Canada's Organic Sector: Trends, Challenges and Opportunities
Canada's Organic Sector: Trends, Challenges and Opportunities
Canada's Organic Sector: Trends, Challenges and Opportunities
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Canadian <strong>Organic</strong> Science Conference<br />
Winnipeg, Manitoba<br />
February 22, 2012<br />
Vitins Consulting
$59 billion US<br />
37 million ha of ag l<strong>and</strong> is organic<br />
0.9% of all ag l<strong>and</strong> is organic<br />
1.6 million producers; more than ¾ in<br />
developing countries<br />
Strong markets still growing; new<br />
markets emerging in BRIC<br />
70 countries have organic<br />
regulations/st<strong>and</strong>ards of some type<br />
Source: IFOAM/FIBL
source: FiBL / IFOAM 2010
‣Most important markets are regulated, with unique m<strong>and</strong>atory<br />
st<strong>and</strong>ards <strong>and</strong> requirements (US, EU, Japan)<br />
‣Other markets have recently introduced draft / new regulations:<br />
(South Korea, Taiwan, Australia, Brazil, China, Israel, etc)<br />
‣As markets become more regulated, countries are looking towards<br />
equivalencies, harmonization.<br />
‣Canada has a strategic edge with access to 95% of world market<br />
through equivalencies with US & EU, but some restrictions apply…<br />
‣Canada’s market is heavily supplied by imports (75%)<br />
‣Need to differentiate & br<strong>and</strong> Canadian products from competitors<br />
‣Focus on growing our domestic market <strong>and</strong> sector through<br />
consumer education, training, mentorship, value chain, value-add
• Approximately 3,700 farms, 695,463 hectares plus<br />
210,000 ha for wild harvest <strong>and</strong> pasture.<br />
• Certified organic farms account for 1.7% of the<br />
total number of farms in Canada.<br />
• More than 1,100 certified organic processors <strong>and</strong><br />
h<strong>and</strong>lers of ingredients <strong>and</strong> consumer-ready<br />
products.<br />
Source: Canadian <strong>Organic</strong> Growers
1200<br />
1000<br />
800<br />
Farms/primary producers 2009<br />
600<br />
Farms/primary producers 2010<br />
Processors (includes food<br />
manufacturers & seed cleaners)<br />
400<br />
H<strong>and</strong>lers (includes packers, brokers<br />
& retail)<br />
200<br />
0<br />
BC AB SK MB ON QC NB NS PEI NFL YK NT<br />
SOURCE: Canadian <strong>Organic</strong> Growers
Certified <strong>Organic</strong> Farms in Canada 1992-2009<br />
4500<br />
4000<br />
3500<br />
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
0<br />
92 93 94 95 95 97 98 99 00 01 02 03 04 05 06 07 08 09<br />
SOURCE: Canadian <strong>Organic</strong> Growers
• Retail sales of organic food: estimated $2 billion in 2008<br />
(doubling sales in two years)<br />
• 2.5% of total food retail sales<br />
• Private label accounts for 21%<br />
• COTA estimated the market was worth $2.6 billion in<br />
2010<br />
• Dem<strong>and</strong> is increasing but supply is tight<br />
Source: AAFC Retail Study 2008; COTA
Packaged & Prepared (15%)<br />
Meat, Fish, Poultry (1%)<br />
Beverages (18%)<br />
Dairy & Eggs (13%)<br />
Bread & Grains (12%)<br />
Fruit & Vegetables (41%)<br />
Source: AAFC Retail Study 2008
•Soya drinks<br />
•Milk<br />
•Yoghurt<br />
$47.3M<br />
$37.2M<br />
$35.4M<br />
•Cereals<br />
$32M<br />
•Coffee<br />
•Soup<br />
•Eggs<br />
•Breads<br />
•Baby Food<br />
•Juices & Drinks<br />
$27.2M<br />
$19.5M<br />
$15.7M<br />
$13.1M<br />
$11.4M<br />
$9.8M<br />
Source: Statistics Canada Import Data Source: AAFC Retail Study, 2008
Conventional Retail: $925.8 million (45%)<br />
Direct to Consumer: $400 million (20%)<br />
Other Retail: $712 million (35%)<br />
(specialty markets, natural health food stores,<br />
foodservice)<br />
Source: AAFC Retail Study
• GE Alfalfa has been approved in the US, <strong>and</strong> is awaiting varietal<br />
registration here: the first perennial GE, <strong>and</strong> critical organic rotation<br />
• The Government has just concluded “Low Level Presence” threshold<br />
consultations with industry.<br />
• What does “coexistence” look like? Is it a bad word?
