From collaboration to planning process
Two articles ago, I spoke to a strategy creation/implementation process that could be used to create a Canadian food industry strategy utilizing the AAFC Value Chain Roundtables (VCRTs). In the last article I talked about things that might get in the way of moving forward, namely, does the will to change exist in the industry? And could we generate the collaboration that would be needed to do so? Now let’s assume the VCRTs were able to agree to make it happen and generate the collaboration necessary. Then what might the process be like? And again, forgive me for using the “corporate” approach, but I think it contains the necessary tools to make it happen. In several of my much earlier articles, I talked about some of those tools, but let’s push a bit deeper.
The first step in the planning process would be to look at the macro-environment in which the industry operates using a PEST Analysis to see what impacts there are on our industry. The analysis looks at Political and regulatory factors that could affect the industry, such as the level of government intervention in the economy, the increasing number of trade agreements, and the regulatory environment. Next it would study the Economic factors such as the growth rates in both developed and developing countries, levels of disposable income, and so on. Then it would show Social and demographic factors such as the growing ethnic complexity of populations and changing demographics generally. Finally, the analysis would look at Technological and environmental factors, especially new and evolving technologies that could affect the industry and improve the effects of the changing environmental aspects.
The process would be started by a group composed of representatives of all of the VCRTs, as well as sectors like Poultry and Dairy that don’t have a roundtable. This group would oversee the carrying out of the analysis and the issuance of an overall report. At that point, each of the commodity sector VCRTs would analyze how it applies generally to their commodities. That would be the sequence I would suggest for all of the analyses I’m going to describe.
The global food industry
So, then, having looked at the macro-environment within which our industry operates, let’s consider our industry using a 5 Forces Analysis. This would look at who our current and potential consumers and customers are, and how that market is changing in ways we need to adapt to. It would study our suppliers, mostly non-food suppliers, but also the customer/supplier relationships within our industry’s value chain. Third, it would look at our existing competition, like foreign food industries competing with us in the global market and exporting food to Canada. Fourth, it would consider the threat of new entries, which in this case would likely be developing countries with some strong focus on their food sectors. And fifth, it would look at the possible chance of substitute products…unlikely in the food industry, but it still needs to be looked at.
Again, do the overall analysis, create a report and pass it on to the sector VCRTs for them to apply to their commodities.
The Canadian food industry
Now, having looked at the externalities of the industry, let’s look at our capabilities and issues by creating a SWOT Analysis looking at our industry’s Strengths, Weaknesses, Opportunities, and Threats to determine where we are strong and weak given the environment outlined above, and what should be our focus areas, either in growth or defending our industry.
Again, I would use the same approach…overall analysis followed by sector analyses.
The strategic plan
After all of that analysis has been discussed and digested, we would then be at a valid position for developing a strategic plan for the industry. That plan, as I’ve said before, would involve stating our mission for “Canada Food Inc.” based on what we value, for example, nutritional health, environmental care, etc. A mission I’ve spoken to before is “To make the Canadian food industry the global leader in the food world by being globally competitive, sustainable in every way, and financially successful.” That’s just my words. The group would obviously develop their own based on the analyses and discussions.
Then they could develop a more concrete and more specific vision of what they want to accomplish in broad terms, and by when, such as I’ve said before, “By 2020, Canada is the global leader in the food industry providing good food that is healthy and responsibly produced, and providing reliable and safe food to Canadians and our export customers.” Again, they are just my words.
And finally, what are our specific goals and strategies for achieving them, and how will we monitor and measure our progress? There may be some overall general strategies as well as some that are specific to a sub-sector(s). In earlier articles, I have spoken to strategies dealing with increased innovation, improved productivity, improved sustainability, increasing exports, applying value chain management principles, improving the regulatory structure impacting our industry. I do believe those are key strategies for the food industry.
Commitment and support
Having done all that, the final step would be to gain buy-in and support from companies and organizations in the industry. We would also need government understanding and support of the plan, and understanding and support by our food academic leaders in Canada. As well, it would be good to get the understanding and support of our consumers, retailers and foodservice operators.
It can be done. Some of it, I would think, may have been done to some degree by some of the roundtables. I know the Food Processing Roundtable has done a lot in this regard.
I know we can do it. 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]