Italy’s rich culinary traditions may have just gained UNESCO heritage status, but the Nutri3D project by the country’s public research agency ENEA shows scientists are out to push boundaries in the quest for sustainable, nutrient-rich snacks.

Prototypes include snack bars and glossy “honey pearls” designed to preserve flavour and nutritional value.

“In a world where arable land is shrinking and climate change forces us to rethink food production, the goal is to keep making what we are used to eating,” said Silvia Massa, head of ENEA’s Agriculture 4.0 lab.

The aim “is not to grow the plant itself, but its cells,” she added.

‘Italians add creativity’

Northern Europe has led early efforts, with Finnish labs producing fruit compotes from cell cultures and researchers in Zurich developing cocoa-like flavourings.

“We Italians add creativity, combining cellular food with recovered by-products,” Massa said, referring to the fruit residues from jam production for example.

The project is run with EltHub — an Italian private technology R&D firm that is part of ELT Group — and Rigoni di Asiago, a family-owned company specializing in organic food products.

At EltHub in the central region of Abruzzo, ENEA’s plant-based “inks” are shaped using a 3D printer.

An ENEA survey found 59 per cent of respondents willing to try such foods.

The technology could also be useful in resource-scarce settings, such as space or in conflict zones, said EltHub director Ermanno Petricca, dubbing the snacks “fruit for astronauts”.

ENEA is also testing microgreens and nano-tomatoes for space cultivation.

On Earth, 3D food printing could enable tailored nutrition for people with dietary restrictions. A plant-based steakhouse in Rome, Impact Food, is already offering 3D-printed sliced meat on its menu.

— Reporting by Matteo Negri

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David Hudson of IMI International, a global consumer tracking company, says there’s growing support for Canadian dairy products – even above the lofty levels of support of the past 10 years.

“Cutting through the noise, there is a lot of love for Canadian dairy farmers,” he said at the recent Dairy Business Summit put on by the Canadian Dairy XPO in Stratford on April 1.

The overall sentiment towards dairy farmers in Canada has risen from 74 per cent very positive or somewhat positive in January to 81 per cent very positive or somewhat positive in March.

He says the positive sentiment is expressed across all age demographics.

Support for dairy farmers isn’t new and has been high for the almost 10 years the company has been tracking it in Canada. What’s different is the increases in the past few months.

Hudson also showed numbers that illustrated growth in people’s intent to purchase Canadian products. A recent survey showed that 34 per cent of Americans purchased products because they were made in the U.S.A., whereas Canadians’ purchase of Canadian products jumped 11 per cent in a week to 63 per cent. Hudson says he expects the next survey will show Canadians’ commitment to Canadian products will jump to 80 per cent.

Opportunities with new Canadians

There were close to 500,000 new immigrants arriving in Canada in 2024, which represents new market opportunities, says Hudson. The federal government has since lowered the number of immigrants coming in the future, but those who are now here are committed to using dairy products.

New immigrants from parts of Asia are more committed to cooking with dairy than other Canadians, but Hudson said to make sure to give them the dairy products they are used to, along with introducing them to new ones.

That follows the trend seen by Quality Cheese, where they are making more paneer, a cooking cheese popular in India. Albert Borgo, said at the dairy business summit that the company he owns with his brothers is working on more ethnic dairy products, as the company expands capacity at its Orangeville plant.

He says there’s real interest in higher protein products in the marketplace and some people are getting that from dairy products.

New immigrants are more interested in quality than quantity and aren’t as focused on price as other Canadians, says Hudson.

“The freshness of dairy is likely to resonate with newcomers,” he says.

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As problems go, this one might seem unimportant or maybe even irrelevant, but for today’s farmers — and especially for farmers looking to grow and diversify their businesses — this hollowing out has very real consequences.

That’s because the infrastructure and the support services that would facilitate startups and innovative business strategies like value adding and vertical integration are increasingly missing from our regional food systems.

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Want to flex your business smarts? Want to grow your farm without growing your land base? More and more often, Canada lacks the environment for vertical integration, value adding or diversification. The essential services — the people we used to call “middlemen” — have moved in-house with the large corporations.

Importantly, the investment needed to support small and medium-sized food ventures has tightened too.

Expansion-minded farmers aren’t the only ones to feel the potential consequences of this trend. As we’ve seen this decade, today’s complex, long-distance supply chains are vulnerable to disruptions like pandemics, wars, trade disputes, weather-related disasters… or even a simple computer glitch like the CrowdStrike update that created havoc in July.

In fact, the list of vulnerabilities keeps growing. Today’s supply chains get accused of everything from exploiting low-paid workers to pumping out greenhouse gases, resulting in the threat of more regulation and higher production costs at every step.

“Our hollowed out regional food systems in Canada are now being seen as hugely problematic,” sums up Sandra Mark, founding executive director of the Small Scale Food Processor Association (SSFPA).

“The missing middle contributes to food insecurity for all Canadians,” Mark says, “as well as making it very challenging for local and regional food producers to reach the market.”

As a result, rural communities have lost small, independent businesses along with many of the jobs and economic activity that growing farm businesses can create.

Consolidation has also driven up costs for consumers for everything from transportation to a loaf of bread.

