David Dzisiak Future of Agrifood
David Dzisiak, COO Botaneco headshot
David Dzisiak
Chief Operating Officer - Botaneco

The Growth Economy: Keeping Canada Competitive in Agriculture

Takeaways

  1. Generation Z and young millennials are leading new food trends that centre around the long-term sustainability of the planet.
  2. To take a leadership position in global agriculture production, Canada should lessen regulatory burdens, increase trade between provinces, and invest in industries like aquaculture.
  3. Private equity pools need a comprehensive understanding of the opportunities in the agri-food sector so that an entrepreneurial class can be built in the Canadian agriculture industry.

Action

Canada needs to commit more energy to value-added processing and agriculture. A long-term, national approach that focuses on value-added ingredients will help Canada build on its reputation as a stable, safe and nutritious food supplier. The Canadian government and investors should support product innovation in the agriculture industry.


How has COVID-19 impacted the agriculture industry in Canada and what must be done to support its recovery? 

It is still too early to understand the full impact of COVID-19 on food production or if there will be any shifts in diet patterns. At this time, what seems more likely are greater shifts toward local supply chains and sourcing, less eating out and more cooking at home. This could mean greater opportunity for domestic production of vegetables. We have a large supply of low-cost natural gas and other energy sources, and this could be aligned with greater greenhouse production of vegetables reducing reliance on imports. 

Fundamentally, Canada is an exporter of food. Growing global demand is still important and there will be greater reliance on trusted producers and reliable suppliers. This could be a great opportunity to accelerate existing initiatives like the Protein Industries Canada supercluster; ramping up the transition from innovation to production of plant proteins for food and high value feed applications would accelerate industry investment, capital spending and job creation.  

Western Canada could be a low-cost pork producer, given the work going on to improve canola protein,  we could create a  domestic supply of high-quality feed protein. Canada has plenty of existing know-how on pork production and processing, we need to support industry development and ensure smart regulation and export market development.  

“Aquaculture has a very high global growth forecast and Canada should be a leading participant, but we are not.”

Industries like aquaculture could also be much more developed. Aquaculture has a very high global growth forecast and Canada should be a leading participant, but we are not. Our plant protein initiatives could also give us an advantage in sustainable feed supply and cost. Maybe it is time to move aquaculture to the agriculture department and view it as an industry for sustainable economic growth and job creation rather than an environmental field. Other countries do this successfully—why can’t Canada?  


What are the global trends that you think are having the biggest impact on the future of food and agriculture? 

There are really four fundamental forces that will drive the future of food and agriculture. One is growing population; the world is going to expand by 2 billion people in the next 30 years. You also have another billion people joining the middle class, and they want to eat better. Interestingly, when people take a step up the social ladder and they get a new dollar, they spend 70 cents on better food.  

The third big force is around health eating and wellness. That is very much set in our society today, especially in the first world and with the Baby Boomer population. The last big change—which is very powerful and will change things forever—is the generational shift with Generation Z and young millennials. They have a different diet pattern which will have a major impact on what kind of food we produce and how we consume it.    

“We are witnessing the intersection between social responsibility and awareness around sustainability, and that is going to influence what people eat.”

There is a new notion of flexitarianism: when people do not strictly avoid meat, but they make it a much less prominent part of their diet. For the first time, we are witnessing the intersection between social responsibility and awareness around sustainability, and that is going to influence what people eat. Generation Z and millennials will be the single largest consumer population that exists, bigger than the Boomers, and they will be the most important shopping cohort—that is who food companies will market to. This cohort does more healthy snacking instead of eating traditional breakfast, lunch and dinner, and they are interested in the long-term sustainability of the planet.  

“When people take a step up the social ladder and they get a new dollar, they spend 70 cents on better food.”

The food industry follows these trends and we are seeing the rise of companies like Beyond Meat and the Impossible Burger, who have created a lot of value very quickly. Now we are also seeing traditional companies in the meat packing business investing in plant-based meat. So, it is very well accepted that this is not a fad—it is a much larger trend, and big food companies are developing and innovating around this space. When you see companies like the Smithfield’s or the McCain’s creating exciting new products, you know the times have changed.  


How would you characterize Canada’s position in the agrifood industry? What are some of our strengths, weaknesses, opportunities and threats? 

Much of the Canadian agriculture system is based out of World War I and World War II, where our job was to grow and export food to feed the commonwealth. Today, we grow as much as we can—we put food on bigger trains and bigger ships and build bigger grain elevators so that our food can get around the world. Canada is still partially hooked on growing commodities and exporting raw materials—but we also have many other strengths.  

Canada has a large natural resource base, great land and some very unique crops that we lead the world in, like canola, pulse crops, wheat and oats. We have rain-fed agriculture, so we are not reliant on irrigation or external water systems. No one else in the world can do what we do in canola, and we are not going to move to a new geography. We can bring novel ingredients to the food industry that the rest of the world does not have access to, and that is a great thing. Strategy, to me, is about having something different—and we can do something different here.  

“No one else in the world can do what we do in canola.”

Canadian farmers are very progressive, and they rapidly adopt technology; we have good infrastructure and logistics. In general, Canada has a very low country risk, we are a reliable producer and supplier and we have strong global trade agreements. And of course, we have good maple syrup.   

On weaknesses, Canada does not commit enough effort into value-added ingredients and branded food development. Despite our great raw materials, Canada pays more attention to the production of agriculture rather than downstream innovation. We tend to have a mindset towards supply management instead of focusing on how the agriculture industry can drive economic growth. 

