Could that idea that you’ve got buzzing around in the back of your head grow into a major commercial success if you took it to a food development centre? Who knows? And how much it would cost?
There’s a lot to learn about Canada’s food development centres, but the fact is, few of our farmers have ever been inside one. So Country Guide has gone on a sort of field trip, and here’s what we found out.
First, there are both private and publicly run centres in just about every province across Canada, plus a number of municipal centres too, and their job is to provide experts and facilities to help would-be food entrepreneurs develop, test and produce their food products.
Read Also
Riding the tariff rollercoaster
Farmers are accustomed to roller-coaster years. But the current geopolitical windstorm is something else entirely. On his cattle operation near…
It’s also important to know that these centres deal with clients of all different sizes, from the individual with a family recipe to large, multinational food companies with a proven track record of developing successful food products.
For farmers, though, there are a ton of questions. If you’ve got a great idea for a value-added food product, at what point should you approach your local food development centre for help?
What will you need to do when you walk in the door? Is it a simple matter of hiring them, as you would an agronomist, or will you have to sell the centre on the idea that your concept is worth exploring?
If you have to sell them, what will you need to know about the market and about your potential competitors? And just how would you find all that out?
Plus, what can you expect the centre to help you with? Will they offer just technical support or will they provide business support as well, like how to set your price and how to achieve realistic sales targets? And what are some of the trends in the food business that you need to understand to be more successful with your food product?
There are a lot of questions.
How to start the conversation
The Saskatchewan Food Industry Development Centre (SFIDC) in Saskatoon offers facilities, equipment and trained technicians to provide technical support that helps food entrepreneurs scale up production of their product to a commercial level.
“In most cases, people have a recipe already,” says Carmen Ly, communications director at SFIDC. “They have been selling at the farmers market or have made something for gatherings that their friends love. They may already be making it in small batches in a health-inspected kitchen and selling it in limited quantities to a small number of retailers.
“That’s usually how it starts, and when they feel that they can make a business out of it, that’s when they generally approach us to help them scale it up. We may need to fine-tune their formulation, review their labelling and provide advice on what else needs to be done before commercial production. We have hundreds of pieces of equipment to manufacture a variety of food products.”
For convenience, most food entrepreneurs will go to the centre in their own province, although sometimes it’s worth going farther afield to access specialized equipment or services that the local centre doesn’t offer.
The Ontario Agri-Food Venture Centre (OAFVC) at Colborne specializes in production support and has a scale-up facility that provides similar services to SFIDC for low-risk food processing (in other words, the facility does not do any meat processing).
The Colborne centre sees itself as the first step in the process for food entrepreneurs who often arrive with only a bare-bones concept.
“We suggest people that can help them conceptualize their product, get it to the point where they understand how to make their product, what’s it’s going to take, what the ingredients are, and do a nutritional facts table,” says Trissia Mellor, OAFVC manager.
“We help people when they’re not quite sure where to go or what to do next. We can give them ideas for things like sourcing packaging, or labels, or how to get French translation, or for the food science side of things. Based on where the client is and what the product is they’re looking to develop, we’ll give them some ideas on where they might turn for their next step. It’s very specific to what their outcome is based on, who we know in the industry, and what their specialties are.”
OAFVC can also connect clients to other partners and resources, like independent food scientists and development programs such as the George Brown College Food Innovation Research Studio’s FIRSt program. This program provides small and medium-sized Toronto-area businesses in the food and beverage industries with access to expertise, technology, equipment and state-of-the-art facilities to accelerate new food ideas from concept to commercialization. There is also the Guelph University Food Innovation Centre and the Niagara College Canadian Food and Wine Institute Innovation Centre, as well as other independent food scientists who can help at various development and research stages.
Then the entrepreneurs come back to the OAFVC when they are ready to scale up their production to serve more demand.
The Food Development Centre (FDC) at Portage la Prairie, Man. was the first in Canada, and since 1978 it has been offering services to help food entrepreneurs develop their products. Robin Young, director of value-added who operates the FDC as a branch of Manitoba Agriculture, says the sooner clients approach the centre in their process the better, because its staff can help navigate the complicated requirements inherent in the food business.
“The food business is unique and there are permits and licensing requirements, even down to how to write a product label,” Young says. “We encourage people to talk to our business development team even if they just have an idea so we can have some of those conversations.”