Country Guide readers might think the pandemic sparked so many headlines about supply chain issues that they’d still be hot-button issues. Often, though, they aren’t. When Penny Fox, general manager of Community Futures for the St. Paul-Smoky Lake region of Alberta, walked into her local Co-op grocery store in June, she found many food shelves were bare. A “supply chain/computer issue” had already closed down all the Co-op’s cardlock gas stations, and stores across northeast Alberta were unable to bring in food and other grocery items from the Federated Co-operative warehouse in Edmonton.

“People don’t get it until they walk into the store and there’s no food there,” says Fox. “They’re still surprised when there are empty shelves. Why?”

The opportunity

How do we fix the missing middle?

In part, the missing middle is a result of a trend well known to farmers. As independent business owners retire with no one to carry on operations, they get gobbled up by larger companies.

Even some popular farm programs get a share of the blame, such as export-oriented agri-food policies and a regulatory environment that favours large-scale processors.

In farm country, though, the biggest impediment is money. Investment in Canada’s food system is chronically low.

More research is showing how hard it is for small food producers and processors to get money to grow their businesses, even when the demand and potential markets are there. Part of the problem is, most people simply don’t understand how the food system works.

Now, however, there’s growing support for a strategy called re-regionalizing our food systems, with its focus on supporting farmers and small and medium-sized businesses.

Mark, for instance, has focused on the concept of building co-operative, localized value chains. SSFPA is working on a comprehensive resource library and a business plan platform for food entrepreneurs that will help potential investors better understand their business and place within in the industry.

But there’s another huge issue, and there’s a drive underway to create an early-stage fund so investors can help grow the food system.

“If they put their money into the fund, they have the assurance that the due diligence will be done for them,” Mark says.

There is potential for farmers to be in on both ends as creators of new ag and food businesses and also as investors, says Kent Mullinix at B.C.’s Kwantlen Polytechnic University.

“We have to create the economic environment for this post-production sector to emerge,” Mullinix says. “In doing so we will create new business opportunities for farmers and local food businesses, and allow substantial economic benefits to be captured and multiplied.

Unequal impacts

For women food entrepreneurs, it’s even more difficult.

Make no mistake, there are a lot of women entrepreneurs across the country. About two-thirds of the Canadian food businesses in the SSFPA are owned by women.

Even so, research by multiple universities and a new SSFPA survey show women business owners still have a tougher time getting financing.

“Every woman who is trying to get a business going in the food sector is running into the missing iddle,” says Mark. “So often a woman would have a good product, and a big retailer would want the product in all their stores, but she would have to give up because she couldn’t possibly grow fast enough to make that happen. We see founders quitting at the point when they should be ready to grow, because they couldn’t get money to grow.”

Statistics Canada data shows that although small and medium-sized enterprises (SMEs) generally have the same capital needs, and request similar levels of funding, women entrepreneurs generally receive 58 cents on the dollar compared to men entrepreneurs. WEKH (Women Entrepreneurship Knowledge Hub) also found that in Canada, women business founders receive only four percent of venture capital, and Mark says the figure for the food industry is likely even lower.

In response to the shortfall, SSFPA turned to the federal government’s Women’s Enterprise Strategy for support putting together a program called Venture-Capital Ready (VCR).

“The aim was to give women the tools that they need to understand the investment process, and to understand how they had to strengthen their business and their financial and personal confidence, so they would be in better shape to go forward and seek investment,” says Mark.

Initial expectations for the VCR were conservative, Mark says. They anticipated they might recruit 25 women from across Canada into the program, but as of late July 2024 the number is more than 200.

“The demand for this information and support is strong. Most of these women entrepreneurs need a lot of support to prepare to face even an interested investor,” Mark adds. “The program includes specialized training resources including the InvestorQ&A program and awareness training for investors as well through our investment partners SVX and Movement 51.”

Many of the women applying for the VCR don’t end up in front of potential investors because they aren’t ready. The strength of the program is that it has developed an extensive database of resources from all around the country that women can access online to find help and training for whatever stage in their business journey they are at.

Questions for women

One of the biggest issues for women is that investment sources ask women different questions than men.

“There are unconscious biases that the women are forced to deal with that men are not,” says Dr. Ellen Farrell who works with SSFPA to deliver the InvestorQ&A training as part of the VCR program.

That unconscious bias usually means women are asked questions that put them on the defensive rather than providing an opportunity for them to shine. As an example, investors may ask a woman questions about their family and community involvement because they may see her as someone engaged in a side hustle or only looking to earn pin money, not really as a serious business prospect.

By contrast, investors ask men more aspirational questions specific to their business, such as where it is going, target markets and their launch strategy. In other words, men, unlike women, get prompted to trot out their business acumen and growth plan.

Learning investors’ language

Through her InvestorQ&A program, Farrell is training these women to speak the language that investors want to hear.

“We help them build competence,” she says. “They have to be the rock stars in the room and talk about their vision and their growth.”

It’s training that many women find useful, says Farrell, even if they aren’t necessarily seeking investment.

“Women who are in the food business or on farms already demonstrate immense leadership because of what they do,” Farrell says. “Mastering the Q&A is going to help any woman be a leader — a real partner on the farm or in their business.”

“We encourage processors to find their product from somebody close at hand,” she says.

Why venture capital?

While it’s true that venture capital isn’t a fit for every type of business, it’s increasingly being used as a tool by many that have the potential for or are experiencing rapid growth. It’s a dangerous stage because it’s often when businesses have a hard time accessing money through conventional financing.

Sandra Mark, founding executive director of the Small Scale Food Processors Association (SSFPA), says many of the small businesses she sees have had to go it alone.

