At some point or other, everyone who has gone to farm meetings has had the valueadded sermon preached at them. The basic speech comes with a few variations, but regardless whether it’s delivered by a slick consultant, an earnest public servant or even just a smart-aleck journalist, it always comes with the same main points.
Farmers are told they need to move up the supply chain and to stop being price takers. The only way for that to happen, the sermon says, is to add value and create something that’s not just a farm commodity.
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Farmers need to think about “building brands” and creating something that a consumer might want, rather than just another commodity that somebody else will make more valuable.
We’ve all heard it.
The reaction from farmers to this preaching has been mixed. Yes, most farmers concede that growing commodities has a history of being be a tough game. You don’t have much pricing power, you’re a long way down the chain from the end consumer and even at today’s prices you don’t actually get a very big share of the food dollar.
But at the same time, most farmers also rightly conclude that getting into valueadded is one of those things that’s easy to say and hard to do. Just a stroll down the aisles of any grocery store reveals there’s a dizzying array of products already out there, many from some of the largest food companies on the planet. So identifying and exploring new niches is going to be tough.
Then there’s the regulatory burden of food labelling, safety regulations and the like. Essentially any farmer who wants to get into value added has to learn an entire new industry while taking a not-insubstantial financial risk at the same time.
So how can someone with a great idea clear these hurdles? Where can they find the skills and knowledge they need to actually create a food product that can pass regulatory muster and muscle aside the other brands on the store shelves?
Many provinces have good research centres that say they can help. We went to Manitoba’s to find out how.
Provincial support
In a non-descript industrial park on the edge of the small city of Portage la Prairie, the Manitoba Food Development Centre (MFDC) is a modest “special operating agency” of the provincial government. According to Roberta Irvine, the MFDC’s business development officer, its purpose in life is to act as a resource for entrepreneurs and associations who are looking to develop new finished food products, so-called functional foods with health attributes, or new and innovative uses for existing products.
During a recent visit to the MFDC by Country Guide, Irvine explained how the centre can provide varying levels of support, depending on the goal and the scope of the individual project.
“We can help in a lot of different ways, from something relatively small like a nutrition label to developing a whole new product from scratch,” Irvine says. As well as developing products, the site is also an accredited food-production facility that can be rented by the day, allowing new manufacturers to get into the business without building a plant.
A quick tour around the facility reveals a dizzying array of food processing equipment, quality assurance laboratories, packaging lines and everything else you’d need to run a factory that produces food. But the real story, Irvine says, are the clients that walk through the doors or pick up the phone, wanting to create something new.
“There isn’t really a typical client,” Irvine says. “A client can be an individual with an idea, an established company that wants to make something new or even an industry association that wants to explore new uses for their crop.”
But are there any shared traits? Is there a certain, indefinable something that binds them all together? Irvine pauses for a second to consider the question.
“They tend to be people with a lot of drive — high-energy people,” Irvine says. “They really believe in what they’re doing and they put a lot of time and effort into it.”
Irvine wasn’t talking specifically about Reynauld Gauthier when she made that statement — but she might as well have been.
The Millet King
Gauthier is a farmer from near the predominantly Franco-Manitoban village of St. Claude, just a few miles south of the Food Development Centre. He’s been growing millet for more than 20 years and has built a solid business selling seed to cattle producers across the Prairies for swath-grazing programs.
Millet is a family of small-seeded cereal crops that are primarily grown for animal feed, and about seven years ago when he was on a sales call to a southern Alberta ranch, Gauthier was engaged in a bit of friendly chitchat with the woman of the ranch when he had a light-bulb moment.
“She was telling me about her problems with celiac disease — people who suffer from it can’t eat gluten,” Gauthier explains. “I thought ‘Why can’t we use this crop? It’s gluten free.’ It was right after that I started really investigating it, and I called the food centre in Portage la Prairie.”
In the ensuing years Gauthier has spent time, money and a heaping helping of his boundless energy pursuing this dream in various different forms, and he says the MFDC has been instrumental. Without it, Gauthier says, he would have faced an incredibly steep learning curve.
“It would have been huge,” Gauthier says. “I was a full-time farmer and I was selling seed already — but I didn’t know anything about the food business.”
