Canadian Food Business Fall 2017

FALL 2017

Âť The science of food and beverage

Digitalize 2018

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This

New technology transforms manufacturing

Are Bread Sales Turning Stale?

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Moisture content 0.7% Fat content 10.5%

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contents

Trending now

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Letter from the editor

6 NEWS BITES

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feature story

Clean LABEL Consumers continue to push for more natural, clean ingredients in their food products.

12

Mintel Intel Bread consumption is declining in Canada, but younger consumers are experimenting with new arrivals.

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How digitalization can transform the Canadian food industry.

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A TASTE OF...

Becel launches new avocado oil products.

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editor'S letter

Publisher & CEO Christopher J. Forbes cforbes@jesmar.com Executive Editor Theresa Rogers trogers@jesmar.com staff writers Hermione Wilson hwilson@jesmar.com

Kelly Townsend ktownsend@jesmar.com CONTRIBUTORS

Markus Brettschneider Chris Brockman Karen Proper

art director Katrina Teimo kteimo@jesmar.com graphic designer Houman Hadidi hhadidi@jesmar.com Secretary/Treasurer Susan A. Browne marketing Stephanie Wilson manager swilson@jesmar.com vp of production Roberta Dick robertad@jesmar.com production Stephanie Bellows COORDINATOR sbellows@jesmar.com

Canadian Food Business is published 6 times per year by Jesmar Communications Inc., 30 East Beaver Creek Rd., Suite 202, Richmond Hill, Ontario L4B 1J2. 905.886.5040 Fax: 905.886.6615 www.canadianfoodbusiness.com. One year subscription and circulation enquiries: Fax: 905.509.0735 On occasion, our list is made available to organizations whose products or services may be of interest to you. If you’d rather not receive information, write to us at the address above or call 905.509.3511 The contents of this publication may not be reproduced either in part or in whole without the written consent of the publisher. GST Registration #R124380270.

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fall 2017

Canadian Food Business

Driving Technology I

was just speaking with a colleague recently about the speed at which technology is changing our lives and how it seems to be accelerating and changing faster than ever.

I can recall a couple of my own personal technology milestones such as finally moving from in-person to online banking and dropping my pager for a cell phone. I’ve really dated myself here, but back then, the changes didn’t seem to come on a daily basis and didn’t seem so life-changing.

We all know there have been a multitude of changes in manufacturing and at the retail level, all of which are aimed at saving everyone in the value chain, and including consumers, time and money.

Markus Brettschneider of ABB takes a look in this issue at connectivity and digitalization in food production, and how Canadian manufacturers stand to benefit. The driving force according to Brettschneider? As consumers expect more convenience and accessibility, companies such as Amazon and Walmart are seizing the opportunity to endorse new ecommerce business models, and active investors are pushing manufacturers to simplify and optimize their supply chains. Digitalization, automation and robotics offer solutions to these challenges.

Shopping lists apps; motion sensors that detect what I am looking at and display ingredients, origin and carbon footprint; smart inventory systems; self-checkouts; self-driving shopping carts; drone delivery; it’s all here.

Sometimes I’m not convinced who is really driving the technology revolution bus – or is it driverless car – consumers or manufacturers. Most of the time I feel like I’m being dragged along and sometimes I miss the good old days.

But then again, wow, is this stuff ever cool!

Sincerely Theresa Rogers editor canadian food business

on twitter @CDNfood

@

On the Web www.canadianfoodbusiness.com

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NEWS BITES

food events 2017 December 5 -6 Canadian Food & Drink Summit Calgary, AB www.conferenceboard. ca/conf/foodsummit/ default.aspx

2018 January 25 - 28 Guelph Organic Conference and Trade Show Guleph, ON https:// guelphorganicconf.ca February 21-22 Ontario Fruit and Vegetable Convention Niagara Falls, ON www.ofvc.ca February 21-22 Food Processing Expo Sacramento, CA http://clfp.com/events/ food-processingexpo-2018/ February 22-25 Canadian Health Food Association West Vancouver, BC https://chfa.ca/en/chfawest/index.html February 26 – March 1 Pittcon Orlando, FL https://pittcon.org

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fall 2017

University of Guelph Students to Develop Innovative Food Concepts with Industry Mentors As part of an annual project, students from the University of Guelph presented their original food product concepts to a panel of industry mentors in October. Students from the Food Science, Marketing, Nutrition and Engineering programs will work in teams to turn their ideas into prototypes, culminating in a final competition in March 2018.

“Our goal is to provide students with a collaborative experience that addresses current trends and challenges in the food industry,” says Lisa Duizer, Department of Food Science Associate Professor at the University of Guelph. “By making University of Guelph students, Colin Jones and Chloe Van Acker, prepare for this an interdisciplinary project that annual project that brings together students from different programs as involves University of Guelph students well as industry experts. Photo Credit: Lisa Duizer from various programs, we are also demonstrating the diverse and interesting career the southwestern Ontario region who are food opportunities that exist in food processing.” industry experts. The mentors include: Rob Bianchin, Each student team is responsible for developing Vice President at Blendtek Fine Ingredients; Daryl a product that fits into a food category currently Holmes, a founder and former COO and co-CEO undergoing significant industry growth and interest: at Nealanders (now Caldic Canada); Brian Jones, vegan; vegetable proteins; convenient indulgences; Director at BAJ Group Inc.; Christina Marsigliese, breakfast; beverage; and snacks. In March 2018, each Product Developer at the Guelph Food Innovation student team will present their product for a taste Centre; Derek Vella, Product Developer at Loblaw test competition to mentors and judges, along with Companies Limited; and Dr. Tyler Zemlak, a business case and marketing plan.

