Food processing poised to become Ontario's top industry

Tuesday, October 29, 2013

by SUSAN MANN

Ontario’s food and beverage industry plans to roar past the automobile sector as the new engine for the province’s economy.

Unlike other manufacturing sectors that are forecasting declines, the province’s food and beverage industry is committed to adding another 60,000 or more jobs to the economy and generating annual revenues of $70 billion by 2020, the Alliance of Ontario Food Processors says in its five-year industry plan released Monday. Currently, the sector employs 125,000 people and generates $39 billion annually in revenues.

“We can become the dominant leader,” says alliance executive director Steve Peters.

He says their plan is not a response to Premier and Agriculture Minister Kathleen Wynne’s challenge issued earlier this month for the entire agricultural sector to double its growth and create 120,000 new jobs by 2020. The alliance began working on its report in the spring and hosted a large industry consultation in July.

But “it kind of dovetailed in very nicely with the premier’s agriculture summit,” Peters says. The summit was held Oct. 7.

The plan outlines four recommendations the alliance says are necessary to support a dynamic and innovative business climate. The alliance is also calling for an industry-government partnership to refine the implementation plans by February 2014, including outlining the costs, timelines and how they’re to be delivered for each of the four recommendations.

The alliance’s recommendations are:

• Establish a food and beverage innovation centre to provide existing processors with market development and business resources plus encourage and foster new entrepreneurs.
• Raise the profile of Ontario food and drink both within the province and around the world.
• Develop talent and raise awareness of the food and beverage-processing sector as an attractive industry for jobs.
• Simplify and modernize regulations at all government levels including municipal, federal and provincial.

 Premier and Agriculture Minister Kathleen Wynne endorses the alliance’s plan. “I support any initiative that drives growth and creates jobs for Ontario,” she says in an email provided by her agriculture ministry communications director Mark Cripps.

Wynne says she’s pleased the alliance has developed a plan to move toward its targets “and if it surpasses the targets of our government’s challenge that would be an example for others in the industry and good for Ontarians.”

It’s important for the alliance and others in the agri-food industry to take leadership in developing strategies, plans and specific actions to move the industry forward. “The government is willing to provide input into this process and offer a whole-of-government approach that cuts across ministries and jurisdictions,” she says.

The Ontario food and beverage-processing sector has more than 3,000 businesses, ranging from small, niche-driven firms to multinationals. Most food and beverage processing businesses are located close to urban centres, while a number of establishments are in rural regions.

Many companies already work to foster innovation, Peters says. But the food and beverage innovation centre is needed because almost 98 per cent of the industry is made up of small and medium-sized companies that may not have that internal infrastructure, he notes.

The alliance isn’t talking about constructing a new facility for the innovation centre but using existing resources to provide this service through possibly the University of Guelph as well as the agricultural or community colleges, he explains. “What we’re really advocating for is just a more coordinated approach to making sure people know what is out there and making sure we can utilize that infrastructure that does exist.”

Peters says for food and beverage makers the current business climate in Ontario “has yet to reach its full potential.” There has been a significant rise in imports of food and beverages into Ontario “and some of that has been to meet the needs of the changing face of Ontario.”

But working with their partners in agriculture, the alliance wants to use the diversity in Ontario’s population to their advantage. “We are the farmers’ best customer,” he says, noting that 65 per cent of everything that’s grown or produced in Ontario has value added to it through the processing sector. “We would like to see that number be higher.” BF