Agriculture and Agri-Food Canada Michele Marcotte, Ph.D., Eng. Director Research, Development, and Technology 12th International Conference on Engineering and Food Congress Center, Quebec City, Canada June 14, 2015

Outline • Structure of the Food Processing Industry • AAFC Policies, Programs, and Technologies to support the Agricultural, Agri-Food and Agribased sectors • AAFC Science and Technology Capacity available to the Food Processing Industry

Food and beverage processing is Canada’s largest manufacturing sector and a critical link in the food supply chain
Canada’s largest manufacturing sector
16% of manufacturing GDP
$27B toward national GDP (2013)

$105.5 billion Shipment




Canada’s largest manufacturing employer



Exports of processed food and beverage products. $27.8 billion in 2014 an increase of 9.8% over 2013; accounting for 26% of production value

247,000 jobs 17% of all manufacturing jobs (2013)




Supplies Canadians with over 75% of their processed food. An additional 17% of production is exported.




Significant market for the primary sector, purchasing 34% of agricultural production

Large firms account for half of the sector’s production


90% of establishments have fewer than 100 employees and 29% have fewer than 5 employees




Large establishments make up fewer than 5% of establishments but account for about 50% of manufacturing sales




Approximately 60% of food and beverage processing sales are accounted for by domesticallyowned firms

Source: CANSIM Table 551-0005, Business Register

The Canadian FB processing industry is quite heterogeneous – with respect to both geography and production Distribution of food and beverage processing production by province, 2014

$7.8 Billion 8.4% of national

$11.3 Billion 12.1% of national

$3.7 Billion 4.0% of national

$4.6 47% Billion 4.9% of national

Total production for 2014: $105.5 B Source: Statistics Canada, Annual Survey of Manufacturing and Logging Note: Percentages do not add up to 100% due to confidential data.

Meat product Manufacturing ($26.3 billion) Dairy product manufacturing ($17.2 billion) Grain and oilseed milling ($10.6 billion) Beverage industry ($10.4 billion) Bakeries and tortilla manufacturing ($8.3 billion)

$36.2 Billion 38.8% of national

$21.5 Billion 23.1% of national $6.5 Billion 7% of national

Animal food manufacturing ($7.5billion) Fruit and vegetable preserving and Specialty food manufacturing ($7.3 billion) Seafood product preparation and packaging ($4.6 billion) Sugar and confectionery product manufacturing ($4.1 billion) Other food manufacturing ($9.1 billion)

Food processing contributes more to almost all provincial economies than primary agriculture


Ontario, Quebec, and Alberta have the largest share of FBP jobs (35%, 23%, 12% respectively)




The FPB sector supplies the largest share of manufacturing jobs in Newfoundland, New Brunswick and Nova Scotia




Manitoba, Saskatchewan, and Alberta are the only provinces where primary agriculture contributes more to provincial GDP than food processing Food manufacturing employment as a share of total manufacturing employment, by province, 2013

Food Processing's Contribution to Provincial GDP, 2013*

Total Provincial GDP (%)

60%

Primary Agriculture

10

51.2%

Food Manufacturing

9

50%

8 40%

7 6

36.3%

30%

26.5%

5 20%

4 3

17.2% 13.8%

12.7%

13.9%

14.6%

14.0%

QC

ON

MB

SK

AB

10%

2

Confidential

1 N.L.

P.E.I.

N.S.

N.B.

Que.

Ont.

Man.

Source: Statistics Canada and AAFC calculations. Note: ** Excludes beverage and tobacco processing. *2013 data is preliminary.

Sask.

Alta.

B.C.