Technology Transfer Officer at the University of New this year is the addition of six mentors from Guelph.

CETA to Help Canada Food Exports Grow in Europe Minister of Agriculture and Agri-Food, Lawrence MacAulay, held a 10-day European agricultural trade mission in October as part of an effort to build on the momentum of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA)’s provisional application.

“The trade links established by Canadian companies and exporters of agricultural products here in Europe are vital to expanding

Canadian Food Business

and diversifying export markets for Canada’s agriculture and agri-food products,” said MacAuley.

Canadian industry estimates CETA will boost agriculture and agri-food exports by up to $1.5 billion annually. The agreement will give the sector a competitive advantage in the EU, and will help Canada move toward meeting its target of growing agri-food exports to $75 billion annually by 2025.

NEWS BITES

New Low-Sugar Glucose Syrups to Reduce Product Sugar Content

food events 2018 February 28 BCFT Suppliers Night 2018 Burnaby, BC www.bcft.ca/suppliers_ night/supplier_details. html

Ingredion Incorporated introduced a new line of low-sugar glucose syrups in North America in October. Its VERSASWEET low-sugar glucose syrups enable manufacturers of confectionery, dairy, ice cream, and baked goods to achieve reduced grams of sugar on the Nutrition Facts panel by formulating with low-sugar corn- or tapioca-based glucose syrups that, compared to standard glucose syrups, have a lower percentage of mono- and disaccharides, also called DP1 + DP2.

More than 80 per cent of consumers are

checking the sugar content of foods and beverages before making purchases, the company said in a press release, citing a 2017 Mintel Sugar Reduction Trends report.

“The challenge for food manufacturers has been to reformulate to a lower sugar product with minimal or no changes to the ingredient declaration list or existing processes,” says Nate Yates, Director of the Sweetness Springboard, North America at Ingredion. “VERSASWEET can help manufacturers overcome this challenge when they are already using glucose syrup.”

Wageningen Opens Research Facility for Quality Control of Fresh Produce Wageningen Food & Biobased Research opened its new research facility for quality control in the fruit, vegetable and flower sector in the Netherlands in October. The facility brings together knowledge and expertise in post-harvest technology and agro-food robotics. The company says the need for quality conservation is growing worldwide and it can help food companies keep their products fresher and reduce waste.

“Companies benefit from a sustainable chain in which quality during storage, transportation and at point-of-sale is optimally controlled. Food losses are reduced and the availability and volume of quality food for the global population increases.

Companies also enjoy a stronger international market position,” says Raoul Bino, General Director

of the Agrotechnology & Food Sciences Group at Wageningen University & Research.

Wageningen Food & Biobased Research has been researching the quality of fresh vegetables, fruits and cut flowers for more than 80 years nationally and internationally. Wageningen experts coordinate the GreenCHAINge Fruit & Vegetables research program which creates smart chains that, via improved quality control, enable manufacturers to deliver quality fruit and vegetables throughout the year. Its Cool – Research on the Move initiative developed with Fontein BV is a mobile research facility that allows companies and governments in emerging countries to significantly increase the quality and shelf life of their products, expanding existing markets and creating new ones.

March 5-8 The Global Food Safety Conference Tokyo, Japan www.tcgffoodsafety. com April 29 – 30 Bakery Showcase 2018 Mississauga, ON www.baking. ca/Bakery%20 Showcase/bakery%20 showcase%20-%20 about.aspx April 30 – May 1 North American Summit on Food Safety Toronto, ON www.foodsafetycanada. com May 2-4 SIAL Canada 2018 Montreal, QC https://sialcanada.com/ en July 15 - 18 IFT18 Annual Meeting & Food Expo Chicago, IL www.iftevent.org

www.canadianfoodbusiness.com

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Mintel Intel

MI

Stopping Bread from Turning Stale Bread consumption has steadily declined in Canada over the last decade but growing diversity in the bread aisle is encouraging younger consumers to stay in the category

By Chris Brockman

Canadians

are unequivocally eating less bread. According to Mintel, based on data from Statistics Canada and the Economist Intelligence Unit, per capita consumption of bread has shown a consistent decline in the country over the last decade, falling by a cumulative 18% from 16.5kg in 2007 to just 13.5kg in 2016 – with the average Canadian now eating 3kg less bread annually now than nine years ago. Like the neighbouring U.S. market, this decline can be largely attributed to poor health perceptions of bread, and the emergence of diets that shun carbohydrates and gluten. Mintel’s Bakery Products: Bread – Canada, July 2017 report revealed that while 97% of Canadians claimed to purchase bread over the last three months, 35% said they were trying to limit the amount they eat, with such avoidance higher among demographics that are typically more health conscious: older consumers and women. (See Figure 1) However, while health concerns are clearly an obstacle for the category, their influence should not be overestimated. When asked what factors most influence their bread purchases, category users cite a number of factors ahead of health, with flavour, price, freshness and format all considered significantly more important. This has enabled manufacturers to counteract declines in overall consumption by introducing new flavours and formats, helping prop up the value of the market while volumes have declined. The same Mintel data as above, for example, revealed that volume sales declined by a cumulative 11% between 2010 and 2016, while the value of the market increased by 1.8%. This suggests that the ongoing challenge for bread manufacturers in Canada is not necessarily tied to overcoming health concerns, but identifying what matters to consumers and introducing value-added solutions that cater to these demands.