Venture capital can be a good fit for such businesses because it injects the kind of investment that allows them to grow, she says.

Adds Dr. Ellen Farrell, “With a bank loan, you have to start paying it back a month after you get it, but with investment capital, investors become a minority partner.”

Investors have a vested interest in seeing business owners succeed and often offer advice and expertise to assist the business to grow rapidly, which also contributes to the strengthening of local economies.

“Together you develop a promising growth company that later on you will be able to sell,” Farrell says. “Some people just want to have it as their baby, and that’s totally fine but it doesn’t work for venture capital. Venture capital is about growing fast and there’s lots of venture capital for the people with the ability to do that.”

What are venture capital investors looking for?

Imagine you have a business that produces an agri-food product and it’s growing fast. Along comes a major retailer that wants to carry your product but you don’t have the money to scale up the operation to meet the demand.

Enter venture capital. It’s a good solution for this type of business scenario, where an investor (VC) injects capital into the business for a stake in the company. But it’s a very competitive process. It’s even harder for women food entrepreneurs, who aren’t perceived in the same way as men when they approach investors with their business pitch.

So, what are investors looking for? What do you need to know walking in to pitch your business idea and go through the Q&A session with potential VCs to help focus the conversation in a way so they will choose to invest in your business?

Position yourself as a leader
“You are not there to ask, you are there to tell,” says Dr Ellen Farrell, who offers a program, InvestorQ&A, that trains women entrepreneurs how to talk to venture capitalists with an aim to securing investment. “It’s not about the product, it is about the leader and the company.”

Don’t get discouraged
“You will be one of the lucky ones if the first VC or two that you run into really likes what you’re doing,” Farrell says. “It’s easy to lose confidence when things don’t work for you right away. But this is a big stakes game, so you have to understand how hard that’s going to be.”

Really know your customer
It’s not enough to simply spout demographic data. In today’s world, you have to really know your customers. “Show VCs that you understand how end-users buy, what they do, how they live their lives, and why your product is important to them,” Farrell says.

Stick to your time limit
“If they give you five minutes, you can’t go seven minutes,” Farrell says. “You have to pick out all the essence that’s the most important and make sure you convey that in the time you have to deliver your pitch. Then the Q & A will begin.”

Have a clear vision
“If you can’t see what the end point is and where you want to go, how can you build a plan to get there?” Farrell says.

Create value
Says Farrell: “Focus on the value that you’re creating; why is what you’re doing 10 times better than what somebody else is doing?”

The bioregional approach

Research underway at B.C.’s Kwantlen Polytechnic University is looking at the concept of bioregionalization to link the agriculture and food systems at a scale large enough to create a viable system. Early numbers are impressive.

The idea is to do a better job of matching the foods needed by restaurants, institutions and other large food buyers in a region with the kinds of food that can be produced there.

“A bioregional food system would operate within the environmental capacity of the bioregion,” says Dr. Kent Mullinix, director of the Institute for Sustainable Food Systems at Kwantlen, who is heading up the research. “It results in a region that is big enough to support all the components of a viable, robust food system.”

Bioregional models are designed to calculate the extent to which a region could feed itself and the economic outcomes if it does, and Mullinix’s research is modelling two theoretical bioregional food systems: one for southwest British Columbia and one for the Okanagan region.

Results in both regions show a higher level of food self-reliance and some impressive economic benefits for farmers and the communities in the region.

Currently the Food Self Reliance level of the Okanagan region is at about 40 per cent, but the model showed that adopting a bioregional food system would increase it to 69 per cent.

But it’s the economic benefits that are the most surprising. The Okanagan model showed that food production, employment, economic output, GDP and household income would all increase significantly, as would the tax revenue generated.

The money adds up, Mullinix says. “But it’s a question of who gets it and where does it go. When the dollars stay and circulate in our communities, it increases all of these regional economic benefits.”

The challenge is huge, and can’t be underestimated. “All of the positive outcomes that we identify are only achievable if there is the infrastructure for the food system, i.e. all the aggregation facilities, processing, packaging, freezing and canning. None of that exists.”

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“By increasing our production capacity, we have been able to supply many more distributors, who are fond of our high‑quality product,” said Dany Deshaies, CEO of Sherbrooke-based SoyXpert Inc in a federal news release today.

SoyXpert was founded in 2019 and uses traditional Japanese techniques to produce its certified organic, firm tofu, its website said. It received the $400,000 “repayable contribution” through Canada Economic Development for Quebec Regions (CED), the news release said.

It recently built a new production facility and installed digital equipment, including a highly automated production line, which has allowed it to increase production and develop its flagship product ‘Soykei,’ the release added.

Quebec is home to multiple producers of the soy-based curd product, including Soyarie, Horium Foods Inc., and Unisoya.

Even so, local manufacturers haven’t always been able to meet demand in the province.

In early 2019, La Presse reported that Unisoya, unable to fill all customer orders, had voluntarily stopped selling to Costco. It was in the midst of expanding its facility.

At the time, Soyarie reported a 25 per cent or more increase in sales over the past few years, the La Presse report said.

The report attributed the increase in tofu demand to factors like the rising cost of meat, interest in reducing meat consumption for health and environmental reasons, and rising interest in vegetarianism.

In 2019, Quebec residents were more likely than other Canadians to eat tofu.

