Perspective Agri Food & Beverage 2019

AgriculturE FOOD & BEVERAGE Processing

Invest in Canada

Modern. Innovative. Growing.

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SMALL CITY

in the Americas for foreign direct investment.

FRULACT CANADA Opens first North American fruit-preparation and R&D facility.

CANADA ROYAL MILK

$250 320,000 Million Investment

A division of Feihe International Inc. Breaks ground on one of the largest agribusiness foreign direct investments in Canada.

Manufacturing Facility

1,500 250

Indirect Jobs New Full-Time Jobs

Completion of Airport

RELIABLE

Fully-Serviced, Shovel-Ready

45 million people live within an 8hr drive.

AIRPORT & OVER $200M EXPANSION in 2019 LOGISTICS DISTRIBUTION INVESTED LAND AVAILABLE

KINGSTON’S

in Water and Waste Water Infrastructure in past 5 years.

Globally Recognized Academic and Research Institutions

Queen’s University / St. Lawrence College / Royal Military College

Ranked Among Top Places to Live

UNDER

IN CANADA

$365,000 Average price of home sold in Kingston

Rochester

Close to 7 Provincial Parks, hundreds of lakes and cottage country.

Syracuse

Kingston Economic Development 613.544.2725 | business@kingstoncanada.com

@KingstonEcDev

KingstonCanada.com

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Cultivating Your Business:

Canada, the Gateway to North America

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onvenient access to North American and international markets, a world-class renowned regulatory and food inspection system and global trade partnerships contribute to the success of Canada’s agricultural and food processing industry.

Food and beverage exports continue to be the strongest in Canada’s manufacturing industry.

A 2017 Farm Credit Canada report showed that the sector experienced an average of 3.2 percent growth from the previous three years – a full two percent better than the country’s overall manufacturing sector. Major national and international brands include Maple Leaf Foods Inc., Ferrero Confectionary, Kraft Heinz Canada ULC, PepsiCo Canada ULC and Clearwater Seafoods Inc. Canada’s place as the world’s fifth biggest exporter of agricultural products is owed in part due to its strategic location.

The majority of Canada’s biggest cities are only a 1.5-hour drive of the U.S. border. Preferential access to a global marketplace is aided by the North American Free Trade Agreement (NAFTA) and the Canada-European Union Comprehensive Economic Trade Agreement (CETA).

A long growing season and a temperate climate also position Canada’s agri-food industry for success. Natural resources are in abundance and include fresh water and a diversity of native plants and animals.

Canada acts as a leading contributor to the growth of the international agri-food industry. The country’s agri-food

processing sector is well known for consistently meeting the demands for technological advances, globalization and changing consumer behaviour.

The country features a highly educated workforce and several internationally recognized research institutes that are dedicated to product innovation.

Helping to drive its position as a leading producer of safe, healthy, high-quality goods is Canada’s globally recognized regulatory and food inspection system.

Each part of Canada is well regarded for the production of certain agri-foods: Western Canada – canola and oilseed milling and pulse processing; Central Canada – fruit, meat product and bakery manufacturing; Quebec – meat, bakery and dairy product manufacturing and Atlantic Canada – processed fish, seafood and vegetable products.

Canada’s Gateways and Trade Corridors strengthen the country’s competitive position in the international marketplace by providing a reliable, efficient country-wide transportation system. Canada’s Atlantic and Pacific coasts have sailing ports that are up to two days shorter than from other North American ports. The country’s unique location also enables agri-food businesses to have access to competitively priced superior raw products.

The 2017 total for Canadian exports of agriculture, agri-food, fish and seafood was $64.6 billion – a $2 billion increase from the previous year. The government has stated they are dedicated to increasing the country’s

agriculture and food exports trade target to $75 billion by 2025. On a recent agricultural mission to China, Canada’s second-largest agriculture and food trading partner, more than $353 million of agriculture and agri-food agreements were secured.

Regarding the successful mission, the Rt. Hon. Justin Trudeau, Prime Minister of Canada, stated that “Premier Li and I discussed how Canada and China can expand trade and commercial opportunities between our countries, work more closely together to fight plastic pollution, and create more jobs for all our citizens”.

The lower Canadian dollar not only causes Canadian food product pricing to be lower than foreign buyers but also harder for foreign food processors to remain competitive in Canada.

Combined with the country’s historically stable banking system and low-interest rates, the future of Canada’s agri-food industry is expected to only get stronger.

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1464 Cornwall Rd, Suite 5, Oakville, Ontario, Canada L6J 7W5 1-866-779-7712 info@perspective.ca www.perspective.ca Publisher, CEO: Steve Montague Vice-President: Ed Martin PerspectiveTM Agriculture was produced independently of the Government of Canada and Industry Canada. Contents are copyrighted and may not be reproduced without the written consent of Perspective Marketing Inc. The publisher is not liable for any views expressed in the articles and opinions do not necessarily reflect those of the publisher or the Government of Canada and Industry Canada.

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Nova Scotia’s Tidal Bay Wine Industry is Making an Impact In some circles, talking about Nova Scotia-produced wines can still raise an eyebrow, and mentioning our signature wine appellation is a guaranteed headscratcher.

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hankfully, the province’s wine industry isn’t paying attention. Producing the only wine appellation in North America, this emerging sector took the sound advice of an expert consultant, came to an agreement on direction and standards, and realized a regional appellation – Tidal Bay. Since its official launch in 2012, the Nova Scotia signature blend has been helping the region’s wine industry find its niche in the competitive world of wine.

Named for the bays, tides and open ocean that so influence the terroir of Nova Scotia (no vineyard is more than 20 kilometers from the water), Tidal Bays are crisp white aromatic wines. Every Tidal Bay displays the unique characteristics of our cool climate region; the soil and resulting grape varieties allowing for the production of distinctive, refreshing whites.

While all Tidal Bays must follow a strict set of standards, each blend is unique, with 11 Nova Scotia wineries producing their own expression of the signature appellation in vintage 2017. This collective effort to craft something uniquely Nova Scotian focuses and amplifies the local wine industry, and as more Nova Scotia wine producers develop export markets and sell their wine outside the province, the Tidal Bay brand plays an important role.

Gillian Mainguy, Head of Sales for Benjamin Bridge, explains the uniqueness and value of Tidal Bay. “Nova Scotia is a very special place. When you start telling people our narrative – the highest tides in the world, the moderating effect of the Bay of Fundy — it makes an impact.”

She adds, “For an emerging wine industry to have agreed on an appellation, it’s an excellent marketing opportunity – every year the wines have to be submitted for approval. That’s where we get respect even though we’re young – that focus.”

That focus is helping create economic impact. Over the past 13 years, established wineries have grown by 133%. Today there are 22 wineries, growing Nova Scotia as a wine tourism destination. A milestone moment for the industry was when Benjamin Bridge’s Brut Reserve 2008 landed on the wine list of one of Gordon Ramsay’s prestigious restaurants.

And though we may be smaller in numbers than other Canadian wine regions like Niagara and Okanagan, Nova Scotia’s unique grape varieties are producing notable, award-winning wines, gaining international attention, whether its Tidal Bay, ice wine, or a traditional-method sparkling.

“We may not always lead with the Tidal Bay, as we’re more focused on sparkling for export,” says Mainguy. “But having an appellation wine always piques people’s interest. It’s truly an example of a rising tide lifting all boats.”

Thanks to the strict standards of Tidal Bay, there is

a guaranteed level of quality.

Always an aromatic white, Tidal Bays are described as “Nova Scotia in a glass, cool, crisp, lively, and aromatic.” All grapes used must be grown in Nova Scotia, with winemakers allowed to choose from more than 20 identified grape varieties to make their Tidal Bay. Every Tidal Bay has to pass a blind tasting by an independent tasting panel to be approved as an official Tidal Bay wine.

Beyond the marketing advantages and stringent standards, Mainguy highlights the true value of Tidal Bay. “It’s fun, it’s refreshing. It may not pair well with your Christmas turkey dinner, but it goes beautifully with Nova Scotia seafood. And to be honest, it also pairs well with potato chips.”

Which if you think about it, is a perfectly Nova Scotian approach to pairing.

Nova Scotia’s food and beverage exports are on the rise, growing 37% in just one year.

An advantageous logistics system facilitates exporting, which includes cold chain logistics, bulk shipping, and convenient international access via air, water, rail, and road.

Learn more about the benefits of locating in and exporting from Nova Scotia at www. novascotiabusiness.com/ AgrifoodBeverage.