Wall of beige takes on colour

Chris Brockman is Research Manager, Mintel Food & Drink – EMEA Region

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fall 2017

The biggest change in the Canadian bread market over the last few years has been the move away from the so-called ‘wall of beige’ to a more vibrant category offering a range of formats, tastes and textures. Packaged sliced bread still ranks as the most popular bread type – purchased by 78% of the population in the three months to May 2017 – while other traditional North American concepts like hot dog/ hamburger buns (51%) and rolls (47%) also remain in demand. However, there is undoubtedly growing openness to breads that can be considered ‘less conventional’, with tortillas (36%), flavoured bread (28%), naans (23%), and other internationally inspired breads/buns (17%) now purchased by a good chunk of the population. Importantly, such formats are helping brands sustain consumption among a younger audience. Millennials are significantly less likely to consume sliced bread than older generations in Canada, but are driving uptake of less conventional formats as they look for products that better resonate with their experimental tastes. Indeed, 18 to 34-year-olds over-

Canadian Food Business

Canada Stopping bread from turning stale in Canada MI

CANADIANS ARE EATING LESS BREAD BUT z Bread consumption has stead THERE ARE OPPORTUNITIES FOR MANUFACTURERS TO Minteldiversity in the bread z Growing COUNTERACT VOLUME stay in the category Intel DECLINES THROUGH z Bread consumption has ADDED-VALUE steadily declined in OPTIONS Canada over the last decade

CANADIANS ARE EATING LESS BREAD BUT THERE ARE OPPORTUNITIES z Older consumers are limiting t FOR MANUFACTURERS TO z Growing diversity in the bread aisle is, however, encouraging younger consumers to products COUNTERACT VOLUME stay in the category DECLINES THROUGH index in their consumption of bagels, tortilla, flavoured bread, ADDED-VALUE OPTIONS BREAD, BAKERY AND CAKES C z Older naans, and other internationally inspired breads/ buns, andconsumers are limiting their bread intake but show interest in artisanal/craft products express significantly more interest in trying “bread/baked However, while health concerns Canadians limit their bread intake goods that are traditional in other countries”. This is helping to clearly an MAY obstacle for the categ generations in Canada, but are driving FIGURE 2: BREAD CHOICE FACTORS, CANADA, 2017 maintain overall bread consumption at 95% of 18 to 34-yearinfluence should not be overestim Canadians are unequivocally eating less uptake of less conventional formats as they Canadians eating lessonbread to poor olds, and suggests that manufacturers in Canada should When asked health what factors most i bread.

Accordingare to Mintel, based data due look for products that better resonate with perceptions and the emergence of diets that shun category maintain Canadians a diversified limit portfolio to ensure relevance across age However, while health concerns are their bread intake Wall of beige takes on colour their bread purchases, from Statistics Canada and the Economist their experimental tastes. Indeed, 18 to an obstacle forIntelligence the category, their cite a number of factors ahead o Unit, per and capita consumption carbohydrates gluten. groups going forward. Such 34-year-olds products areover-index also likely to have inclearly their consumption Flavour (e.g. white, whole wheat) influence should not be overestimated. eating less The biggest change inhealth, the Canadian bread price, freshn with flavour, of bread has shown a consistent decline increasingCanadians appeal inarea unequivocally country where immigration, largelynaans, of bagels, tortilla, flavoured bread, date When asked what factors influence bread. According to Mintel, based on data market overfalling the last few years hasall been BREAD, BAKERY AND CAKES and format considered signifiC inExpiration themost country over the last decade, and other internationally inspired breads/

Growing value sales in recent years do, however, from Asia, is expected to drive population growth in the priceusers18% from their bread purchases, category from Statistics Canada and the Economist the16.5kg move in away from the so-called ‘wall This of has enable more important. byLow a cumulative 2007 buns, and express significantly more interest highlight bread isthe no longer seenmanufacturers as a commodity coming years.

Statistics forecasts that between cite a29% number of factors ahead of that Intelligence Unit,Canada per capita consumption beige’ toaverage a more vibrant category offering to counteract dec toFreshly just 13.5kg in 2016 – with baked in trying “bread/baked goods that are infreshness Canada, creating opportunities for manufacturers and 32% of Canadians will be a memberdecline of a visible health, minority with flavour, price, of bread has shown a consistent range of formats, tastes andconsumption textures. overall Canadian now(e.g. eating 3kgaseeds) less bread BREAD, BAKERY AND CAKES CONSUMER | 2by introduci Ingredients nuts, traditional in in other counties”.

This is helping generations Canada, are driving FIGURE 2: BREAD CHOICE FACTORS, CANADA, MAY to counteract volume declines through added value group byin2031, manyover of whom will prefer the but traditional and format all considered significantly the country the last decade, falling Packaged sliced bread still ranks asformats, the2017helping pro flavours and annually now than nine years ago. Like to maintain overall bread consumption Format (sliced loaf, buns, bread) of less formats as at theyThis the more important. has enabled a cumulative from 16.5kg inconventional 2007 mostpretzel popular bread type purchased the–value of theby market while vo neighbouring US market, this decline options. breads of by their heritage. 18% uptake 95% of 18 to 34-year-olds, and suggests that

The Analyst’s View

BREAD, BAKERY AND for the products that CAKES better resonate withto counteract Texture (e.g. attributed soft, generations in Canada, but are driving FIGURE 2: BREAD CHOICE FACTORS, CANADA, MAY 2017 manufacturers declines in flaky) to just 13.5kg in 2016look – with average 78% of the population in thedeclined. three months have The same MintelC can be largely to poor health manufacturers in Canada should formats maintain uptake of less conventional tastes.

