The Conference Board of Canada says the food industry “has
become an innovation laggard and does not appear to be very concerned about
it.”
“Canada’s food processors are not increasing –in fact, they
are barely maintaining – global market share in the face of competition from
established and new players,” the board says in a new report.
“Most Canadian firms in the food industry don’t think
innovation is a priority,” says the board.
The combination of low investment in research and low
priority on innovation explain why Canada’s share of global food and drink
exports declined from 4.2 per cent in 2000 to 3.2 per cent in 2010, says the
Conference Board. The share increased to 3.9 per cent last year.
Brazil’s share nearly tripled and China’s share almost
doubled and now they each hold 6.3 per cent.
The Conference Board’s recommendations are that:
- - Food processors should innovate to create new
products for emerging and fast-growing markets.
- - Small and medium-sized companies should innovate
for niche markets to increase their profits. “Innovation is as much a survival
strategy as a growth strategy.”
- - Supermarket chains should use the data they
collect in their loyalty programs to ensure that their product innovations meet
consumer demands.
- - Retailers and food processors should improve
their working relationships, clarifying retailers’ expectations about product volumes,
shelf fees, food quality and food safety, because that would reduce
product-innovation waste.
- - Governments should promote more competition and
export market access. “More innovation could be stimulated by transitioning
sheltered subsectors to fair but competitive environments,” says the report. -It
may have in mind the supply-managed dairy and poultry sectors.
- - The Food and Drugs Act needs to be overhauled “to
accelerate innovation in healthy food and food safety.”
- - Government funding for food research and
innovation “should be better aligned with innovators’ financial needs.
Currently many firms with genuine financial need are failing to access public
research and development funds for innovation. Savings could be redirected . .
. (to) the primary agriculture sub-sector where innovation returns on public
research and development have historically been strong.”
Y(The new five-year federal-provincial Growing Forward program for farmers puts a higher priority on innovation.)
- - “Incent more food innovation with social value.
Governments should adjust regulation and use financial incentives to support
and stimulate healthier and more environmentally-sustainable food innovation.”
