Growing the Agri-Food Ecosystem and Next Level of Talent

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What is the current state of Canada’s agri-food industry, and what are some of its general strengths and weaknesses?

The overall strength of Canada’s agri-food sector is doing quite well. COVID-19 has thrown a bit of a wrench into the sector, but I think we have to look at it through a value chain perspective. Primary production, ingredient processing, food processing, and food retail in the food service industry have all been affected differently by COVID-19. For primary production, harvest is underway right now in Western Canada. Crop production volumes have been steadily growing over the last 10 years. Canada is recognized as an environmentally sustainable supplier of commodities. That sector of the value chain is very strong. The ingredient processing sector is also very strong and growing. Canada is being recognized as a supplier of high quality food ingredients, and we need significant investment and growth in this sector to satisfy the growing global demand for plant based proteins and other products, but again, the sector is quite strong.

“Canada’s agri-food sector is the largest employer in Canada and the second largest contributor to gross domestic product (GDP).”

Food processing and food retail has done okay throughout COVID-19. People certainly still need to eat and we have had an uptick in food retail. The food service industry is certainly the part of the value chain that has been hit the hardest. Canada’s agri-food sector is the largest employer in Canada and the second largest contributor to gross domestic product (GDP). Overall, the sector is doing quite well.

To get to some of the strengths, a lot of them lie in the fact that we have a large production base. We are one of five jurisdictions globally that is a net exporter of food. We have very strong primary production, innovative farmers, and a really strong research infrastructure that spans everything from plant breeding and production agriculture, to processing and food research and development (R&D). We also have a very large land base, a great climate for agriculture production, a great international reputation, and a crop mix that is in demand in most places globally.

In terms of weaknesses, part of what we are trying to do at Protein Industries Canada (PIC) is spur on investment in innovation because we are falling behind some other jurisdictions globally on our investments in innovation. One of the weaknesses we have is a lack of processing infrastructure, both for ingredient and consumer packaged goods. Canada is a small market, so we do not have a lot of processing for the domestic market and we do need investment there. Certainly, we have a regulatory system in Canada that needs to keep pace with the speed of innovation that is happening in the agriculture and food processing sector, and like most industries, we are suffering a bit in agri-food from a lack of talent and skills, as well as some labor force challenges that we are facing to grow the sector.

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What competitive advantages make Regina and Saskatchewan attractive to investors?

As you start to drill down and think about Canada writ large in terms of our global reputation and how we are perceived, that really comes down to individual locations within Western Canada. For Saskatchewan, the competitive advantage that we enjoy here and maybe even in the Regina, southern Saskatchewan area, is that we have a very good production base with large amounts of agricultural commodities available for processing.

We have a growing processing sector in southern Saskatchewan with investments made on canola crush facilities by ADM, Cargill, and Richardson International as primary processors of canola. We have a large anchor firm based out of Regina that many have maybe heard of, AGT Food and Ingredients, led by Murad Al-Katib, which is an exporter of high quality ingredients around the world. When you get that level of investment from large companies and startup companies, you start to get an ecosystem built around that. When you put together not only the R&D capability that we have in Saskatchewan together with the production base in innovative producers and some large anchor firms that are really doing some excellent primary processing for Saskatchewan-based commodities, you really have, pardon the pun, all of the ingredients in place to make this a food processing hub.

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Why is innovation important for the Canadian agricultural sector, and why was plant protein chosen as the focus of the supercluster?

If you take a step back to why innovation is so important to grow this sector, you will find that Canada has a bit of an issue in terms of the amount that we are investing in science and innovation. If you look at the statistics of Canada’s investment in science and innovation, not just in the agri-food sector but across all sectors of the economy, what you see is we are not investing as much as other Organisation for Economic Co-operation and Development (OECD) nations are in terms of science and innovation across private sector industry, academia, and the federal government. In fact, Canada probably needs to double its investment in science and innovation just to keep pace with the OECD average. Innovation is critical not just for the agri-food sector but all sectors of the economy to keep pace with the rest of the world.

“Canada probably needs to double its investment in science and innovation just to keep pace with the OECD average.”

That really spurred on the creation of the Innovation Superclusters Initiative. At PIC, we are investing $300 million to grow the value-added processing sector. We are investing directly with for-profit, private sector companies because that is the segment of the economy that grows GDP, creates jobs, and creates wealth for Canadians. Our vision at PIC is that Canada is a global leader in plant protein, and we are working to transition the agriculture economy from a commodity provider to an ingredients supplier.