• All signs point to declining<br />
producer numbers in 2010,<br />
• Just as the market is<br />
heating up <strong>and</strong> global<br />
commodity prices are near<br />
record-high<br />
• How can we find long-term st<strong>and</strong>ards funding?<br />
• How can we avoid the old cyclical agriculture up-<strong>and</strong>-down?<br />
• How can we ensure producers stick with certification for the long<br />
term?<br />
• How can we support new entrants, provide knowledge transfer,<br />
<strong>and</strong> encourage conversion?
•Almost 50% of Canadians<br />
believe it is more important<br />
a food be labelled natural<br />
than organic (CBC Jan.<br />
2010)<br />
•60% of Canadian<br />
consumers believe it's<br />
important a new product be<br />
made from "all-natural<br />
ingredients," while 45 %<br />
have "greater trust" in<br />
natural products than those<br />
labelled organic<br />
(Br<strong>and</strong>Spark International)
• Under the OPR, we cannot use “Certified <strong>Organic</strong>” on our labels<br />
• But: because most provinces do not yet regulate organic within the<br />
province, there is organic (certified) <strong>and</strong> organic (not certified)<br />
product confusing <strong>and</strong> competing for the same consumer<br />
• How do we address the<br />
double st<strong>and</strong>ard?<br />
• Do we maintain two-tier<br />
organic within the province<br />
or do we try to streamline<br />
the rules across the<br />
country?
Recently conducted SWOTS:<br />
• <strong>Organic</strong> Value Chain Roundtable strategic<br />
planning<br />
• Br<strong>and</strong>ing <strong>and</strong> Marketing Campaign<br />
Research<br />
• COTA’s Long-Term International Strategy<br />
• Provincial
Strengths<br />
◦ New st<strong>and</strong>ards, certification, accreditation systems<br />
◦ Increased organic sector capacity<br />
◦ Canada Br<strong>and</strong> <strong>and</strong> buyer image of Canada<br />
◦ Diversity: consensus st<strong>and</strong>ards, cooperation, cross-pollination<br />
◦ Dedicated industry organizations<br />
◦ Research<br />
<br />
Weaknesses<br />
◦ <strong>Challenges</strong> facing new <strong>and</strong> existing producers, processors, distributors<br />
◦ Limited data <strong>and</strong> analysis of full value chain<br />
◦ Risk management along the supply chain, public relations<br />
◦ Diversity: horizontal sector across all commodities <strong>and</strong> scales<br />
◦ Confusion<br />
◦ Lack of Funding
<strong>Opportunities</strong><br />
◦ Significant growth in consumer dem<strong>and</strong>, import displacement<br />
◦ Strategic equivalencies <strong>and</strong> trade recognition, exports<br />
◦ Growing consumer awareness of food issues<br />
◦ Potential to increase domestic supply<br />
◦ Potential to connect with other agriculture organizations<br />
◦ Research<br />
<br />
Threats<br />
◦ Low market power <strong>and</strong> downward price pressure across industry<br />
◦ GE impacts on organic integrity <strong>and</strong> market<br />
◦ difficulties in “connecting the dots” — with each other, other agriculture<br />
organizations, with consumers<br />
◦ Attrition<br />
◦ Negative publicity
Tagline/Slogan<br />
It’s in our good nature<br />
nature<br />
C’est dans notre bonne<br />
Br<strong>and</strong> Essence<br />
Br<strong>and</strong> Vision<br />
Br<strong>and</strong> Mission<br />
Positioning Statement<br />
Value Proposition<br />
Br<strong>and</strong> Pillars<br />
Our better nature<br />
High quality Canadian organic products in every home<br />
To grow <strong>and</strong> promote a vibrant Canadian <strong>Organic</strong><br />
<strong>Sector</strong><br />
The Canadian <strong>Organic</strong> <strong>Sector</strong> provides organic products<br />
of the highest st<strong>and</strong>ards – it’s in our nature to care for<br />
the health <strong>and</strong> vitality of all communities<br />
Canada <strong>Organic</strong>, the closest thing to nature. It starts<br />
with a healthy attitude, pure air, water, <strong>and</strong> l<strong>and</strong>.<br />
Caring Credible Committed<br />
Br<strong>and</strong> Equities Integrity Sustainable Healthy Canadian<br />
Passionate<br />
Source: OVCRT 2011
Recommendation: evolve the initial tagline<br />
“It’s in our good nature” to a simpler <strong>and</strong><br />
