In­no­va­tion drives food, bev­er­age pro­cess­ing

Lo­cal ini­tia­tives help­ing to open up new mar­kets and de­velop new prod­ucts

Toronto Star - - SPECIAL REPORT: LOCAL FOOD PROCESSING - DICK SNY­DER

It’s the not-so-sexy part of On­tario’s eco­nom­i­cally pow­er­ful agri-food sec­tor, but the in­dus­try devoted to food and bev­er­age pro­cess­ing is a vi­tal part of the lo­cal food value equa­tion.

And th­ese days, it’s where a wave of On­tario-bred in­no­va­tion and in­ge­nu­ity is driv­ing eco­nomic ac­tiv­ity for busi­nesses new and old by open­ing new mar­kets, de­vel­op­ing new prod­ucts and pro­vid­ing On­tario farm­ers with fresh op­por­tu­ni­ties.

Take the cel­e­brated On­tario ap­ple. More than 16,000 or­chards pro­duce more than 165 mil­lion kilo­grams of ap­ples in an av­er­age year, many of which are en­joyed by devoted ap­ple-a-day­ers with a hearty crunch. This rep­re­sents $634 mil­lion in eco­nomic ac­tiv­ity and 5,127 full-time di­rect and in­di­rect jobs.

The mere act of pack­ing those ap­ples into three-pound bags is part of the food-pro­cess­ing chain. So is stor­age, sort­ing, grad­ing and wash­ing.

But per­haps you’d rather drink that ap­ple, say in one of On­tario’s cel­e­brated craft ciders. Pick­ing, crush­ing, fer­ment­ing, bot­tling — th­ese steps are all part of pro­cess­ing.

“Just look at the bev­er­age sec­tor alone,” says Burkhard Maus­berg, CEO of the Friends of the Green­belt Foun­da­tion and Green­belt Fund, which pro­vides grants for projects that in­crease lo­cal food con­sump­tion.

“Mak­ing beer is a pro­cessed prod­uct. Mak­ing wine, mak­ing juices . . . it’s all pro­cess­ing. And there is a huge value-add in that bot­tle of On­tario wine ver­sus an im­port. Buy­ing a bot­tle of On­tario wine puts about $8 back into the lo­cal econ­omy.”

Then there’s ap­ple­sauce, ap­ple pie fill­ing, dried ap­ples, ap­ple slices. Pro­cess­ing takes many forms, from the slight­est han­dling of a whole food to the trans­for­ma­tion through cook­ing into a ready-to-eat dish.

“We’re see­ing in gro­cery stores a lot more prod­ucts . . . in smaller runs and higher qual­ity, which is what our plant is de­signed to fill.” RICK SPRAGUE SPRAGUE FOODS

On­tario grows And it’s all part of On­tario’s greater agri-food sec­tor, which sup­ports more than 790,000 jobs and con­trib­utes more than $36.4 bil­lion to the prov­ince’s GDP.

Ac­cord­ing to the On­tario Min­istry of Agri­cul­ture, Farm­ing and Ru­ral Af­fairs (OMAFRA), On­tario’s food and bev­er­age pro­cess­ing sec­tor counts more than 3,800 com­pa­nies and 96,600 jobs in the prov­ince. This makes On­tario the sec­ond-largest food and bev­er­age man­u­fac­tur­ing sec­tor in North Amer­ica.

It’s a sec­tor that con­tin­ues to grow.

Ac­cord­ing to OMAFRA, the pro­vin­cial and fed­eral gov­ern­ments are in­vest­ing about $11.7 mil­lion in 223 food and bev­er­age pro­cess­ing projects across the prov­ince. This sup­ports On­tario’s ef­forts to dou­ble the growth rate of the agri-food sec­tor and cre­ate 120,000 jobs by 2020.

Unique in Canada, Toronto’s Food Starter in­cu­ba­tor was launched just over a year ago. Food Starter pro­vides equip­ment and con­sul­tants for en­trepreneurs to test and re­fine their prod­ucts for mar­ket.

“Food Starter comes in at that point where you have peo­ple with great ideas who see an op­por­tu­nity to serve un­met con­sumer needs,” says ex­ec­u­tive di­rec­tor Dana McCauley, a vet­eran food mar­keter, food trends ex­pert and cook­book au­thor. Of the 100 bud­ding com­pa­nies work­ing with Food Starter, McCauley says they focus on lo­cal in­gre­di­ents and lo­cal tal­ent and ex­per­tise in cre­at­ing healthy and unique prod- ucts. Th­ese busi­nesses are help­ing to re­de­fine the word “pro­cess­ing.”