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International Milk Producers visit Kawartha Lakes Dairy News Motor Rally Comes to the City of Kawartha Lakes

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or five days in July, 50 international dairy farmers and processors came to Canada on a mission to discover what makes our dairy industry so successful. For the first time in six years, The Dairy News Motor Rally event crossed borders, giving farmers a firsthand opportunity to learn about quality genetics, feeding systems, farm management, equipment, technology, and entrepreneurial processes from Canadian dairy farmers. The 1,200 KM journey included stops in Montreal, Ottawa, the City of Kawartha Lakes, Guelph, and finally, Niagara Falls.

Highlights from Kawartha Holsteins Hosted in part by Leading Livestock Genetics Breeders’ Association and the City of Kawartha Lakes, the tour offered foreign guests an opportunity to visit some of the top managed dairy herds in the country.

Kawartha Holsteins offered visitors a glimpse into the world of elite genetics. Owned and operated by the McMorrow family, this featured location is known for their exceptional cattle and as a result, high quality milk. Here,

visitors were educated on the importance of taking care of cattle through feed and silage in order to yield a high-quality product.

The Role of Agriculture in Kawartha Lakes In the City of Kawartha Lakes, the agriculture sector plays an extremely pivotal role, improving the quality of life of its residents and the economy as a whole.

The City benefits from a strong and reliable farm service network and dairy manufacturers, where partners and potential can be sourced in abundance. For instance, decreasing consumption for fluid milk has posed a unique problem for Canadian dairy farmers. However, altering marketing philosophies and increasing co-operation with processors and retailers, have helped grow the market for dairy related products by 20% in the last four years.

“A strong sector in Kawartha Lakes supports a full spectrum of agri-businesses in the supply, service, processing, marketing and distribution value-chain for agriculture and food”, says Kelly Maloney, agriculture development officer for the City of Kawartha Lakes.

The community is also strengthened through employ­ ment, in addition to the buying

Canadian Farmers Take Pride in Successful Motor Rally For the duration of The Dairy News Motor Rally event, Canadian farmers shared their valuable knowledge and experience with international farmers looking to make dairy sector improvements in their own countries.

Maloney sums it up best, “As a result of the tour, we have opened the door to understanding and trust between the dairy farmers, processors and industry suppliers with counterparts around the world.” and selling of goods and services.

Therefore, as the main source of economic activity, agriculture has become the City’s leading business development resource and also serves as one of the biggest links connecting communities across Canada.

According to Maloney, economically savvy farmers can anticipate and plan for inevitable improvements in relation to the operation of their farm, “and that can be seen and felt as their spending ripples through our community.”

What Makes Kawartha Lakes Unique?

With 1,265 farms inside city limits, Kawartha Lakes is one of East-Central Ontario’s leading agri-hubs. Physical characteristics of the land make it an ideal place for livestock and other food related processes to thrive. The City is home to: • Kawartha Dairy Limited – Specializes in cow milk and cow milk ice cream products • Mariposa Dairy Limited – Specializes in goat milk cheeses and artisanal hard goat and sheep milk cheeses • DLF Pickseed – A world-class grass and forage seed production facility

• A regional centre for farm marketing with a livestock sale barn and large commercial grain elevators • A regional centre for farm supply with all major farm machinery dealers present, dairy supply company, etc.

• A diverse agricultural landscape well suited for grain and forage production, as well as horticultural crops and tree nurseries.

• The biggest community pasture in Ontario

BRAMPTON’S

Food & Beverage Sector

Brampton, Ontario, Canada The gingerbread capital of North America

Feel free to judge us by the companies we keep Join industry-leading businesses like Give and Go Foods, Coca-Cola, Loblaw Companies, Italpasta Ltd and Nestle Canada who call Brampton home. A young, educated, highly skilled and multicultural workforce. A strong economy. World-class transportation corridors to major markets. Room to grow. Need we say more?

Discover why we’re the best business decision you’ll ever make. brampton.ca/business

BRAMPTON

ECONOMIC DEVELOPMENT & CULTURE

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City of Brampton

$2 Billion+

The open data is available for anyone to share or to use and the story map is open to associated organizations or institutions to build or promote connections and relationships.

Food & Beverage Geo Hub

in packaging, distribution, storage, transportation and food testing.

The Brampton GeoHub has been recognized internationally for its groundbreaking use of GIS software to make it easier for people to access public information and to tell the story of Brampton in maps, apps, stories and datasets.

The Brampton food and beverage sector employs more than 9,000 people at more than 150 companies in Brampton.

It is one of the city’s four Food and Beverage is strategic target sectors for growing in Brampton economic development. The city offers sector managers and expeditors in key sectors who Talent provide one-on-one assist51% companies can draw their ance to streamlineBrampton municipal workforce from world-class talent approvals, customized guidance, Brampton’s food manufacturing has generated overTalent $2 billion and expert advice in accessing Highly Skilled academic institutions in revenue 25 in Ontario offering 51% of workforce have the wide range of incentive agri-food programs post-secondary education programs in the sector.

Brampton takes pride in cultivating a Brampton is home tois also within close proximitydynamic andfood supportive business Brampton to major research centres such as environment its thriving foodGeorge and Brown the University of Guelph Food Institute, ConestogaforCollege and the the headquarters of Loblaw beverage sector, supported by industry College of Food Innovation and Research Studio (FIRSt).

Companies Ltd. and major leading technology, top-quality products and a rich agricultural tradition. operations of producers Top Employers in Food and food Beverage Brampton’s and beverage sector is a Maple Lodge Farms, Cocaone-stop-shop, with food testing, LOBLAW COMPANIES LTD. NAFTA FOODS AND PACKAGING INC. processing and packaging facilities as well Cola, Nestle, Olymel, Sofino MAPLE LODGE FARMS LTD. NESTLÉ CANADA INC.design, as transportation, packaging Foods, Pepsico Foods Canadaequipment and refrigeration storage– all COCA-COLA REFRESHMENTS PEPSICO FOODS CANADA locatedFRITO withinLAY the city.

Frito Lay and Italpasta, CANADAalong OLYMEL L.P. MAPLE LEAF FOODS INC. with leading companies

$2 Billion+

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he City of Brampton is at the heart of Ontario’s food cluster and that is mapped out in an innovative visualization based on the municipality’s award-winning open data platform GeoHub. The “story map” tool combines economic development with geographic information system software to showcase the breadth and depth of the $2-billion food and beverage sector in Brampton and Beverage andFood where each businessisis growing in Brampton operating in the city.

The map format easily demonstrates Brampton’s key economic advantages, including the CN Intermodal terminal, cold storage facilities, Brampton’s food manufacturing and proximity to Toronto’s has generated over $2 billion Pearsonin airport, revenue the Ontario Food Terminal and major Brampton takes pridenew in cultivating toola highways. This dynamic and supportive business allows companies looking to environment for its thriving food and relocate expand get a beverageor sector, supported to by industry leading technology, top-quality products quick snapshot of potential and a rich agricultural tradition. partners, competitors, suppliers Brampton’s food and beverage sector is a foodplace testing, them all andone-stop-shop, services,with and processing and packaging facilities as well within the context of critical as transportation, packaging design, transportation networks key equipment and refrigeration storage and all located within the city. markets.

SOFINA FOODS INC.

ITALPASTA LTD.

Brampton Value Added Food & Beverage S

Brampton Value Added Food & Beverage Sector Chain

INBOUND

INBOUND

OUTBOUND HEAD OFFICES

– Loblaw Companies Ltd. – Maple Lodge Farms Ltd.

Export Products

FOOD & BEVERAGE PROCESSING FACILITIES

Raw Materials

– Coca-Cola Refreshements Canada – Italpasta Ltd.

– Nafta Foods & Packaging Inc. – Parmalat Canada Inc.

SUPPORT INDUSTRIES Transportation of raw materials & goods Food Testing, Equipment & Ingredients

– MD Food Transport Ltd. – CanAmex-Cabra Transportation Services Inc.

– Contract Testing Inc. – QBD Modular Systems Inc. – Dealers Ingredients Inc.

Packaging

Raw Materials

– WG Pro Manufacturing Inc. – Atlantic Packaging Products Ltd.

FOOD &

– Coca-Cola Re – Italpasta Ltd.

Food & Beverage Retail/Services Transportation of raw materials & goods

– Aramark Canada Ltd. – Apetito Canada Ltd.

