
Work Wear Cont’dHow they Buy:• Government customers purchase on official tender/contract basis• Quotations• Consumer retailLeaders (Retail):• Mark’s• Walmart• SearsLeaders (Manufacturing Distributors):• Helly Hansen• Richlu• AGO
Health CareDescription:• Nurses• Doctors• Laboratory Technicians• 125,000 across Canada – 52% in Ontario and QuebecWhat they Wear:• Scrubs, lab coats, nurses uniforms
Health Care Cont’dHow they Buy:• Government contract• Direct sales• Consumer retail• OnlineLeaders (Retail):• Walmart• Mark’s• SearsLeaders (Distributors Online):• Professional Choice Uniforms• Scrubs Canada• Etc.
School UniformsDescription:• Private Schools and Public Religious Schools• Ages 7 to 16• About 850 private schools in Canada (avg. 400 students)• Canadian public school students do not wear uniforms• School year is from September - JuneWhat they Wear:• Slacks, grey poly flannel or cotton, skirts, polo shirts, dress oxford shirts, knit sweaters, blazers, tunics and ties• Crests, embroidery• Specific colours
School Uniforms Cont’dHow they Buy:• From distributors (contract or quotes)• Pricing less of an issue vs. service relationship and other considerationsLeaders:• R.J. McCarthy• In School Wear• Small local distributors
Market Trends• Sources of Information: Government and Industry Statistics, Survey and Interviews with Leading Sector Distributors – not including U.S. Conglomerates
Amalgamated Canadian Distributors IndependentLarge US CanadianConglomerates DistributorsVF Imagewear CimaCintas OmegaAmeripride C2CG&K Unisync Premium R. Nicholls Uniform Utility Garment RJ McCarthy Mark’s
Market Trends Cont’d• Acquisition of smaller Canadian companies by larger U.S. Corporations – Making their purchasing for Canadian employees from U.S. head office – Raising level of service beyond the competition (IT, logistics, design, sourcing, pricing, inventory)• Industry leaders anticipate between a 5 to 20% annual growth in volume over the next 5 years – may represent acquisition growth more than market increase
Market Trends Cont’d• Canadian corporate acquisitions and amalgamations• Government contract purchasing amalgamating divisions and/or products into a single contract• General dissatisfaction with suppliers – Delivery times • China 120 days • Bangladesh 90 days • Mexico 60-75 days – Cost, communication, distance, quality control• Greater value on reliable quality goods and services vs. cost• Growing consideration for eco-friendly products
2. Canadian Regulations• The Canadian Boarder Services Agencies (CBSA) is the federal law enforcement agency responsible for (among other duties) administering and enforcing the laws and regulations regarding the importation of goods into Canada; interdicting illegal goods and collecting all applicable duties and taxes on imports.• Suppliers are not responsible for Canadian Rules and Regulations• The Canadian importer (or dealer) is responsible for meeting and honouring: – the standards, rules and regulations including: • product registration; labelling; packaging; quality and safety standards; tariffs and dutiesSome requirements and links to government websites for additional details and explanations are in the following:• Certification• Tariffs and Rules of Origin• Quality and Safety Standards• Packaging and Labelling
Certification• All imported garments require a Certification Identification Number (referred to as a “CA Number”) – Five digit number proceeded by the letters “CA”• The source of any garment can be traced by its “CA Number” online at: http://strategis.ic.gc.ca/app/cb/cnmbr/srchFrm.do;jsessionid=00005 -_sdbwHkK_vOsJOs-MhcKO:1247mv5k6?language=eng
Certification Cont’d• The CA Registration will tell you the Dealer Company (or individual’s) by name, address, the date the number was issued and its status (issued, terminated etc.)• You can also search the U.S. Dealer Database (by their RN Number ) from the same site• Relevant regulations are covered in the Textile and Labelling Act of Canada and are administered by the Competition Bureau www.competitionbureau.gc.ca.