“In fact, 26 per cent of Quebecers will eat tofu on a regular basis versus 16 per cent in the rest of Canada,” said Sylvain Charlebois, professor of food distribution and policy and Dalhousie University, in a Jan. 31, 2019 report from CTV.

At the time, the province was experiencing a shortage of tofu.

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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The proposal, already approved by the upper house Senate, passed by 159 votes in favour to 53 against, prohibiting the use, sale, import and export of food and feed “from cell cultures or tissue derived from vertebrate animals”.

Factories breaching such rules can be subject to fines of up to 150,000 euros ($162,700) and risk being shut down, while owners may lose their right to obtain public funding for up to three years.

The proposal of Agriculture Minister Francesco Lollobrigida, a close aide of Prime Minister Giorgia Meloni, is seen as part of a broader bid by the rightist coalition to safeguard tradition.

As the debate in parliament was under way, tensions erupted between demonstrators from agricultural lobby group Coldiretti and two opposition lawmakers, one of whom claimed the president of the lobby group, Ettore Prandini, had assaulted him.

“I believe it is subversive that the president of Coldiretti believes he can assault a lawmaker,” lawmaker Benedetto Della Vedova said, adding he would report Prandini to police. Della Vedova appeared to have been pushed in the chest in the incident but was not hurt.

Prandini told Reuters the lawmakers had provoked the farmers with offensive banners, and played down the confrontation.

The +Europa party and other opposition groups depicted the right-wing’s administration move as an attempt to please farmers and breeders’ lobbies, as lab-grown food is not yet available in the European Union.

Critics of the bill say producing meat without breeding animals would limit greenhouse gas emissions and provide an option for consumers who would appreciate eating a product that does not involve slaughter.

The opposition warned the government risked breaching EU single market rules by unilaterally banning the product in case the bloc ever decided to make lab food available.

Minister Lollobrigida reiterated the ban was needed to protect the food industry.

–Reporting for Reuters by Angelo Amante.

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After meeting with Liberal Party legislators in London, Ont., Trudeau said the government asked the executives of the five largest grocery chains, including Loblaw, Sobeys and Metro, to come to Ottawa next week to explain how they will stabilize prices. The five companies, representing 80 per cent of the Canadian grocery market, have until Oct. 9 to come up with a proposal.

“If their plan doesn’t provide real relief … we will take further action and we are not ruling anything out, including tax measures,” Trudeau said.

“It does not make sense in a country like Canada that our largest grocery chains should be making record profits while Canadians are struggling to put food on the table.”

In 2022, Canada’s three largest grocers — Loblaw, Sobeys, and Metro — collectively reported more than $100 billion in sales and earned more than $3.6 billion in profit.

Trudeau, who is under pressure over a lack of affordable housing, said his government will remove the federal five per cent sales tax on the construction of new rental apartment buildings.

“There are many developers and builders that are not moving forward with building new apartments because the costs are simply too high,” Trudeau said, adding the measure will lead to the creation of many new apartment buildings.

Trudeau’s minority government is propped up by left-leaning New Democrats and a federal election is only due in 2025. But opinion polls show the main opposition Conservatives, who accuse Trudeau of driving inflation through high government spending, would win power and end eight years of Liberal rule if an election were held now.

Boosting competition

Several grocery executives denied profiteering charges in a parliamentary committee earlier this year. But the lack of competition in the grocery sector has also irked the federal competition watchdog, and in June, it said more players were crucial to combat soaring prices of essential goods.

Trudeau waded into that debate on Thursday and said his government will remove provisions in competition laws that companies use to defend big mergers, saying cost savings outweigh negative impacts on competition.

Soaring food prices have been a concern for European governments as well and in March the French government reached a deal with the country’s main supermarket chains to help shoppers cope with food prices.

But the Retail Council of Canada pushed back against Trudeau’s claims and blamed the surging prices on food manufacturers and producers passing on higher costs to the grocers.

The association’s spokesperson Michelle Wasylyshen said any “credible discussion” on restoring prices must include food processors, manufacturers and other relevant businesses within the supply chain.

Sobeys and Walmart Canada had no immediate comment, while Metro declined comment. Loblaw said the company was “always open to discussions about what more can be done across the industry.”

In July, Trudeau shuffled much of his cabinet to focus on issues like a housing shortage and the rising cost of living and on Thursday he reiterated that he had no plan to quit.

Conservative leader Pierre Poilievre on Thursday again blamed the housing crisis on Trudeau, and said he would introduce his own plan to get homes built to parliament when it reconvenes next week after the summer break.

— Reporting for Reuters by David Ljunggren and Steve Scherer; additional reporting by Deborah Sophia in Bangalore; writing by Denny Thomas.

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The continent is facing its worst food crisis ever, with more than one in five Africans — a record 278 million people — facing hunger, according to United Nations estimates.

A major theme of the three-day summit in the Senegalese capital Dakar was that African countries need to boost their food production capacity rather than relying on imports that have left them vulnerable to price spikes and shortages.

The meeting brought together African leaders, development banks and international partners including the United States, the European Union and Britain to mobilize funding and political commitment.

Around 40 countries from across the continent presented agricultural development plans to the bank and other partners, who pledged support for the plans over the next five years to enable the countries to increase food production.

“We’re going to invest in markets, we are going to invest in infrastructure, energy, we’re going to invest in roads, we’re going to invest in storage, all the things that you need to make agriculture work,” African Development Bank president Akinwumi Adesina told Reuters in an interview.

