Canada needs to seize value-added opportunities, including more domestic processing, innovative end-uses for our agri-food products, co-product manufacturing and turning waste products into revenue streams
The agri-food sector today
Canada's agri-food sector is complex and interdependent. Agri-food includes agriculture, fisheries and aquaculture, and food and beverage processing. While Canadian agri-food products have high profile and a strong reputation around the world, competition is intensifying.
At A Glance
- Agricultural demand in 2050 will be 50% higher than it was in 2013Footnote4—meaning Canada's agri-food sector has a strong, global growth opportunity.
- The biggest growth market will be Asia-Pacific, where middle-class consumer spending is projected to climb from US$12.3 trillion in 2015 to $36.6 trillion in 2030.Footnote5
- Changing preferences will boost demand for dairy products, alternative proteins, lean meats and processed foods with enhanced health benefits.
- Abundant land and water resources
- Positive global reputation as a trusted supplier of safe food in foreign market
- Well-placed to access global markets
- Strong R&D capacity, particularly in agriculture
- Food Processing sector investment in machinery and buildings as a percentage of sales is trending downward—from 3% in 2002 to 2% in 2015Footnote6
- Labour markets are tight and the skill set for the sector is evolving
- As a highly export-oriented sector, continuous need to keep markets open
The global market for agri-food products continues to expand. For this reason, Canada has set an ambitious target to grow its agri-food exports to at least $75 billion annually by 2025. In recent years, industry growth has been strong, with annual exports reaching record highs. Members of the Agri-Food Economic Strategy Table made it clear that in order to seize its share, Canada's agri-food sector needs to be competitive.This view is shared by the Agri-Food Table's Producer Advisory Council, which was established to provide a producer perspective to the Table's work. The following priority themes were identified by the Agri-Food Table to scale up capacity and boost productivity.
- Increasing innovation and seizing value-added opportunities
Canadian food producers and food processors can no longer afford to compete on the basis of price alone. Growing middle classes around the world are demanding higher-quality products, while socially conscious consumers want foods with specific qualities, such as being locally sourced and sustainable. Canadian leadership in agri-food demands companies embrace innovation to maximize the value derivedfrom their products and to position Canada as a preferred supplier to high-value markets.
- Adopting technology and advancing digitization
Today, Canada's agri-food sector has low rates of technology adoption compared to other countries. This is a liability: in a very short time, players who do not embrace automation, digitization and other technological advances will simply becomenon-competitive. Canada's entire agri-food value chain needs to recognize this and actively adopt. Doing so demands a cultural shift so the sector sees itselfas a technology industry, not a resource industry.
- Modernizing infrastructure and regulations
Agri-food products have a long and multi-stage journey to market. The country needs modern infrastructure to facilitate that journey, as well as a forward-looking, synchronized regulatory system that supports the development and commercialization ofinnovative products. This involves an interconnected, coordinated approach that removes impediments to the movement of goods and services as well as the development of state-of-the-art supply chains that are lean and adaptive to shifting opportunities. Canada's overall business environment needs to be competitive and enable growth.
- Increasing market access and growing exports
Population growth and rising incomes around the world present huge opportunities for the agri-food sector over the next 10 to 15 years, especially with the demandfor protein. Canada's firms must be competitive to diversify their markets and capture domestic and global growth opportunities. To diversify successfully, Canadamust focus on areas where it has strategic advantage. Achieving this will require a whole-of-government approach to market access and business development, seizing new trade agreements with high-growth that support both exports and domestic growth opportunities, and a greater opportunity for small-and mid-sized companies to seize new market opportunities.
- Dealing with labour shortages and being prepared for the future
Canadian agriculture currently faces labour shortages that impact production levels and tomorrow's growth opportunities. These shortages will intensify as markets for Canadian products expand. Reliance on foreign workers has lessened the impact of thelabour shortage. In order to compete, the sector will need a workforce with the right skills to succeed in an automated, digitalized future.