0% NL

PE

NS

NB

Source: Statistics Canada, Survey of Employment and Payroll and Hours (SEPH) Note: PEI employment in food manufacturing is confidential

BC

6

Canadian Food Industry Sector Opportunities

Vulnerabilities

• Growing off-shore demand for processed food • US market – exports are growing but Canada has only a 2% share • Market access initiative opening the door to new markets • Tariffs are dropping thanks to bilateral agreements • Good agricultural base for grains, livestock, and pulses • Natural resource advantage • Innovation to capture shifts and diversification in demand

• Higher costs for some key inputs • Flat productivity • Legacy (ageing) plants need modernization • Lack of access to capital • Rising import competition from non-traditional suppliers • Market access challenges including border issues and private standards • Sufficient supply of labour, including skilled workers

Canadian Agricultural Policies •

First Generation - The Agricultural Policy Framework (APF) - 2003-2008 – – –

The first guiding framework for agricultural policy development and programming Emphasis has been on establishing a risk management platform for the agriculture and agri-food sector Key areas of focus were: • • •

•

Second Generation - Growing Forward - 2008-2013 – – – –

The second policy framework for agriculture While risk management programming continued, emphasis has shifted towards science and innovation and sector renewal programming to enhance sector productivity, profitability and competitiveness Greater recognition of bioeconomy opportunities for agriculture beyond traditional food and feed Agri-Innovation Program – Stream A AAFC-led research and development activities • • •

–

Addressing regulatory-related challenges to sector innovation, investment and competitiveness Animal and Plant Health Research Program Environmental Programs: SAGES, WEBs, NAHARP

Agri-Innovation Program - Stream B – Industry-led research and development activities • •

•

Business Risk Management Food Safety and Quality Environmentally Responsible production

Development of Innovative Agricultural Projets (DIAP) Agri-Science Clusters

Third Generation - Growing Forward II - 2013-2018 – – – –

Increased investment in science and innovation Partnership as a key driver for success Accelerating the pace of innovation Agri-Innovation Program – Stream A AAFC-led research and development activities • •

–

Crop, Livestock, and Food Sustainable Science and Technology Advancement

Agri-Innovation Program (AIP) - Stream B – Industry-led research and development activities •

Agri-science Clusters and Agri-science Projects

A systems approach to innovation and competitiveness to speed the flow of ideas, and knowledge along the innovation chain INNOVATION CONTINUUM DISCOVERY PHASE

Basic Research

PRE-ADOPTION / PRE-COMMERCIALIZATION PHASE

Applied Research

Prototype Development

Demonstration Full Scale

Market Ready Product Development

MARKETING PHASE

Market Entry

Market Development

Policy Environment

Industry

Governments/Academia

Government Funded Government conducted

Jointly Funded Public-Private Partnerships

Industry Funded Industry Delivered

AgriInnovation Program (AIP) • Growing Forward 2’s Agri-Innovation Program (AIP) is a fiveyear, up to $698 million initiative. • The Program supports innovation in three streams: – Research Accelerating Innovation; – Industry-led Research and Development and Knowledge Transfer; and – Enabling Commercialization and Adoption.

• The Industry-led Research and Development and Knowledge Transfer theme provides funding for AgriScience Clusters and Agri-Science Projects that have been proposed by the sector.

Agri-Science Clusters •

The Canadian Agriculture Sector is benefiting from the AIP program through major research underway through 14 Agri-Science Clusters with funding totalling $127 million. These Clusters include: – – – – – – – – – – – – – –

Beef Cluster - Beef Cattle Research Council Organic Cluster - Organic Federation of Canada Pulse Cluster – Pulse Canada Dairy Cluster – Dairy Farmers of Canada Wheat Cluster - Western Grains Research Foundation Barley Cluster – Alberta Barley Commission Canola Cluster – Canola Council of Canada Bioproducts Cluster - Bioindustrial Innovation Centre Agri-Food Innovation and Prosperity Cluster – Canadian Food Innovators Poultry Cluster – Canadian Poultry Research Council Horticulture Cluster - Canadian Horticulture Council Swine Cluster - Swine Innovation Porc (SIP) Ornamental Cluster - Canadian Ornamental Horticulture Alliance Field Crops Genetics Improvement Cluster - Canadian Field Crop Research Alliance

