Food processing growth faces hurdles

An interim report by the federal Agri-Food Economic Strategy Table highlights three hurdles Canada’s food processing sector must overcome if it is to capitalize on global growing demand.

Food processing sector investment in machinery and buildings as a percentage of sales is trending downward from three per cent in 2002 to two per cent in 2016, labour is scarce and the skillsets required are changing, and market access is in jeopardy, the panel says.

The strategy table headed by Murad Al-Katib, president and CEO, AGT Food and Ingredients, delivered its report to the recent federal, provincial and territorial ministerial meetings.

“Canada needs to seize value-added opportunities, including more domestic processing, innovative end-uses for our agri-food products, co-product manufacturing and turning waste products into revenue streams,” Al-Katib says in the report.

Balancing those challenges however, is this country’s abundant land and water resources, it is relatively well-positioned to access global markets, and its strong research and development capacity, the report says.

The federal government wants to grow Canada’s agri-food exports to $75 billion by 2025.

Canadian food producers and food processors can no longer afford to compete on the basis of price alone. Growing middle classes around the world are demanding higher-quality products, while socially conscious consumers want foods with specific qualities, such as being locally sourced and sustainable, the report says.

It says the sector in Canada has lower rates of technology adoption compared

Tomato calibration machine in a dry tomato production facility. Getty Images

to other countries, which is a liability.

“In a very short time, players who do not embrace automation, digitization and other technological advances will simply become non-competitive.”

The report also called for investments infrastructure required to get products to market and a “synchronized regulatory system” that supports the development and commercialization of innovative products.