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Canada’s agricultural brand has fizzled

Canada used to be known as the top producer of the world’s best food. Now, if we’re lucky, we’re considered second-rate

As you sit in the cab of your combine, swather or truck this harvest season, a point to ponder is how Canadian agriculture will be remembered by the next generation.

I think back to my grandfather’s farming days when Canada was considered part of the “bread basket of the world.” Grain buyers depended on the plentiful and reliable supplies of grain available in North America.

Today, by contrast, South America and the FSU (i.e. Former Soviet Union countries) produce and export far more agricultural volume than Canada. We no longer feed the world but are merely one of many potential suppliers of food.

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Then, in my father’s time, Canadian grains were marketed as best in the world and a premium product. A key to sales was Canada’s pristine environment where grains were grown. Fresh air, clean water, and our cold winters limited insects and diseases in the crop. And while most farmers still believe it to be true, it is questionable if our customers and consumers still believe this.

Fusarium, blackleg, and ergot have cost us sales. GMO technology, while highly endorsed by Canadian farmers, has limited our marketing opportunities to Europe and other premium markets. Farmers bought into GMO technology before selling the benefits to consumers.

Worse yet are the too common occurrences of misuse of technology. No matter how the story of Roundup Ready wheat evolves, Canada’s reputation as a premium supplier has been stained by the Triffid flax experience and by farmers applying new pesticides and plant growth regulators to crops before MRL (maximum residue limits) for those products have been accepted by the market place.

As well, the misuse of pesticides through practices like not following labels, by the application of products too close to harvest, or by using glyphosate as a desiccant instead of its labelled use as a herbicide, can not only cost markets, but fuel public perception that Canadian farming practices and products are substandard and unsafe.

Most telling is that other countries are now usurping our claim of growing a premium product. New Australian promotional material for their wheat states: “Grown in a clean and safe environment” and “Australian wheat is produced in one of the cleanest environments in the world.”

But, you may argue, we offer organic production for consumers and buyers, not just conventional production.

Interestingly, Canada does not even make the top 10 list in terms of acres farmed organically, according to Helga Willer and Julia Lernoud, researchers with the Research Institute of Organic Agriculture (FiBL) in Frick, Switzerland. In their BIOFACH 2017 report they point out nearly half of the 50 million hectares of land world-wide which is classified as organic is in Australia.

In terms of organic producer numbers, India has roughly one quarter of the world’s organic farmers. Yet I doubt if many people consider India a premium producer of foodstuffs.

Unfortunately, Canada’s claim of being the world’s premium agricultural producer is questionable in the minds of many consumers.

This is also likely the sentiment of many Canadian farmers today. The current generation of producers seem much more concerned about maximizing production and competitiveness than quality. This can be seen in the switch to higher-yielding but lower-quality wheats on many western Canadian farms.

Quality concerns by international buyers are increasing. This has even forced reclassifications of some of the most popular hard red wheat varieties from the globally recognized CWRS classification to the new lower value Canada Northern Hard Red.

Unfortunately, what we have gained in production we are losing in value.

Worse yet, Canada is no longer competitive in world wheat markets. Higher land prices, higher transportation costs and higher input costs have pushed production and transportation costs of Canadian-grown wheat significantly higher than Black Sea wheat landed in the Middle East, which has been a major market for our grains.

In fact, a 2016 Australian study found Russian farmers could grow wheat profitably for less than US$200 per tonne. Can you compete at that price?

Even more troubling is that we have become an unreliable supplier. Transportation issues have resulted in increasing backlogs of ships waiting to load in port and rising demurrage costs over the last five years.

We are increasingly uncompetitive in terms of price, quality and reliability.

The value of our brand

We live in a time where brand is critical, no matter what the product, commodity or industry. A strong, recognizable brand increases sales and prices. Equally important, a strong brand creates a customer who is unwilling to accept substitutes.