Agri-Science Projects • The Canadian Food Industry will also benefit from several Agri-Science projects with funding totalling close to $1.5 million. Research for these Projects will touch on several areas including: – Extraction, Action and Commercial Development of Flax Bioactive Compounds – Accelerating the Commercialization of Pulse Nutrition, Health, Processing & Utilization Research – Drying Curve Parameters of a Large Scale Process for Crispy Vegetable Chip Production

Contribution of STB to AAFC Mandate • 2012 Science and Technology Branch Roles – Informing regulatory and policy decisions – Producing far-from-adoption applied science with broad stakeholder application – Supporting innovation to improve economic prosperity

• 2012 Science and Technology Branch Pillars – Pillar 1: Providing science that enhances the sector’s resiliency – Pillar 2: Fostering new areas of opportunity for the sector – Pillar 3: Supporting sector competitiveness

2013 Definition of the bew STB Strategy, approved in 2014

Value Chain Approach Processed product quality

Technological quality Post harvest processing (Milling) Ingredient Manufacturing

Processed food

Harvest

Farming

Production

Manufacturing of processed Products - Food - Non Food Fresh foods

Quality of fresh produce

Primary processing

Consumers (Market Demand) - Drivers

Secondary processing

14

Product Pipeline Stages from Foundational to Clinical Research INNOVATION STREAMS “Inherently Functional Foods” (e.g. oats, barley fruits & vegetables) (“Functional Foods”) Supplemented, Fortified Foods (Transitional terms) AAFC does research only Nutraceuticals, on NHP’s sold and Natural Health consumed as foods Products (e.g. probiotics) not “pills, (e.g.capsules, extracts, etc”pills,

herbal medicines)

FOOD/HEALTH LINKAGES MAP THROUGH THE AGRI-FOOD SECTOR STRATEGY (2014-2019) FOOD INNOVATION FOR GROWTH Improve attribute for food and non-food uses

PRODUCT PIPELINE Evaluation Progression Foundational Pre-clinical Stage 1 Bioactive Research

Stage 2 In vitro Evaluation

Stage 3 Cell & Tissue Evaluation

Clinical

Stage 4 Animal Models

Stage 5 Human Trials

At the discretion of the Minister, AAFC-STB MAY

but only through Collaborative R&D Agreements with LICENSED,

participate in human trials

MEDICAL/CLINICAL CAPACITY AND EXPERTISE

AAFC-STB will continue perform and publish foundational and pre-clinical research (Stages 1-4). 1. 2.

Supplies authenticated, sustainable sources of agricultural and agri-food products for downstream health and nutrition research. Such reliable, well-documented resources contribute directly to the scientific rigorous and unbiased research integrity required for health claim petitions.

Our sector strategies is delivered in a national organization across the country FOOD INNOVATION FOR GROWTH Enhance the innovative capacity and competitiveness of the Canadian agrifood sector – Improve attributes for food FOOD SAFETY - Strengthen the safety of, and address threats to, the Canadian food supply across the value chain

Agassiz

Morden

One unified and coordinated Food RDT Centre Two campuses; Guelph and Saint-Hyacinthe One RDT Leadership

Coastal Ecozone Prairie Boreal Ecozone Mixedwood Plains Ecozone

Guelph Food Research Centre Guelph, ON • Mission – To proactively mitigate food safety threats throughout the food chain and develop and enhance the competitiveness for Canadian agri-food products through innovation

• 47 indeterminate staff (STB), including 17 scientists • 4130 m2 floor space ─ Biosafety Level-II pilot scale food plant

17

Food Research and Development Centre, Lead on Food Processing •

• • • •

•

focusing on increasing productivity and enhancing environmental performance in the production of animal-derived food and attributes 70 indeterminate employees including 20 scientists 12 464 of m2 including 3 500 m2 of pilot plants for food processing Industrial Program – Universal access to multifunctional pilot plants Unique Canadian asset to help various sectors in food manufacturing – to increase their efficiency and profitability – to master and control technological, sensory and nutritional properties of raw materials and their components to improve the quality of existing products – to develop innovative products 4 industrial incubators to support start-up companies or perform trials for market access through fee for services

Saint-Hyacinthe, QC

THANK YOU !