Innovation is a key priority to increase the Canadian food processing industry’s competitiveness
In the past several articles I’ve talked about the whole issue of developing a clearer export strategy for Canada’s food and beverage sector. In the last article I talked about how we are now in “wait mode” while we wait for Donald Trump to take office in January to see how that might affect NAFTA and our role in it. We are also waiting to see how the CETA issue is going to evolve with BREXIT happening. And it looks pretty much like the TPP is dead, so what are our options with regard to Asian and Western Latin American countries? As I said, we need to be developing alternative plans for building our export business while all of that starts to get resolved. So let’s go on to talk about one of our other key strategies, innovation.
Innovation is a very complex topic, and it varies by sub-sector as to where the key opportunities are and how they are being addressed. But first of all I believe that the industry as a whole, including agriculture, aquaculture and fisheries, as well as researchers in universities and colleges and independent research centres, are seeing innovation as a key priority to increase the Canadian food processing industry’s competitiveness. In fact, two key groups, the Food Processing Industry Roundtable (FPIRT) and the Federal, Provincial and Territorial Food Industry Development Forum are now putting a lot of focus on the state food innovation in Canada and how we could make it more effective.
There are several key elements to consider when we look at Innovation. First, innovation must be market oriented. Whether it is red meats, grains, horticulture, or whatever else, we must have sufficient understanding of what the markets are looking for whether domestic or international and try to find ways to meet those needs, wants, and demands and trends that are in place.
Second, there is what I call “blue sky” research or basic research that reflects the creativity of the researcher. This may apply to inputs of all kinds: agricultural products, processing equipment, packaging, and on and on.
In other words we need to see innovation as a “value chain.” That chain runs from basic scientific researchers to applied researchers to commercialization work to consumer product development. The flow is both ways. Basic researchers are coming up with science-based innovations that can be turned into products with consumer appeal. The reverse flow is that from product developers back to researchers, we must understand what’s happening in the market place and what consumers want.
It is often said that the state of food innovation in Canada is not what it should be. But we have tremendous resources at all levels of the value chain. We have universities and community colleges in every province that have a deep focus on food. We have food research and technology centres across the country that do outstanding work in product development, process technology development, etc. And of course, companies in the food processing sector do extensive work in the area of new products. However, we are beginning to see some cost reduction and facility combination to reduce cost among large companies due to the current economic situation. And the small- to medium-size companies often don’t have the facilities to carry out innovation research and product development because they don’t have the funds to do so.
So what could be done to make it better?
First of all, I think we need to focus on increasing the collaboration up and down the innovation value chain. This can be done on a regional basis since there are universities with food researchers, technical centres, and food companies in every region. Someone I spoke to recently thought the Toronto, Guelph, Cambridge corridor could become the “Silicon Valley of Food Innovation” in central Canada, and perhaps the Fraser Valley could become the same for B.C. I thought that was an interesting analogy. Up until now, I think that the Netherlands has been seen as “Silicon Valley of Food Innovation” in the EU. They have been very successful in marketing Dutch foods and beverages on a global basis, but their industry is much smaller and less complex than Canada’s. But I think we could do it if we make the effort.
Then the other issue that comes to mind is Open Innovation. I don’t know enough about Open Innovation, and want to learn more, but it should likely become the model for innovation in the Canadian food and beverage sector, and when I say that phrase, I am always including agriculture and fisheries/aquaculture, not just food and beverage processing.
So innovation is a complex issue, but it needs to be improved. I hope that the FPIRT and the Food Industry Development Forum can take the lead and help make it happen. I know it can be done. Let’s do it!
Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent more than 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at [email protected]