“Helping southern U.S. companies export food & agricultural products around the world.” Canada Initiative

“Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org

Canada Initiative


U.S. is Canada’s number one trading partner.

The United States is Canada's largest agricultural trading partner, buying 51% of Canadian exports and supplying 59% of Canadian imports.

Agricultural exports from the United States to Canada accounted for 16% of total U.S. food and agricultural product exports of $98.5 billion.

Consumer-oriented agricultural products accounted for 76% of total U.S. food and agricultural product sales to Canada in CY2009 with fresh and processed fruits and vegetables, snack foods, red meats, breakfast cereals, and fruit and vegetable juice products as the category leaders.

The Big Picture Brief Description


The Big Picture Current Exports to Canada


The Big PictureProducts Exported to Canada (2010)

List of ProductsAmount ($US)

‘000

Preparations of Cereals, Flour, Starch or Milk (Including Bread and Pastry) 1,821,065Edible Fruits and Nuts 1,735,663Miscellaneous Edible Preparations 1,622,128Edible Vegetables and Certain Roots and Tubers 1,548,078Meat and Edible Meat Offal 1,363,206Beverages, Spirits and Vinegar 1,348,050

Source: Statistics Canada


List of Products Amount ($US)

Residues and Waste from the Food Industries, and Prepared Animal Fodder 1,257,166Preparations of Vegetables, Fruit, Nuts or Other Parts of Plants 1,078,175Fish, Crustaceans, Molluscs and Other Aquatic Invertebrates 666,176Meat, Fish and Seafood Preparations 659,506Fats, Oils, Their Cleavage Products and Waxes 606,133

Cocoa and Cocoa Preparations 527,499

The Big PictureProducts Exported to Canada (2010), continued


List of Products Amount ($US)

Cereals 516,256

Coffee, Tea, Maté and Spices 440,526Oil Seeds, Oleaginous Fruits, Industrial or Medicinal Plants, Straw and Fodder 421,772

Sugars and Sugar Confectionery 362,857Dairy Produce, Eggs, Honey and Other Similar Edible Products of Animal Origin 228,160Live Trees and Other Plants (Incl. Cut Flowers and Ornamental Foliage) 167,050



List of Products Amounts ($US)

Products of the Milling Industry; Malt, Starches, Inulin and Wheat Gluten 156,900

Live Animals 121,404

Products of Animal Origin Not Elsewhere Classified 61,776

Tobacco and Manufactured Tobacco Substitutes 57,202Lac, Gums, Resins and Other Vegetable Saps and Extracts 41,913Vegetable Plaiting Material and Other Similar Vegetable Products 3,727


The Big Picture:Opportunities and Challenges



Pressure is growing on Canada to dismantle the quotas and import restrictions that protect its dairy and poultry producers from foreign competition

Geographic proximity

Little language barrier (exception: Quebec)

Due to NAFTA, there are limited tariffs and fee barriers

Canadian food preferences tend to be similar to those of Americans

The Big PictureOpportunities

Challenges to Export


Market size: The relative market size is small, with a limited number of retailers, brokers, importers and distributors

Changing Consumer and Societal Demands: Canadian consumers are demanding more variety, convenience, environmentally-friendly and healthier food choices

Increased Government Support: Government support of domestic public R&D in agri-food innovation and competitiveness has increased

Technical requirements (e.g. product nutrition labeling) may pose challenges for select SUSTA producers


Health Canada must be notified with sufficient accompanying information prior to the sale or advertisement of novel foods which are products ofgenetic modification

Voluntary claims on foods that are and are not products of genetic engineering may be made provided such claims are truthful, not misleading, not deceptive, and not likely to create an erroneous impression of a food's character, value, composition, merit or safety

ChallengesGMO Ingredients

ChallengesTariff Barriers


First Come, First Served (FCFS) Tariff Rate Quotas (TRQ): Import quota allocations are not issued to individual companies

Products subject to FCFS TRQs Margarine Wheat and wheat products Barley and barley products

ChallengesTariff Barriers, continued


Tariff Rate Quotas (TRQ) Subject to Allocations: importers must have a specific import permit issued by the Minister for International Trade

Goods subject to these TRQs Broiler hatching eggs and chicks, chicken, turkey Eggs and egg products Cheese, butter, milk and cream Butter milk, yogurt, ice cream and other dairy products


Alcoholic Beverages: Provinces and territories have full control over the importation of intoxicating liquor into their jurisdictions

Dairy Products: Subject to Dairy Products Regulations under the Canada Agricultural Products Act

Eggs and Processed Eggs: Subject to Egg Regulations and Processed Egg Regulations of the Canadian Agricultural Products Act

ChallengesNon-Tariff Barriers


Fish and Fish Products: Subject to the Fish Inspection Act and Regulations, which contain requirements for wholesomeness, labeling, packaging, grading, and health and safety

Food Additives: Must conform to specifications in the Food Chemicals Codex

Food Colour: Regulations concerning food colours are listed in the Food and Drug Regulations and must be certified

ChallengesNon-Tariff Barriers, continued


Foods for Special Dietary Use, including Weight Loss: Subject to Food and Drug Regulations

Fresh Fruits and Vegetables: Regulated by the Fresh Fruit and Vegetable Regulations under the Canada Agricultural Products Act (includes nuts)