“We must make sure that agriculture allows people to feed themselves. That’s the core of what we are doing here. It’s embarrassing that Africa is not able to feed itself,” Adesina said.

Heavy debt burdens from the COVID-19 pandemic and the war in Ukraine, which raised prices of fuel, grain and edible oils, have added to long-term causes of food insecurity such as climate change and conflict, experts say.

The Ukraine war also disrupted the supply of fertilizer to the continent, pushing prices beyond the reach of farmers.

The bank last year reached a deal and got assurances from fertilizer manufacturers on the continent including Nigeria’s Dangote and Indorama, and Morocco’s OCP that Africa will not be marginalized in the fertilizer supply chain, Adesina said, adding that the bank had made investments in the manufacturers.

“I think we will not have a fertilizer crisis in Africa. The challenge we’re going to have is affordability problem,” he said, adding that governments would have to put support measures in place to make fertilizer affordable for farmers.

— Bate Felix is Reuters’ bureau chief for West and Central Africa, based at Dakar; writing by Nellie Peyton.

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The plan, backed by eight ministries and government agencies, comes amid slowing growth in the world’s second-biggest economy, due to persistent COVID-19 curbs and a prolonged property slump.

Beijing has already issued a raft of measures to try to stimulate the economy in the final months of the year but ongoing measures to contain COVID-19 are stifling economic activity.

The rural infrastructure plan will target renovation of irrigation systems, reinforcement of reservoirs, building modern greenhouses and fisheries as well as cold storage facilities.

It urged construction to start as soon as possible, with local governments encouraged to support the projects.

“Strengthening the construction of agricultural and rural infrastructure is a key task for expanding effective investment and stabilizing the overall economic market,” it said.

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A way of life? Only if it turns a profit.

And there’s something else that’s curious too, especially for operations designed as vertical farms. Often, the people behind them have no agricultural background. To this new breed, it’s all business.

Commodity-based agriculture outside of cities remains overwhelmingly the pride of generational farmers. Now, though, it isn’t the only game on tap, and a growing number of bright people are rewriting the narrative. They’re proving that green thumbs come in varying shapes, sizes and postal codes — even some that don’t have to contend with the limitations facing traditional farmers, like expensive land and trouble finding workforce in the countryside.

Among these bright young things is the exuberant, 31-year-old, Paul Shumlich, the founder and CEO of Calgary’s Deepwater Farms.

Shumlich, it has to be admitted, doesn’t look much like he belongs on a farm. Nor do his unlaced Nike trainers — not exactly the first choice in tractor wear.

But then, he and business partner Reid Henuset know who they are without that.

“Yes, we are definitely farmers, there’s no ifs, ands or buts about it,” says a resolute Shumlich. “But we are entrepreneurs that want to do more.”

Officially formed in 2015 and operating at a commercial scale since 2018, their farm is a 10,000-square-foot warehouse in the southeast part of the city producing — like clockwork — a weekly 1,500 pounds of leafy greens (baby kale, baby arugula, watercress, Swiss chard and beet leaves) for grocery stores and restaurants in an environment of highly controlled light, humidity, water usage and a precise 14-day growing period from seed to salad.

It all started nearby when Shumlich was a student at Mount Royal University, first studying business and then innovation and entrepreneurship. As a young man in his 20s he got curious about food; he wondered who grew what he ate, and, more importantly, how?

“I saw the opportunity when I was walking through the grocery store and I noticed that all the produce was coming from Mexico and California in the middle of winter. It was organic, but the quality just wasn’t there.

“I realized — if somebody could grow it year-round, do it locally, it would be a huge opportunity.”

That was in 2013, and Shumlich figured that what he was lacking in agrarian knowledge, he could backfill with a combination of the bedrock business principles he was learning as a Mount Royal University student and what he was picking up as a small business owner himself with a window washing company he created to pay for his post-secondary education.

Business and Shumlich were about as natural a pairing as salt and pepper and had been from his earliest days with grass cutting and lemonade stands. Now, he set to researching urban agriculture with the help of Google and YouTube to look into indoor aquaponics and hydroponics. He worked tirelessly to built prototypes of the farm he eventually created: a symbiotic fish farm where sea bass would be raised, their manure later collected and recycled as fertilizer for leafy greens in an aquaponic setting, meaning the roots were directly in water, not soil.

Above all else, though, Shumlich knew he needed a market for his product. So, he did the most logical thing he could think of. He went around Calgary, banging on the back doors of popular restaurants, asking chefs about food preferences and what they thought of locally grown produce. If the response was positive, Shumlich would whip out fresh samples of various leafy greens he grew at his university’s community garden for a live taste test.

Those beta rigs were built in his backyard and a garage as he slowly tinkered and perfected the system that would be used in commercial production.

This was the groundwork for what the business is today: a vertical farm that, at its core, is as much committed to being socially conscious as it is about the bottom line. Shumlich loves Tom Shoes’ 1-for-1 model and sees no reason why such an ideology of treating people as more than a dollar sign of various sizes can’t be applied to food.

“Is there a way that we can build a business that can feed a lot of people for less and give them a better product and be truly disruptive?” he asks. “I really like disruptors that are pushing the boundaries and breaking rules but ultimately improving lives and making things more affordable.

“We can grow a better product at a better price than what’s coming in,” Shumlich decided. “I thought we could completely disrupt an industry and, you know, bring people’s cost of food down and give them something better. Absolutely, that’s my belief.”

