Long recognized among the world’s leading suppliers of foods ranging from meats and seafood to grains and legumes, Canada has earned a global reputation as a ‘bread basket’ nation. Along the way, Canadians have also built formidable strength in related industries that span sophisticated fertilizers to farm equipment.
As impressive as that track record may be, experts say the future of Canadian agri-food trade hinges increasingly on Canada’s ability to shift from being a supplier of commodities, expertise and equipment into a full-fledged producer of high-quality, healthful and nutritiously enriched food ingredients and finished products.
EDC vice president, Resources, Justine Hendricks, whose sector-team responsibilities include agriculture, forestry and equipment, says, “Citizens in the U.S. and EU, in particular, already demand high-quality foods. At the same time, millions of citizens in emerging markets including Brazil, China and India are also entering the middle class each year. As they do, they want higher-quality foods too.”
Further pushing this trend, Ms. Hendricks says global enterprises such as McDonalds and Frito Lay are also seeking better ingredients.
As a result, she says forward-thinking companies are building their competitive advantage by employing innovation and transparent processes designed to yield superior quality foods.
“Today, there is a huge interest not only in the end product, but also in the methods used to modify or process foods. Companies are investing in R&D to make nutritional extraction and enhancement more pure, so that it provides the best outcome possible.” Justine Hendricks, Vice President, Resources, Export Development Canada
She says, for example, Atlantic Canada-based Ocean Nutrition – recognized among the world’s biggest buyers of sardine oil – is intently focused on finding superior ways to incorporate omega-3s into foods. “They recognize that the research aspect and quality are key ingredients to success.”
Leveraging Canada’s positive reputation for quality is another key to future success, says Ms. Hendricks. Perhaps no other industry has made greater recent strides in this regard than Canada’s promising organic foods sector.
The global market for organic foods is now valued at $56 billion, with more than 96 per cent of demand attributable to U.S. and EU consumers. While Canadian organic food producers sell $2.5 billion of products domestically and export about $400 million annually, trade proponents including Agriculture Canada and the Canada Organic Trade Association (OTA) have helped lay the foundations for an even more prosperous future.
OTA executive director Matthew Holmes says while organic producers worldwide welcomed organic regulations that would ensure consumer protection, regional differences such as climates, growing conditions and other factors meant the resulting standards evolved with a similar intent but differing specifications.
“The standards weren’t the same. This created significant trade barriers,” said Mr. Holmes. “In Canada, we had organic wheat farmers sending product by the shipload. They were working to U.S., EU, Japanese and other national standards and paying for each one. At the end of the day they were all organic, but the system was inefficient.”
Recognizing a need for more progressive trade policy, the OTA joined Agriculture Canada in 2006 on the development of a long-term international strategy. “We prioritized equivalency agreements – to meet domestic socio and environmental standards – but also that would enable Canadian producers to certify under standards recognized by our trade partners.”
The strategy paid off. In 2009, Canada and the U.S. signed a historic Organic Equivalency Agreement. Then, this summer, another triumph: “Canada signed a deal with 27 EU countries recognizing the Canadian standard. And we have done the same with theirs,” said Mr. Holmes.
As a result, Canada is now the world’s only country that can produce organic products based on its own national standard and supply them into these key markets.
Among Mr. Holmes’ priorities now is to help boost Canada’s production of processed organic foods.
“We have a growing processing sector, but we still ship a lot of commodities,” said Mr. Holmes. “More agreements that facilitate the efficient trade of organic ingredients such as spices, which are used to make food products, are needed.”
For now, Mr. Holmes says the enhanced access to the mature U.S. and EU markets offers Canadian organic producers an opportunity to scale-up for anticipated demand for organic foods grows in countries like China and India.
“If we act now, when these big markets come on-board, we will have the capacity to serve them.”
Whether or not an agri-food product is organic, Ms. Hendricks encourages Canadian companies to consider advancing their interests by participating in supply chains.
“The supply chain aspect of trade is becoming stronger and more important,” she says. “Let the big players with the infrastructure, investment heft and international market penetration do what they do best, and the smaller players feed that demand.”
The bottom line, she says, is to focus on quality. “The ability to connect with consumers and respond to their needs, in terms rising demand for high-quality foods, is key. It’s not an easy play, but it’s definitely something we can leverage.”