“We need to take the word back,” she says.

“With pro­cess­ing, you can make crap or you can make great qual­ity food. You know, with my car I can drive in a way that hurts peo­ple or I can stay be­tween the lines and stop at the red light.” Canned heat Sprague Foods in Belleville, Ont., is a mid-sized food pro­ces­sor of canned beans and pulses, soups and sauces. Es­tab­lished in1925, the com­pany has rolled with the times: Their or­ganic prod­ucts such as chick­peas, black beans and lentils used to be con­sid­ered spe­cialty prod­ucts for an eth­nic mar­ket. Now, th­ese are pop­u­lar with a broader con­sumer base.

“We’re see­ing in gro­cery stores a lot more prod­ucts than when I was a kid. Prod­ucts made in smaller runs and higher qual­ity, which is what our plant is de­signed to fill,” Rick Sprague says.

The com­pany’s canned beans are wet packed in wa­ter and cooked with steam right in the can on the pack­ing line, which helps main­tain nu­tri­ents and qual­ity.

“We’re a bit of a hy­brid be­tween a restau­rant and a food pro­ces­sor. We pre­pare food prod­ucts here like I would in my kitchen.”

Sprague has been work­ing to de­velop new canned soups and “meal builders” that will ap­peal to dis­cern­ing, qual­ity-ob­sessed and glob­ally in­flu­enced palates.

“Last fall, we made a very large com­mit­ment to Costco for our new or­ganic lentil soup with veg­eta­bles. It was our big­gest or­der in our 92-year his­tory. A truck­load a week was go­ing to be com­ing out of here, and that was go­ing to cause a bot­tle­neck.”

With a grant from the Green­belt Fund, Sprague mod­ern­ized its pack­ing line to meet in­creas­ing de­mand and in­tro­duce seven new prod­ucts. By the end of 2017, the com­pany will have tripled rev­enues over early 2016.

It’s a sim­i­lar story at NMK Foods Inc., a man­u­fac­turer of ha­lal-cer­ti­fied prod­ucts made from On­tario-sourced poul­try. The com­pany ob­tained a Green­belt Fund grant to up­grade its pack­ing line, im­prov­ing ef­fi­ciency and ca­pac­ity. This is open­ing new re­tail op­por­tu­ni­ties with na­tional gro­cery chains. The com­pany ex­pects to add four new full-time jobs by this sum­mer.

“Buy­ing lo­cal has in­trin­sic ben­e­fits to us, but the help we have re­ceived from the Green­belt Fund and Food­land On­tario, mon­e­tary and be­yond, has helped us reach a much higher level of busi­ness op­er­a­tions,” says NMK’s Adnan Khan.

The mar­ket mo­men­tum for lo­cal foods has driven Toronto’s Fresh City Foods Inc. from its in­cep­tion six years ago as an or­ganic food de­liv­ery ser­vice into new ter­ri­tory with meal kits and pre­pared foods. Com­mit­ment to lo­cal “We have an iron­clad com­mit­ment to lo­cal,” says founder Ran Goel. “It’s not that we use it ‘when we can.’ ” A Green­belt Fund grant helped the com­pany build a new pro­duc­tion fa­cil­ity cus­tom­ized to process whole in­gre­di­ents from its own farms and more than100 other farms and grow­ers.

Fresh City’s lo­cal food sales reached $2.6 mil­lion in 2016. With Jan­uary’s new prod­uct launches, the com­pany ex­pects to add $1 mil­lion in mar­ginal rev­enue, with the ad­di­tion of 20 full­time jobs to its ex­ist­ing staff of 50 by the end of the year.

“All the de­ci­sions I’ve made are based on want­ing to be in a place where if we win, other peo­ple win, so­ci­ety wins,” Goel says.

“That sounds corny, but I wanted to feel that every ex­tra buck of rev­enue means an ex­tra job in our fa­cil­ity, an ex­tra job for other farm­ers, bet­ter health for our cus­tomers, a cleaner en­vi­ron­ment.

“I re­ally feel that what we do has a broader im­pact than just mak­ing a dol­lar of rev­enue.”

SPRAGUE FOODS

Belleville’s Sprague Foods is a mid-sized food pro­ces­sor of canned beans and pulses, soups and sauces.

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