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Why Edmonton is so well-suited as a hub for food processors

BUSINESSEdmonton.com
Why Edmonton is so well-suited as a hub for food processors

Edmonton is a better fit for food-processing than you might think

    EDMONTON ECONOMIC DEVELOPMENT

APRIL 25, 2018


What makes Edmonton so well-suited as a North American hub for would-be food processors?

With the Alberta government heavily investing in agriculture and its offshoots, a thriving community of forward-thinking researchers in our academic institutions and the close-knit group of existing food-processing businesses ready to welcome newcomers to the fold, the Alberta Treasury Branch in November 2017 predicted continued steady growth in the province’s agri-food industry. And the heavy concentration of natural resources; facilities; government, academic and business support in Edmonton means this city is the place to be to get in on that growth.

Some of the ethnic-food companies thriving in Edmonton:

There are 302 food processing companies in the Edmonton region, with a combined total earnings of more than $500 million. This local industry employs more than 4,000 full-time workers.

And with dollars spent on local food products circulating within the community eight to 15 times, increasing the number of local food-processing organizations will have far-reaching benefits to the city, from sustainable recession-proof jobs to an increased tax base and increased income.

NATURAL FIT

A close second to Saskatchewan in the annual number of sunny days—Edmonton alone basks in an average 2,345 hours of sunshine every year—the province of Alberta is rich in agricultural resources.

With about 32 per cent of Canada’s arable land, there are more than 50 million acres of agricultural land in the province. Small wonder, then, that Alberta is the nation’s largest producer of barley, second-largest for wheat and canola, and third for oats.

With an explosion of growth in farms producing pulses such as peas and lentils, along with a thriving livestock industry, the Edmonton region is well positioned for easy access to fresh raw materials for food products.

  • According to the Alberta Pulse Growers’ 2016/17 annual report, the province enjoyed a record harvest in 2015 of more than 1.8 million acres of pulses, with about 2.4 million acres seeded in 2016.
  • Pulses, packed with protein, fibre, vitamins and minerals, are a food producer’s dream ingredient. At the fall 2016 Pulse Showcase, innovative chefs shared beef patties, crispy chips and even red and black licorice— made at the Edmonton Region's Food Processing Development Centre — to illustrate the ingredients’ limitless potential.
 The Agrivalue Processing Business Incubator -- (Teryle Simpson/Government of Alberta)

The Agrivalue Processing Business Incubator -- (Teryle Simpson/Government of Alberta)

ACCESS TO MARKETS

Highway 16 (also called the Yellowhead) and Queen Elizabeth II highways offer easy and direct access to North American export markets in all directions, while both Canadian National Railway (CN) and Canadian Pacific Railway (CPR) provide efficient rail transport.

  • Edmonton is the northernmost point on the Ports-to-Plains Corridor, which links the region to major mid-west American cities and the Texas Gulf Coast.
  • The city provides quick access to the North American Super Corridor (NASCO), which connects to midwest and southern U.S. markets and ports.
  • The city’s Anthony Henday Road, completed in the fall of 2016, is the province’s first ring road. The $1.8-billion, 80-kilometre ring offers a highly efficient transport route around the city, to the airport and toward eastern and western markets.
  • In early 2016, the federal, provincial and municipal governments announced a $1-billion plan to ease congestion on the 25-kilometre portion of the Yellowhead Highway that passes through the City of Edmonton. This corridor sees traffic volumes of up to 81,000 vehicles per day — almost 20 per cent of which are transport trucks. Scheduled to begin in 2021, the project will eliminate traffic signals and intersections, converting the road from an expressway into a freeway.

Direct cargo flights regularly depart Edmonton International Airport, about 30 km south of the city’s core, to cities such as Chicago, Memphis, Cincinnati and Seattle in the United States, Shanghai and Tianjin in China and Amsterdam, the Netherlands.

The EIA Cargo Airport boasts a more-than-90-per-cent on-time rate in 2017 for service, is open 24 hours a day, seven days per week, and has the capacity and expertise to handle perishables and cold storage, crucial to exporting food products.

It’s also located within the Port Alberta Foreign Trade Zone (FTZ), reducing trade barriers and enhancing access to Canadian markets.

GOVERNMENT SUPPORT

Alberta is the third-largest exporter of food products in Canada, behind Ontario and Quebec. The Edmonton Economic Development Corporation works closely with all levels of government to help food companies access a wide range of supports, from grants and funding to seminars and workshops in how to start a business, to trade missions to viable markets to grow exports.