– MD Food Transport Ltd. Food Testing, Equipment – CanAmex-Cabra Transportation of & Ingredients Transportation – Contract Testing Inc. products end materials, Warehousing Services Inc. – QBD Modular Systems Inc. & goods – Dawn Food Products Ltd. – Dealers Ingredients Inc. – CN Intermodal – Nestlé Canada Inc. – Midland Transport Ltd. – TAS Refrigerated Distribution Inc.

SUP

“Brampton’s Italpasta has been ma was founded in 1989 with just 10 team, Italpasta has grown to ove “Brampton’s Italpasta has been manufacturing premium pasta for Canadian consumers since the company was founded in 1989 with just 10 staff. With continued market leadership, innovation and a JOSEPH dedicatedVITALE, Italpasta founder team, Italpasta has grown to over 220 employees and today boasts sales across North America.”

JOSEPH VITALE, Italpasta founder CONTACT:

Daryl Van Moorsel Sector Manager, Food & Beverage 905.874.2660

CONTACT:

Daryl Van Moorsel Sector Manager, Food & Beverage 905.874.2660 daryl.vanmoorsel@brampton.ca FOODemail: AND brampton.ca/business

BEVERAGE

BRAMPTON

ECONOMIC DEVELOPMENT

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Investing in one of Canada’s Fastest growing Sectors – Cannabis

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ven before adult-use cannabis legalization came to Canada companies were looking over the horizon to international markets. Their pursuit of global opportunities at this early stage carries significant risk given the number of challenges their rapidly developing domestic operations will face.

But done correctly – with a clear understanding of local laws and regulations, well-devised tax plans and sound operational strategies – international expansion might not only prove lucrative, but also ensure the long-term success of the business.

Canada has just become the first major economy to legalize adult-use cannabis federally, giving domestic players a first-mover advantage to supply and serve international markets. Canadian licensed producers (LPs) have a unique opportunity to establish a global leadership role in the industry at a time when many jurisdictions are considering legalizing cannabis. In fact, Canadian businesses have the opportunity to influence foreign policy development thanks to this country’s leadership position on cannabis. Already, most of the prominent Canadian companies have invested in countries with strong medicinal markets – including Australia, Israel and Germany – and some have set

their sights on investments in Columbia, Jamaica and South Africa (primarily through Lesotho), to name just a few locations.

Prudent international expansion should be welcomed by investors who have rewarded LPs aggressive valuations in expectation of oversized returns. The average enterprise value trading multiples for publicly-listed Canadian cannabis companies currently exceeds 50x and 10x estimated Fiscal 2019 EBITDA and revenue respectively. As previously discussed in Chapter 6 of this series, the domestic market alone will not be able to support such high valuations for the entire industry, and the supply of cannabis will quickly exceed domestic consumption. Emerging markets overseas will offer significant earnings potential to successful companies. Germany’s medicinal market on its own, for instance, could prove larger than Canada’s medicinal and adult-use markets combined.

Seed Opportunity To move beyond the shortterm market growth expected in Canada, LPs must take advantage of international opportunities.

This process starts with a global strategy and a playbook – which, designed and executed effectively, could produce dominant global players with proprietary technology, products and brands.

Thanks to a Good Manufacturing Practice (GMP) agreement between Canada and Europe, Canadian LPs whose products meet GMP and ISO certification enjoy a competitive advantage in European markets.

Canadian cannabis companies also benefit from the absence of major competitors from the United States. As long as cannabis remains federally illegal in the United States, US multinational companies are reluctant to enter the industry and be unable to dominate as they do in so many other industries.

LPs that have the resources should consider developing early footholds in foreign markets.

By building infrastructure to support the growth of the medicinal cannabis market, these companies will be well positioned once regulations evolve to allow the sale of adultuse cannabis.

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Tomorrow’s global leaders It is rare for new industries to emerge as rapidly as the cannabis sector has and even less common for Canadian enterprises to find themselves with a huge lead on foreign competition.

International cannabis markets beckon Canadian LPs, who enjoy an abundance of capital and have the distinct advantage of operating in the world’s first fully legalized domestic marketplace. If Canadian companies can pair their expertise in cannabis production and distribution with external knowledge of how to effectively and efficiently expand operations abroad, then Canada will be well positioned to continue its leadership of the global cannabis industry.

Overall success both domestically and abroad will depend largely on their ability to establish and maintain an effective supply chain. In chapter 8 of our cannabis series, we look at how supply chain strategy is built, and how it could determine leaders in the new market.

Thinking Technical It is important that LPs’ tax and legal structures are designed in such a way as to satisfy the requirements for receiving foreign investment incentives as well as avoiding inadvertent Canadian and foreign tax implications. Extra attention will need to be paid if global production reaches a level that leads cannabis to become an exchange-traded commodity.

A properly designed global strategy will provide operational synergies and the chance to

AGRI FOOD

invest in jurisdictions that offer favourable tax rates and tax incentives. Although the global tax environment is in a constant state of flux, there are established strategies that cannabis players can adopt to provide substantial tax savings on profits earned abroad.

For example, Cannabis companies will want to maximize the benefits of the locations of their R&D activities, as well as ownership of their proprietary technology and intellectual property (IP). Specifically, IP that will be leveraged in foreign jurisdictions need not be located in Canada, and can be offshored to leverage foreign investment incentives. It is imperative, however, that there is real substance to the operational activities required to support the development and ownership of IP and that these activities be permitted under local laws.

As markets mature and industry players look to redeploy cash, creating strategies for repatriating earnings will become important.

The process should include the design and implementation of tax-efficient operating models, foreign holding structures and international financing structures.

The cost of procrastination will be significant, with corporate income tax rates and withholding tax costs each amounting to 30 percent of earnings or more depending on the jurisdiction.

With time, businesses may also want to consider the segregation of operations from real estate ownership as another way to create value for investors, in much the same way as retail and other industries have successfully accomplished.

For more information about investing into Canada, please contact: Rami El-Cheikh, MBA, CMA PwC | Consulting & Deals C: +1 647 669 4555 Email: rami.el-cheikh@pwc.com Assistant: Stephanie Porco T: +1 416 941 8383 ext. 14520

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Getting Started An initial checklist for investors looking to start-up, relocate or expand a business within Canada’s Cannabis Sector • Understand the local laws and regulations in the foreign jurisdiction.

• Consider all the incentives offered by local governments at all levels.

• Realize that capital and banking arrangements may be limited in other jurisdictions and have alternative financing arrangements in place.

• Engage early in strategic operational and tax structuring to develop a playbook for international investment or expansion.

• Create an inventory of the company’s IP and assess how it can be best leveraged internationally.

• Consider the accounting implications of investments and other business relationships.

• Understand how investments and contracts will be accounted for, and how they may affect financial results and valuation models used by industry analysts.

• Consider where cannabis supplies may be located in the future and whether trading company functions can be centralized to drive efficiencies, improve margins and reduce taxes.

• Consider the other costs (e.g. transportation), risks (geopolitical, environment etc.) and regulatory requirements of moving abroad.

This publication is made available by Price­ water­ houseCoopers LLP (PwC) for educational purposes only as well as to give you general information and a general understanding of the cannabis landscape, not to provide specific financial, investment or other advice. By using this publication you understand and agree that there is no client relationship between you and PwC, or any of its member firms. The publication should not be used as a substitute for competent financial, investment or other advice from a professional services firm.

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Farm to Fork:

Agriculture and Food Sector is leading Hamilton’s Economic Success Hamilton’s Logistics Infrastructure allows Food Growers & Processors to expand their business in Hamilton.

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amilton is the hub of a regional food cluster that is among the largest food and beverage processing areas in North America.

“We are really on par with the major regional agri-food clusters in North America in Chicago and Los Angeles areas. We have a strong concentration of food companies in the Greater Toronto and Hamilton area (GTHA) and the Greater Golden Horseshoe as a whole; Hamilton is the geographic heart,” said Brian Morris, a business development consultant in Hamilton’s economic development department specializing in agri-food.

Over the last two census periods, agri-food has grown by 35 per cent in Hamilton. There are more than 4,400 people employed in food manufacturing in the city and 7,100 in agribusiness overall. As a subsector of manufacturing, food and beverage manufacturing is the largest both in terms of revenue and employment.

Food processing and production builds on the huge economic force that is Hamilton’s $950-million primary agriculture sector.

“Many people don’t often associate Hamilton with agriculture, but it is a driver in our economy. Primary agriculture provides the raw materials that supply food processers,” said Morris.

“Our goal has been to continue the diversification of our economic base and agri-business is a big part of that. We see strong growth across a range of sectors, including meat, confectionary, dairy, and bakery.”