Canada has an economic roundtable committee focused on agriculture, and a few years ago they set a goal for Canada to increase exports by $20 billion and increase domestic sales by $30 billion by 2025. We need to focus on our ability to compete and take a leadership position. Canada should be reducing regulatory burdens, improving internal trade among the provinces, and opening up industries like aquaculture. We have a great hand to play, but we are not currently capitalizing on it.  

“Canada should be reducing regulatory burdens, improving internal trade among the provinces, and opening up industries like aquaculture.”

We also need to invest more, better align our public research and development system with long-term market goals and focus on having a long-term program to realize success in this area. That is why things like Protein Industries Canada, the supercluster initiative, can bring leadership and focus to some of these avenues. Protein Industries Canada can help make people aware of opportunities, and it should become a good example of our country focusing on a goal and sticking to it. 

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How is technology transforming the agrifood industry in Canada? What technologies are you most excited about? 

The positive thing about the Canadian agriculture system is that farmers are very good at adopting technology. If it works, they will adopt and incorporate technology very quickly. We have a very innovative system with a good cultural practice in place surrounding tech transfer and rapidly adopting technology at the pace of change. 

Everything is going to happen faster than ever with artificial intelligence, machine learning and robotics. Sensors and quality measures using blockchain are really going to improve our ability to make more food and better food. This is the sustainable intensification that Canada is going to need in the future. 

One area that is impacting innovation is the lack of attraction for private capital—but even that is beginning to change with new products, like Beyond Meat. However, we need to build more comprehensive awareness around private equity pools, so that they understand that agriculture is a great industry to invest in. Since Canada has a global reach, we are talking about an industry that can generate tens of billions of dollars of commerce. It is a growth industry, and we have very few of those. If we can attract investment, we can build an entrepreneur class, which has never existed before.  

“Agriculture is a great industry to invest in. Since Canada has a global reach, we are talking about an industry that can generate tens of billions of dollars of commerce.”

When I think about the potential for technology in agriculture, there are three areas that stand out to me. The first is plant science. We have always been strong in plant science; we essentially invented the pulse industry. But we are lagging behind now because funding in public research has been cut, and every five years Agriculture Canada is told it has a different purpose. We need a deeper, long-term focus on public research surrounding plant sciences. 

The second area is clustered regulatory interspaced short palindromic repeats (CRISPR) and gene editing. These technologies can be very impactful for creating better tasting and more nutritious food, and if we can lessen the regulatory burden, public research can take these new tools and apply them.  

The last area is artificial intelligence. At the University of Alberta they are beginning to apply AI to agriculture. The Olds College in Alberta is also launching an agriculture information technology degree, which will offer training in precision farming. This is a good, nascent area that can be very powerful for the industry.  

How can Canada leverage its strengths to become a leader in sustainable agrifood production?  

One thing that I tell people, which comes as a shock, is that there is nothing natural about agriculture. Since the 1970’s, we have increased crop production in the Prairies by 400% with the same land, without expanding our crop base and with 40% fewer farmers. That is an incredible productivity gain and sustainable intensification, and in that sense, Canada has already done a lot to become a leader. 

“Since the 1970’s, we have increased crop production in the Prairies by 400% with the same land, and with 40% fewer farmers.”

High yield farming has also helped mitigate climate change. There is a great researcher at the University of Saskatchewan called Lana Awada, and she measured how farmers can now sequester more carbon than they emit—and they have increased carbon sequestration by 400%. Canada is storing 16 million tons of carbon annually, which is equivalent to 3.5 million cars. Canada has a very good track record and we need to keep applying it—that way, we can sustainably increase our crop production without having to plough up more forest, prairie or wetlands. 

“We have a responsibility to do the best we can to help fill the future void around food supply.”

In the long-term, because of climate change, the Canadian agriculture industry will actually increase its yields. If we tack on another 10 frost-free days to our growing season, that would enhance our productivity. Canada needs to take advantage of that, because other parts of the world are going to lose their productive capacity at the same time. We have a responsibility to do the best we can to help fill the future void around food supply. Canada has done a really great job so far, and we are aware of our responsibility—but we need to continue the sustainable intensification of our crop production and do so in a way that ensures we can continue producing food forever.  

“In the long-term, because of climate change, the Canadian agriculture industry will actually increase its yields.”

Internationally, Canada has a great brand. We are a safe and nutritious food producer, and we export most of what we produce. Canada has a small domestic market, so we really depend on trade—and we are seen as a safe, reliable supplier of nutritious food. In that way, we have a good reputation, and it is something we can definitely continue to build on. There are really only a handful of countries that export at the levels that we do, and as the world continues to need more food—especially Asia Pacific—they will look to Canada as a place where they can get that food supply.    


If you could build a national strategy around agriculture, what would it be?  

There are four main pillars to my national agriculture strategy. The first is for Canada to become an advocate for the best science we can get. We have already done that with genetically modified technology, which we have been using since the mid-1990s, but we need to do better at aligning public and private research with log-term goals. Canada needs to apply the best science to advance our productive capacity and improve the quality of our food. 

“In the past, agriculture was seen as an industry that always needed a hand-out but now, we can be part of the growth economy.”

The second pillar is around value-added processing for better ingredients. Canola is a very high-quality plant protein for human food—but we sell it to dairy cattle in California. We need value-added processing of our crop, and we should be pulling protein out of high-value markets like aquaculture in order to serve the demand for human food. 

The third piece is related to our national innovation ecosystem: we need to connect brand food innovators to our production system. Canada should strengthen that ecosystem. 

The final piece is really about connecting Canadian companies to the global marketplace and helping small companies become medium-sized or big companies, and really have them participate in the global food value chain.  

I have been in the agriculture industry for 35 years and have never been more excited about it. In the past, agriculture was seen as an industry that always needed a hand-out but now, we can be part of the growth economy.