The Edmonton region is home to a variety of provincial government-funded facilities—such as the Food Processing Development Centre and the Agrivalue Processing Business Incubator (the latter the beneficiary in 2016 of a $10-million infusion from the Alberta government that will see about 2,300 square metres added to its 7,000 square metres by 2019)—where startup companies can hone their products from inception to export.

According to the provincial Ministry of Agriculture and Forestry’s business plan for the period ending in 2019, “Investing in innovation, value-added agriculture, food and forest products expands revenues and makes a valuable contribution to Alberta’s Economic Growth and Diversification Strategy.” Some key takeaways from the plan:

  • In 2015, Alberta’s top export markets for agri-food products were the United States (about 40 per cent of total exports), China, Japan, Mexico and South Korea. Exports of manufactured foods to these five countries were worth about $4.2 billion, and the provincial government aims to increase that number to nearly $4.9 billion by the end of 2019.
  • The ministry aims to support the development of 226 new agri-food products for market in 2018/2019, and 228 in 2018/2019.
  • The government plans to grow its funded collaborations with food-products industry investors for research and development from $5.2 billion in 2015 to $6.3 billion by the end of 2019.

The provincial government’s Alberta Innovates is also heavily invested in promoting research into the use of food ingredients for non-food purposes, a cutting-edge example being the government’s CNC Challenge 2.0.

  • Of the 38 organizations that applied to join the CNC Challenge 2.0, 11 were each awarded up to $25,000 in funding and the use of the Alberta Innovates-Technology Futures pilot plant— one of the few in the world capable of producing high-quality CNC in kilogram volumes—for research and development of innovative uses for plant-fibre cellulose.
  • The most abundant organic polymer on earth, CNC is biodegradable and non-toxic and has rich potential in the fields of health and energy, among others.
 The Food Processing Development Centre -- (Government of Alberta)

The Food Processing Development Centre -- (Government of Alberta)

ACADEMIC STRENGTH

The University of Alberta’s Faculty of Agricultural, Life and Environmental Sciences contributes significant research to the local agri-food industry in the areas of processing and packaging technologies for food products and the development of value-added ingredients from meat, milk, eggs, grains and plants.

The campus’s Agri-Food Discovery Place is engaged in continuous world-class research in which staff and academics work together to bring companies to commercialization in such growth areas as natural health products and functional food, among others.

  • In 2015, the U of A’s faculties of science and agricultural, life and environmental sciences together pumped out nearly 1,000 graduates in the broad sphere of biotechnology. These recent graduates are well placed to contribute to furthering agri-food research in areas such as crop science, plant biology, food science and food technology, all crucial components of innovating in Edmonton’s thriving food-processing scene.
  • U of A researchers at the campus’s Food Microbiology Laboratory conduct biochemical, physiological, and functional genomic analyses of bacteria in food model systems.
  • The U of A is a major player in the study not just of ingredients, but of the technology required to process those ingredients. Research in extrusion processing, fluid extraction and emulsion regularly contributes new, more efficient and often more environmentally friendly processes to the local food manufacturing industry.

The faculty promotes the kind of cutting-edge research environment that inspired recent postgraduate students Silvia Ronzani and Claudio La Rocca to study the many future-focused food attributes of the lowly cricket. The result? Camola Sustainable Bakery, which produces tasty and nutritious baked goods made with a not-so-secret ingredient: cricket flour. Crickets, they discovered, are extremely high in protein and nutrients, and require a fraction of the resources a herd of beef cattle does to raise. Food companies making their start in Edmonton can look to form creative relationships with researchers like these.

At the Northern Alberta Institute of Technology, meanwhile, the culinary program trains students in food safety and other areas, and collaborates with the Food Processing Development Centre on project development where culinary expertise is required.

BUSINESS CLIMATE

More than 25,000 people work in Alberta’s food and beverage industries, and sales of more than $13 billion annually make it the province’s second-largest manufacturing sector.

“The biggest thing about Edmonton is it's a relatively settled business climate,” says Jerry Bigam, president and CEO of the city’s Kinnikinnick, one of the world’s largest gluten-free manufacturers. Of five major Canadian cities—Edmonton, Montreal, Toronto, Vancouver and Calgary—Edmonton ranks lowest in terms of the cost of operating a food processing business, when considering labour, facility lease, taxes and utilities.

