Ottawa – A blend of strong leadership, global market savvy and entrepreneurial spirit can help any food company succeed in spite of the challenges the food industry faces today.
This is a conclusion the Canadian Agri-Food Policy Institute (CAPI) came to after compiling 13 case studies of food companies. The case studies show that the sector has the building blocks to be an even greater economic contributor, but there needs to be greater recognition of the sector’s importance, which is facing a large and growing trade deficit.
CAPI says it decided to tackle the study because the food-manufacturing sector is now the leading manufacturing sector by employment and GDP, larger than auto manufacturing. But the trade deficit it’s facing is now at $6.8 billion and there are other on-going challenges.
The 13 case studies have been published and look at companies across the country. The cases include a range of small and family owned companies to long-established and larger Canadian firms and multinationals.
“These 13 case studies reveal the top factors that have allowed these companies to earn market prominence and competitive advantage. Despite the fact that the Canadian food processing sector has been coping with significant change and challenges in recent years, such as the retrenchment of many large U.S. food firms from Canada, we’re seeing examples of impressive business success across the country”, says David McInnes, president and CEO of CAPI.
“It’s time we recognize this industry’s full importance and understand its future potential.”
Competitive Canadian food companies share three key factors that set them up for success. A fourth factor enables the sector as a whole.
Isolating what drives success is fundamental to helping other food companies position themselves for growth and to better support the sector. Here are some key factors:
• CEOs and senior leaders need a clear purpose – more than a simple mission statement. For instance, British Columbia’s Premium Brands, which owns 29 diverse food companies, is driven by maintaining the entrepreneurial spirit across these companies and avoiding commoditization. Quebec’s Domaine Pinnacle’s purpose is all about creating an international brand for ice cider.
• Creating layers of uniqueness from the quality of ingredients to delivering what consumers want drives success. Quebec-based Bonduelle Americas does so by emphasizing their planning and forecasting of its vegetable supply in central Canada to ensure plant capacity. Saskatchewan’s InfraReady produces unique grain products accredited to meet Kosher and Halal certifications. Ontario-based Ferrero mass markets unique and fresh chocolate products that are difficult to copy.
• Successful relationships are also vital. P.E.I.’s Island Abbey Foods, relied on technical experts to assist in product innovation, and globally through a co-branding strategy with international partners. PepsiCo Foods Canada has forged strong relationships with growers. This is important given that all the oats for two Quaker Oats plants in Canada and the U.S. are sourced from Eastern and Western Canada.
• The fourth factor is supportive external conditions. While the industry has worked with government to create a relatively open-for-business approach, which has acted as a powerful magnate for capital and helped make Canada an attractive place for food companies to operate, globalization is forcing new thinking and a more proactive approach for retention and attraction is required. All levels of government are beginning to see the critical importance that growing companies and export mandates play in preserving vibrant communities. Access to high-quality raw material from Canadian farms is a tremendous advantage for Canadian manufacturing and should be a more significant catalyst for new investment. The case studies capture observations about how to ensure business conditions continue to be attractive and enhanced, such as all three levels of government working together and with the industry to attract and retain investment in communities.
The 13 companies include:
• Bonduelle Americas
• Club Coffee
• Domaine Pinnacle
• Heritage Frozen Foods
• Island Abbey Foods
• Groupe Leclerc
• Maple Leaf Foods
• PepsiCo Canada
• Premium Brands
Click here for the cross-case study analysis.