Indeed, 18 toas they by overall consumption introducing Canadian now eatingtheir 3kg experimental less bread May 2017 – while other traditional North as above, for example, perceptions of new bread, andtothe emergence Calories Artisanal breads can encourage older Experimental younger consumers can be reached revealed for products better resonate with a diversified look portfolio to ensure relevance 34-year-olds over-index inthat their consumption and18formats, helping prop up Flavour (e.g. white, whole wheat) annually now than nine years ago.their Like American concepts like hot dog/ hamburger volume sales of diets that shun carbohydrates and %declined by a cum experimentalflavours tastes. Indeed, to Artisan/small batch agetortilla, groupsflavoured going forward.

Such consumers to trade US upacross by embracing diversity and therolls growing number of of bagels, bread, naans, in their consumption the value of the market while volumes the neighbouring market, this 34-year-olds decline over-index buns (51%) and (47%) also remain in and 2016, w 11% between gluten.

Mintel’s Bakery Products: Bread Flavour (e.g. white, whole wheat) 582010 Expiration date generations in Canada, but are driving FIGURE 2: BREAD CHOICE FACTORS, CANADA, MAY products are also likely to have increasing Base: 1,932 internet users aged 18+breads who have available purchased bread in themarket, past 32017 months of bagels, tortilla, flavoured bread, naans, Ensuring can relevance among younger generations will be a internationally inspired in the and other internationally inspired breads/ have declined. The same Mintel data2017 report be largely attributed to poor health demand.

However, there is undoubtedly date 47 value of the market increased by –Expiration Canada, July revealed Low price and otherwhere internationally inspiredas breads/ Source: Lightspeed/Mintel uptake of a less conventional formats they appealand country immigration, Low price 97% 45that express significantly moremore interest priority for bread manufacturers ininemergence Canada forward, while older consumers are likely tobreads be attracted above, for example, revealed thatoffrom perceptions of bread,buns, and the growing openness to that See can betothe ongoing c This suggests while Canadians claimed buns, andgoing expressas significantly interest that This is an excerpt Bakery Products: Bread Canada, July 2017.

Databook. look for products that better resonate with largely from Asia, is“bread/baked expected to drive Freshly baked baked 40 in trying “bread/baked goods that are volume sales by a cumulative in tryingconsumers goods that are declined of diets that shun carbohydrates and considered conventional’, with tortillas for bread manufacturers in Cana toFreshly purchase bread over the lastthat three‘less artisanal/craft breads offer an alternative to but the ageing population suggests that older must their experimental tastes.

Indeed, 18 to population growth in coming years.

Ingredients (e.g. (e.g. nuts, seeds) 38 traditional inthe other counties”.

This is helping Ingredients nuts, seeds) traditional in other counties”.

This is helping 11% between 2010 and 2016, while the gluten.

Mintel’s Bakery Products: Bread (36%), flavoured bread (28%), naans not necessarily tied to overcomin months, 35% said they were trying to limit mass-produced options. not be forgotten. According 34-year-olds to Mintel’s Canadian Lifestyles: to maintain overall bread consumption at over-index in their Format (sliced loaf, buns, pretzel bread) 35 Canada forecasts thatconsumption between FIGURE 3:they BREAD PURCHASES

BY TYPE,

BY DEMOGRAPHICS, CAN Flavour (e.g. white, whole wheat) value of the market by 1.8%.

– Canada, July 2017 Statistics report revealed (23%), and bread) other internationally inspired to maintain overall bread consumption at that increased concerns, but identifying what m the amount eat, such avoidance Format (sliced loaf,with buns, pretzel 95% of 18 to 34-year-olds, and suggests Pride and Purse Strings – Canada, April 2017 report, 31% ofnaans, Texture (e.g. soft, flaky) 31 of bagels, tortilla, flavoured bread, 29% 32% of Canadians will be a 2017 Expiration date This suggests that ongoing challenge that while 97% of Canadians claimed breads/buns purchasedand by introducing a in Canada should maintain 95% and of 18 tomanufacturers 34-year-olds, and suggests that thehigher consumers valu among demographics that are (17%) now Texture (e.g. soft, flaky) Calories 15 and other inspired breads/ the country’s population was aged over-55 in 2016, equivalent member ofinternationally aavisible minority group by 2031, diversified portfolio to ensure relevance for bread manufacturers in Canada is to purchase bread over the last three good chunk solutions that11cater to these dem manufacturers in Canada should maintain typically more health conscious: olderof the population.

Low price Artisan/small across age groupsthe going forward.

Such buns, and express significantly more interest Calories batch many oftrying whom will prefer traditional to 10.8 million consumers.

Seniors also account for the fastestnot necessarily tied toconsumers overcoming health months, 35% said they were to limit (See Figure 2) and women. (See Figure 1) a diversified portfolio to ensure relevance products are also likely to have increasing Base: 1,932 internet users aged 18+ who have purchased bread in the past 3 months Freshly baked trying goods that arebut 45-54 breads of“bread/baked their heritage.