Dynamic duo

He needed a partner, though. Shumlich began to realize the capital costs would do him in unless he expanded ownership offerings to unlock more money. Through a mutual friend, he was introduced to Reid Henuset, another non-farmer, but a “capital E” entrepreneur from a long family line of small business owners. Henuset had just sold off a successful oilfield services business in 2017 and was looking for a new challenge.

Shumlich was completely undeterred by Henuset’s lack of ag acumen. In fact, it was just the opposite.

“A lot of the stuff from oil and gas translated … figuring it out, just do the hard work. You know, solve the problems that are right in front of you, not the ones you think exist,” says Shumlich.

The concept of a vertical farm squared with Henuset, and he and Shumlich left their first meeting with a handshake deal to work together. Henuset could see Deepwater had serious potential in a market segment that was, at the time, virtually untapped.

“I just saw the opportunity as something different that Calgary needed and I was looking for something to do,” says Henuset. “So, I thought, well, let’s do it. I thought it was a great idea so I jumped on board.”

Despite starting from scratch in many respects, the two felt nothing but optimism. 

“It was an industry that had yet to be established,” says Shumlich. “There’s no leaders and it’s not every day an industry begins, right? To me, it was like the golden opportunity. And I’m like, ‘Yeah, it’s time to put it all in on this one.’”

Once up and running, the system worked like a charm for two years and the farm supplied restaurants, a local fish market and select grocery stores.

However, CanadaGAP, a national food safety program for companies within the fruit and vegetable space, changed its regulations around chemical hazards and water-based contaminants for aquaponic farms in April 2020, which forced the company to separate into two farms running parallel to one another.

That led to more change. “As we scaled up our production for the fish, our system became more and more inefficient because it wasn’t designed and engineered to do what we were doing with it,” says Shumlich. “We were actually kind of burning cash throughout that operation.”

Shumlich looked at the financials separately for fish and plants. The plants looked great but the fish were horrible based on their current operation, and that led them to realizing they’d need to find how to get way more efficient.

What becoming “way more efficient” led to, though, was a difficult decision to get rid of the fish production entirely in October 2021. From that day onwards, it became all about the veggies.

There was a less on learn. “It was death by our own success on the fish,” says Shumlich. “We started growing less than 500 pounds a week and by the end we’re growing 1,000 pounds a week. That resulted in us Frankensteining a system to keep up.”

Pandemic pressures curbed their expansion plans too because of uncertainties in the real estate market and the global supply chain for procuring the equipment they would need.

However, that was just half the pandemic picture. From the produce perspective, things couldn’t have been much rosier.

When COVID-19 set in by mid-March 2020, Calgary’s restaurants quite literally shut down overnight, including the 100-plus that were now buying from Deepwater. In just 24 hours, Deepwater’s entire business model of 90 per cent restaurant to 10 per cent grocery sales became 100 to 0 in favour of grocery stores.

Borders had closed, panic buying set in and fresh food simply flew off store shelves. Deepwater was one of the only local farms that could produce at any sort of scale. As the phone kept ringing, it was clear the business was entering uncharted territory and Shumlich reacted as any farmer might when multiple national grocery chains started trying to secure product.

“Oh f***,” he said. Then, quickly, “Buy clamshells.”

Inventories of the clamshell packaging they needed to supply grocery stores were dwindling and the two men worked as fast as they could to secure as many clamshells, seeds, media and other inputs as they could. It paid off. They secured 12 months’ supply in a matter of days. 

“People couldn’t get in their fresh produce and we were literally the only ones on shelves at all the grocery stores we were in,” says Shumlich. “So yeah, it was kind of a crazy time for us. It was huge growth but huge growing pains.”

For instance, they had been distributing to a few food service companies which delivered their products. Now they had to deliver themselves to countless grocery stores across the city. They had to buy a truck, ramp up packaging production — and figure out how to package more efficiently — and hire more staff.

“Our margin actually shrank, but our business grew,” says Shumlich.

Part of that margin shrink was shifting from primarily restaurants wholesale packaging—two 10-cent plastic bags and a box for restaurants—to retail packaging—10 clamshells per box at 60 cents apiece complete with product and best-before stickers.

Looking ahead

Today, after moving at the speed of business for more than two straight years, things have levelled off for the company. They are in a steady phase of delivering consistently to more than 50 grocery stores and 25-plus restaurants.

Deepwater’s staff has grown to 10, including six horticultural technicians, a marketing/sales manager, operations manager, part-time bookkeeper, Shumlich and Henuset, and the company is planning its next growth phase. 

There’s more good news too. Thanks to their recent sweat equity, Deepwater is first choice for throngs of Calgary consumers who are consistently buying their products.

“It’s not easy to go from creating a brand to becoming recognized in a city of 1.3 million, so we feel we probably have that upper hand because we have been around; people know who we are,” says Henuset.

The idea of competition doesn’t threaten them, either. In fact, they welcome it at this point, still ideologically driven that Deepwater is about more than just about turning their greens into green.

“Any competition is good,” says Henuset. “Ultimately, whether there’s three or four local suppliers, I’d rather that than six from California.

“Our industry is really just getting started with what we can do,” says Shumlich. “The back end of this industry is just catching up in terms of creating genetics and different types of systems that will optimize growth and enhance product types and qualities that can be grown indoors and in a greenhouse year-round in Western Canada and in Canada. At this stage what’s working is displacing imports and (having a) high value crop. That’s it, plain and simple.”