The sector includes giants such as Maple Leaf, Canada Bread and Tim Hortons, which roasts its coffee in Ancaster, time-tested veterans, such as E.D. Smith, The Meat Factory, Karma Candy, Oakrun Farm Bakery, and G.S. Dunn Mustard, the world’s largest miller of mustard seed. Hamilton is also home to a growing roster of newcomers, such as Collective Arts brewery, Dawson Hot Sauces and La Dee Da Sauces.

Canadian dairy co-operative Gay Lea Foods is making a significant investment in a new innovation centre at its Salerno Dairy operation in east-end Hamilton.

The 60-year-old co-operative purchased the family-run Salerno in 2014. It has almost doubled production at the Hamilton facility since the purchase, added a $10 million expansion and new cheese block production line and hired 35 additional staff.

President and CEO Michael Barrett cited Hamilton’s infrastructure, labour pool and market access, along with the support of the City, as reasons for its decision to invest. He promised more expansions to come.

“Hamilton serves as a hub.

We’ve got dairy just to the west of us and markets just to the east of us. This is the right place to be.”

The Hamilton Port Authority has seen about $200 million in investment in food handling facilities in recent years, including

Parrish and Heimbecker’s new flour mill and a G3 grain terminal.

The volume of agricultural cargo handled by the port has doubled since 2010.

“Having that infrastructure in place is so critical to bringing in raw materials and in shipping out finished goods,” said Morris.

The cargo handling operations of John C. Munro Hamilton International Airport are also key for manufacturers wanting to maximize shelf life of their products. The airport has a temperature-controlled facility to handle a wide range of food products.

Another key factor in the sector’s growth is access to talented labour, says Morris.

Hamilton’s position as a manufacturing hub, its strong post-secondary institutions and its geographic location at the centre of the Golden Horseshoe allows new and growing companies to readily access a qualified pool of labour.

Food processors tend to want purpose-built facilities in order to address food safety regulations.

“They generally want to build new on greenfield sites and Hamilton is positioned very well in the near-term and the future. We have a strong stock of greenfield land and more serviced land coming on stream. Many communities don’t have that kind of inventory.”

Along with strong highway links in all directions, Hamilton’s food cluster also offers the complementary services needed by processors, including packaging, warehousing, ingredient handlers, post-secondary research, and food science companies.

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Gala Bakery

The Meat Factory

Mondelez Canada

Gala Bakery specializes in European-style baked goods, supplying sweet and savoury products to national chains and independents across Ontario.

Owner Jacqueline Janosevic says her company is bursting at the seams of its 11,000-square-foot east Mountain facility and she is considering expansion options. In just a few years, she’s grown from six employees to 17.

The company’s 522 per cent five-year growth earned it No. 160 on Canadian Business Magazine’s Growth 500 list. Gala was also named to Hamilton’s Fast 40 rankings.

“We are building a reputation in the industry, which is what I’m most happy about,” said Janosevic.

“We also have the highest food safety certification in the global industry, which is required by the big retailers.”

The production plant now offers research and testing services to retailers and ingredient suppliers looking to develop new products and also repackages bulk bakery ingredients to be used in store bakeries. New products include gourmet cookies, protein cookies and bar cakes.

“Our niche in the market is that we are small enough to work directly with our customers on new products but big enough to serve the national chains.”

Janosevic credits both her local RBC bank and the City’s economic development staff for backing her business and helping her find ways to grow.

“I was born in Hamilton, my children were born in Hamilton.

It means a lot to have my business grow here.You get one-on-one service here.You don’t get that in big cities.”

The Meat Factory (TMF Foods) produces an extensive line of slow-roasted, readyto-eat beef, pork, chicken and turkey products out of its 90,000-square-foot cooking operation in Stoney Creek. It is the largest manufacturer of peameal bacon in the country and the largest seller of ready-toeat ribs, said president and CEO Dan Davies.

Within its Hamilton facility, TMF Foods operates Canada’s largest open-rack smokehouse and a cutting-edge culinary centre that enables the company to cater its products to the needs of its customers, which include grocery stores, foodservice operators, schools, military, and convenience stores.

The 40-year-old business began when Hamilton native Lou Albanese started delivering meat to restaurants. The operation grew into a storefront before Albanese decided to focus on serving retailers in 2000.

Since then, it has grown into a $70-million company employing 160 people. It remained family owned until March when it was acquired by a Canadian company that specializes in continuing family operations, says Davies.

“I still consider us a family values company. We treat our employees like family and we always give back to our community. We sponsor the Tiger-Cats, work with food banks, and we are planning a breakfast program for local kids,” he said.

“Hamilton feels like a small city even though it’s 500,000 people. Our employees are fiercely loyal to the city.”

Candy maker Mondelez Canada is undertaking a $40-million expansion of its west-end Hamilton production facility.

“We have a long and proud history in Hamilton and we continue to be committed to our future here, for our people, the community and our growing business. We’ve been making candy at the Hamilton factory since the 1960s,” said Hamilton factory manager Bernard Ryan.

Hamilton candy-makers produce Maynards Sour Patch Kids, Maynards Wine Gums, Swedish Fish and Maynards Fuzzy Peach.

It’s expected that the new state-of-the-art facilities will be in full production in 2019, says Ryan.

“We are pleased this investment will also create over 50 new full-time jobs in Hamilton, including skilled machine operators, packers, material handlers and maintenance staff. The skilled manufacturing labour pool in Hamilton is critical to the success of our site. Hamilton’s proximity to major population areas and the U.S. border positions us well to be able to make candy for both the Canadian market and export to the U.S. efficiently, while also providing us with great local sources for our raw materials and services.”

Mondelez Canada is a top 10 Canada food company, with brands that include Oreo, Chips Ahoy!, Dad’s, Peek Freans, Mr. Christie, Cadbury, Caramilk and Halls. Mondelez International is the world’s largest chocolatier, biscuit baker and candy maker, and second-largest maker of gum.

Hamilton is one of the three largest food and beverage processing areas in North America. investinhamilton.ca

Brandon, Manitoba Where the pieces of the Food Manufacturing puzzle come together to create a picture of success.

Among the lowest overall manufacturing costs in Canada.

Home to Koch Fertilizer, LLC, Saputo, Maple Leaf Foods Inc.,

Among the lowest electricity costs in North America.

Canada Inc.

Abundant potable and process water.

60,000 plus labour force with strong Ag roots.

Reliable renewal power.

Surrounded by rich fertile soil with 2/3 of Manitoba’s farmland within one hour of Brandon.

High standards of food safety.

Located at cross roads of two major highway systems and two class 1 railroads.

24-Hour Reach

Agriculture and Agri-Food Canada Research Centre.

48-Hour Reach

Brandon

Assiniboine Community College School of Business, Agriculture and Environment.

Thousands of acres of diverse land for all scales of development.

Economic Development Brandon 410 9th Street Brandon MB R7A 6A2

204-729-2132 or 1-866-729-2132 econdev@brandon.ca www.economicdevelopmentbrandon.com

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A Golden Business Opportunity Awaits You in Western Manitoba

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he future is bright for soybeans in Manitoba.

The warm, sunny days characteristic of the Canadian prairies and the fertile, loamy clay soil found in Manitoba provide the ideal environment to grow high quality soybeans.

Widespread adoption of soybeans as a crop choice in Manitoba and Saskatchewan is trending upward at a strong and consistent pace. Growth in key markets for soymeal and soy oil also points to growing demand.

These factors, and Manitoba’s demonstrated Agriculture friendly, open for business attitude, mean the time is right to share the Manitoba soybean story with the goal of attracting a sector-leader to Manitoba to establish a world scale soybean processing facility in close proximity to the soybean growth areas.

Manitoba has western Canada’s highest concentration of hogs, 3.5M on Manitoba farms in 2017, and further growth is anticipated through a combination of existing barns needing re-development and expanded production.

Manitoba’s hog industry is a major consumer of locally produced soybean meal thanks to the high protein content and digestibility synonymous with soybeans.

Highlights of Manitoba’s soybean processing facility opportunity: • Continued investment in soybean varietals points to future expansion across Manitoba & Saskatchewan.

• A recent feasibility study indicated a critical mass soy bean plant would require about 2 million tonnes of production in its catchment area. This critical mass has been exceeded now for 3 consecutive years and over 3 million acres of soybeans were planted in 2018 in a potential catchment area of Manitoba, Saskatchewan and northern North Dakota and Minnesota.

• The centre of Canadian soybean production is migrating west, with significant growth now happening in Manitoba and Saskatchewan.

• Companies with limited North American processing capacity are examining the opportunity.

