Eyesafe 2020
Features

Roadmap to a Robust Food Processing Industry on the Prairies

For its first few decades as a province, Saskatchewan was synonymous with wheat production.

The province’s nicknames, “The Wheat Province,” “Canada’s Breadbasket’’—even its coat of arms bearing three iconic wheat sheaves—symbolized the importance of grain production to the provincial economy.

Even today, Saskatchewan remains a wheat powerhouse, producing 50 per cent of the country’s wheat and 10 per cent of world wheat production.

But our dependence on ‘King Wheat’ came at a cost—a less diversified economy and less populous province than might otherwise have been the case. Macdonald’s National Policy, the Crow’s Nest freight rates and concentration of political and economic power in Eastern Canada all conspired to stunt Saskatchewan’s growth.

More importantly, a decade-long depression and drought in the 1930s devastated the province’s wheat-based economy and drove tens of thousands of people out of the province.

While agricultural production recovered during the 1940s and ’50s, the province’s population didn’t surpass its 1936 peak of 931,567 until the early 1960s. The province’s economy remained overly reliant on primary production until the 1970s and ’80s, when efforts to diversify the agricultural economy began.

By the early 2000s, the province’s food processing industry generated $1.8 billion in revenues annually from more than 160 processing companies. During the last 20 years, Saskatchewan’s value-added agri-food sector has virtually doubled in size, with over 300 food processors generating $4.3 billion in revenues a year.

But the Saskatchewan Party government aims at more than doubling that number in the next 10 years. In its Plan for Growth to 2030 announced last November, the province wants to increase value-added agricultural revenue from $5 billion in 2017 to $10 billion by 2030.

“Value-added production is one of the most important economic drivers for the growth of Saskatchewan’s economy over the next decade,’’ the Growth Plan says.

The growth plan calls for canola processing to increase from 45 per cent of the crop, generating $3 billion in revenues annually, to 75 per cent of the crop, generating an incremental $2 billion in revenues.

Similarly, processing 50 per cent of the province’s pulse crops from the current 10 per cent would boost value-added production revenues by roughly $1 billion. Doubling meat-processing and animal feed value-added revenues would bring in another $1 billion a year.

The province also plans to invest more than $70 million by 2030 to support new investment, grow small businesses, commercialize new technology and enhance sector competitiveness, according to the growth plan.

“Adding value to the products we export around the world will support the growth of new industries and new investment in our province,” Premier Scott Moe said in releasing the growth plan last fall.

“Technology and innovation will be the catalyst for growth in our core economic sectors and the growing diversification of our economy,’’ he added.

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One community that has enthusiastically embraced the province’s growth strategy, especially in the area of value-added food processing, is Moose Jaw.

The city of 34,000 is welcoming new food processing companies and existing business expansions with open arms, even renaming its industrial park to reflect the importance of value-added food processing.

The city’s industrial area is currently the site of a number of value-added processing plants, including Simpson Seeds pulse processing plant and AgroCorp International’s $10-million pulse processing plant.

Also in Moose Jaw, Donald’s Fine Foods of Richmond, B.C. operates Thunder Creek Pork, Saskatchewan’s only hog processing plant, which processes more than 6,000 hogs per day and employs 250 people.

Recently, Donald’s Fine Foods announced it was looking at the feasibility of converting the former JBS/XL Foods beef processing plant into a sow processing facility. Donald’s Fine Foods acquired the former beef processing plant in 2016.

Mayor Fraser Tolmie is confident the new sow processing plant will get the green light. “We’re obviously very excited about the news and it’s a good step forward for us. “

The refurbished plant would employ 100 workers and provide a value-added market for cull sows, low-value animals that currently have to be shipped the eastern U.S. for slaughter, reducing producers’ profits.

Tolmie says converting the former beef plant, which had been shut down for nearly 10 years, to process sows will complement Donald’s Fine Foods market hog processing operation.

“We look at this as an opportunity to have one of the largest processing plants in Western Canada,’’ Tolmie adds.

Indeed, Tolmie believes that Moose Jaw could become a model for the government’s growth plan to increase value-added food processing in the province. “I believe that Moose Jaw could be leading the province out of this economic slump. People need to eat.’’

Tolmie said the province has the right combination of resources—food, fertilizer and fuel—required to make Saskatchewan a value-added food processing powerhouse.

“This could be an economic generator for generations to come.’’

Jim Dixon, the city’s economic development officer, said the city is even rebranding its industrial park as the Moose Jaw Agri-food Industrial Park.  “It’s recognizing all the advantages we have around agriculture, shipping, our location…our location near Regina is close enough that we draw labour from there. We actually have a strong labour market, which is what site selectors and investors look for,’’ Dixon says.

Tolmie says Moose Jaw is now pitching itself to other food processing and value-added manufacturing companies looking for places to build plants.

“We’re not waiting for businesses to come to us. We’re going out and marketing our community. We do realize that we’re in a global competition to attract people to our community. We can say we have all the things (needed), but people won’t know that unless you tell them.’’

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A recent arrival to the Moose Jaw area is Zak Organics Food Co., owned and operated by Allen Zak, his wife Marilyn and their two sons, and business partner, Daena McMurdo. The company was formed in 2015 to manufacture and market Zak Organics Crunchy Peas, line of organic green pea snacks developed by the company.