With no publicly announced deadline for when they want to be at their next goal, the pair have earned the time to re-evaluate and, as the saying goes, to work on the business, not strictly in the business. 

Part of that is acting like it’s 2018 all over again, back at the starting line. That year, they were just getting their toes inside the door, eager to build brand preference. Then came the pandemic, with many consumers having little to no choice but to buy Deepwater products. They liked what they were buying, but there is still brand building to do to keep them loyal.

“We need to get into the stores,” says Shumlich. “We’re rolling out sampling booths.”

They’re also focused on learning the lessons of the past two years.

“A big one for us was just pushing through,” says Shumlich. “Clearing out the uncertainty has been a huge win and allows us to operate with confidence.”

But business never stands still. For Deepwater, it will likely involve renewable energy sources, compostable packaging and automation and, ultimately, a net-zero or even net-negative carbon emissions goal.

There are other opportunities too. Over the last two years as Shumlich and Henuset learned more about local food systems, their knowledge proved magnetic. Deepwater now acts as a third-party distributor for other farm operations, and they see this as an area for growth.

At its most basic level, however, the success at Deepwater is no coincidence. From their perspective, anyone who thinks they aren’t savvy, modern farmers needs to think again.

“We started from the ground up, we built everything with our hands, we fix everything with our hands, but I think we’ve realized that you can’t be a farm without a solid business — that almost takes precedence,” says Shumlich.

“Once you’ve got your farm running, you can’t settle, you’ve always got to push. Innovation is a big piece of it, too, because we realize that this is a rapidly growing and changing industry and it takes following technology curves where things are always getting better every day at a faster rate.

“We need to stay up with that and we need to be leaders,” Shumlich says. “It’s a crossroads of innovation, business and farming.”

Wow, that’s big!

It isn’t just Deepwater that is making a splash in Canada’s fourth-largest city. Already the city is becoming a food hub with a dozen commercial vertical farms of various size, scale and product lines and entrepreneurs like AgriPlay’s Dan Houston.

Calgary Economic Development is playing a vital role, along with the city, to lure prospective businesses. Brady Stadnicki, CED’s business development manager for agriculture, fields a call or more every month from investors looking to seriously put down roots.

Part of the reason is the city has made a point of enticing entrepreneurs with minimal red tape. Currently, would-be businesses have their licence fees waived, and once operational there are no property taxes paid on the entirety of a farm’s production area.

The city also provides free water service consultations as well as pre-application advice which will be reviewed and commented on at no charge before a formal application is submitted.

“We are wanting to put together a business experience and concierge service with pre-application meetings with companies,” says Stadnicki. “Just having a bit of a turn-key solution for these types of operations … it’s how we’re continuing to make our market more attractive.”

And it’s not just in an industrial park, either. Calgary’s downtown is becoming quite an attractive location. Currently, the city’s core has more than 13 million square feet of vacant space for rent, much of it due to upheaval in the energy sector via mergers, selloffs and consolidation.

One company, for instance, AgriPlay, just took up residence at the base of the Calgary Tower. By October, 65,000 square feet — one-third of the company’s planned downtown farm — will be operational and producing yet-to-be decided crops, although in its farming system, AgriPlay has successfully grown many fruits and vegetables including strawberries, cucumbers, kale, chives, honeydew and watermelon and cucamelon.

Company founder Houston says the first phase of the farm will showcase how the system can be installed without damage to an existing building.

“This is to show them how we handle moisture, and dispel myths about moisture,” says Houston.

The company is currently building out what it calls a fortress plan for Alberta with a goal of four million square feet of vertical farms, primarily situated in Calgary and Edmonton.

From his perspective, Houston sees indoor farming as the way of the future. No stress, no headaches and, most important, virtually no variability.

“You could be the greatest farmer on the planet, you could be psychically connected to the crops that you are growing and still, 80 per cent of what makes or breaks your ability to make money and to provide food is completely out of your control, and that’s the environment,” says Houston. “The only way to get around that is to go indoors, and that’s vertical farming.”

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But not all experts agree. Dr. Mitch Hunter, research director at American Farmland Trust, has analyzed the newest figures and suggests that food demand will likely increase somewhere between 20 per cent and 60 per cent.

That’s still a lot, but it doesn’t sound quite as challenging or quite as invigorating as doubling the world’s food output, especially when you mix in the kinds of yield increases we’ve seen in many crops since the turn of the millennium.

Still, the other thing that needs to be said is that 20- to 60-per-cent estimate represents a very large range. On a global scale, that’s billions of tonnes.

“It depends on how fast the global population and economy grow, and how quickly people in developing countries do or don’t adopt Western diets that are very heavy in meat and dairy,” says Hunter.

So, a lot was up in the air even before the pandemic. “COVID-19 is slowing down economic growth worldwide and I think it’s going to slow down food demand as a result, which is tragic because in many cases that will mean people are too poor to buy food,” says Hunter. “It will also mean that the emerging middle class in developing countries will be slower to move to a diet where, for example, they’re having steak on a regular basis.”

It’s expected the COVID-19 pandemic will affect fertility rates and global population growth, although again, that’s difficult to call.

Big implications

It’s hard to put an exact number on future food demand. There’s no surprise in that. What is certain, though, is that whatever the number is, it’s going to have big implications, and not just for agriculture.