• Soybean meal competes well in the livestock value chain; local soymeal production would increase sector viability by eliminating transport costs to and from the US for processing. Recent work

by Mercantile Consulting Ventures Inc. confirmed that a Manitoba-based soybean

processing facility would have a total cost advantage of $47.58/tonne (CAD) over American competition; when realized these savings would support long term investment into a Western Canadian facility.

• MB and SK together produce 3.3M beef and dairy cattle and 114K kg. of poultry annually, all of which require feed.

• MB currently imports $114M of soymeal annually from the US (2017).

• MB imports 61M kilograms of bio-diesel annually valued at $82.5M (2017).

The Westman Opportunities Leadership Group (WOLG) comprised of community and business leaders from Western Manitoba, have worked tirelessly to validate the soybean processing facility opportunity in order to take the opportunity to the private sector with confidence. Our team is knowledgeable and well connected within the Ag sector and government and we would be pleased to assist you with exploring the potential further, in a confidential manner.

SoybeansInfo@BrandonU.Ca www.brandonu.ca/rdi/ attract-soybeans-mb

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Clarington: Strong Roots in Agriculture

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ith a population fast approaching 100,000 and a growing community of over 5,000 businesses, Clarington offers what citizens and businesses desire: affordability, proximity to major highway systems and amenities, desired quality of life and a progressive, engaged community. Eyes are on Clarington as the place to grow!

Comprised of four main communities of Courtice, Bowmanville, Newcastle and Orono, the municipality is home to four of the top 100 largest infrastructure projects in Canada: Ontario Power Generation’s Darlington nuclear refurbishment project; Port Granby soil remediation project; Hwy. 407 east expansion to Hwy. 35/115 and the expansion of the GO Train to Bowmanville – expected to be in service by 2024 – are all significant economic drivers in the community and together represent more than $14 billion in investment.

In addition to the investment in infrastructure, Clarington’s economic core strength stems from business diversity.

Manufacturing, retail, tourism, life science, and agriculture are strong sectors. Embedded in the history of the community, agri-business is a top economic driver in Clarington. Clarington has 56,000 acres of cropland, which represents a 3% increase since 2011. There are over 400 working farms and a growing food processing industry. From dairy, eggs, beef, soy beans and grains to apples, apple juice, fruit wine and honey – Clarington continues to respect the impact and importance of agriculture, as farmers play a crucial role in feeding the world.

Clarington is building a foundation in cannabis innovation. With nearly 150 employees and varying skill sets, Clarington has three licenced producers who are in the east end of Bowmanville. Five more growers or cannabis related businesses are at various stages

Ceresmore Farms, multi-generational farmer Don Rickard and friend & fellow farmer Tom Barrie of Terwidlen Farms.

Algoma Orchards: produces enough apples annually to provide each Canadian with two apples. of establishing a footprint in Clarington. It is anticipated this industry will represent close to one thousand skilled jobs including those involved in cultivation, extraction, research & development and product development efforts.

There is an evolution into additional markets such as edibles, wellness products, and innovative applications surrounding medicinal use such as puffers, patches and soft gels.

As the industry plays a role in enhancing Ontario’s economy through investment, innovation and job creation, Clarington is proud to be of support as they work alongside industry partners to build a centre of excellence in the cannabis industry in Ontario.

With a strong agricultural sector in Clarington, existing talents, resources and skills, CBOT is starting to explore synergies and opportunities surrounding the industrial hemp industry.

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Where Business & Lifestyle flow Together

U

nique villages wrapped in the scale of a city. The City of Kawartha Lakes is comprised of many unique villages, each with a distinct personality and culture. It’s the best of both worlds.

Farm owners and their families can take advantage of fresh water lifestyles and country-side living – the scale and diversity of our municipality ensures the efficient delivery of services you expect (health care, education, family activities, community services).

Farm living, big city scale, village charm; right next door to the largest market for food in Canada. The City of Kawartha Lakes is a perfect match for the needs of a new generation of farm families and food processors.

There are 1,265 farms inside our city limits. That alone makes Kawartha Lakes distinct. Our farm families are trending younger, 1/3 of our agri-operators are women and over 16% of our growers sell local food directly to consumers.

What’s happening here in agriculture is a successful example of the transition in food production just starting in pockets elsewhere across Ontario. We have a rich heritage in creating new ideas as Mariposa’s world class goat and sheep dairy processing operation demonstrates. Our agriequipment dealers serve the entire region and saw sales increase by almost 30% in 2016.

Home to livestock and crop farming and related food processing and distribution, The City of Kawartha Lakes is one of East-Central Ontario’s leading agri-hubs.

Equally important, the farm culture here is supportive and receptive to new ideas.

You’ll find no shortage of mentors, partners and potential in the City of Kawartha Lakes agriculture and food community.

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The lakes, rivers and waterways that connect us to neighbouring farms and quaint villages result in a unique lifestyle and business environment that naturally flow together. No city in Canada is like it – no rural community can match its diversity. Our strength in advanced and tailored manufacturing, engineered products, agriculture/ food, tourism and the arts and culture sectors means the skills, experience and talent you need to start or expand a business are close by. Even better, our major highway access to Canada’s largest market and the largest centres in North America means your food and agriculture products are only an hour commute to unlimited opportunity.

Take the next step.

Imagine your business and preferred lifestyle flowing as one in the City of Kawartha Lakes.

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CATTLE—GOATS—SHEEP

ELITE

GENETICS – HOUSING FEED-MANAGEMENT

79%

Growth in new business compared to only 40% growth across Ontario on average (Source: CKL Situation Analysis 2017)

Please contact Kelly Maloney, Agriculture Development Officer, 180 Kent Street West, Lindsay, Ontario Canada K9V 2Y6 kmaloney@kawarthalakes.ca

Market value of livestock in the City of Kawartha Lakes

86

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www.kawarthalakes.ca 705-324-9411

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The Ultimate Guide

to Moving Your Agri-Food Processing Business to Canada

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ith its dedication to business growth in the agri-food sector and to providing a high quality of life to its citizens, Canada provides an ideal location for international agri-food entrepreneurs.

As the largest manufacturing sector in Canada, the agrifood industry contributes over $100 billion to Canada’s gross domestic product (GDP) and over $60 billion to its exports.

More Canadians are employed by the agri-food sector than any other manufacturing sector with approximately 2.3 million Canadians working in the industry.

Fully committed to innovation within the agriculture and agri-food sector, the country’s Federal Government provided almost $4 billion in research dollars – the single biggest investment in essential research in Canadian history – in 2018. The country’s low inflation-rate, low corporate income tax rate, favourable tax incentives and stable banking institutions provide a successful environment for agri-food businesses to prosper.

Unlike other countries, Canada offers a program that allows immigrants to become permanent residents without conditions based on a business’ success. The country is known for its relatively simple process of establishing a business – compared to other G7 countries, it’s quicker to establish a new business in Canada. Temporary work visas are available for business immigrants looking to purchase a business and move to

Canada. After less than one-year, permanent residency can be granted to successful temporary work visa holders and their families.

Already-established foreign businesses can expand into Canada relatively easily.

Registration procedures and fees are offered by each province for extra-provincial incorporation. If a foreigner wants to start a new business in Canada, Citizenship and Immigration Canada offers a Start-up Visa Program for entrepreneurs and a Selfemployed Persons Program.

In December 2018, a new program targeting visible minority newcomer women to Canada was announced by the Ministry of Immigration, Refugees and Citizenship.

As stated by The Honourable Ahmed Hussen, Minister of Immigration, Refugees and Citizenship, the program aims to “support racialized newcomer women to participate in our economy and grow our middle class…[and] help fill critical labour shortages from coast to coast to coast.”

As the world’s second largest country, Canada encompasses almost 10 million km².

Coastline access to three oceans (the Pacific, the Atlantic and the Arctic) coupled with a well-integrated trans-border transportation system provides Canadian businesses with easy access to a global marketplace.

Parts of Canada have become globally recognized for certain agri-food processing businesses: Western Canada is well regarded for its beef and grains, Central Canada and Quebec’s dairy and

meat industries continue to flourish and Atlantic Canada has a solid reputation for vegetable, seafood and fruit production.

Besides its commitment to being an international leader in the agri-food industry, Canada is also well regarded as being one of the best places to live in the world. Compared to other G7 countries, Global Affairs Canada ranks Canada as first in overall living conditions and quality of life and second for highest standards of living. The country has an international reputation for being a safe, politically stable, economically strong place to live.