According to the most recent federal census, Edmonton is the fastest growing major city in Canada, with a population nearing one million in 2016. With the demographics skewing young—the best-represented age group is between ages 25 and 39—there is a large pool of labour eager to work.

For food processors, the city is also a uniquely collaborative environment. “People find time for each other, it's more than just making a buck,” says Jeff Clark, CEO of Kitchen Partners, in the business of sauces and dips in Edmonton for more than 25 years. “It's actually about working together, having a good time together and making exciting things happen.”

  • The Food Processors Logistics Research Council is just one example of the collaborative spirit at work. For more than a decade, 10 group members representing a diverse cross-section of the city’s food-processing industry have come together for consolidated freight purchasing to significantly lower shipping costs. Clark, a member of the FPLRC, particularly enjoys the CEO Club, which meets frequently throughout the year to discuss “business-to-business issues, business challenges— we’re always looking for ways to help and assist one another.”
  • There is also strong provincewide support in the form of the Alberta Food Processors Association. The non-profit group has been a rich resource for organizations in all areas of food processing since 1974, and for an annual $250 membership fee, it offers training to help navigate complex regulations, meet and exceed safety standards, and grow export reach, just to name a few.
  • Funded in part by the federal-provincial Growing Forward 2, the AFPA’s LEAP program is of special note. In 2016/17, with financial assistance from Growing Forward 2, the AFPA hired two sustainability experts to design Leverage Efficiencies to Drive Profit & Productivity (LEAP), which helps streamline food companies’ processes to bring them in line with better environmental practices and ultimately reduce their footprint. AFPA members had access to four workshops about carbon management, a magazine focused on better green practices, and a sustainability conference in May 2017.
  • Another informal partnership to watch is the work being done together by the Alberta Pulse Growers and the Food Processing Development Centre, who teamed up in 2016 to introduce pulse ingredients and uses to Alberta’s food processors. Together, they leverage the growth in sustainable protein crops with some of the brightest and most creative minds in food science, to create marketable food products to satisfy local and global tastes.

With a strong labour force, relatively low costs and a tight-knit community of business owners, the city is a great place for an entrepreneur to take a calculated risk.

 Range Road Meat products are premium-level food products sold widely across Western Canada.

Range Road Meat products are premium-level food products sold widely across Western Canada.

THRIVING CULINARY SCENE

Diversity

Edmonton is a multicultural centre, its population of immigrants fast growing. The 2016 federal census showed an influx of nearly 80,000 new immigrants to the Edmonton region since 2011, and today immigrants make up nearly one-quarter of the population.

That’s reflected in the city’s diverse culinary scene. Says Kitchen Partners’ Clark, “We bring our customers to the city—that live in Toronto, Vancouver or other markets—(and) take them and help them experience some of the cultural variations in cuisine that the city has become well-known for.” With the wealth of ethnicities represented in the city’s bustling restaurant scene, there’s no end of inspiration—not to mention opportunities for thriving partnerships—for local food companies.

In fact, the FPDC’s Ken Gossen has seen a rapidly growing trend of recent immigrants using his facility to start and build ethnic-focused food businesses, such as halal. “New Canadians want their traditional comfort foods, can’t find them in grocery stores, and want to broaden that out to share with the community,” he says.

    Focus on local

    Chefs at many of the city’s top dining spots have a mandate to use locally sourced and seasonal ingredients as often as possible, even in this northern clime. Edmonton had a strong showing in En Route Magazine’s ranking of the nation’s top 10 new restaurants of 2017, with Alder Room (10), Café Linnea (6) and Clementine (5) all placing in the list of must-visit spots.

    All three boast menus that take inspiration and ingredients from local sources. Not to be outdone, larger chains also take advantage of local resources—as just one example, Boston Pizza buys many of its sauces and dips from Edmonton’s own food-processing giant, Kitchen Partners.

    FEASTival

    An annual event sponsored by the AFPA, FEASTival showcases the creative work of local chefs as well as the diversity of local ingredients. Guests enjoy a four-course meal prepared by participating establishments, using only locally sourced foods and food products the chefs were notified of 24 hours prior to the dinner. The dinner brings new restaurants into the public eye, showcases local food products and supports an endowment for aspiring chefs through its silent auction.