Assessing Canada’s plant-based food competition

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Industry Reports

A rising global demand for plant-based foods means rising global competition for leading the supply of plant-based ingredients and food. Canada is one of several countries increasing its investments into the plant-based food, feed and ingredients space—and those other countries won’t easily give up the fight for the lead spot.

The Ernst and Young Report recently commissioned by Protein Industries Canada lists the United States, China, the Netherlands and Singapore as some of Canada’s top competitors in the plant-based food space. Bill Greuel, CEO of Protein Industries Canada, agreed with this assessment, adding that each country presents as a competitor for different reasons.

“[The United States has] a history of large-scale processing in soy, and they have the infrastructure to meet demand,” Greuel said. “They also have established relationships between ingredient manufactures and food companies. Between these two factors, they represent a strong competitor to Canada.”

China’s competitive advantages come down largely to its low labour and processing costs. The Netherlands, meanwhile, offer the infrastructure, advanced technology, and private and public support to advance their sector. And Singapore has made significant regulatory changes related to plant-based foods, while supporting the innovative atmosphere the country has been working to build.

While these countries each offer their own advantages to the world of plant-based foods, Canada is holding its own against them. Greuel said our own plant-based foods ecosystem is growing at a rate similar to our competitors, putting us in a good place to achieve the opportunity we’re facing.

Both Greuel and the Ernst and Young Report credit our ability to reach this opportunity ahead of our competitors to several factors. Both also say, however, that more work could be done to strengthen those factors. When it comes to counter-balancing our perceived business cost barriers, for example, increasing value from the end products developed could make a significant difference.

“When you think about business costs, there’s both sides of the equation: one is the costs side … but the other side of the equation is the value that we can generate from the products that we’re producing,” Greuel said. “We need to find the balance between cost and the value that we can extract. So the value that we can extract is driven by the functionality, the unique characteristics, leveraging our good international brand because of our strong regulatory and food safety system, and making sure we’re selling products into the highest-value markets that are available.”

Canada’s plant-based foods and ingredients sector also faces plenty of opportunity related to collaboration. Changes in consumer demand occur quickly, and it can be difficult for an individual company to keep pace if working alone. If companies along the value chain partner together, however, they can create a full feedback loop, allowing them to communicate these changes more easily, react quicker and supply consumers with the products they’re looking for before competitors can.

At the same time, the assurance of a steady stream of capital is necessary to help make both low business costs and full ecosystem collaboration a complete reality.

“Our best estimate is we have to increase processing capacity in Canada by almost 6 million metric tonnes of crop today,” Greuel said. “The capital required to do that is measured in the tens of billions, not the hundreds of millions. So we really need to educate the venture capital community, we need to incent patient capital into the market, and we need to create opportunities for innovative processing and food manufacturing companies to talk directly to the capital community.”

By increasing its strength in these areas, Canada can make itself more competitive, putting itself at an advantage compared to other countries vying to lead the global plant-based food, feed and ingredients market. Join Protein Industries Canada next week as we discuss key actions the country can take to help see these potential strengths become a reality.