Canada’s multicultural workforce is highly educated; the majority of its workingaged population possess a postsecondary education. Three of Canada’s universities are ranked amongst the top 50 in the world and the country leads the way in post-secondary research. Canada’s solid job market continues to grow, earning its place as the country with the second strongest employment growth in the G7.

The universal healthcare system in Canada is worldrenowned. Canadians enjoy a long-life expectancy (80 years for men and 85 years for women) and generally good health.

The Bottom Line When looking for a well established, prosperous country to locate your agri-food processing business and to enjoy a high quality of life, look no further than Canada.

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Industrial Hemp – An Emerging Industry in Medicine Hat, Alberta Even before the Canadian government legalized recreational cannabis on October 17, Southern Alberta was a global leader in hemp production.

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ith the addition of Aurora Sun, a 1.2 million square foot cannabis production facility currently under construction in Medicine Hat, the region is also emerging as a leader when it comes to cannabis production.

While Bill C-45 legalized cannabis in Canada, it also allows industrial hemp farmers to harvest the flower and leaves of their crop for the first time, paving the way for new processing industries in food, fibre and medicine.

Located in the heart of the Canadian prairies, Medicine Hat, Alberta offers the hemp and cannabis industry a unique combination of proximity to feedstock, a skilled workforce, and established supply chain networks, making Canada’s sunniest city an ideal location for hemp and cannabis producers and processors.

Indeed, Medicine Hat provides the hemp and cannabis industry with distinct advantages that will allow new and expanding businesses in the fast-growing hemp and cannabis industry to thrive. These include: • Access to hemp feedstock 40% of Canada’s hemp food crop is grown in close proximity to Medicine Hat, with the majority growing under irrigation, boosting crop yields per acre, in comparison to dryland.

• City-owned utilities The City of Medicine Hat is one of the only North American jurisdictions that generates, transmits and distributes its own electricity, providing customers with sustainable source of competitive advantage.

• Skilled labour and workforce Medicine Hat is home to Alberta’s largest greenhouse cluster, providing an experienced and available labour force. It is also one of Alberta’s largest petrochemical clusters, providing experience in chemical manufacturing.

• Low Cost of Living Both wages and cost of living in Medicine Hat are below the provincial average.

Medicine Hat has been recognized as having some of the lowest cost housing in all of Alberta.

• Market Access Medicine Hat is at the junction of the Trans-Canada and Crowsnest Highways.

Medicine Hat Regional Airport offers multiple daily flights to Calgary International Airport via WestJet and Air Canada.

Growing Industrial Hemp and Cannabis Sectors in Alberta and Beyond The economic impact of hemp and cannabis production will be positive and significant.

For example, the demand for CBD products is emerging as the next major growth area, expected by market researchers to reach $2.1 billion by 2020. At present, Canadian farmers are

responsible for 80% of exported hemp products. Most of these products are sent to the US. Medicine Hat’s unique combination of skilled labour, vast agricultural land base, and market access make it the perfect location for farmers and new businesses looking to gain a competitive advantage in hemp and cannabis production and processing.

Growing Industrial Hemp and Cannabis in Southern Alberta Dryland hemp farming can yield between 800 and 1,000 pounds per acre, with irrigated land yielding as much as double that amount.

Alberta is far and away the leader in irrigation in Canada.

The province’s 625,000 irrigated hectares represent 65% of all irrigated land in Canada. Of that, 525,000 hectares are located near Medicine Hat. With the bulk of Alberta hemp grown under irrigation near Medicine Hat, a processing facility in Medicine Hat would provide easy access to reliable feedstock.

Aurora Sun, a 1.2 million square foot cannabis production facility, is the latest project currently under development. It is scheduled for completion in 2019.

With an abundant supply of industrial hemp, growing market demand for hemp-based products, easing regulations, and a pro-business city council, industrial hemp and cannabis production and processing makes good business sense in Medicine Hat.

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Benchmarking for success Food and beverage processing industry Deloitte on Canada’s Food Retail Environment Canada’s food retail industry comprises food sold at food and beverage (F&B) retailers such as supermarkets and grocery stores, convenience stores, mass merchandisers, and specialty stores. In Canada, retail sales of stores offering food and beverage totaled over $110 billion in 2016, with market value forecasted to exceed $117 billion by 2019. Grocery stores make up the majority of the over 40,000 F&B stores in Canada. Supermarket chains Costco, Loblaws, and Walmart are among the leading food retailers. Leading Canadian F&B companies include food processors such as Saputo, Maple Leaf Foods, and Weston Foods.

Maple Leaf Foods, a packaged meats company, generated over $3 billion in revenue in 2016 and held a 99% share of the lunch kits category that year.

With the recent rise in food costs in Canada, price remained a key factor for consumers selecting F&B products. In a recent survey, consumers in Canada also indicated that it’s

vital for them to know where their food comes from. Only 22% of the respondents said they support the development and sale of genetically modified foods in Canada as of March 2016.

In 2016, Loblaw’s discount banners (Maxi, No Frills, Extra Foods, and Lucky Dollar Foods) saw the biggest increase in sales owing to the increase of discounter consumerism in

Canada. The discounter trend bolstered consumer demand to buy at discounted prices.

The recent rise in food costs in Canada has contributed to this increased demand for value products. Although not a pure discounter, Walmart also continued to leverage its position as a competitively priced retailer to lead grocery retailers in value terms in 2016, as it did in 2015.

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Merger & acquisition activity North American M&A activity in the F&B sector has remained strong. Start‑ups saw significant profit increases in 2017, and new companies are seeing explosive growth across the industry. Not surprisingly, the majority of M&A activity occurred in the US during 2014–2017, with the total number of transactions rising considerably in 2015. Similar to previous years, 10 – 15% of all M&A transactions targeted Canadian companies over this period. Number of Transactions

By Sub-Sector, 2014 – 2017 The beverage sector has experienced record M&A levels, whereas retail grocery saw a decline in number of transactions, with 27 deals in 2017 as compared to 39 deals in 2014. Additional M&A activity is expected in 2018 and beyond as consolidation continues to be perceived as a viable route to short‑term growth. Private equity investors are looking for opportunities among legacy food companies similar to the synergies developed from the 2015 KraftHeinz merger. However, market uncertainty and recent interest rate hikes may decrease M&A volume. Furthermore, investors are investing in disruptive start‑up F&B companies with innovative and healthier product choices that appeal to modern consumers. In 2017, there were approximately 270 transactions in the F&B space as compared to 271 transactions in 2016 highlighting the stable nature of M&A activity in North America.

In line with the trend of recent years, 12% of all M&A transactions from 2014 to 2017 targeted Canadian companies.

Additionally, the vast majority of North American F&B M&A activity continues to involve privately held companies; almost 9 out of 10 target

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companies were private. Recent transactions in the space indicate consumers have redefined the food supply chain through their willingness to pay more for healthier products. Key trends likely to drive F&B M&A activity Start-ups gain market share: Large F&B companies are attempting to adjust their business models from a highvolume, low-profit margin model focused on affordability, convenience, and taste to fit the new consumer profile.

Start‑ups focused on producing healthy, fresh, local, and organic ingredients are likely to continue their exponential growth and challenge legacy brands for market share.

PepsiCo has proven to be one of the active legacy brands that has driven revenue growth with its healthier product lines. Other legacy brands will likely need to follow similar suit if they’re to remain competitive.

Number of Transactions By Sub-Sector (2014–2017) 300 250 # of transactions

Perspective

200 150 100 50 0

2014 2015 Baked Goods/Snack Foods

Beverage

2016

2017 Food Distribution

Processed Branded Foods

Protein Processing

Retail Grocery

Deloitte provides audit & assurance, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights and service to address clients’ most complex business challenges. To learn more about how Deloitte’s approximately 264,000 professionals—9,400 of whom are based in Canada—

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Leamington Ontario One of Canada’s leading AgriBusiness & Greenhouse Industries

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he area’s rapidly growing greenhouse industry represents $1 billion in farm gate value. Over 60% of Ontario’s greenhouses can be found in the Leamington/ Kingsville area. In fact, the area’s greenhouse acreage is larger than the entire U.S. greenhouse industry combined, making it home to the largest concentration of greenhouses

in North America with nearly 2000 acres “under cover”. The majority of crops grown are destined for markets in the United States. Principal crops include tomatoes, seedless cucumbers and peppers.

Floriculture, including potted plants, bedding plants and roses is also an important part of Leamington’s greenhouse economy.

Greenhouse development has spurred the growth of supportive industries, including greenhouse fabrication, automation, packaging, and research and development.