action oriented option:<br />
Option A: Canada <strong>Organic</strong>, For the Better<br />
Option B: Canada <strong>Organic</strong>, Eat Real<br />
Source: OVCRT 2011
A Voice for <strong>Organic</strong><br />
“As a teacher <strong>and</strong> a mom, I’ve joined the<br />
movement toward organic food. Since it’s<br />
produced without persistent toxic pesticides, it’s<br />
healthier for my kids. They like it because it<br />
tastes better. I like it because it’s good for the<br />
environment. Go organic <strong>and</strong> join a movement<br />
that’s growing every day.”<br />
Carole Thomas<br />
Teacher<br />
Source: OVCRT 2011
GrowingCanadianGoodness.ca<br />
Growing <strong>Organic</strong> food means more than just<br />
farming without persistent toxic pesticides. It’s<br />
about farmers meeting stringent, governmentregulated<br />
st<strong>and</strong>ards. Choosing agricultural<br />
practices that keep our soil healthy, our water<br />
clean <strong>and</strong> our animals happy. And most<br />
importantly, providing better-tasting, nutrientrich<br />
food.<br />
<strong>Organic</strong> farmers aren’t just growing food.<br />
They’re growing Canadian goodness.<br />
Source: OVCRT 2011
Think Before You Eat<br />
Why you should eat organic food:<br />
•It’s great tasting <strong>and</strong> nutrient rich<br />
•It’s produced without persistent toxic pesticides<br />
•It’s healthy for soil, plants <strong>and</strong> animals<br />
•It helps the environment by keeping our water<br />
clean <strong>and</strong> reducing our carbon footprint<br />
Next time you’re planning a meal, choose organic<br />
food.<br />
Think Canada <strong>Organic</strong>.<br />
Source: OVCRT 2011
Think Before You Eat<br />
Planning a meal? Think before you eat.<br />
Say yes to:<br />
•Healthy soil, plants <strong>and</strong> animals<br />
•Nutritious, real food<br />
•Environmental excellence<br />
•A healthier future<br />
Think Canada <strong>Organic</strong>.<br />
Source: OVCRT 2011
It’s a good sign.<br />
It’s a small symbol, but it carries a big<br />
message. It verifies the food bearing this<br />
label is produced under rigorous organic<br />
st<strong>and</strong>ards regulated by the government. It<br />
also represents good health, nutritious food<br />
<strong>and</strong> environmentally-beneficial practices. It’s<br />
not just a sticker.<br />
It’s a sign of goodness.<br />
Source: OVCRT 2011
Thank goodness, it’s organic<br />
Say yes to:<br />
•Healthy soil, plants <strong>and</strong> animals<br />
•Nutritious, real food<br />
•Environmental excellence<br />
•A healthier future<br />
100% Canadian Goodness<br />
Source: OVCRT 2011
Thank goodness, it’s organic<br />
Enjoy delicious <strong>and</strong> healthy foods, switch to<br />
Canada <strong>Organic</strong> food<br />
It’s produced under stringent, governmentregulated<br />
st<strong>and</strong>ards<br />
It offers great taste <strong>and</strong> vital nutrients in every<br />
bite<br />
It’s good for the environment because it keeps our<br />
water clean <strong>and</strong> reduces our carbon footprint<br />
Switch to organic food <strong>and</strong> experience goodness.<br />
Source: OVCRT 2011
Caring about our future today<br />
As organic farmers, we're not only helping Canadian<br />
families, we're also caring for their future. We proudly<br />
produce organic food because:<br />
•It's great tasting, rich in nutrients <strong>and</strong> healthy for our<br />
families<br />
•It's produced under rigorous, government-regulated<br />
organic st<strong>and</strong>ards, which do not allow the use of<br />
persistent toxic pesticides<br />
•It's good for the environment because it keeps our<br />
water clean <strong>and</strong> our soil healthy <strong>and</strong> reduces our<br />
carbon footprint<br />
Choose Canada <strong>Organic</strong>.<br />
Source: OVCRT 2011
<strong>Organic</strong><br />
Passionate<br />
Global<br />
Healthy<br />
Community<br />
People<br />
Sustainable<br />
Fresh<br />
Responsible<br />
Professional<br />
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Thank you<br />
Gunta Vitins<br />
Vitins Consulting<br />
Email: gunta.vitins@gmail.com<br />
Tel: 778-772-5996<br />
Vitins Consulting<br />
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