NU Grocery: Next steps in Growing the Business and the Community
1. Introduction
NU Grocery was Ontario’s first “zero waste” grocery store, founded in 2017 by 2 immigrants to Canada to enable consumers in the Ottawa region to buy their groceries without excess packaging. More broadly, Valérie Leloup, co-founder and CEO and her co-founder and business partner Sia Veeramani wanted to use their backgrounds in sustainability and business management, and their own efforts toward a zero waste lifestyle, to help consumers include their grocery purchases as part of a sustainable lifestyle while promoting the circular economy. This video provides an introduction to Ms. Leloup and NU Grocery; and this recent article provides an overview of NU Grocery as well as the company’s broader mission.
In October 2023 NU Grocery had a thriving retail location in Ottawa, and a strong online business for zero waste lifestyle accessories as well as online grocery ordering with zero waste local delivery. Ms. Leloup and her business partner had also built the firm in to a thriving community-centred platform.
Ms. Leloup: “We are definitely changing the game in an industry where the waste problem has long been ignored. The problem that brought NU Grocery to life is still very much here. The pollution crisis is worsening by the minute, exacerbated by an economic system designed to continuously extract resources for consumption and disposal. To address this issue, the concept of a ‘circular economy’ is gaining traction among policymakers and leaders, and NU Grocery is a true pioneer in this space.” (See Appendix 1 for more information about waste, zero waste, and the circular economy.)
Nu Grocery was eager to grow: not only to grow sales, both retail and online, but also to grow that community of consumers and other stakeholders who believed in participating and sharing their belief in the circular economy and, more broadly, taking care of the environment toward a more sustainable future.
© 2023 Telfer School of Management. The sole purpose of this case study is to provide material for analysis by DGD teams in Telfer ADM1300 Fall Semester 2023. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. This case study is not to be used for any other purpose; nor to be shared, reproduced, or distributed by any means whatsoever.
Unless otherwise specifically noted, all information in this case study was provided by the company.
This case study was written by Professor Dana Hyde of the Telfer School of Management, and has benefited from background research by Carolina Jimenez Pena. The author and the Telfer School of Management express their appreciation to Valérie Leloup and NU Grocery for their excellent collaboration and support.
    2023-10-24
2. NU Grocery’s “Zero waste” grocery store
In August 2023 Canada’s federal government announced plans to require Canada's largest supermarket chains to develop and roll out plans to cut their plastic waste footprint, and that it was prepared to take further action if supermarkets did not respond accordingly.1
NU Grocery was featured prominently in the CBC’s coverage of this announcement as an exemplar of the possibilities of reducing all packaging toward striving for zero waste.
NU Grocery’s retail store was specifically designed for zero waste shopping. NU Grocery offered a very wide range of products in bulk, including ‘the usual’ products sold in bulk such as nuts, grains, and pasta but also condiments (ketchup, mustard), prepared foods (samosas, kimchi), and package- free produce from local farmers. For bulk purchases shoppers could bring their own containers, borrow refillable jars for $1 deposit, or purchase a variety of refillable containers at the store. Products which were not sold in bulk – milk and yogurt, for example --- were sold in glass bottles with a $2 deposit. When the customer returned the bottle, the deposit was refunded and the bottle returned to the supplier for reuse, thus creating a closed zero waste loop.
Larger cities such as Montreal had a variety of zero waste stores: the first zero waste store in Canada opened in Montreal in 2017, followed soon after by a store in Vancouver. Gatineau’s MultiservicesVert had also opened during that time. However, NU Grocery was the first and as of 2023 still the only zero waste store in Ottawa with such a varied offering and community presence.
NU Grocery had opened its first store in the Hintonburg neighbourhood of Ottawa in 2017. At the same time the company also launched an online store for zero waste lifestyle accessories including products for self-care and food storage items which generated about $2,000 per month in sales. Given the steady increase in sales and a consistently positive cash flow after their first 6 months in operation, in 2019 NU Grocery opened a second location in the Old Ottawa East neighbourhood.
When the pandemic began in March 2020 NU Grocery was in a solid financial position, with sales trending upward in both store locations and with cash reserves ready to invest in future growth.
Unlike many small retail businesses, NU Grocery had already established online operations. In April 2020 the company was able to pivot quickly to boost online sales, adding a grocery category to the existing online store and a zero waste plastic-free curbside pickup and delivery service, enabling customers to continue to practice zero waste shopping while still respecting pandemic restrictions. Online sales reached as high as $50,000 per month during the pandemic.
But like many small retail businesses, with the evolving restrictions on shopping in person combined with the ban on common reusables such as grocery totes and coffee cups, NU Grocery experienced a sharp decline in sales in both stores. Toward the end of 2022 sales had still not recovered to pre- pandemic levels, and the co-founders made the difficult decision to close the Hintonburg location and focus efforts on the larger Old Ottawa East location as well as on online sales.