(See Figure 3) identifying Artisan/small batch Source: Lightspeed/Mintel concerns, what matters to the amount with such avoidance Importantly, such formats18-34 are helping35-44 brands growing age group, they and eat, thein number isgroups expected to almost appeal ingoing a country where immigration, across age forward.

Such This is an excerpt from Bakerynuts, Products:seeds) Bread - Canada, July 2017. See Databook.

Ingredients (e.g. traditional in largely other counties”.

This istohelping from Asia, consumers is expected drive % % % and introducing value-added higher among demographics that are sustain consumption among a younger products are also likely to have increasing double over the next 25 years. This makes themgrowth a potentially Base:1:1,932 internet users consumption aged 18+ whoofhave purchased bread in the (KG), past 3 months Figure Volume Per Capita bread and bread products population in the coming years. to maintain breads overall bread atcater toFIGURE Artisanal can consumption encourage Format (sliced loaf, buns, pretzel bread) solutions that these demands. typically more health conscious: older audience.

Millennials are significantly less Source: Lightspeed/Mintel 1: VOLUME PER CAPITA CONSUMPTION OF BREAD AND BRE appeal in a country where immigration, Any bread 95 98 97 Statistics Canada forecasts that between FIGURE 3: BREAD PURCHASES BY TYPE, BY DEMOGRAPHICS, CANADA, MAY lucrative demographic across95% categories, particularly and as they Canada, 2007 to 2016from Bakery Products: Bread - Canada, July 2017. See Databook. ofconsumers 18Figure to29% 34-year-olds, suggests older tooftrade This is an excerpt (Seetoup Figure consumers and women.

(See 1) likely to consume sliced bread than older and Canadians will be 2) a that 2017 from Asia, is 32% expected drive Texture (e.g. soft,bread flaky) Packaged sliced loaf 73 76 83 are typically more financiallylargely stable than younger consumers, member of a visible minoritymaintain group by 2031, manufacturers in Canada should population growth in thewill coming years.

Calories many of whom the traditional Bagels 57 53 53 leaving room for discretionary spending and a prefer greater a diversified portfolio to ensure relevance Ensuring relevance among younger 2007 3: BREAD 2008PURCHASES 2009 2010 2012 18-34 35-44 45-54 2011 55+ Statistics Canada forecasts that between FIGURE

BY TYPE,

BY DEMOGRAPHICS, CAN breads of their heritage.

(See Figure 3) Artisan/small batch across age groups going forward.

Such willingness to splurge on higher quality products.

Hot dog/hamburger buns 47 52 57 generations will be a priority for bread FIGURE 1: VOLUME PER CAPITA AND BREAD PRODUCTS (KG), TO 15.12 2016 % % 2007% % 16.48 16.25 16.32CANADA, 16.22 14.29 29% and 32% ofCONSUMPTION Canadians will be aOF BREAD2017 breads canaisle, encourage products areArtisanal also likely to have increasing Base: 1,932 users aged 18+ who have 3 months manufacturers in going forward, but Importantly, such behaviour translates toCanada the bread Any bread 95 purchased 98 bread in 97the past40 97 Tortilla pitainternet bread (egEconomist breads for wraps) 37 member of aolder visible minority group Source: Statistics Canada, Intelligence Unit/Mintel 38 consumers to trade by up 2031, Source: Lightspeed/Mintel appeal in a population country where immigration, Packaged sliced bread loaf 73 76 83 83 the ageing suggests that older where the over-55s are less price sensitive and show many of whom will prefer thegreater traditional Naan bread 292017. See Databook.

25 20 This is an excerpt from Bakery Products: Bread Canada, July Bagels 53 42 largely from Asia, is relevance expected to drive 2007 2008 2009 2010 2011 2012 2013 201457 2015 consumers must not be forgotten.

According Ensuring among younger 18-3453 2016 35-44 45-54 breads of their heritage.

(See Figure 3) interest in added value concepts.

While older consumers are Internationally inspired breads/buns 22 18 16 Hot dog/hamburger buns 47 52 57 53 generations will be a priority for bread population growth in the comingPride years. to Mintel’s16.32 Canadian Lifestyles: and 16.48 16.25 16.22 15.12 14.29 13.99 14.02 13.86% 13.53 % % manufacturers in Canadatheir going forward, but more likely than any other age group to beforecasts limiting Tortilla bread (eg breads for wraps) 38 40 BY DEMOGRAPHICS, 37 28 Base: pita 2,000 internet usersPURCHASES aged 18+ Statistics Canada that between FIGURE 3: BREAD BY TYPE, CAN Purse Strings – Canada, April 2017 report, the ageingUnit/Mintel population suggests that older Source: Statistics Canada,Artisanal Economist Intelligence breads can encourage Naan bread 29 25 20 15 bread intake, there are opportunities to counteract declining Any bread 95 98 97 Source: Lightspeed/Mintel Statistics Canada, Economist Intelligence Unit/Mintel 29% and 32% of Canadians will be aaged 2017 consumers must not be forgotten.

According Source: 31% of the country’s population was older consumers to trade up Pride and Internationally inspired breads/buns 22 - Canada, 18 July 2017.