Some entrepreneurs need help across the board. As they get more established, others often learn what their strengths are and focus their energies there. For them, the centre’s role becomes one of helping them fill any potential knowledge gaps or to find other service providers to help them.
“We would refer a client to the FDC once they have refined their concept and have an idea of where they want to go with their business,” Young says. It’s important to get it right, he says. “The FDC charges for our services, and we want to make best use of their resources.”
Staking your turf
A conversation Manitoba Agriculture advisors always have with their clients is about how to establish margins and differentiate their product.
“We advise people to set their margin right off the top. It’s intimidating because often the cost of their product, when they are starting out, is going to be high, and they are coming to market often at a higher price point than their multinational competition for the same section,” Young says.
Marketing today is not simply about putting a product on a grocery store shelf. Today’s retailers expect the food entrepreneur to be a part of the marketing story to help drive customers to the stores to buy their product. That means the entrepreneur must develop unique marketing to convince consumers to believe in and buy their brand.
“We encourage our clients to find out what is in their story that provides that extra value that someone will make a point to buy their product,” Young says. “When they’re talking to retailers, we encourage them to bring that story as part of their value proposition.”
For the small entrepreneur who does have a product that they have been producing already, perhaps in a commercial community kitchen, the best place to test it is at a farmers market or other venue where they have a direct, ongoing relationship with customers. It’s valuable for gauging how well the product sells and sometimes for refining the product based on the feedback they get.
In fact, Young says many of the branch’s clients continue to attend farmers markets even after their products are available in retail stores because they value the input they get and keep the personal relationship strong with consumers.
Help with the homework
Mellor says the OAFVC looks for clients who have a safe, proven process. “By that I mean they’ve made the product at home or, better still, in a small commercial kitchen before, and they’re already selling it somewhere,” she says.
“It could be a farmers market, it could be a farm-gate stand, it could be one or two boutique retail outlets, but they’re looking for an opportunity to grow their business, grow their production, grow their batch size, and that’s when they come to us for help.”
The OAFVC is also very often a first point of contact with someone who basically just has an idea for a product that has yet to be produced and proven. With such cases, the centre helps them understand what it’s going to take to develop that idea, and it will also help connect them to the right people to do it.
Not everyone who has an idea for a product, even when they have already made and sold that product, will have a true understanding of what it takes to scale up the recipe, so OAFVC staff will often arrange a tour of its facilities to help the client visualize what making a lot more of their product will entail.
Sometimes it’s simply a matter of understanding terminology. For example, what is the difference between a proofing oven, a convection oven and a steam oven.
“When folks start out in a community kitchen, that’s sort of a church basement situation; they might not realize what that looks like to to scale up from a pot of sauce to a 190- to 200-litre batch,” Mellor says. “For new clients or products, we can do a trial shift where they come in for up to four hours of production time and we try to process as close as we can to 60 litres or 60 kilos of their product. It’s helpful for the team to understand what the process is to get the end product that the client wants, and helps the client understand what that process is going to look like and if we can do it here.
A lot of questions
“We’re happy to sit down with them, help them understand the process that they need to go through, and help them understand where they are in that process,” Mellor says.“They may have a great idea, but there are some things they need to think about like how are they going to source their ingredients, what the final product is going to look like, what the packaging is going to look like, what they need on the label (French and English for example), who is their target consumer.”
Business essentials
At the very least, before a new food entrepreneur makes the call or visits their local food development centre, they should have a basic understanding of where they want their business to go, says Carmen Ly at Saskatchewan’s food centre.
“Not just the idea itself, but the business and marketing plan,” Ly emphasizes. “Even if it’s just a draft. At least that tells us that they have explored the potential of the product/business and it gives them direction on how to proceed with their business.”
And also be prepared to spend some time looking in the mirror. Ontario’s Trissia Mellor has worked with a number of farmers who have developed successful value-added products, and she finds the number one thing they share is a passion for what they are doing.
“I think it holds true across the board. The more excited they can be about the process, the continuous learning and growing their business, the more successful they will be,” Mellor says. “The ones that I’ve seen that have fallen off are the ones that say, ‘I don’t have to do this, I could be doing this other thing instead’.”
As Mellor asks, “If you aren’t committed and excited about your product, how can you get a consumer excited?”
Of course, cost is a big part of any business plan, and how much a centre will charge will depend on where the client is at with the product and the complexity of that product. Development costs could range from hundreds to thousands of dollars, depending on those specifics.
