Agropur looks to milk the public for ideas

• The largest dairy processor in Canada is looking to the public for ideas that will help the company think outside of the carton.

Agropur Co- operative launched a web- based program called Inno Challenge on Monday, inviting anyone to pitch novel ideas that might change food, drinks, packaging or anything else that might bring innovation to the dairy of the future.

Although Agropur already invests $ 15 million a year for internal research and development from its office in Longueuil, Que., the company’s CEO, Robert Coallier, says that with some dairy products losing market share to substitutes, this is an opportunity to source ideas from those not currently working in the industry.

“We have a great team internally, but they’re very focused on what they know. We’re looking for what we don’t know,” Coallier said.

The financial contributions are not particularly hefty, with up to four $25,000 grants to come up with prototypes using resources from Agropur’s facilities, along with work space and business- development consulting services with Ag- Bio Centre. The new innovation, with the lofty goal of making consumers “excited by dairy products,” will ideally get to market by 2018.

So far, the firm has set no specific targets related to patents or revenue, only that it is looking for ideas that will increase market share.

“We might be copied at the end of the day, but the first one at the finish line always has the gold medal,” Coallier said.

This is the first so- called “open innovation” initiative in Canadian dairy, an industry that has faced significant disruption in both consumer habits and the global market.

Canadians are drinking less fluid milk now than they have in the past while yogurt consumption has risen. Coallier says overall industry growth is between one and two per cent a year, with Agropur reporting sales of $5.9 billion in 2015.

Agropur launched the initiative just a day after Prime Minister Justin Trudeau signed the Comprehensive Economic and Trade Agreement with the European Union, a deal that worries some Canadian dairy producers because of an increased cheese import quota.

The co- op, which is comprised of some 3,367 dairy farmers, has expressed concerns over free- trade agreements like CETA that could threaten Canada’s quota system, which allows producers to get paid well while high tariffs on imports keep foreign products away from Canadian consumers.

“Timing is everything,” Coallier said. “This process that we’re implementing today is more important than ever because it’s going to differentiate us from the rest.”

Sourcing the public for ideas is a growing trend for grocery stores and elsewhere in the food industry, according to Sylvain Charlebois, a Canadian researcher in food distribution and policy at Dalhousie University.

“There are many headwinds in the dairy sector right now so I think it’s a good thing for Agropur to reach out and connect with the broader public to get some novel ideas,” Charlebois said.

He says that while inhouse researchers are aware of the business areas that are currently successful, they don’t necessarily have the foresight to generate novel, innovative ideas.

Charlebois says that alt hough t here have been some developments in the dairy industry over the past couple of decades — such as yogurt drinks and singleserving packaging — for the most part innovation has been fairly stagnant.

“( Open innovation) is actually a healthy thing to do. I would encourage any company to do that because after a while you go through that groupthink phenomenon,” Charlebois said. “You rely on cash cows and you think you’re doing great but over the long term you don’t necessarily see or appreciate the threats.”

THERE ARE MANY HEADWINDS IN THE DAIRY SECTOR RIGHT NOW.