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John Rowe, president of island Abbey Foods, displays the honibe product at his company in Charlottetown, P.E.I. (Brian McInnis)


Canada's food producers relish taste of success Add to ...

Canada's manufacturing industry typically conjures images of machinery, steel, cars and technology.

These sectors are vital not just because their health is critical to the country's economy, but because they have come to define what Canada is, and what it brings to the world.

But the country's largest manufacturing sector is no longer one that produces auto parts or high-tech gadgets like BlackBerrys.

It's food. The sector is the country's largest manufacturing industry by sales, the most recent statistics show. Sales set a record last year, topping $80-billion - more than textiles, paper, machinery and aerospace combined. Also last year, it quietly passed transportation equipment to become the industry's top employer. Solid demand in Canada and abroad is helping the resilience, and so is the sector's adaptability to change.

From giants like McCain, Saputo and Maple Leaf to mom-and-pop makers of butter-chicken sauce and pita bread, the sector has steadily expanded over the past decade and now employs about a quarter of a million Canadians. Even in the recession, as most other sectors slumped, food sales kept growing.

The success echoes that of other niche manufacturers in precision machinery or textiles. As global manufacturers struggle to find their place in a post-recession world, the food industry is undergoing sweeping changes, expanding to new parts of the globe and seeking out niche markets. These specialized products, which range from ethnic foods like tortillas and Vietnamese spring rolls, to gluten-free breads and high-fibre pasta, are rapidly becoming mainstream. Organic and health-food products - such as cheese with added Omega 3 - are also expanding.

The rush to niche markets reflects changing consumer tastes and, especially as boomers age, a predilection for healthier food. Globe-trotting consumers are developing a taste for international flavours, and the industry is responding.

Experts believe the sector could form an even greater share of Canada's GDP in the coming years - a vivid contrast to other pockets of manufacturing, which are slicing jobs, closing shop or shifting production overseas. The recession wiped out a quarter of a million manufacturing jobs and its share of the country's economic output has shrunk.

The food sector isn't without its challenges. Like other manufacturers, a strong Canadian dollar is squeezing margins. So are high commodity prices. It's less productive than peers, relies too heavily on the United States as an export market and red tape means new products can take ages to come to market.

But as food prices soar, Canada could become a world leader in this diverse field. It has the raw materials, research facilities and abundant water supplies. A multicultural, well-educated population and trusted brand name also give Canada an edge.

From ducks to honey

Central Canada - Ontario and Quebec - is home to two-thirds of Canada's food manufacturing sector. Atlantic Canada hosts several large producers, such as McCain Foods in New Brunswick - the world's largest maker of frozen French fries. The West has meat processing and churns out many of the raw materials used in production, from wheat and canola oil to pork, lentils, mustard seed and milk.

The growth symbolizes the potential for Canadian companies to compete globally. And, unlike other manufacturers, many in the food sector have no intention of outsourcing as they expand.

King Cole Ducks, Canada's largest duck producer, embodies many of the industry's shifts. The company, based in Newmarket, Ont., began in 1951 when Jim Murby visited a nearby farmer's market and realized demand for duck outstripped supply. So he began raising them to serve the local market.

The problem is that other than Quebeckers, Canadians don't eat a whole lot of duck. So King Cole adapted its strategy in several ways. For one, it hitched its growth to expanding immigrant markets that do enjoy duck, such as Koreans and Eastern Europeans.

It began to look overseas, targeted cruise-ship lines and restaurant chains. And it marketed its sustainable approach - the ducks are free run and by-products produce zero waste.

But most importantly, it has morphed in recent years from a producer of a raw material - duck - to a manufacturer of value-added products. Packages of cooked, sealed roast duck à l'orange, char-grilled roast half ducks and smoked boneless duck breast are now shipped as far as Japan, Tahiti and Mexico.

"We can't go head-to-head and compete with China. But we can in terms of quality and food safety," says Patricia Thompson, director of sales, duck farmer and granddaughter of Mr. Murby, at the company's spotless, chilly plant.

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