Food and Beverage Export Strategy Development · Overview The food and beverage sector in Atlantic Canada (excluding seafood) accounts for approximately $900 million in annual

Food and Beverage Export Strategy Development

2018 to 2021

Overview The food and beverage sector in Atlantic Canada (excluding seafood) accounts for approximately $900 million in annual

exports responsible for 11,000 jobs in Atlantic Canada. Over 50% of these exports are frozen potatoes and blueberries,

with the vast majority of the remaining 260-400 processors currently not export ready. This sub-group of processors is a

key focus. As well – this strategy will follow the key objectives of ATIGS which by 2025 will:

• Double the number of exporters;

• Increase the value of Atlantic exports by 30%;

• Increase the percentage of Atlantic firms exporting to more than one market to 40% of exporters; and

• Increase foreign investment in Atlantic Canada.

Context CONDITIONS HOW DO THESE CONDITIONS IMPACT OUR

STRATEGY?

1. Fostering Innovation - Delivering the right product to the right market in the

most efficient way

- Product innovation, product renovation, automation of

product processes

2. Coordinating multi-

level government

supports and reducing

policy barriers

- A Pan-Atlantic approach to pathfinding to improve ease

and access for industry

- Coordinating programs and funding

3. Ensuring that key

infrastructure is in place

- Inventory: processors, capacity, infrastructure,

knowledge, export readiness

- Training and support programs

- Industry Export Association

4. Improving

management and

workforce skills

- Building a culture of export

- Increase export readiness

Methodology PHASE 1 Research/Industry Analysis based on information, reports, statistics, etc. provided by

the team members and or other resources (online, etc.)

PHASE 2 Stakeholder Engagement Interviews – processors (13), funders (5), importers (2),

matchmakers (3), trade commissioners (6) and

government partners

PHASE 3 Gap Analysis/Best

Practices

key areas of best practices identified – synopsis style –

i.e. Australia

PHASE 4 Strategy Development initial findings presented to the team on Nov. 28

PHASE 5 Review December 11 – December 22

PHASE 6 Final Draft Strategy January 5, 2018

The Total Sector

Without Seafood

Current Exports

Sub Sectors

Of the $242M in sector exports, the following are the sub sectors that

represent the industry in Atlantic Canada:

Animal Food

Grain and Oilseed

Sugar and Confectionary

Fruit and Vegetable (minus frozen potatoes and wild blueberries)

Dairy

Meat

Bakeries and Tortillas

Soft Drinks

Breweries

Wineries and Distilleries

Where Atlantic Canada Fits: PEI NB NS NL

Per capita food manufacturing sales 1ST 4TH 9TH 8TH

Growth in food manufacturing 1ST 3RD 9TH 7TH

Food manufacturing exports 1ST 5TH 7TH 3RD

Food manufacturing R&D

expenditures

2ND 3RD 6TH 9TH

SWOT STRENGTHS

o Value of the Canadian dollar

o Well-qualified workforce supplied by local universities and

colleges

o Access to local, essential raw materials

o Strength of “Canada” brand

o Plant efficiencies and increased automation

o Supportive government agencies/funders

o Atlantic Growth Strategy

WEAKNESSES

o Lack of market readiness/knowledge

o Lack of export savvy and entrenched attitudes limit

perspective and outward vision

o Value of the Canadian dollar

o Misalignment between small scale production and demands of

large European and Asian markets

o Lack of coordinated marketing efforts to foreign markets

o Under-utilized processing capacity

o Labour: low wages, aging workforce and high cost of labour

o Lack of consolidated innovation and product development

efforts

o Access to capital

o Competitiveness has stalled

o High energy costs

OPPORTUNITIES

o Growth through mergers and acquisitions

o Value-add food products

o Artificial Intelligence to maximize efficiencies

o Asia-Pacific and Euro zones (CETA)

o Segmented global food market

o Organic/health food markets

o Emergence and growth of global food value chains

o Growing protectionism in the USA (Mexico, Latin America

opportunities)

o Regional branding

THREATS

o Price and affordability dominate consumer demand

o Focus on healthier eating has led to decline of processed food

consumption

o Growing protectionism in the USA

o Existing and future trade regulations –

o Rising input costs

o Lack of cooperation between provinces

o “Founder” syndrome

Key Challenges (1-5)

1. The state of export readiness is overwhelmingly highlighted as the key

issue for the food and beverage processors in Atlantic Canada. Many

companies have had failed attempts at export because they were not prepared,

or did not have the ability/knowledge to follow through - but only discovered it

while already in the process.

2. A lack of innovation in product development is hindering export

opportunities.

3. A perceived unwillingness of processors to adapt their product offering, i.e.

flavor profiles, product positioning and/or branding.

4. Processors view their products as premium sector products and therefore

aren’t realistic when it comes to cost and expectations related to exporting.

5. Many companies are afraid of the idea of export and what it might do to

their business.

Key Challenges (6-10)

6. Many companies aren’t interested in exporting at all and only participate for

the network potential.

7. Capacity to deliver product and price competitiveness tend to be recurring

and dominating issues in many markets.