Tariffs• Canada Border Services Agency (CBSA) publishes advance rulings – To help the importing community determine the proper tariff classification of goods• These rulings, issued under paragraph 43.1(1)(c) of the Customs Act, (available at the Justice Ministry site: http://laws- lois.justice.gc.ca/eng/acts/C-52.6/section-43.1.html) provide information on the importation of particular goods, including their 10- digit tariff classification number under the Canadian Customs Tariff• For information on the importance of proper classification of goods see the Harmonized System (HS) Compliance (http://www.cbsa- asfc.gc.ca/publications/pub/bsf5118-eng.html)
Rules of Origin• Rules of Origin (or Country of Origin) are stringent in Canada• Due to the Free Trade Agreement between Canada and Colombia importers and exporters must know if their garments meet the requirements for duty exemption (or not) – Proper documentation to satisfy the CBSA is required• These rules are complex and often subject to interpretation. You are strongly encouraged to obtain the full document via emailing your request to: firstname.lastname@example.org• Ask for: Memorandum D11-5-9 Canada-Colombia Free Trade Agreement (CCOFTA) Rules of Origin – contains the CCOFTA Rules of Origin Regulations and provides a link to the Foreign Affairs and International Trade Canada (FAITC) Web site where the Rules of Origin for the CCOFTA may be found• Under the current agreement, duty free is only granted to Colombian producers using locally-sourced/made materials. – If the fabric used in Colombia is imported, then finished goods imported to Canada will be assessed at the 18% duty rateLearn More: http://www.international.gc.ca/trade-agreements-accords-commerciaux/
Quality and Safety Standards• Garment care, particularly washing instructions are not mandatory but generally provided with uniform garments in accordance with Textile Labelling Act and meeting the standards of the Canadian General Standards Board (CGSB) harmonized with the North American Free Trade Agreement (NFTA).• Likewise specific sizing or size designations are not mandatory (but if used they must be accurate)• Canadian Standards Association (CSA) International – Sets standards for clothing particularly related to safety work wear worn in the Canadian workplace – Flame/heat, electricity or static resistant garments, and light reflective features require CSA certification to be sold in the Canada – CSA provides latest minimum standards, labelling requirements and inspections for factory certification
Packaging and Labelling• It is national policy to provide both French and English labelling on most garments and packaging. – Particularly an issue with government end users and customers with national distribution – Importer will have details• Labelling and packaging issues are ultimately the responsibility of the importer – A major cause of delay in the release of goods is due to poor or improper labels applied by the supplier – Close and clear communication, including visual confirmation of labels and packaging before manufacturing or shipping is essential
3. The Competitive Environment• Worldwide (China, Bangladesh, Vietnam, Mexico, Colombia)• Canadian Manufacturing• Products and Pricing
Worldwide• Government sourcing statistics track general garment classifications (not specifically uniform numbers)• The following graph is a reliable estimate based on their numbers and input from leading industry Distributors. Vietnam Mexico and and Other 7% Indonesia 8% Bangladesh and Pakistan China 15% 70%
Worldwide• China dominates the Canadian market – supplying an estimated 70 – 100% of most Distributor’s uniform imports• Bangladesh plus other Asian countries (Vietnam/Indonesia) may represent 20% or more – high volume low cost basic t-shirt, polo, dress shirt and pant market particularly for School Uniforms and Hospitality garments• Mexico is somewhat an underachiever in the market in spite of NFTA due to unreliable production
Canadian Manufacturing• Work Wear manufacturing in Western Canada ; Quebec and Atlantic Canada servicing industrial resource production (oil, mining, forestry) construction and related industries• Products include highest standards of flame resistant (FR) and 100% Cotton Duck Fabric – Cotton duck fabric or duck canvas, is a heavy, plain woven cotton fabric used primarily for outerwear, coveralls, bib overalls and pants) and basic work shirts and pants (denim, poly cotton etc.)• Examples are: – Richlu Manufacturing (West) http://www.richlu.com/ – Big Bill (Quebec) http://www.bigbill.com – WorkWell http://www.wearwellgarments.com/ – Geliget http://www.geliget.com/Home.aspx (Atlantic Canada) – Helly Hansen of Norway is manufacturing out of Dartmouth Nova Scotia (Atlantic Canada) http://www.helly.ca/EN/
Canadian Manufacturing Cont’d• Executive, Sportswear, Health Care and Hospitality manufacturing by various smaller operations across Canada.• Law Enforcement pants, shirts and outerwear examples: – Empire Shirts (Quebec) http://empireshirt.com/ – Perfection Shirt Inc. (Quebec) http://www.perfectionshirt.com/en/index.php – Outdoor Outfits (Ontario) Outerwear for First Responders, Law Enforcement http://www.outdooroutfits.com/
Products and Pricing What are they buying? Where? What quantities? What are they paying? Target Price?The following information was garnered through a survey of a number of leading uniform distribution companies, most with national distribution, representing all sectors of the industry.The survey does not include companies operating in Canada with head office management based in the U.S. or large retail companies who may be servicing the uniform market through consumer retail distribution (primarily: Wal-Mart, Sears, Mark’s Work Warehouse ).
