Boosting Canada’s exports of novel products

A good argument can be made that the global market of alternative proteins, and plant-based food ingredients continues to go through significant evolutionary pressure. Meeting demand for foods that satisfy personal health and flavour expectations as well as have verifiable sustainability credentials while being affordable is indeed a tall order.

In the world of food choices, 2022 was marked by contractions in the valuations of big-name plant-based brands. Private investors re-circled with greater caution in due diligence, assessing unique selling propositions, and how products contribute to unmet consumer needs. Start-ups, scale-ups, legacy CPGs, and their suppliers are in deep iteration mode to meet these complex market aspirations.

Adding to the broader equation is the perceived dichotomy between animal- and plant- based diets. The relatively subtle rise of flexitarian diets is a broader marketplace consideration. Flexitarians represent a larger segment of consumers than vegetarians and vegans alone. Further, flexitarians don’t seem to compromise on taste, texture, pleasure, or expected value in price points. Likely we are seeing some of the continued fallout of this in 2023, with market adjustments, post-hype in 2022.

Heme can produce colour intensity, and ‘bleed’ in plant-based burger patties. Photo © Bill / Adobe Stock

New ingredients

By way of specific examples, globally competitive companies are pursuing food ingredient formulations to address specific needs in the market. Collagen, for example, adds texture and unique mouthfeel in food applications (currently largely produced from meat industry by-products). Companies like Canada’s Liven Proteins are seeking to produce collagen at greater scale through precision fermentation. Whey protein, another important ingredient in a range of dairy products, (traditionally sourced from bovine milk), is being produced at a growing scale by U.S.-based Perfect Day. Significant energy is being committed to food ingredients sourced from mycoproteins (from mushrooms, mycelia, and fungi), and from algal-based powders and oils, by Canadian companies like Smallfood and Mara, for nutritional food supplementation.

Colour also matters in food purchase decisions, as does its ‘naturalness’, and clean label, not an easy balancing act. An example of this is with ‘heme’, derived from either plants or animals, and developed by different alternative protein companies. Heme can produce colour intensity, and ‘bleed’ in plant-based burger patties. Currently, there is an ongoing legal dispute between Impossible Foods and Motif FoodWorks over production process claims in the application of heme.

Global competition in the food ingredients market is surging out of traditionally strong ecosystems in Germany, France, Denmark, Sweden, Switzerland, France, Japan, and Korea to name a few. Companies like Givaudan, IFF, Firmenich, DSM, McCormick, Lesaffre, Novozymes, Chr. Hansen, Griffith, Caldic and Ajinomoto are some of the leading providers of food ingredients meeting new expectations in the subtle art and science of food product formulation. So, where does this leave Canada?

Advantage Canada

In 2022, Canadian food and beverage exports grew at a healthy pace, at 14 per cent year-over-year, but food and beverage imports also increased, up 18 per cent. Changing multicultural demographics in Canada means international food imports are up. According to a recent Farm Credit Canada (FCC) report, expectations for 2023 are that grain and oilseed milling and meat product manufacturing will outperform plant-based protein products, seasonings, dressings. The report added that demand remains strong for ‘affordable, convenient, and sustainably produced foods’, and there is ‘strong demand for flour and edible oils from downstream food and beverage manufacturers.’ Specific to dairy alternatives, oat prices are down 40 per cent, which could make oat-made food alternatives more competitively priced.

Canada’s advantage lies in a traditionally strong land and natural resource base to source raw ingredients from farms, marine ecosystems, and forests. Canada is a leading producer of peas, lentils, flax, hemp, and oats, which increasingly is translating into value-added products such as protein isolates, starches, concentrates, flours, and fibres that are essential for a new generation of products. These lend themselves well to export markets seeking protein-rich foods.

Strong advances in the Canadian food ingredient sector have been driven by the government-backed efforts of Protein Industries Canada and Plant-based Foods of Canada that foster innovation in the ecosystem, especially over the past decade. Companies such as France-based Roquette Foods’ investment in Manitoba, as well as the establishment of Phyto Organix Foods and More Than Protein Ingredients (both in Alberta), are testament to ongoing efforts in plant-based food ingredient creation. It is also important to acknowledge industry challenges, such as Winnipeg-based Merit Functional Foods going into receivership in first half of 2023. A surge of effort by food ingredient companies, old and new including Ardra Bio, Genuine Taste, Mara, Bartek, Biofect Innovations, and Lallemand, are further evidence of an attuned industry seeking to bring valuable and functional ingredients to the marketplace, especially with the power of fermentation (both traditional and precision-based).

These providers will need to conform to the diversity of consumer and business needs in export markets, whether in functionality such as emulsification, stabilizing, texture, colour, or flavour enhancement. If Canadian companies are to thrive, they need to understand these subtle nuances. Realizing these objectives with trading partners in both developed and emerging markets across the Americas, the E.U. and Asia, requires agile ecosystems, supply chain partners, government co-ordination, financing, and university and college researchers astute to market segments. Canada also needs to protect its reputation in food safety, traceability, and lend itself to articulating this among the health, pricing, and sustainability drivers of today’s food sector.

Mark Juhasz is CEO and founder of Harvest Insights. He has more than 20 years of experience in the agri-food industry. He can be reached at www.harvestinsights.com.

This article was originally published in the October 2023 issue of Food in Canada.