Jumping in with both feet, Gauthier commissioned the centre to help him develop a number of different products. The centre, which operates on a cost-recovery basis, was his best and most economical option.
“It wasn’t cheap — there was a significant cost associated with developing these products — but I think it was definitely worth it,” Gauthier says.
By working through the MFDC Gauthier said he was able to get to the ready-for-processing stage, together with the knowledge he needed to make sure the millet products comply with existing food regulations.
Gauthier is currently finalizing the first products he’s going to take to market under his Millet King Foods brand. Among the products he’s working on are a waffle and pancake mix, a flour base and a millet breakfast cereal. He is currently looking for a co-packer to work with him on the cereal product, and there’s also a millet beer in the works. Gauthier is finalizing plans with a Montrealbased brewer to produce it under the “Old Fashioned Millet Beer” label.
“I don’t have the cash to build my own plant right now — but that doesn’t mean I can’t get started,” Gauthier says with a chuckle. “I’m just looking for someone now to work with — someone who’s good at what they do and honest, so they won’t just take my recipe.”
But Gauthier is also convinced that it’s not just the recipe that will sell the product in the end — it’s the identity that the products build in the marketplace after they’re released. He’s planning to sell himself as the Millet King as much as he’ll be selling beer, cereal and flour.
“People do care about where their food comes from,” Gauthier insists. “They want to know what’s in it and who produces it.”
And while he’s targeting the celiac market initially because it represents a ready market that’s not overwhelmed by existing food companies, Gauthier is thinking even bigger. After all, at a recent food competition sponsored by the Food Development Centre, one of the judges — a chef by trade — gave his product a great compliment.
“He told me ‘Reynauld, the celiac products I’ve tried always taste like either cardboard or sawdust, and yours don’t,’” Gauthier says. “That was really nice to hear, because that’s what I’m trying to produce — something that a celiac will buy, but that’s so good the rest of the family wants to eat it too.”
Unlike Gauthier, Margaret Hughes was no stranger to processing Prairie agriculture products when she contacted the Food Development Centre a few years ago.
Yumpeez
She and her sister, Trudy Heal, are the latest members of a family pulse processing business with a long history of splitting and packaging field peas and other pulse crops.
Their grandfather and a business partner founded the company, Best Cooking Pulses, in 1932. Until 2004, their father Geoff ran the operation, which has two processing plants, one at Portage la Prairie and a second near Rowatt, Sask.
“We were basically splitters — we clean and split peas, then package them for sale,” says Hughes. “We had developed a market for the seed coatings in the U.S. because they’re pretty much entirely dietary fibre — about 90 per cent-plus fibre. Ironically we didn’t have approval to sell it in Canada, which is why we first approached the MFDC, to earn that approval from Canadian regulators.”
It was during some of the early discussions with MFDC staff that another idea emerged. Was there any opportunity to take the split peas and create a unique product that might fill a market niche?
It was then that one of the food scientists at the MFDC suggested roasting the peas to create a nut-like product. “It is a different and much healthier take on snack food,” Hughes says. “It’s a high-protein, high-fibre snack that’s very low in fat.”
Hughes says the MFDC staff was instrumental in helping the company understand a new product and how it might be produced. Initially the concentration was on individual portion-sized packages of flavoured roasted peas, marketed under the Yumpeez brand name. They come in either barbecue or dill pickle flavour, and a big marketing push was aimed at parents who were looking for healthier options for their kids, especially ones who were involved in sports activities.
Hughes says consumers have embraced the products, but more slowly than they’d hoped.
“The reception has been good, but it hasn’t really taken off like we’d hoped,” Hughes told Country Guide during a recent interview.
So was it just a brave experiment that ended in failure? It might have been if the story ended there. But Hughes and Heal were convinced they were onto something. After all, they were now able to produce an extremely healthy product that had a pleasing crunch and they were convinced that there was a market out there for them — although finding it and exploiting it would take a different approach altogether.
“The place we’ve actually had the most success is in the unflavoured ones — what we call ‘naked’ Yumpeez,” Hughes explains.
In this case the market wasn’t selling directly to parents who wanted to make sure their kids were eating healthy snacks, or athletes looking for food products that wouldn’t put them off their dietary plan. Instead it was other manufacturers looking for healthier alternatives that could be substituted for products like peanuts in their ingredients list.