Products and Pricing Cont’d Style Description Fabric Treatment Units/Yr. Origin Price FOB/Land Target FOB/LDPGolf shirt Collar/placket 60/50 (250 gsm) non-pill 4% shrink max 300k Egypt 4.15 FOB 3.75 FOBGolf shirt Collar/placket 50/50 (220 gsm) 10k Bangladesh 6.5 LDP 5.75 LDPGolf shirt Multi colours flat knit 50/50 (210 gsm) 10k China 8 FOBShirts Military epaulettes 4.5 oz 65/35 polycotton stain/liq resistant 50k Bangladesh 6.5 LDP 5.5 LDPShirts Military epaulettes 4.5 oz 65/35 polycotton stain/liq resistant 25k China 8.5 FOB 7 FOBShirts Military epaulettes 5 oz 65/35 polycotton Teflon 20k China 10 FOBShirts Military epaulettes 6oz 65/35 polywool Teflon 10k China 15 FOBShirt Dress Single pocket 5oz. Poly cotton crease/stain resistance 10K China 6 FOB 6.5 LDPShirt Dress Single pocket 4.5 oz cotton 10k China 8 FOB 6 FOBPants 6 Pocket cargo 8.5 oz. 65 /35 poly cotton crease/stain resistant 40k China 11.5 LDP 9.5 LDPPants 6 Pocket cargo 8.0 oz. 65 /35 poly cotton Teflon 10k China 17 FOBPants 6 Pocket cargo 7.5 oz. 65 /35 poly wool Teflon 10k China 22 FOBPants 6 Pocket cargo 7.5 oz. 65 /35 poly cotton 25k China 9.5 FOBPants 5 Pocket cargo 65 /35 poly cotton Twill crease/stain resistant 4k Colombia 33 FOB USA 10 LDP
Products and Pricing Cont’d• Margins – Fluctuate in this highly competitive market (particularly when bidding for large volume business)• Generally volume importers (dealer distributors) are getting 75 to 100 point mark-up on first cost or about 45 to 60 points on their landed costs or more.• Most volume buyers are considering quotes based on FOB (freight on board) price in US Dollars.
4. Getting the Business• Preparation and Presentation• Marketing Strategy• Finding the Buyer• Trade Shows• Courting the Buyer• Keeping the Customer• Success Stories• Opportunities
Preparation and Presentation• Marketing Materials – Up to date and informative website – Product samples and specifications – Pricing sheets (in CDN or US dollars, on an FOB or Landed CIF basis)• Address technological capabilities (machinery, labour training and experience, IT interface potential )• Quality control procedures (production, labelling, packaging and shipping)• Fluent English speaking personnel with professional communication skills• Knowledge of the Canadian market (Use TFO and ProExport; surf the web; attend trade shows)
Marketing Strategy• Prepare to meet these demands: – Rapid turn around and sample production – Same day reply to every communication – On-time deliveries with any changes agreed to by buyer – Deliver products that meet agreed to specifications – Continuity of supply – Maintain quality and price (particularly on contract product) – Correct labelling, packaging and shipping details as specified by the buyer – Upgrading of facilities, technology and human resources commensurate with growth – Partnering on design and fabrication innovation
Finding the Buyer• Attend trade shows at home and in competing countries, but especially in the USA and Canada.• Alternatively, contact organizers to obtain catalogues of exhibitors and attendees.• Your Canadian potential customers are “selling” at their trade shows not “buying”. Buyers may not be present but contacts can be made and competitive product viewed.• ProExport has offices in Canada and knows the market and players. Use them.• “How to Do Business in Canada” commercial web site: http://www.communicaid.com/cross-cultural-training/culture-for- business-and-management/doing-business- in/Canadian_Business_Culture.php
Trade Shows• Advanced Work Wear Canada – Protective clothing and uniforms for public safety services (firefighters, police, emergency medical services) – Held in March and November in Toronto, Montreal or Calgary – www.gcttg.com• Imprint Canada – Embroidery and printable sportswear and promotional products – Vancouver: The Western Imprint Canada Show, October 12 and 13, 2012 – Toronto: The Toronto Imprint Canada Show, January 11 and 12, 2013 – www.imprintcanada.com• North American Association of Uniform Manufacturers and Distributors (NAUMD) – Organizes bi-annual gatherings alternating between Toronto and Montreal – Members have NAUMD benefits (access to the USA NAUMD trade show) – Orlando, Florida, April 5 to 8, 2012 – www.naumd.com
Trade Shows Cont’d• Shooting, Hunting, Outdoor Trade Show (SHOT Show) and Conference – Organized by National Shooting Sports Foundation (NSSF) – Combined firearms, law enforcement, cutlery, outdoor and protective apparel – Largest presentation of law enforcement uniform brands open to the trade – Las Vegas, Nevada, January 15-18, 2013 – www.shotshow.org• Techtextil North America – Technical side of the textile industry – Research and development, raw materials and production, processes, product innovation, treatment and recycling – Atlanta, Georgia, April 24 to 26, 2013 – www.techtextilna.com