Because of this, a brand may be the most valuable asset of a company or business. Widespread acceptance of a brand name can even displace the generic term for the product. Consider how many people ask for a Kleenex rather than a facial tissue or a Coke rather than a cola.

However, failure to live up to the brand can be a disaster. Think back to 1985 and the introduction of New Coke. In an attempt to increase their already dominant share of the cola market, Coca-Cola reformulated their flagship soft drink. By making it sweeter, New Coke was closer in taste to Pepsi, and Coke’s executives hoped it would attract Pepsi drinkers to the Coca-Cola brand.

Instead, the marketing gamble flopped. Instead of attracting new customers to New Coke, Coca-Cola quickly lost existing customers. There was such public outcry against New Coke, that three months after the introduction of New Coke, Coca-Cola reintroduced the original coke formulation as Coke Classic.

New Coke was rebranded as Coke II but it never caught on and within a few years was dropped from the market. And eventually “Classic” was dropped from the Coca-Cola label.

Smart marketers realize that brand is more than just a description of a product. The best brands actually elicit an emotional response from customers who feel good about buying the product. Brands are as much about perception as they are about fact.

Organic producers targeting local markets have this figured out. They understand the consumer will pay a premium for clean, safe, locally produced, and especially “green” foodstuffs. They heed surveys such as the Ipsos survey commissioned by Business Development Bank of Canada that found “86 per cent of Canadians consider food that comes from Canada to be safer than food from abroad, while 82 per cent say they make an effort to buy locally grown and produced food.”

Branding can work for selling commodities as well as local organic production. In fact, the “Made in Canada” brand has been used to sell wheat overseas for years. But is it possible Canadian agriculture is experiencing exactly what happened to Coca-Cola in the mid ’80s?

Are we ignoring the factors which made Canadian wheat attractive to buyers in the first place? Are we losing (or have we lost?) the Canadian brand for agricultural commodities? Have we lost the trust of the purchasers of commodities and the consumers they serve? Have we become just another global commodity producer?

Today’s branding tells us how a product will be remembered in the future. So as you are harvesting the crop this fall, ask yourself: What should the Canadian agricultural brand be? More importantly, ask yourself: What am I doing that supports or diminishes that brand? After all, branding always begins with the product and producer.

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Comments

  • Joe

    I think that in general Canadian growers need to stick to their guns: continue using the best technology and practices available to produce products which there is a market for. Consumer fads like ‘organic food’ and gluten free come and go. Eventually the consumers realize things like organic produce are not healthier and have a large environmental footprint and are less sustainable (organic production consumes more resources per pound of product and this is reflected in the price).

    This article does not seem to recognize the fact that Canada is a small player in the modern grain export market because of the lack of productive acreage in the country (our total production is tiny on the global scale). It also omits the fact that Canada contains almost no acres capable of producing high quality hard red wheat which meets modern standards (standards have increased over time). Shockingly it compares our competitiveness to deliver wheat to the middle east with the Black Sea region (long distance over sea shipping vs. a next door neighbour). In the past the black sea didn’t have much quality wheat available for export. Russia is a very difficult place to compare production costs with since no one really seems to know what’s going on there, even the Russians. But yes, I can produce wheat profitably for less than 200USD which 263CAD at today’s exchange rate.

    However, I do agree that we need to work hard on protecting our brand and continuing to improve quality. The same things that worked in the past will not maintain our brand in the future. Growers need to be extremely careful when applying products near harvest time in wheat and during pod fill in soybeans and these messages have not been adequately explained to growers by the CGC, PMRA, provincial regulators, and product vendors. Even though practices like this can improve quality, harvestability, and profitability, sometimes the cost to our reputation outweighs these gains. However, some of these practices are new and Canada will get them straightened out eventually, but time is of the essence.

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  • Ted Kuntz

    The excessive use of glyphosate has not only harmed the reputation of Canadian farmers, it has harmed the health of our infants and children. Time for farmers to be more discerning of the claims of the pharmaceutical industry. They are not acting in our best interests and should not be trusted with our health.

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