According to Gary Fread, a transformation of the food industry must occur now
In my past articles on how to make the Canadian food industry globally competitive, financially profitable, and sustainable over the long term, I’ve talked about the challenges we face, the opportunities that exist, and some of our strengths and weaknesses as a industry. I’ve also spoken to various focal points and strategies that we need to concentrate on to gain our true success potential. This has caused me to go back to a previous time when such a challenge faced us.
Back in the early 1990s, we were faced with the implementation of the North American Free Trade Agreement (NAFTA). Many of you will remember that. We feared that the potential for loss of jobs and closing of plants in the processing sector was inevitable. As a result, the Agri-Food Competitiveness Council (AFCC) was created to assess the situation and develop operating strategies and policy change recommendations that needed to come about to halt that possibility. It was chaired by Dr. Larry Martin of the George Morris Centre, and I was honoured to be one of the members of that council. When I look back on the outcomes of that project, so many things seem to still be very appropriate for the sector despite the very different market place – including it being more global vs. North American, with more focus on the environment and energy and a more diverse market. So if I go back to a rough summary of the AFCC and compare it to today, here are the results:
AFCC Overall Results: “Unlimited Horizons.” I believe this is in line with what I have said up to now about our current opportunities.
AFCC Statement of Strategic Intent: “There is nothing to stop us from being the premier agri-food sector in the world.” Again, this is in line with what I believe is the Mission/Vision/Strategic Intent we should have for the industry.
AAFC Key Focal Points to achieve the Strategic Intent:
1. “Attitude: We can be the best in the world because we have shown there are no barriers to competitiveness, only challenges and opportunities.” As I have maintained in my articles, we can be the best in the world.
2. “Customer Focus: All stakeholders in the value chain have customers and are customers.” This emphasizes two things we have talked about. The first is that we need to collaborate along the value chain with our customers and suppliers much better than we do. The second is that we need to understand the consumer markets much better and where we can best focus for success by “commodity business unit.”
3. “Collaboration: With strong strategic alliances and vertical and horizontal collaboration within the value chain, we can satisfy customer needs and realize greater efficiencies.” Again, this points to continuous process improvement and value chain collaboration, not just in productivity gains, but also in product innovation, sustainability and more.
4. “Technology: With technology we can reduce the vulnerability of Canada’s heavy dependence on undifferentiated exports.” This highlights the ongoing need for innovation, not just in product characteristics, but also improved efficiency and improved sustainability.
5. “Human Resources: We must develop a life-long learning culture to compliment the adoption of new technology.” I haven’t spoken specifically about the human resource element, but it is clear that continuous improvement in all areas is very dependent on the quality of human resources we have working at all levels and aspects of the value chain and continually developing those resources.
6. “Prompt Policy Resolution: Only once we resolve long-standing domestic issues will we realize the full potential to be gained by the emerging clarity in trade policy.” Again, the issues now may be different than they were 20 years ago, but there are many policy areas that need to be addressed and resolved if we are to be competitive. Government needs to promptly and efficiently address such issues with proper industry consultation and collaboration.
7. “Environment: Environmental issues are not barriers to competitiveness.” In fact, solving the environmental issues and other social responsibility issues are key factors in our success. If you want an interesting point of view on this, read Richard Branson’s book Screw Business As Usual, in which he strongly maintains that only by addressing environmental and social issues will we have a long-term chance of business success and profitability. This is especially true in the food industry that is fully reliant on natural resources.
I strongly believe that the results and recommendations of the AFCC are very much ongoing, long-term ideas that haven’t changed much over the past 20 years and likely won’t over the next 40 years.
The key then is what are the specific strategies we need to agree on and embark on to achieve success in these focus areas and lead us to global success? I say that a group similar to the AFCC needs to be implemented. The commodity roundtables go part of the way, but we need an overall Competitiveness Council for the Agri-Food Sector, and we need it now.
Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent 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]
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