“One of our earliest customers — and a customer we’ve done a lot of business with since — was an energy bar manufacturer near Boston,” explains Hughes.
Hughes concedes that in retrospect she’s a little surprised at where this journey has taken the company, noting that there were a couple of pivot points where the direction changed entirely. But she also says that she’s happy with the way it has all worked out, and says that the MFDC was a terrific resource for their company and others just like it.
“The centre is in quite a unique position in the Manitoba market,” Hughes says. “They have a great range of skills in their staff, from product development to food science — it’s very helpful for anyone who wants to develop a new value-added food product.”
Ingredients
Peter Watts understands just what a triumph it is for Best Cooking Pulses to have created a market for a new healthy product with an existing manufacturer.
That’s because it’s the sort of market development work he things about day and night in his role as director of market innovation for the industry group Pulse Canada. The organization and provincial grower groups have worked closely with the Food Development Centre, Watts says, grappling with exactly these sorts of questions.
“The work we’ve done with the MFDC involves taking pulse crops and developing ingredients — things like flour and other fractions like starch and fibre,” Watts explains. “We then look at how they might be used in other products — in breading and batters for processed foods, for example.”
It’s an attempt to do something that’s never really happened before, industry insiders say — turning North American consumers into big customers of pulse products. The pulse industry knows that while production has taken off here in the past 25 years — largely in the Prairie provinces — we still don’t eat many pulses. Canadian consumption is pegged at only three kilograms per capita a year, and a recent study by Ipsos Reid suggests that even that modest number is inflated by our large population of recent immigrants from Southeast Asia.
So the challenge to the pulse industry is to get the rest of us to eat our veggies, and Watts says the key to that appears to be getting the pulses into processed products as ingredients.
But while processors are interested, especially after they hear about the health benefits of pulse products, Watts concedes that large manufacturers are reluctant to do anything to complicate their processes.
Efficiency equals money in this business, so any changes could potentially upset that delicate balance. And that, Watts says, is precisely where the Food Development Centre comes in. By funding research to address some of these concerns, they’re able to move the discussion with food processors on to the next level.
“The more information that you can show them that proves that it works, the better,” Watts says. “These are companies that are very efficient and every time they add or change an ingredient, there is a cost. Even if that cost is just adding another storage bin.”
But for manufacturers, the concerns go much further, Watts says. They also need to know that it won’t affect any of the rest of their processes, from how it works in existing handling and processing equipment to its flavour, palatability and what’s known in the food business as mouth feel.
Essentially when it comes to new food ingredients, processors are professional skeptics and the role of industry groups, working with institutions like the MFDC, is to defuse their concerns one by one. It’s definitely playing the long game, but Watts says he’s convinced that sticking with it will pay back dividends down the road.
“We have products that are very healthy,” Watts says. “They’re low fat, high fibre, an excellent protein source and can be an important part of a low glycemic-index diet.”
Organizations like the MFDC will be central to making that case to the companies that buy food ingredients, Watts says. They allow the industry to test-drive new products and concepts, do the science that will allow health claims on labels and other vital development work.
“There’s no question that the MFDC is an absolutely invaluable resource to the food industry in Manitoba,” Watts says.
Back in the lab
At MFDC, Roberta Irvine says from her perspective the organization offers a handful of benefits that food entrepreneurs can’t get anywhere else in the province.
First, this is a central resource and can actually help neophyte processors network and make the connections they need for the business side of their operations. They can put them in touch with anyone from a management specialist with Manitoba Agriculture to a processor that might be interested in co-packing arrangements.
“We have a lot of great connections to all the various players in the food business in the province,” Irvine says. “I don’t think anyone else is as well-connected as we are.”
Perhaps most important, however, is the role they can play as a sounding board for entrepreneurs who are convinced they’ve got a great idea but don’t know how to pursue it. A quick phone call can set up a meeting with people who understand the food business from front-to-back.
Says Irvine: “The first consultation is even free, so we really do encourage anyone with a good idea for a food product in Manitoba to call us.”CG
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Reynauld Gauthier sees a bright future for celiac-friendly millet products, but is betting he can also make foods that are so good everyone wants to try them
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Margaret Hughes of Best Cooking Pulses says they found success with their roasted Yumpeez by tapping into a wholesale market with an unflavoured version