Crops include tomatoes, cucumbers, peppers, and cannabis.

Known as the “Tomato Capital of Canada”, Leamington’s fertile soils sustain a variety of agricultural crops for fresh markets and processing. A supportive business environment has influenced the establishment of numerous industries related to Leamington’s fast growing and profitable agri-business and greenhouse sector.

The favourable climate due our location on the 42nd parallel and proximity to Lake Erie creates ideal growing conditions www.leamington.ca/en/business/ business.aspx

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Leamington, a beautiful community of 28,000, is located 45 minutes from the Windsor/ Detroit international border, and within a one-day’s drive of over 125 million people. We offer a thriving and modern urban environment surrounded by greenhouses and traditional agricultural crops, as well as businesses associated with the regional automotive and manufacturing economies.

Known for its southerly climate, Leamington is a place where rare plants and species thrive; a place where the land is so rich it produces the most diverse range of crops in Canada; a place where naturalists flock to witness the impressive migration of birds and butterflies.

For all these reasons and more, Leamington is a great location to start and grow your business, and the Leamington Economic

Development Office is available to help through every step of the process. The economic development portal has all the information you need to make Leamington the place for your business.

Contact our Economic Development Team today to learn more call T:Â 519-326-5761 ext: 1601 or visit www.leamington.ca

#SomethingsHappening

Largest concentration of commercial greenhouses Thriving manufacturing sector minutes from the US Home to a Healthcare Hub

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AGRI-BUSINESS

GROW T $

1.4 BILLION 200+

GREENHOUSES

contributed to Niagara’s GDP by the agriculture sector and more than 19,900 jobs

almost 22 million sq. ft. of greenhouse space, including award winning cannabis operations

R&D SUPPORT

$

GROUNDBREAKING RESEARCH INSTITUTES: • Niagara College Canadian Food and Wine Innovation Centre • Brock University Cool Climate Oenology and Viticulture Institute • Vineland Research and Innovation Centre

Learn more at niagaracanada.com/agri-business

500 MILLION

in recent investments in the Food & Beverage industries

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4 Reasons Why Niagara Canada is Fertile Ground for Agri-business

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hile Niagara, Canada is known as Ontario’s fruit basket and produces 80 per cent of the country’s grapes and wine, agri-business here extends far beyond the wine cellar and the fruit stand. Niagara, Canada has always offered some of North America’s best growing conditions, but today, technology, research and new approaches are changing the face of farming here in a most profitable way.

More Bucks Per Basket Thanks in part to higher value crops and technology and automation driving higher yields per acre, between 2011 and 2016 Niagara, Canada farms experienced a 15.5% increase in gross farm receipts and average net farm revenues increased by 47%. In that same time period, gross farm receipt value per acre increased by 18%.

A Bumper Crop of R&D Support Ground breaking research taking place in Niagara, Canada is developing innovative approaches to the way crops are being grown and used here and around the world.

From precision agriculture to biomanufacturing, creative new solutions go from lab to local thanks to collaborative partnerships encouraged by the region’s diverse collection of research institutes, including: • Niagara College Agriculture and Environment Innovation Centre • Niagara College Canadian Food and Wine Institute Innovation Centre • Brock University Cool Climate Oenology and Viticulture Institute • Brock University Advanced Biomanufacturing Centre • Vineland Research and Innovation Centre

Great Places to Grow Niagara, Canada is home to over 218,000 acres of farmland that benefits from the Niagara Escarpment’s unique impact on the soil and the modifying offshore breezes of Lake Ontario and Lake Erie. In addition, Niagara, Canada has one of the highest concentrations of greenhouses in the country, offering 22 million square feet of space to keep things growing across all the seasons.

A Market Leader in Canada’s Next Top Crop Niagara, Canada has just over 2 million square feet of licensed cannabis cultivation. Applications for additional growers are currently under Health Canada review and Niagara, Canada’s cannabis industry is expected to continue growing in 2019.

At 1,000,000 square feet, Tweed Farms in Niagara-on-theLake is currently the world’s largest cannabis greenhouse operation. Niagara College’s new Commercial Cannabis Production program will provide a pool of talent that is highly skilled in cannabis plant nutrition, growing environments, lighting, climate control, pest control and cultivar selection.

Learn about the other competitive advantages for agri-business companies located in Niagara, Canada at niagaracanada.com/ agri-business.

Put yourself in the green.

Here’s why Middlesex is a field of dreams for Agri-business: ✔ Favourable microclimate for growing ✔ Direct connection to Ontario’s major transport network

✔ Stable labour force No wonder so many agri-businesses have chosen to situate along highways 401 and 402 in Middlesex County.

In fact, production, tourism, equipment, animal care, and food processing combine to represent the County’s largest employer, generating $1.2 billion in economic impact.

Middlesex has plenty of horsepower to fuel your growth, especially if you’re involved in the equine industry. This sector encompasses a range of activities, including: racing, non-racing competition, pleasure riding, breeding stock, riding schools and other tourist activities. Seelster Farms, Canada’s largest breeder of

Standard-bred horses, has called Middlesex County home for three generations.

The eight municipalities and almost 75,000 residents of Middlesex surround the city of London with its population of 402,956 potential consumers. The County also benefits from its close proximity to other large urban markets like Detroit, Windsor and Sarnia.

Prominent facilities such as Agriculture and Agri-food Canada’s London Research Station, and Syngenta are located nearby, as are London’s Western University and Fanshawe College. This results in a large selection of well-educated potential workers.

Middlesex County is a member of the Ontario Food Cluster, a group of 12 communities from across the province, which collectively promote Ontario Southwest on the global stage.

Closer to home, Middlesex works with the London Chamber of Commerce on initiatives including agribusiness tours, and an annual agriculture networking event that attracts hundreds of industry stakeholders and exhibitors from across the region.

Middlese

In 2016, the County helped spearhead the Middlesex London Food Policy Council, focused on breaking down the barriers between urban and rural communities and finding innovative solutions to make local food systems more sustainable.

In addition, the County commissioned two economic impact and strategy reports to ensure that the sector continues to thrive for generations to come.

Middlesex further partners with the Southwest Ontario Tourism Corporation to film Next Stop Taste Tours, which feature local food providers, like: berry farms, greenhouses, orchards, and restaurants.

Clearly, Middlesex County is exactly right for your agribusiness with lots of room to seed bountiful growth. ■ For more information about harvesting success for your investment in Middlesex County, please visit: www.investinmiddlesex.ca/ key-sectors/agri-business.

actly Right for your business

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Newbury • Southwest Middlesex • Adelaide Metcalfe Strathroy-Caradoc • North Middlesex • Lucan Biddulph Middlesex Centre • Thames Centre

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Success in Durham

B

usinesses large and small and old and new are growing and thriving in Durham Region’s agriculture cluster.

“Our local agri-food related businesses help to shape this community. We are there to support, retain and create opportunities for these local entrepreneurs,” said Nancy Rutherford, Manager of Agriculture and Rural Affairs in Durham Region’s Planning and Economic Development Department. She is part of a dedicated team working to develop and implement strategies aimed at growing the sector.

Agri-food is already the leader for goods production in Durham and 1,323 farms account for more than $321 million of Ontario’s farm production, not including millions in valueadded products.

Almost half of Durham’s 622,963 acres are farmland, all of it Class 1 to 3, with a climate moderated by Lake Ontario and sitting at the gateway to the Greater Toronto Area.

“There are so many good news stories among our farming and food and beverage sectors,” said Rutherford. “We launched a Local Food Business Retention and Expansion project this year to support local business development and job creation in the agri-food sector. It told us so much about what was going on in the sector.”

Trained volunteers conducted interviews with local producers, manufacturers, distributors, and food service providers to understand needs, concerns and opportunities and give the Region the necessary data to be a strategic partner in the growth trajectory of those businesses.

The project clearly showed that local agri-food operators are healthy, strong and optimistic, with 64 per cent reporting their industry was growing, and 22 per cent reporting it was stable.

About 47 per cent have added employees in the past year, and 42.2 per cent have stayed the same. Those interviewed have added a total of 202 employees in the past three years, driven by food manufacturers, producers and food service.

Eighty-six per cent of businesses had a good or excellent impression of the community as a place to do business and 30 per cent are feeling more positive about doing business in the community and 47 per cent felt the same.

Ninety-four per cent of respondents rated local quality of life as good or excellent. When asked about the community’s top three advantages as a place to do business, Durham’s location, including its proximity to Toronto and major highways, was the most cited reason, followed by quality of life, and a growing population.