While Ly’s centre can assist with scaling up the recipe to produce larger batches and doing nutritional analysis and food safety testing, it doesn’t offer business planning or marketing analysis. That’s where the entrepreneur needs to do some homework before they think about manufacturing the actual product on a bigger scale.
To help, the Saskatchewan centre offers online tools as a starting point for clients to assess where they are at with their business. This helps them explore if they are really ready to take the next step on developing and scaling up the product.
“We want to make sure that they are able to answer the questions, and really give their food business some thought,” Ly says. “They need to know that there is a market for the product first.”
One of the best ways for clients to do that market analysis is to simply go shopping.
“Take a look at what’s out there, especially in the retail stores or shelves where you envision your product would be,” Ly says. “What are the products you will be competing with? What is their packaging like? What’s their competitive edge compared to yours?”
What’s trending in food?
For food development centres across the country, the big spike this year is in plant-based and animal-derived proteins.
Ontario Agri-Food Venture Centre (OAFVC) at Colborne, Ont., only works on plant-derived food products, but the upsurge is huge, with everything from cauliflower french fries to products that put a new, often healthier spin on traditional products, such as sugar-free ketchups and barbecue sauces.
“One of our new Canadian clients has created a ketchup-type sauce that as a condiment also counts as a serving of vegetables,” says Trissia Mellor, manager of the Ontario centre, where business has doubled since 2019. “Many of the products that we are seeing are much more health-conscious.”
The Food Development Centre (FDC) at Portage la Prairie, Man., is getting busier and is well positioned to take advantage of the growing protein trends in today’s markets.
“We do produce such high-quality proteins, both animal and plant, in Manitoba and we’ve seen all along that there is an interest in protein-type products,” says Robin Young, director of value-added at Manitoba Agriculture. “Health and wellness is still a strong trend, and the clinical nutrition market is massive for products that provide a specific health benefit to patients with a specific condition.”
The Saskatchewan Food Industry Development Centre (SFIDC) at Saskatoon is also seeing huge interest in plant-based proteins in the area of vegan meat alternatives and non-dairy foods. “Our extrusion technology, coupled with our years of prototype development work in meat alternatives is really paving the way for Saskatchewan’s food industry,” says Carmen Ly, communications director at SFIDC. “We have successfully developed various plant-based meats including jerky, burgers, chicken nugget, and seafood. The possibilities are endless.”
In Ontario, Mellor also sees more growth in clients asking the centre to connect them with local farmers.
An example is one food processor who is committed to being as close to zero waste as possible.
“We have some clients that work hard at creating a whole closed-loop system like that,” says Mellor. “We also have clients that come in and ask us if we can help them to source some of their ingredients locally.”
Historically, the Ontario centre saw a lot of farm families looking for help to develop value-added products, and they still do see some. And while its current protein focus means FDC is serving more established companies, keeping strong links with the farm community is still a high priority.
“Some food entrepreneurs don’t come from agriculture or know anything about agriculture, so connecting them to the value chain is something I think we do really well,” says Manitoba’s Robin Young. “We love working with farm families and farmers that are looking to add value. They know the production end of their value chain … it’s the other end of the value chain, closer to the consumer, where we can help educate them.”
Interestingly, retailers are also seeking out more local suppliers because farmers are so much more in tune with consumers than they used to be.
But there’s another twist too, Young says. Now, it’s retailers who are walking through farmers markets to see what products they can develop.”
Everything needs to be right, though, and it all needs to be adapted to the current consumer, including packaging.
“They are not building packaging that makes the product look bigger than it is,” Mellor says. “They are very truthful in what they put to market, as in ‘this is my product, see it and take it for what it is’.”
How much will it cost?
Although some food development centres give detailed breakdowns on their websites of the cost for different processes, equipment rentals and staff time etc., there isn’t an average cost because it’s dependent on the stage a client is at when they come to the food lab for help and the type of product they want to develop.
“The project cost increases depending on the challenge and the product,” says Carmen Ly, communications director at the Saskatchewan Food Industry Development Centre. “Product development could cost from $1,000 to $20,000. We deal with small entrepreneurs to large multinational companies who are paying $50,000 for development. Project contracts are established before we start the work so that clients are aware of the costs.”
– This article was originally published in the May/June 2022 issue of Country Guide.
