Canada’s food strategy: risks and benefits

I have covered many topics in these articles on the idea of developing a strategic plan for the Canadian food industry, or Canada Food Inc. as I have referred to it. I have developed a sort of corporate framework in which to view the industry and used a corporate strategic planning approach to what we should be doing to maximize the results that our food industry could create.

I have also discussed the challenges that would be faced in attempting to develop such a strategy mostly from two standpoints: 1) does the will to carry out such an action exist, and 2) could we build the collaboration necessary to do so? I think that both could be made to happen, and to some extent, it is starting to take place to a greater extent due to the AAFC Sector Roundtables. But there is no question that it would be a complex project that would need participation by more than just the sector participants, but also governments, academics and supplier industries.

So could we and should we take on such an endeavour? What are the benefits of doing so and what, if any, are the risks? Let’s take bit of a look at those.

Benefits

As I have discussed, there are many benefits that could be achieved by a national food industry strategy that is focused on making our industry the highest quality and most financially sustainable as possible. We have a great industry base in Canada. If we could pull it together in moving toward being the best in the world, we could surpass nations like The Netherlands which has achieved wonderful results doing something like this, but with a much smaller and less complex industry than Canada’s.

To do so, we would have to work on a total value chain basis from growers through to consumers and all the critical supplier industries that serve that value chain. The value chain concept would enable us to maximize our achievements in Innovation, Productivity, and Sustainability, all of which are the keys to success, not just Innovation where our attention seems to be focused currently.

Yes, Innovation is key to meeting the market demands for products, including processing technologies and packaging technologies. But Innovation must also lead to improvements in Productivity like cost of production and level of quality versus competitors and the service we can provide our customers. Innovation must also lead to improvements in industry Sustainability in areas like energy usage, environmental protection, as well as societal expectations in areas like food safety and nutrition, and corporate social responsibility, like ethical treatment of animals.

Achieving all of that would make us the best food industry in the world. “Canada Brand” food and beverages would be sought all over the world.

And speaking globally, if we could achieve all of that, we would become a key to feeding the nine to 10 billion people we need to feed by the last half of this century. We have the capacity to be a key player there.

And then there are the domestic benefits in terms of jobs and taxes stemming from the increased profitability of the industry, which is already the largest industrial sector of the Canadian economy. But we are losing jobs and plants, and we could become more profitable and secure by carrying out a national food strategy.

Risks

I see few risks associated with developing a national food industry strategy. Most of those risks relate to the complexity of our industry versus, say, oil or auto production. Lets look at a couple of those complexities.

One is that because we have so many commodity sectors and sub-sectors it is more difficult to find approaches that work for all. Is a red meats strategy going to be the same as a grains strategy? And within red meats, are beef and pork and others going to be the same? Probably not, so we would have to develop the strategic plan to achieve some key national goals but allow the individual sector and sub-sectors a degree of flexibility that lets them help achieve those national goals in a way that works for them. If not, they will not be supportive.

Also, our industry varies so much from province to province, the same type of issue arises there. And if all provinces are not bought in, it will lead to a huge number of problems.

Second, our companies are also a big mixture of types. For example, about 80 per cent of Canadian food/beverage companies are SMEs. But the majority of our revenues come from large companies. There is a potential conflict in terms of strategies. Also so many of our large companies are foreign-owned multinationals, and their head offices will certainly have a strong say in what’s going to happen, and that may be very different than if we were all Canadian-owned.

And so…

Yes all of those elements are in the industry environment in which we operate, and I hear those comments all of the time. But I still believe that with the necessary collaboration and leadership, both in industry and governments, we can still overcome the risks and achieve the benefits.

I know we could 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 gfread@sympatico.ca