8. A lack of market knowledge has left many Atlantic Canadian companies

heading down the wrong path (wrong product for the wrong market at the wrong

time)

9. Export growth for Atlantic food and beverage companies.

10. Confusion over tools and services available.

Critical Barriers to Export

Development

1. Unique Selling Proposition of many Atlantic Products not as

strong as some processors think

2. Ability to compete on price

3. Capacity to deliver product volumes

4. Lack of market knowledge creates false expectations

5. Lack of willingness to modify products for certain markets

6. CETA – Increased domestic competition

7. Marketing/Branding (No one knows Atlantic Canada)

Slides for Reference Only

for Q&A

NAICS 3111 3112 3113 3115 3116 3118 3119 3121 TOTAL

Category

Animal

Food

Grain

and

Oilseed

Sugar

and

confectio

nary Dairy Animal

Bakeries

and

Tortillas Other Beverage

America

United

States 41,778,780 26,854,543 10,949,737 10,060,166 3,017,906 36,284,881 77,020,194 15,351,291 221,317,498

Mexico 1,302,159 1,579 - 652,001 290,398 2,766 978,001 - 3,226,904

Asia

China - 37 11,310 444 419,844 - 77,084 782,248 1,290,967

Asia (other) -

Philippines 427,788 242,662 8,842 - - 11,789 - 691,081

Taiwan 12,213 41 142,955 - 39,708 8,255 105,442 161,954 470,568

Hong Kong 122,270 11,948 - - - 15,944 34,910 185,072

Japan 51,772 14,456 729,941 492,568 - 51,839 26,131 1,366,707

Vietnam 43,362 3,829 - - - 5,105 - 52,296

Korea,

South 384,467 - 33,790 - 236,632 309,078 963,967

Europe -

United

Kingdom - 9,117 44,111 48,040 - - 23,378 144,580 269,226

European

Union

(Western) -

France 64,964 183,739 2,946,282 209,548 357,589 69,505 3,978,477 258,382 8,068,486

Iceland - 111,837 18,881 - - 149,390 13,136 8,239 301,483

Germany - 96,626 61,317 - - - 3,201 164,312 325,456

Netherlands - 13,649 883,647 - - - 1,178,196 3,319,964 5,395,456

Spain - - 127,306 - - - - - 127,306

Sweden - - - - - 42 30,975 - 31,017

Portugal - - - - - - 4,732 - 4,732

Switzerland - - - - - - 102 56,729 56,831

Denmark - - - - - - 40 - 40

Ireland - - - - - - - 89,393 89,393

Norway - - - - - - - 10 10

TOTAL 43,585,904 27,731,234 15,609,088 11,700,140 4,651,803 36,514,839 83,734,267 20,707,221 244,234,496

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Atlantic Food and Beverage Processors - Online Survey • Monday, January 08, 2018

• Date Created: Monday, October 30, 2017

37 • Total Responses

• Complete Responses: 32

Q1: Is your business in

food or beverage?

• Answered: 35 Skipped: 2

Q1: Is your business in

food or beverage?


Q2: What is your

position/title?


Q2: What is your

position/title?


Q3: How long has your

business been operating?


Q3: How long has your

business been operating?


Q4: How many employees

do you employ?


Q4: How many employees do

you employ?


Q5: What are your yearly

revenues?


Q5: What are your yearly

revenues?


Q6: Do you export?


Q6: Do you export?


Q7: Have you ever

considered exporting?


Q7: Have you ever

considered exporting?


Q8: Why don’t you export?

Check all answers that apply.


Q8: Why don’t you export?



Q9: What do you

think the biggest

barriers to export

are for Atlantic

processors?

Check all answers

that apply.

• Answered: 11

Skipped: 26

Q9: What do you

think the biggest

barriers to export

are for Atlantic

processors? Check

all answers that

apply.

• Answered:

11

Skipped:

26

Q10: What would it take for you to

consider exporting your products to

other markets? Check all answers that

apply.

• Answered: 10

Skipped: 27

Q10: What would it take for you to

consider exporting your products to

other markets? Check all answers that

apply.


Q11: Where

do you think

would be a

likely export

market for

your existing

products?

Check all

answers that

apply.


Q11: Where do you think would be a likely

export market for your existing products?


• Answered: 11

Skipped: 26

Q12: Could you see your business

developing new products to export?


Q12: Could you see your business

developing new products to export?


Q13: How long have you

been exporting?


Q13: How long have you

been exporting?


Q14:

Where are

you

currently

exporting?

Check all

answers

that apply.

• Answered: 21

Skipped: 16

Q14: Where are you currently exporting?


• Answered: 21

Skipped: 16

Q15: What

other markets

do you think

have potential

for you?

Check all

answers that

apply.


Q15: What other markets do you think

have potential for you? Check all

answers that apply.

• Answered: 21

Skipped: 16

Q16: What did you do to prepare your

business going into new markets? Check all

that apply.


Q16: What did you do to prepare

your business going into new

markets? Check all that apply.


Q17: What are

your biggest

challenges in

exporting

today? Check

all answers that

apply.


Q17: What are your biggest challenges in exporting

today? Check all answers that apply.


Q18: What percentage of your total

sales volume is from exports?


Q18: What percentage of your total

sales volume is from exports?


Q19: Do you have an

export plan?


Q19: Do you have an

export plan?


Q20: Has exporting

changed your business?


Q20: Has exporting

changed your business?


Q21: What are you doing to prepare to

go to market? Check all that apply.


Q21: What are you doing to prepare to

go to market? Check all that apply.


Q23: Do you invest in new product

development and R&D?


Q23: Do you invest in new

product development and

R&D?


Q24: If yes, please provide

estimated levels of investment.


Q24: If yes, please provide

estimated levels of investment.


Q25: Using a scale of not important to

very important, how important is product

innovation in your business?


Q25: Using a scale of not important to

very important, how important is product

innovation in your business?


Documents

Food and Beverage Export Strategy Development · Overview The food and beverage sector in Atlantic Canada (excluding seafood) accounts for approximately $900 million in annual