A couple of years later, the company opened a 6,000 square-foot manufacturing facility in Moose Jaw and signed distribution agreements with major food retailers to sell their products in Canada and the U.S.

The Zak Family, Zak Organics

The Zak Family, Zak Organics

The Zak Organics story goes back nearly 120 years to the family farm at Fir Mountain in southwestern Saskatchewan.  The farm was started in 1911 by Allen’s great-grandfather and has been in the Zak family for four generations.

“I started farming in 1997 and switched the farm to organic in 2007,’’ said Allen Zak, who bought the farm from his father.

After getting certified as an organic producer in 2010, Zak began growing various types of crops, finally settling on green peas on his 7,000 acre farm. “We wanted to take something that we grow right to the finished product and add value to it.’’

They tested 20 varieties of peas and, after much trial and error, sought technical assistance from the Saskatchewan Food Industry Development Centre in Saskatoon. Zak also went back to school and got his MBA.

“It’s a steep learning curve. Value-added agriculture requires a different skill set than just regular agriculture. But it has lots of rewards, including adding value to the products and employing more people and everything else that goes along with that.’’

One of those rewards was creating a unique organic snack that’s good to eat and good for you, too. “Pulse snacks are tasty and healthy and nutritious. North Americans are a chip-snacking culture. We’re trying to provide an alternative, a healthier option.’’

Zak said Crunchy Peas are “much higher in protein, much higher in vitamins and minerals, much lower in fat, salt, and sugar than chips. It’s similar to eating nuts, but nut-free’’ for those with nut allergies, he added.

Another advantage to growing peas is their agronomic benefits for producers.  “They’re very healthy for our farm, they’re adding nitrogen to the soil, they use very little water and they’re very resistant to disease.’’

“It’s a natural fit for an organic farm.’’

With its manufacturing facility in Moose Jaw, Zak Organics can control product quality and ensure that preservatives, artificial flavours, trans fats, dairy, gluten, MSG and cholesterol are not used in the manufacture of the snack food.

“There’s no preservatives, there’s no additives, anything like that, in our product. Nobody in Canada or the U.S. that we could find had an organic roasting facility was also gluten-free and nut-free.’’

Zak Organics distributes the products to more than 130 independent food retailers, major retailers like Superstore, London Drugs, Pharmasave and Federated Co-operatives, and recently signed distribution deals with Sobeys and Safeway stores.

With the COVID-19 pandemic, Zak Organics has shifted more towards online sales, which has proven to be highly successful. “That’s how people are buying. You have to go where the people are.’’

Zak Organics currently employs about eight people, mainly at the Moose Jaw facility. It also buys locally produced organic herbs and spices and sources its packaging locally. “If we can find a Canadian source, we’ll do that for sure. And, of course, everything we do is organic.’’

While organic food production and processing costs tend to be higher than conventional production and processing, Zak says organic producers can charge a premium for their products.

“We feel there’s a 10 to 15 per cent premium. Being a farmer, I realize the difference in production systems. Being a food processor, I realize (organic) is an ever bigger deal.’’

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In Regina, Canada’s first plant protein supercluster is taking shape.

Protein Industries Canada (PIC) was one of five ‘superclusters’ awarded funding from the federal government’s Innovation Superclusters Initiative in February 2018. PIC will receive $153 million under the superclusters initiative, which will be matched dollar for dollar by PIC’s 200 or so partners, including private sector companies, research institutes and industry organizations.

Since taking over as CEO of Protein Industries Canada (PIC) in October 2018, Bill Greuel has been busy bringing together PIC’s partners from B.C. to Ontario, but primarily in the Prairie provinces, to build a plant protein supercluster.

Greuel says Western Canada has everything needed to become a global plant protein powerhouse. “We produce about 14 million tonnes of plant protein on an annual basis. We’re processing a very small fraction of that.’’

“The growing global demand for what we’re sitting on here is really unprecedented. The trends that are supporting the growth of plant protein in the global marketplace are strong.’’

So far, PIC has launched about six projects, worth an estimated $100 million, despite the COVID-19 pandemic, which has slowed many businesses down.

PIC’s projects are aimed at “supporting for-profit private sector companies that are really focused on commercial outcomes, the development of new processes, new technologies, new products, new services that have real economic impact,” Greuel says.

Recently, PIC announced its seventh project between Regina-based pulse processor AGT Food and Ingredients and Saskatoon-based start-up, ulivit superfood inc., which specializes in plant-based protein products.

The $11.3-million project will see AGT and ulivit work together to process pulses – peas, lentils, and beans—into texturized pulse protein (TPP), which be flavoured and shaped into products, like sausage, chicken and burger patties.

The market for plant-based meat products is currently $5 billion a year and could hit $40 billion by 2025, according to Laura Gustafson, founder of ulivit. “We are thrilled AGT and PIC are part of our plant-protein journey and look forward to creating delicious and sustain plant-based for Canadians and the world.’’

Murad Al-Katib, president and CEO of AGT, said AGT has been at the forefront of the “plant-based revolution’’ since its inception 20 years ago. “Meat alternatives, like those we see in many products in the marketplace, have really gained traction with consumers as they search out new and innovative products that are good for them and taste good as well.’’

PIC’s Greuel says the AGT-ulivit project is “a classic example of how the cluster is supposed to work—collaboration between large and micro companies to bring innovations to the market.’’