It will also create new questions, and new twists on old ones. For instance, increased food demand has got to be a good thing from a farm perspective, right?

Yes, maybe, says Hunter. “It sets up the expectation that the markets are going to be exploding, demand is going to be very high, and we’re going to need more and more product, which is a hopeful future for a farmer who’s always needing to have a market to sell to.”

The problem is, will the narrative that says we need to double food production to feed so many more billions of people on the planet be pushed at all costs?

Says Hunter: “What we need to do is fundamentally rethink how we value agriculture and its products, and create the incentives in policies and markets so that farmers can prioritize sustainability and conservation alongside production.”

Even recently, global agriculture has struggled with oversupply and low prices. It seems every commodity group is trying to figure out new ways to use their crop, whether it’s a new animal feed or human food use, or for fuel or industrial purposes.

“When you compare that to where we’re headed, with more demand by 2050, we know that we don’t want to expand agricultural land, cut down forests and convert wetlands,” Hunter says. “Right now, farmers, in many cases, want to build healthier soil, protect water quality, promote wildlife and all those other environmental benefits that come from agriculture, but all the market incentives are to maximize production and cut costs. This set of incentives doesn’t recognize that soil, water and other natural resources are finite and we need to think about them in the long-term.”

Technology has been trumpeted for decades as the big global solution, but maybe we’re forgetting one very important thing. Hunter argues that a lot of the best tools and knowledge already exist on the farm to allow food production to meet demand in a sustainable way.

“We know how to make a farm more sustainable, we know that farmers should grow a diverse set of crops, have complex crop rotations, include perennial crops, disturb the soil as little as possible, add organic inputs like manure, compost and cover crops, keep the soil covered all year round. The challenge is setting up the systems that reward them and make it possible to do those things and have a profitable farm,” says Hunter. “There are leaders who are showing the way, individual farms that have figured out how to put a system together that uses that diversity and complexity to their advantage, and harness ecological processes, but the market is still just pushing for high volume and low cost.”

That focus on efficiency is also not helping our food supply chain to be resilient to shocks and crises. As the COVID-19 pandemic has demonstrated so clearly, big centralized food processing systems aren’t always best.

“There’s a greater recognition that our food system is efficient but not resilient, and having gone through a crisis, I hope that people will be more motivated to think about resilience in the food system, and that definitely means getting away from incredible consolidation back towards a more distributed model of processing food,” says Hunter. “It also means building our soils to have resilience against fluctuating weather and developing our cropping systems so that they themselves are resilient….Simplicity is good for efficiency but bad for resilience.”

Looking at the future

Hunter’s work at the American Farmland Trust (AFT) is looking at how we can learn from the past to make future food systems more resilient. In a recent report called Farms Under Threat: The State of the States, his team looked at how much agricultural land was converted to urban and low-density development between 2001 and 2016. Their next report will try to project how much more agricultural land will be threatened by 2040 through development due to population growth and climate change.

“All of the challenges get harder as we have less agricultural land to work with,” he says. “We don’t have the ability to sequester carbon, we have to produce the same amount of food on less land, the carbon that we’ve already built in the soil is often lost as that land gets bulldozed and paved over. So, having smart development and protecting farmland are all part of this overall strategy.”

As an example, the study documents that in California, agricultural land converted for development emits between 58 and 70 times more greenhouse gas emissions.

At the same time, there could be other complicating factors that few of us have even begun to consider.

For instance, AFT is also reaching out to female landowners and non-operating landowners who play a key role in agriculture but may not be aware of how much power they have over production and conservation practices.

“These groups are increasing in terms of the amount of land that they own, so they have an important role to play in choosing who gets to farm their lands and what the terms of their leases might be,” Hunter says. “That’s a great opportunity to align those incentives and say, ‘I’d love to have you rent this land from me and I’ll give you a discount because I’d like you to use cover crops, or diverse crop rotations, or build the soil health,’” The question is, who is thinking about whether the farmer is sustainable?

What if there aren’t that many mouths to feed?

In their book, Empty Planet, leading international social researcher Darrell Bricker and award-winning journalist John Ibbitson argue that populations in many countries are already in decline and most others are heading that way, with the result being that the overall global population will also start to decline.

“The most recent studies suggest that by 2024, China’s population will be in decline and there will be fewer Chinese people every year starting in about five years,” says Ibbitson. “What does that mean for the Chinese economy? And what does it mean for exports of food to China when every year there are fewer mouths requiring feeding?”

And it isn’t only China. Canada exports to Europe, which is already losing population, and we have a free trade arrangement with South Korea, where the fertility rate has dropped below 1.0. (A rate of 2.1 children per woman is needed to maintain population.)

“All of these major markets are close to or below the replacement rate, many of them are on the brink of going into population decline, and some of them are declining already,” says Ibbitson. “That has to have an impact on Canadian exports, especially exports of agriculture.”

Ibbitson also believes that an economic model based on exports resulting from burgeoning populations in developing countries might need a rethink.

“Those populations are not burgeoning, they are stabilizing and are going to decline over time; in some cases, in 20 or 30 years those markets will cease to exist,” says Ibbitson. “But it is not in the nature of industry to think 20 or 30 years down the road; it’s hard to get them to think past the second quarter. So, this is a phenomenon that may just sneak up on us as so many other phenomena have snuck up on us in the past.”

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