Fruits and Vegetables, Processed: Subject to Processed Products Regulations under the Canada Agricultural Products Act



Honey: Regulated by the Honey Regulations under the Canada Agricultural Products Act

Infant Formula (Human Milk Substitutes): Regulated under the Food and Drug Regulations and manufacturers

Low Acid Foods in Hermetically Sealed Containers (Canned Foods): To prevent and control any public health threat

Maple Products: Subject to the Maple Products Regulations under the Canada Agricultural Products Act



Meat and Poultry: Regulated by the Meat Inspection Act and Regulations, the Health of Animals Act and Regulations and the Export and Import Permits Act

Novel Foods - Biotechnology: Subject to the Novel Food Regulations under the Food and Drugs Act and Regulations

Sports Nutrition Products: Canada has very specific compositional and labeling requirements, with strict controls on the addition of vitamins, minerals and amino acids to foods


Importing into Canada



Road Map

Step 1: Contact SUSTA for possible financial assistance and marketing advice

Step 2: Research the competitive marketplace

Step 3: Locate a broker and distributor

Step 4: Understand Canadian government standards and regulations that pertain to your product


Documentation

Two copies of cargo control document

Two copies of invoice

Two copies of completed Canada Customs Coding Form

One copy of Certificate of Origin

Any import permits, health certificates, or forms that other federal government deptments require

Calculate and declare the value for duty of the imported goods (where necessary)


Regulations

Labeling Requirements: Bilingual labels, metric quantities, list of ingredients, common name of product, country of origin, etc.

Nutrition Labeling: The U.S. nutrition panel is not permitted on labels of foods sold in Canada


Regulations

Packaging and Container Regulations: Canadian regulations govern package sizes for fruits and vegetables, processed horticultural products and processed meats that may differ from the U.S. sizes

Food Additive Regulations: Most foods approved for sale in the U.S. would comply with Canadian additive regulations but differences can occur in the permissible levels and uses of food colorings and food preservatives


The Buying ProcessMajority is through brokers, importers, distributors or wholesalers

A broker (or agent) sells your product without taking ownership A distributor (or wholesaler) buys your product at a discount

from the retail price and resells it to other firms

There are more than 800 brokers & distributors in Canada A regional and/or national focus Retail and foodservice Look for non-competing products, exclusivity, innovation

Partial listing of Canadian food brokers is available on the Foreign Agricultural Service website http://gain.fas.usda.gov

Retail versus Foodservice Landscape


http://www.loblaws.ca/en/default.aspx


There are only two nationwide grocery store chains in the country, Loblaw Cos. Ltd. and Sobeys Inc.

Overall, 60.3% of retail food sales are from grocery store chains

Chains are most important in the Atlantic provinces (77.8%) but much less important in Quebec (36.4%)

Blurring of boundaries between food and non-food retailers

Specialty retail not as developed

Retail Landscape

http://www.loblaws.ca/en/default.aspx


Retail Distribution Process

Importer Broker Distributor Wholesaler

Retailer

U.S. Exporter

Customs


Duties and Taxes

Canadian Food Inspection Agency fees (for products containing items regulated by the CFIA)

Import Permit Fee and Customs Brokers Fee (if applied through a customs broker)

Broker/Distributor Fee (if required)

Labeling Consultant Fee (if required)

Trademark Application Fee (Approximately $500, but not necessary)

Listing Fee: Ranges from $2,000/SKU to $124,000/SKU

Other costs: Variable funding to drive sales (Flyer, Demos, etc.)

Retail Costs


Foodservice Landscape

Top 5 Chains in Canada: Tim Hortons, McDonalds, Cara, Tricon and Subway

Approximately 10% of the meals/snacks are sourced from restaurants

Ethnic & specialty foodservice sector is growing

Foodservice is the third-largest consumer services expenditure category


Foodservice Distribution

Importer Broker Wholesaler Re-packer

Restaurant

U.S. Exporter

Customs

Hotel Institution

Distributor


Duties and Taxes

CFIA Fees (for products containing items regulated by the CFIA)

Import Permit Fee and Customs Brokers Fee (if applied through a customs broker)

Broker/Distributor Fee (if distributed through a broker or distributor)

Foodservice Costs

2012 Planned Activities



We are Here to Help! Trade Shows

SIAL Show, Montreal (May)

Grocery Innovations Show, Toronto (September)

Landscape Ontario’s Expo, Toronto (October)

Wine Trade Show, Montreal (TBD)

Outbound Trade Missions

HVAP Mission to Ontario (September)


We are Here to Help! Inbound Trade Missions

• Produce Mission, Florida (March)

• Seafood Mission, Virginia/Florida (June/October)

• Horticulture Trade Mission, Florida and Middle Tennessee (July)

• Fancy Foods Show, Washington DC (July)

• PLMA Show, Chicago (November)

Thanks


SUSTA

701 Poydras Street, Suite 3725

One Shell Square

504-568-5986

www.susta.org

Argyle Communications

175 Bloor Street East, South Tower, Suite 1007

Toronto, ON M4W 3R8 Canada

416.968.7311

[email protected]

Documents

“Helping southern U.S. companies export food & agricultural products around the world.” Canada Initiative