Food manufacturers said their expansion plans will add more than 100 people to the workforce, with producers planning to add at least 44 employees.

Gordon Food Service Canada is among new arrivals to Durham. The food distribution company is building a new 330,000-square-foot, highly automated distribution centre in the Town of Ajax. It is expected to be operational in early 2020 and to employ about 300 people in the initial phases.

Here are more examples of what is happening in Durham’s agriculture sector:

Brooks Farms This five-generation farming family in Mount Albert has expanded its offering into maple syrup and Christmas trees, invested millions into a farm market building that is now two years old and grown into a 10-month-a-year operation. The plan is to become a year-round venture, says owner Paul Brooks.

The 10,000-square-foot farm market includes two commercial kitchens, and the farm hosts a 10-acre barnyard playground, plenty of seasonal festivals, sales, educational tours, and workshops.

“We’ve become a strong attraction for tourism on the weekend. We are on a side road, so people have to come to us as a destination,” he said. “People are interested in visiting farms for an authentic experience.

People are interested in their food, where it comes, who grows it.”

Brooks Farms employs 33 people, up from four or five a decade ago. Brooks says his focus is on marketing and strategic planning to continue growing.

Brooks Farms works with local food producers and artisans.

Nothing sold at Brooks Farms is imported and rarely does anything come from outside Ontario.

“Farming is seeing a renaissance. Farmers are being more assertive about what they can provide and how important we are to the economy. We are creating a stronger voice together.”

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Flanagan Foodservice

Algoma Orchards

Flanagan Foodservice, the largest family-owned food distributor in Canada, started operations in a new facility in Whitby in 2018.

The 41-year-old company bought an existing 80,000-square-foot building and added another 100,000 square feet and is now delivering more than 100,000 items per week to customers from Brampton to Muskoka to Montreal.

“We were looking strategically in terms of how to split the province,” said Barry Reid, vice-president sales and marketing. “We wanted a facility on the eastern side of Toronto to service the eastern part of the province. In Durham, we found a lot of opportunities for hiring.”

The new $25-million facility features dry warehouse space, a temperature-controlled dock, two freezers, and an innovative and environmentally advanced refrigeration system.

Flanagan now employs about 100 in Durham and expects that to grow. The company’s customers include national chains such as Wendy’s, A&W, and Arby’s, along with regional groups, and independent restaurants, and long-term care homes and schools. The company Has $525 million in yearly sales and 625 employees and has been named one of Canada’s Best Managed Companies five years in a row.

“Whitby is a great community and we hope to continue building there,” said Reid. “We’ve had a great welcome to the community.”

This Newcastle-based venture, a partnership of two longstanding apple families in Durham, oversees about 1,200 acres of orchards in Courtice, Bowmanville, Newcastle and Orno, a year-round farm market, along with a very busy pressing operation.

Algoma has an aggressive planting program, too, says coowner Kirk Kemp, adding about 120,000 to 140,000 trees a year – about 110 acres. The growing conditions in eastern Ontario are ideal for many varieties, including gala, honeycrisp and McIntosh.

“The demand for apples is very strong but well over half of the apples eaten in Ontario are imported,” he said, though that could change.

“Canadians want Canadiangrown food. That has been happening for years, but it is getting stronger. Canadians want to support their own country and to look after the earth, too.

The buy-local movement is very strong and that is good for us.”

Algoma sells its fruit to Loblaws, Walmart and Costco, as well as pressing juice and cider that it sold under its own label and that of other brands.

Algoma employs about 120 fulltime workers, and another 180 seasonally.

Kemp says Durham understands how important agriculture is and backs that up with action.

“When we go in for building permits, we get a great reception.

The regional chair or the mayor or councillors always bring up our names and talk about what we are doing to create jobs or displace imports. There is always great support.”

Geissberger Farmhouse Cider Brothers Garry and Gord Geissberger have taken what was a small cider hobby on their grandparents’ dairy farm near Mitchell’s Corners and turned it into an innovative mobile apple pressing operation and their own line of cider.

The brothers still retain some of the original farm’s acreage and orchard trees and used a wooden apple press built by their father and a cousin in 1970 right up until 2012 when they bought a mobile press.

“It allows us the flexibility to continue pressing when it’s cold or raining. We are out on a customer’s front lawn or driveway pressing in some pretty wicked weather,” said Garry, a retired elementary school teacher.

“It was a giant leap for us.

Some of our customers were driving 45 minutes or more to come to us to press 40 bushels of apples. We would press it and they would drive back the next day. We felt we could service our customers better if we could go to them.”

Farmhouse Cider also totally changed its packaging, going with a vacuum sealed bag inside a box to vastly extend shelf life without preservatives.

Geissberger Farmhouse Cider received a Premier’s Award for Leadership in Agriculture in 2013 and has also received funding from Ontario’s Local Food Fund.

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Deloitte looks at trends within the North American food and beverage industry Evolving consumer value drivers Historically, traditional value drivers such as price, taste, and convenience largely determined consumer purchasing decisions.

Today, however, an increasing number of consumers are making purchasing decisions based on the “full plate” by combining traditional and evolving value drivers—a shift that is fundamentally altering the value equation for retailers and manufacturers.

Deloitte’s food value equation survey showed that approximately half of consumers surveyed say that they weigh evolving drivers such as health and wellness, safety, social impact, and experience more heavily in purchasing decisions than they do traditional value drivers such as taste and price. This was evident in 2017, as we saw continued and increasing consumer demand for sustainable, plant‑based protein food products.

Naturally, traditional players in the protein market have begun to respond to this trend in part by acquiring high‑growth, early‑stage companies specializing in plant‑based products.

Acquisitions of plant‑based companies increased from just four in 2016 to seventeen in 2017. Notable transactions in 2017 included: • Maple Leaf Foods’ acquisitions of Lightlife Foods, a U.S.based producer of refrigerated, plant‑based protein, and Field Roast Grain Meat Co., a leading brand of premium grain‑based and vegan cheese products. The acquisitions are part of Maple Leaf Foods’ shift toward achieving its vision of becoming a leader in sustainable protein.

• Nestlé USA acquired Sweet Earth, a plant‑based foods manufacturer based in California, as it works to build out its portfolio of vegetarian and flexitarian choices.

In addition, ethnic influences continued to find their way into the mainstream, enabling innovative twists to traditional food product as consumers looked to further enhance their eating experience. A recent transaction was Parmalat acquisition of Karoun Dairies, a producer of ethnic cheeses and dairy products.

Shifting retail landscape and e-commerce The grocery retail sector in 2017 saw food retailers using innovative approaches to shift from conventional methods of selling to offering online and home delivery options.

• Loblaws and Costco partnered with Instacart, a California‑based company that enables customers to shop from local stores’ inventory and use an app to place their order which is then delivered to the customer’s door.

• Amazon acquisition of Whole Foods sent shockwaves

throughout the North American grocery sector. The deal is viewed as perhaps the most significant step to date in the transformation of the grocery retail sector as the largest e‑commerce company in the world enters the space.

• Walmart announced a partnership with Buzzfeed’s social food network Tasty, prompting users to purchase Walmart.com and Jet.com products directly from recipes in Tasty’s app. They also plan to integrate Walmart’s online grocery services directly into the app.

The North American online grocery market is expected to grow at a considerable rate over the next several years as more consumers adopt buying groceries online. The coming of the e‑commerce age in the food and beverage industry means consumers will now have more choices than ever before. What required a trip to a specialized health food store 5 to 10 years ago will now be available with a click of a button. This will only amplify the importance of the consumer’s value drivers and accelerate the rate at which the market responds to them.

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DURHAM REGION

THE RIGHT CHOICE FOR A BRIGHT FUTURE

61% of the

Businesses had been in operation for over 11 years indicating overall stability

46.9% of

businesses have added employees in the past year,

42.2%

have and stayed the same, indicating good health in the sector.

Those interviewed have added a total of

202

employees to the workforce in the past 3 years, driven by food manufacturers, producers and food service.

PROPERTY OWNERSHIP Producers largely own their properties, whereas food manufacturers and food service businesses are more likely to lease

QUALITY OF LIFE 93.8% of businesses rated quality of life

as good or excellent. There are positive feelings towards the support received by fellow businesses, residents and the medical community.

FAST FACTS When asked what are the community’s top 3

advantages as a place to do business, 3 advantages rose clearly to the top: the incredible location, including its proximity to Toronto and major highways was the most cited reason, followed by quality of life, and the size of the population.

The food manufacturers’ expansion plans will add over 100 people to the workforce.