Plant protein was chosen as one of Canada’s five innovation superclusters to capitalize on the growing global demand driven by a number of trends. What we see today is a growing population globally and a requirement for increased food consumption driven by numbers out to 2050, but inside of that, we are also seeing a large increase of the middle class. When the middle class increases their disposable income, generally, a portion of that goes to food products and it lands with increased protein consumption. We are also seeing changing eating habits. The convenience of plant-based products lends itself to this market, especially in North America and Western Europe, where people are eating differently. Millennials are eating very differently and wanting convenience and health in their food. We are seeing a lot of consumers think about the environmental consciousness of the food products that they are choosing, trying to increase the number of plant-based products in their diet to improve animal welfare, and increase environmental and health-consciousness. When you take a look at the totality of those trends, it really does lend itself to a growth in the plant protein sector globally, and Canada is very well positioned to meet that.

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Who does PIC collaborate with in the protein industry ecosystem?

When we think about who it is we are working with, we think about it in terms of segments of the innovation economy, and so that is really corporate, government, academia, the entrepreneurial community, and the capital community. On the corporate side, that would be some of our member companies I had mentioned before like AGT Food and Ingredients, Roquette, a large processor, and some startup companies that are trying to break into the market. We are developing research, science, and innovation projects directly with them and working on a number of issues with our corporate clients around capacity building improving their understanding of intellectual property processes and data management. The corporate community for us is our core because again, they are the ones that create jobs and grow GDP.

On the government side, they are really critical to the growth of the innovation ecosystem and plant protein. We work directly with Innovation, Science and Economic Development at the federal level. They provide the core funding for PIC, but we also have great working relationships with Agriculture and Agri-Food Canada and the National Research Council in driving forward our science agenda. We are also working with Global Affairs Canada, because at the end of the day, this is largely an export play for us in Western Canada. We have a small population and large land base, and we need to be plugged into international markets—Global Affairs is really helping us with that.

On the academic side, we have 33 different academic institutions already involved in science and innovation projects with PIC, spanning everywhere from the University of British Columbia, University of Alberta, University of Saskatchewan, University of Manitoba, and some universities out in central Canada as well. We have a really good cover of the academic institutions and that is critical for us to grow the plant-based protein ecosystem because they have access to research and students, and they are also training the next level of scientists that will be critical for the growth of the sector.

“A lot of startups are leveraging knowledge and technologies that may have been used in other sectors, and applying that to agriculture.”

In terms of the entrepreneur community, we are really dealing with a lot of startup companies that are either early stage revenue or pre-revenue, and what I find interesting about this on the digital and agtech side is that a lot of startups are leveraging knowledge and technologies that may have been used in other sectors, and applying that to agriculture. We recently announced a project just last week here in Regina—a $26 million investment looking at utilizing artificial intelligence drone technology and high frequency cameras to apply herbicides to weeds using a very targeted perspective. That is the application of science outside of agriculture bringing that in, and that is really why we need the entrepreneurial community around.

Finally, we have the capital community, which is a critical one for us. We need capital to grow the value-added processing sector in Western Canada. The statistics on the investment of venture capital (VC) into the Prairies is quite low: only about 3% of Canada’s VC funding flows into the Prairie region and only a portion of that flows into agriculture. We started to engage the capital community to make sure that they are aware of the opportunities that we have around growing the agri-food sector, and they will feature very prominently in theforward work that we are doing at PIC going forward.

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What is the availability of talent in the agri-food sector in Canada and what is being done to train, attract, and retain top talent?

When it comes to value-added processing in agriculture, you need both a pool of unskilled or lightly-skilled labor, and then a highly technical series of labor such as food scientists and food engineers. You need both to be successful. We are trying to improve the knowledge and recognition that food processing is a good place for employment, and we are going to see that increase over time in Western Canada as recognition that this is a very strong industry that will grow.

“We are trying to increase the level of students that are being trained on food science and food engineering.”

On the more technical and specialized side of labour, there are a few things. One of the goals of PIC is to work with academic institutions. I might have mentioned before we have about 33 academic institutions involved in PIC projects to date. They are helping train the next level of scientists at the Master’s and PhD level. We are trying to increase the level of students that are being trained on food science and food engineering.

We are opening up discussions with other markets globally around talent exchanges, mostly in the Netherlands. They have Wageningen University and Foodvalley that pump out many PhDs every year. We are thinking about a strategic relationship to bring some of those people to Canada. Even in our PIC projects, what we have done is supported foreign costs associated with those projects to bring talent to Canada and train the next level of people in real-time working on the R&D projects that we are doing. There is quite a lot going on especially on that side of the highly technical, highly trained people, and the PIC projects all have that as an objective in terms of growing the next level of talent.