Trade Shows Cont’d• Marine Hotel Association – Suppliers for cruiser lines – Uniforms, towels, bed linens and others – Orlando, Florida, April 21-23, 2013 – www.mhaweb.org• PPAI EXPO – Promotional Products Association International – Suppliers of promotional products – Uniforms included – Las Vegas, Nevada, January 14-18, 2013 – www.ppai.org• National Restaurant Association – Restaurant suppliers of different goods (uniforms and home textiles) – Chicago, Illinois, May 18-21, 2013 – www.restaurant.org/events/
List of Potential BuyersCompany $M Prov. Website Contact Position Phone Email Sector Source 450-442-R.Nicholls Distributors Inc. 20 QC www.rnicholls.com Kuna Seelan VP Sourcing 9215 email@example.com C, F CH,B 905-361- C, F, W,Unisync Group 20 ON www.unisyncgroup.com James Bottoms COO 8989 firstname.lastname@example.org M CH,I,B, O 416-650-Marv Holland Apparel 18 AB www.marvholland.com Dennis Zukowsky New Bus.Dev. 5885 email@example.com C, F, W CH,M, 514-279- C, F, W,Utility Garments 10 QC www.utilitygarments.ca Harold Geyer CEO 8488 firstname.lastname@example.org M,S CH,I,B,O 905-565-Spirito 10 ON www.spirito.com Sam Lee President 7576 email@example.com C,F,W,M CH,I,B Margaret 604-708-Omega Uniform Systems 10 BC www.uniformsystems.com Ramsdale Pres. 8904 mramsdale@uniform systems.com C,F,W,D CH,M, Dir.Purchasin 416-593-RJ McCarthy 10 ON www.rjmccarthy.com Eisavi Edmon g 6900 firstname.lastname@example.org S CH,E,I,B 514-745-C2C Uniforms 7 QC www.c2cuniforms.com Vince Feigin Director 3384 email@example.com C,F,W CH, 514-596-CIMA LTCI Corporation 5 QC www.cimaltci.com Kevin Lutes Pres. 0327 firstname.lastname@example.org C, F CH,Col, Giovanni 416-535-Premium Uniforms 5 ON www.premiumuniforms.com Moschetta Sales Mgr. 0535 email@example.com C, W O Sectors: C=Corporate/Hosp F=First Responders, W= Work Wear, D= Dress, M=Medical,S=School Source: CH=China, I=India,B=Bangladesh,M=Mexico,Col=Colombia O=other (or not declared)
Courting the Buyer• Contact and Visit (by email or phone)• Schedule a personal visit• Follow Up! Regardless of immediate possibilities, build relationships for the future.• Buyers are looking for savings but also security. – Colombian pricing may be high but reliable quality, delivery and reaction times are valuable too (See Marketing Strategy)
Courting the Buyer Cont’dColombia Potential Negatives: Cost, inexperience with market; technology and access to materialsPotential Positives: Shorter lead times and turn-around; smaller volumes; specialization opportunities and better quality IF RELIABLEBuyer and Supplier are geographically closer making personal visits easier and less costly• Take small steps particularly regarding volumes• Promise small, deliver big• Be honest throughout
Keeping the Customer• Meet and maintain Market Strategy objectives• Develop a close relationship (including personal visits) built on performance, integrity and shared goals
Success Stories• High volume supply to large volume retailer(s) – very basic product (e.g. socks) – well established and well operated manufacturing company – significant exporting experience• Specialty product (e.g. men’s designer underwear) – Canadian brand, marketed globally – High end, state of the art packaging and design
Success Stories Cont’d• Law Enforcement uniform manufacturing for U.S. brands – well established factory with extensive exporting experience. – Quality manufacturing, labelling and inventory controls• Canadian Distributor working closely and specifically with Colombian sources (e.g. various law enforcement products) – Smaller quantities, slow build of customer base
OpportunitiesVolume vs. Niche• Uniform market in Canada is mature, well serviced and experiencing growing domination by large corporate category “killers”• Colombian product known for quality but not price• Opportunity to supply smaller companies operating “under the radar” of the larger dominant distributors• Feature service and quality over price• Customers willing to pay a premium for quality and reliable deliveries.
Opportunities Cont’d• “Brand” partnerships with Canadian marketing companies• Knitwear (e.g. acrylic sweaters)• Customer will pay a premium for specialty products such as: – Fashion styling – Maternity – Unique fabric applications – Eco-friendly product• Create product specifically with Colombian fabric
Thank You Ben Gordonbengordon@rogers.com Supported with funding from
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