16 See Databook.

12 This is an excerpt from Bakery Products: Bread Mintel’s Canadian Lifestyles: frequency of consumption bymember encouraging them to trade up.by Packaged sliced bread loaf 73 76 83 atovisible minority group 2031, over-55 inof2016, equivalent to 10.8 million Base: 2,000 internet users aged 18+ Purse Strings – Canada, April 2017 report, many of whom will prefer thepopulation traditional There is, for example, particular interest in artisanal/craft bread Source: Lightspeed/Mintel consumers.

Seniors also account for the Bagels 57 53 53 31% of the country’s was aged Ensuring relevance among younger NEXT  This is an excerpt from Bakery Products: Bread - Canada, July 2017. See Databook.

18-34 35-44 45-54 over-55 in group, 2016, equivalent to 10.8 their heritage.

(See Figure 3)million fastest-growing age and the number FIGURE 4: ATTITUDES TOWARDS BREAD,

BY DEMOGRAPHICS, among these consumers, with breads 27% ofofthe over-55s agreeing that Hot dog/hamburger buns 47 52 57CA generations will be a priority for bread consumers. Seniors also account for the is expected to almost double overand the next MAY2:2017 %MAY CANADA, % % Figure Attitudes towards bread, by demographics, Canada, 2017 it is worth paying more for artisanal or craft compared manufacturers in bread, Canada going but fastest-growing age group,forward, the number FIGURE 4: ATTITUDES TOWARDS BREAD, BY DEMOGRAPHICS, Tortilla pita bread (eg breads for wraps) 38 40 37 Artisanal breads can encourage 25 years.

This makes them a potentially is expected to almost double over the next MAY 2017 Any bread 95 98 97 the Developing ageing population suggests thata older to 22% of 18 to 34-year-olds. products with Naan bread 29 25 20 25 years. This them potentially older consumers tomakes trade upa According lucrative demographic categories, consumers must not beacross forgotten.

Packaged sliced bread loaf 73 76 83 simple, more natural position, and a hand-crafted image thatcategories, lucrative demographic across Internationally inspired breads/buns 22 18 16 particularly as they are typically more particularly Lifestyles: as they are typically Mintel’s Canadian Pridemore and stands in opposition to the to mass-produced majority, could Bagels 57 53 53 Ensuring relevance among younger financially stable than younger consumers, financially stable than younger consumers, Base: 2,000 internet users aged 18+ Purse Strings – Canada, April 2017 report, leaving room for discretionary spending and therefore help brands reengage an older audience that isfor either Hot dog/hamburger 47 52 57 generations will a priority bread leaving room forbe discretionary spending and Source: Lightspeed/Mintelbuns 31% of the country’s population wasonaged a greater willingness to splurge higher This is anpita excerpt from (eg Bakery Products: - Canada, July manufacturers in Canada going forward, but reducing frequency of bread consumption, or largely stuck on a greaterinwillingness to splurge on higher Tortilla bread breads for Bread wraps) 382017. See Databook.

40 37 qualityequivalent products. over-55 2016, to 10.8 million the ageing population suggests older quality products. low-cost formats like packaged sliced bread.

(Seealso Figure 2)that consumers.

Seniors account for the Naan bread 29 25 20 Importantly, such behaviour translates consumers must not be forgotten.

According fastest-growing age group, andthe theover-55s number FIGURE 4: ATTITUDES TOWARDS BREAD, 22

BY DEMOGRAPHICS, to the bread aisle, where Internationally inspired breads/buns 18 16CA to Mintel’s Canadian Lifestyles: Pride and Importantly, such translates arealmost lessbehaviour price sensitive and show is expected to double over thegreater next MAY 2017 Base: 2,000 internet users aged 18+ in added April valueover-55s concepts.

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trending now

Connectivity and DIGITALIZATION in

n o i t c u d o r P d Foo How Canadian food manfacturers will benefit from digitalization

By Markus Brettschneider

From

automotive and aerospace, many industries have been using digitalization technologies, such as automation and robotics, for many years. This goes hand in hand with the idea of the Industrial Internet of Things (IIoT), where connectivity of devices opens up new possibilities to improve production. However, the food and beverage sector has been slower to adopt these new technologies. In Canada, the government and industry are looking at what could be done.

This article explores how digitalization has transformed from a trend into a core component of modern food business strategies.

Canada is the fifth largest exporter of food products in the world and generated $32.3 billion in 2016. Because food manufacturing makes up the largest manufacturing sector in Canada, the Canadian government and the Conseil de la transformation alimentaire du Quebec (CTAQ) recently partnered with ABB to host the country’s first National Food Technology Event.

The event, held in September, aimed to educate businesses of all sizes on how to ensure sustainability and growth of the Canadian food industry through the integration of digitalization.

Focusing on key industry topics such as automation, industry 4.0 and artificial intelligence, ABB presented the reasons why food manufacturers should be making the most of digitalization and the benefits it can have to those in the industry.

The big picture

While digitalization is transforming the way that industrial environments operate, the food manufacturing industry has been slow in adopting and integrating these new technologies.

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This is despite research firm PwC reporting that 90 per cent of companies expect digitalization to increase their competitiveness, as analytics from smart technology provides businesses with knowledge about what their customers think and what they want.

The results of PwC’s Industry 4.0 global survey suggest that most businesses believe they do not have the right talent, IT infrastructure or defined strategy to implement digitalization and the IIoT. This is particularly true for companies who already have an existing set-up and are looking to embark on their digital journey within their existing manufacturing footprints.

