The world's population is growing and Canadian food producers are feeding global demand.
The global population is expected to increase to more than nine billion by 2050 and the Food and Agriculture Organization of the United Nations estimates that world food production will need to rise by 70 per cent to feed those extra mouths.
Also important to Canadian agricultural exporters is a growing global middle class and consumer demand for specialty products, according to Farm Credit Canada. Canada was the world's fifth-largest exporter of agriculture and agri-food products in 2013, according to Agriculture and Agri-Food Canada, and Canadian export sales in this sector have grown steadily and in 2015 sat at more than $55-billion, according to the government department.
Canada has bilateral and multilateral trade agreements with several countries in effect. The government confirmed in January its intention to sign the Trans-Pacific Partnership, which would create a free-trade zone among 12 nations around the Pacific, making it the world's largest. If ratified, it is expected to further open up new markets, but also bring new regulations affecting Canadian food producers in certain sectors, such as dairy, chicken and egg farming.
Alison George, senior vice-president at Argyle Public Relationships in Toronto, fronts a team of specialists who advise small- to medium-sized food and agriculture companies on the most efficient way to export into foreign markets. She shares her Top 5 tips here.
1. Size matters
Stabilize and grow your domestic business before pursuing export markets. We do not recommend companies consider export before they have established consistent high-quality production, warehousing and distribution processes domestically – and have the capacity to grow. Exporting is an investment and your company has to be strong enough domestically to absorb the incremental costs.
2. Build a brand story
Create a clear and compelling identity for your product line, establishing its brand position and unique selling proposition. Companies with a compelling brand story and that offer something new or unique have a greater opportunity for success in international markets.
3. Research regulations
Research and prepare for any regulatory requirements in your target export markets. These include – but are not limited to – product, ingredient and labelling compliance and customs procedures and documentation. You need to research and understand specific requirements in each export market you are targeting.
4. Price for profit
Estimate the per-unit consumer cost for your product in the export market. Consider shipping, potential broker fees, fixed costs to adapt your product label or packaging, duties or taxes, customer broker fees, cost of product samples required for sales, marketing and promotional costs, currency exchange rates, broker and retailer markup. Don't forget to add a profit margin for yourself. If the end consumer price is not competitive, then you may need to reconsider your export plan.
5. Ask an adviser
Provincial and federal government agencies have programs designed to support companies that are new to exporting. Export and communications consultants offer counsel, help guide companies through the process and ultimately build the plans and relationships that result in profitable international growth.