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         1 https://www.cbc.ca/news/politics/supermarkets-plastic-waste-1.6947490
 
3. NU Grocery’s store operations and supply chain
NU Grocery also set itself apart from other retail grocery stores and emphasised its community orientation by focusing on the well-being of its staff. Grocery retail was generally an industry with low pay (typically minimum wage2), often difficult working conditions, and minimal if any benefits (medical, dental, paid sick leave). Ms. Leloup believed that treating their employees fairly was an investment in the long-term success of the business, and “quite simply, the right thing to do!”.
NU Grocery had always offered paid sick days, extended benefits, and paid mental health days, together with growth opportunities and paid practical training. In August 2023 the company was also certified as a Living Wage Employer. Drawing on community-specific data, the “living wage” reflected what people needed to earn to cover the actual costs of living in their community. Living wage employers voluntarily decided to pay a living wage and maintain their certification as new rates were calculated for their area, updated on November 1st every year. For example, the living wage in Ottawa in 2022 was $19.60 per hour.
Operations were as close as possible to zero waste. Organic waste was composted; cardboard, glass and plastic were picked up by a recycling partner. By reducing waste at the source, and diverting any remaining waste to composting or recycling, the firm’s un-diverted waste was kept to a minimum.
NU Grocery also endeavoured to be zero waste in its supply chain. The company had built a network of local suppliers with which NU Grocery had built innovative partnerships to use refillable containers and return empty containers for re-use. Local procurement had other advantages, including reducing greenhouse gas emissions through shorter transportation routes. NU Grocery also considered its local supply chain as part of its community efforts to develop reusable packaging programs, as well as supporting and strengthening the local economy.
4. NUGroceryasacommunityplatform
NU Grocery was more than simply a retail store. Since NU Grocery’s inception Ms. Leloup and her team had built a thriving community-centred platform to exchange information and educate consumers about waste reduction. For example, NU Grocery had organized over 100 in-store workshops around a variety of topics related to waste reduction, as a low-cost way to build community and strengthen NU Grocery’s image as a community hub for sustainable and zero waste living, as well as bring new customers in to the store.
The company’s reach and engagement on social media continued to rise. Through Facebook and Instagram as well as Twitter (now known as “X”), NU Grocery shared not only store information and promotions but also ways to shop with minimal waste and progress toward a zero waste lifestyle.
5. NU Grocery in 2023
By the autumn of 2023 online sales were steady at about $15,000 per month. Store traffic was increasing regularly, with increased monthly store sales for the first time since the pandemic. Focusing on one retail location had enabled the company to cut overhead costs. While sales had not yet returned to pre-pandemic levels, Ms. Leloup and her business partner believed that their business was on solid ground and were ready to focus on growth again.
2 On October 1, 2023 Ontario’s minimum wage was raised to $16.55 per hour, a 7% increase from 2022. https://www.ontario.ca/document/your-guide-employment-standards-act-0/minimum-wage#section-0
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NU Grocery would welcome your team’s analyses and recommendations on the following:
NU Grocery would welcome your team’s analyses and recommendations on the following. The company has recently been certified as a “Living Wage
Employer”. NU Grocery believes that treating their employees fairly is a critical aspect of sustainability including as part of what is known as the ‘triple bottom line’: people – planet - profit. How can the company build awareness of and capitalize on its new Living Wage certification in terms of being seen as a leader in this sustainability- focused Human Resources practice, and as part of their corporate brand including to continue to build a community around sustainability?
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Appendix 1: “Zero waste” and the circular economy
Waste
Waste can be treated in two broad ways: disposed in to a landfill or incinerated, also known as “un- diverted waste”; or it can be “diverted” from landfills and incinerators, generally through recycling or composting. Un-diverted waste contributes to a variety of serious environmental issues including surface and groundwater pollution; other forms of air, soil, and water contamination; and habitat destruction. Landfills emit methane, which contributes to global warming, and other gases; while incineration creates toxic substances contaminating the air, soil and water.3
While Canadians had generally favourable attitudes toward recycling, Canadians still generated the most waste per capita in the world – 2.33 kg per day per person, or over 850 kg per person per year - - second only to Americans4. Only 28% of that waste was diverted to recycling or composting: 72% of waste in Canada was “un-diverted”, i.e. sent to landfills or incinerators.5
Un-diverted waste was part of the “linear economy”: “An economy in which finite resources are extracted to make products that are used - generally not to their full potential - and then thrown away” 6, also known as ‘take-make-waste’.
Zero Waste and the Circular Economy
The Zero Waste International Alliance defined zero waste as “the conservation of all resources by means of responsible production, consumption, reuse, and recovery of products, packaging, and materials without burning and with no discharges to land, water, or air that threaten the environment or human health”.7
By contrast to the linear economy, the circular economy was a “system where materials never become waste and nature is regenerated. In a circular economy, products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, remanufacture, recycling, and composting. The circular economy tackles climate change and other global challenges, like biodiversity loss, waste, and pollution, by decoupling economic activity from the consumption of finite resources”.8
NU Grocery was a member of the Ellen MacArthur Foundation community, a network of thousands of organizations working to accelerate the global transition to a circular economy. The Ellen MacArthur Foundation was a leading NGO (non-governmental organization) devoted to promoting the principles and practices of the circular economy.