This research is confirmed by ABB, which also conducted its own survey and found similar results. Although this initial hesitation is to be expected from manufacturers, in the U.S. and Canada the demand for manufacturers to optimize their supply chains is greater than ever.

As consumers expect more convenience and accessibility, companies such as Amazon and Walmart are seizing the opportunity to endorse new ecommerce business models, and active investors are pushing manufacturers to simplify and optimize their supply chains. Digitalization, automation and robotics offer solutions to these challenges.

What’s impacting demand?

Both Amazon and Walmart have been leading the development of the grocery ecommerce market, which has grown significantly since it was first developed in 2007.

Revolutionizing the way consumers shop for food so that it is

trending now

easy and convenient for the consumer, ecommerce systems also allowed retailers to provide a greater amount of choice.

With that said, the high level of choice means customers can compare prices across different retailers quicker online than in store, driving greater competition between companies as a result.

As mergers like Amazon and Whole Foods happen, more pressure will be put on manufacturers to meet retailer demands.

Why digitalization?

Today, many of our household appliances are connected to the internet. We can control our televisions, washing machines, and even look into our refrigerators from our mobile devices. The low cost of connectivity enables this, combined with easily accessible and secure cloud services and storage. Today, technology has advanced so much that cost is not a barrier to connect a device to a network, whether it's a consumer device or an industrial one.

In the same way that digitalization allows consumers to interact with their fridges, it also facilitates better engagement for engineers in the industrial food and beverage sector. For example, the ABB Ability Smart Sensor for motors is a device that connects to existing low voltage motors. It collects motor performance data, such as temperature and vibration levels. This data is collected in the cloud where analytical services provide plant engineers with a simple overview of the health status of their motors.

This changes the maintenance concept from reactive, meaning service is done when a problem happens, to predictive; knowing ahead of time and scheduling maintenance before the problem happens.

Ecommerce grocery shopping is just one example of a change in buying behaviour in the U.S. and Canada. Other trends include the rise of vegan, gluten-free and dairy-free foods, as well as a shift in packaging materials and designs. Consumers are looking for portion sizes that allow them to reduce the amount of food they throw away.

In turn, manufacturers are being compelled to create a variety of serving sizes, such as single-serve packaging, multi-packs and resealable packs. To enable this, manufacturers need to efficiently adapt production lines to accommodate these new products.

Robotics are a key enabler and, even before a robot is installed, digitalization helps make the process more efficient. For example, virtual commissioning allows plant engineers to create a 3D model of the proposed process line change, program robot and other automation, and then test the whole line prior to making any physical changes. This not only saves time, it is an economical and fast solution that helps manufacturers become more flexible in a shorter timeframe.

Supply chain pressures

In Canada, and around the world, manufacturers are increasingly analyzing their supply chains, from grass to glass and farm to fork.

Understanding how ingredients are used across production and being able to analyze production data, while maintaining tracking and traceability for food safety, is a complex task.

Digitalization at the enterprise level, such as Manufacturing Operations Management systems, help integrate and track diverse production information. The data gathered feeds optimization analysis. This data helps manufacturers identify where and how optimizations can be made, including in the usage of utilities such as water and electricity.

The National Food Technology Event in Canada helped open the discussion about digitalization and shows the importance for both the country and the industry to ensure the future of food manufacturing remains competitive in Canada, and globally.

Consumer buying habits will continue to change and the demand for greater choice will Markus grow. Manufacturers need to be Brettschneider is prepared to adapt and respond Group Senior Vice President and General quickly; and the more they Manager of Global know about the possibilities Food and Beverage digitalization enables, the more Applications at ABB competitive they will be.

www.canadianfoodbusiness.com

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research & development

Clean Label Ingredients and So Much More

By Karen Proper

In the early to mid-2000s, “light” and “fat-free” foods took the centre stage for a brief period of time. Consumers demanded products that were lower in calories and fat – and the industry delivered. These products did not provide the sensory qualities consumers expected. Consumers were unwilling to sacrifice so-called healthier options for a compromised taste and eating experience. Light and fat-free foods faded from the spotlight, waiting for the next trend to take their place.

This scenario does not seem to ring true for the clean label trend. In fact, the term “clean label” has been a hot topic of discussion in North America since at least 2011 and continues to gain momentum. The term is not defined by government regulations and as a result has morphed into a mega-trend fueled by consumer perceptions. Consumers are reading labels, seeking out products with specific ingredients, or the absence of specific ingredients, and making an investment in healthy eating.

Humble Beginnings to Extraordinary Heights In the humble beginnings of the clean label trend, the removal of artificial colours, flavours and ingredients was enough to satisfy food-savvy consumers. Kraft Heinz removed all synthetic colours, flavours and preservatives from its iconic macaroni and cheese meal to make the product more “natural.” Hershey’s Chocolate Kisses, Campbell’s soups, Taco Bell tacos, Pizza Hut pizzas, Subway sandwiches and General Mills cereals underwent a similar transformation in response to consumer demands for clean label products. Brands highlighted these product differences by boasting “free-from” claims on their labels or through advertising campaigns. Consumers were heartened by these forward steps and their appetite for clean food products was satiated for a short time.

But what about those hard-to-pronounce and difficult-tounderstand ingredients such as propylene glycol alginate, autolyzed yeast extract and calcium disodium EDTA? Forget the science, the rigorous regulatory approval process and functionality of these ingredients – “Surely, if the ingredients are not recognizable, they could not be good for you” was the general conclusion of consumers.

In response, North American food service and retail grocery store chains including Whole Foods, Panera, Trader Joe’s, Aldi, H-E-B and Kroger developed respective lists of unacceptable ingredients not permissible in the food sold by their stores or restaurants. These expansive lists often identified more than 100 ingredients that were

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once commonplace, but were now prohibited in their foods.

As might be expected, the perception of “clean label” soon expanded to include shorter ingredient lists. Non-essential ingredients were removed to simplify ingredient declarations and new products were developed using a limited number of ingredients. Nestle was up to the challenge and in 2016 introduced Boost Simply Complete - a nutritional beverage highlighting the fact that the product was made with fewer ingredients and no artificial colours, flavours or sweeteners. Likewise, this year, Nestle overhauled its Nestea iced tea beverages to possess only four ingredients: water, sugar, tea and citric acid.

Natural colours, flavours and limited use of additives became more commonplace in our food supply. Consumers, led by the Millennial generation, continued to read labels, prioritize healthy eating and engage in social media and discussions about food. They understood what was no longer in their food – now they wanted to know what was in their food. The term “clean label” was positioned for growth once again. A demand for transparency took root. Consumers called for information about sustainability, processing and the origin of food ingredients. Recognizing an opportunity to strengthen trust with its consumers, Dannon pledged to change how it makes yogurt.

It committed to including the use of more natural ingredients, voluntarily labelling GMO ingredients (with a loftier goal of removing them entirely) and partnering with suppliers and family farms to adopt sustainable agricultural practices and improve animal welfare – because, to quote Dannon, “what’s important to you, is important to us.”

Over the years, “clean label” has become bigger than the demand for natural ingredients in food products. Millennials are looking to food as a pillar for health, longevity and wellness, triggering a revolution in the way consumers think about food. Companies are reformulating products to appeal to these everKaren Proper is Technical expanding consumer demands. The Manager, Product & term “clear label” aptly describes Process Development, Consulting and Technical how the trend has evolved to Services, NSF achieve greater summits and the International performance is far from over.

Becel Gets Trendy

A TASTE OF...

with New

Avocado-Based Product

a lot of people asking where they can find it, so we’re trying to make sure that ramps up. People see it as another healthy option for them to choose.

What are some common misconceptions about margarine when it comes to healthy eating?

There’s always the reference that it’s a processed product, so it’s inherently unhealthy. That’s the biggest misconception because, in fact, Becel is made of a blend of heart-healthy oils—Canadian-grown canola and sunflower oils, which are both rich in poly and mono-saturated fats. I think it’s about trying to educate Canadians about what is in Becel.

By Kelly Townsend

Avocado,

anyone? Like it or not, the green fruit has dominated as a major food trend the last few years, to the point where avocado toast has became the unexpected mascot of healthy eating everywhere. Recognizing an opportunity, Unilever developed an avocado oil product for its major margarine brand, Becel.

“It’s important for us to continue modernize and rejuvenate the margarine category,” says Nicole Fischer, Senior Brand Manager, Baking, Cooking and Spreads at Unilever. “Avocado is extremely ontrend and, from our perspective, very heart-healthy, so it aligns with the Becel brand mission about healthy fats.”

It took roughly a year for Becel with Avocado Oil to move from research and development to landing on Canada’s grocery shelves.

Workers had to carefully review the existing formula base to see how to incorporate avocado oil while maintaining the right balance of different types of fat and keeping Canada’s heart health claim on the packages.

Much of the motivation behind the product was based on a rich consumer need. Fischer says one in two Canadians don’t know how to add avocado oil into their diets, while many other Canadians indicated they don’t like the taste or texture of avocados, but still wanted the health benefits. “It’s one of the main reasons we wanted to give them an option from something they’re already cooking with.”

What has the consumer response been?

It’s been really positive. We’re obviously in early stages. We’ve had some of our launch events… we also have our TV communications, digital, and social. All of the pieces are coming to light. We’ve had

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What do you think is most important about healthy eating?

I think, for me, it’s all about balance and customization.

There’s no “one size fits all” for how to have a healthy lifestyle, which I think is part of what’s frustrating for consumers. In the media and brands it’s always something new: it’s all about low carbs, now it’s paleo, now high fat is a villain, and now sugar’s the villain. It’s confusing so having an approach of moderation and balance, back to basics, is great.

What has been your favourite food trend of 2017?

I think the move toward plant-based options has been really cool, and seeing plant-based alternatives across a number of different categories to provide more variety and choice.

You see it more and more across grocery stores. And a lot of them are pioneered by Canadian companies, which is really inspiring.

Describe your go-to avocado recipe.

I’m a big avo-toast fan. I know it’s a pretty easy one. When I was pregnant with my son, every morning I would have toast, Becel, smoked salmon, and a fried egg. That was my personal avocado toast phase. But incorporating it into bowls is also cool. Becel has two quinoa-based bowl recipes where you really have flexibility to add a variety of ingredients. I also just eat it straight-up—my son basically eats half an avocado in every meal, so we have a lot of avocado in our house.

Bynes Blueberries

The Coca-Cola Company

King’s Hawaiian

SAVOR Front Porch Pecans

Proper Pepper

University of Georgia Center for Food Safety

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Visit Georgia.org/FoodProcessing to find out how you can become Georgia’s next success story.

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