Cracks in the foundation, or why we need to rethink our support for the agri-food sector

By Micheal Mikulak

Executive Director, Food & Beverage Manitoba

Advocating on behalf of Food and Beverage Manufacturing

When I started this role two years ago and began meeting with our members, I was amazed at the tenacity of the entrepreneurs behind the food brands so many of us love. With every conversation I had, I was impressed by the sheer perseverance and grit. Running a business isn’t for the faint of heart. From constantly worrying about cashflow, to the never-ending production problems and staffing shortages, it seemed like everything was stacked up against the people who feed us. I often wondered how we allowed such a vital and essential industry become so vulnerable to global shocks, market forces, and climate? As we emerge from the pandemic and think about how to build back better, it is vital to think about the cracks forming in the foundation. It’s time to look closely and make sure that we are protecting this essential part of our culture, economy, and national identity.

While demand for local food has grown over the years, Covid-19, conflict in Ukraine, supply chain disruptions, inflation, and rising interest rates have made what was an already difficult path impossible. Over the last few months, the news of shutdowns has filled my inbox. From KUB and GORP, to Flora and Farmer, Bonbon Bark, Cramptons and now Merit Functional Foods, it seems like size, category, and capitalization are no protection against an increasingly brutal marketplace. While we are sadly used to stories of small companies shutting down, it’s time to look at the foundation of our food system and ask some important questions. How are we going to ensure the sector survives and thrives in the next 5 years? What role do consumers and governments have to make sure that the companies feeding us can still keep the lights on? 

Last week when the news of Merit going into receivership landed on my desk, my jaw literally dropped. A crowning jewel of Manitoba’s plant-based protein success story, Merit broke ground with their innovative process, state of the art facility, and commitment to quality. Not only were they a major employer and economic driver in the city, with hundreds of millions invested into their facility, but they were leading the way in developing novel and unique proteins for the plant-based sector. 

Food and Beverage Manufacturing is Manitoba’s largest industry, employing more than 10,000 workers and contributing billions to our GDP. Not only is it a key economic driver, it is the basis of culture, tradition, and helps weave the fabric of our cities and rural communities. It’s time that all of us pause and consider what we need to do to support the sector as consumers, policy makers, funders, investors, and governments. While some industries may be too big to fail, this one is too important to fail. 

It is vital that we look at the string of closures and understand them not as failures in the traditional sense. These are not stories of poor management or bad business practices. These are cautionary tales about how we have allowed a vital sector to become vulnerable and precarious.  As global population grows, we need to maintain Canada’s position as larder of the world. But to do this, we need to truly value the contributions of the countless entrepreneurs, front-line workers, farmers, processors, and all the people that give us our daily bread. Let this be a wakeup call to all the eaters out there. 

It is for this reason that Food and Beverage Manitoba has focused more attention on advocacy and government relations over the last two years. By speaking with a united voice on behalf of the entire industry, FabMB is able to translate your individual and most pressing concerns into a common and collective voice that speaks louder than any one company can. We take pains to survey and consult with members and keep apprised of research and trends, all so we can advocate for the supports you need to thrive.

I was recently able to travel to Ottawa and represent Food and Beverage Manitoba in the Nation’s capital during Canada Agriculture Day. Although we are the centre of the country and one of the biggest sectors in Canada, Food and Beverage Manufacturing is fragmented and forgotten and often lumped in as an afterthought to primary production. With all the talk about food inflation, sustainability, and the future of food, it was important for FabMB to represent our sector in the Capital.

I had a chance to meet with Minister Bibeau and new President and CEO of FCC Canada and impress upon them the critical role of our sector. Food and Beverage manufacturing is often treated as something that happens after the farm gate and as a mere afterthought. Not only does this fail to see the important role of our sector, it also fails to recognize that people don’t eat raw farm products for the most part: they eat processed foods that have been made nutritious and delicious by the thousands of companies working across this country. 

With the imminent release of the Sustainable Canadian Agriculture Partnership (S-CAP) and ongoing discussions about the labour crisis being faced by the sector, FabMB has been busy advocating locally and nationally. Last year, an unprecedented coalition of processors, associations and stakeholders across the food system, successfully advocated for changes to the Temporary Foreign Worker Program. The result was that the TFW program caps were increased to 30% and the LMIA process was simplified. Commitments to speeding up the process and creating a Trusted Employer Program are making it easier for employers to utilize this vital program. FBC-ABC estimates the value of the announced changes to industry to be $192M in the first year and $96M a year going forward.

FabMB has also been part of the National Workforce Strategic Plan for Agriculture and Food & Beverage Manufacturing. The public launch of the project and Strategic Plan took place on April 8, with almost 200 industry, government, and academia in attendance. The Strategic Plan continues work began in 2019 and is focused on five key themes: Perception & Industry Awareness; People & Workplace Culture; Immigration & Foreign Workers; Skills Development; Automation & Technology. With the commitment of over 10 million dollars to move the strategy into action planning, FabMB will continue to focus on supporting the current and future workforce.

And finally, FabMB has been working diligently on the grocery code of conduct. Beginning in September 2021, Food and Beverage Canada participated as a member of the industry Steering Committee overseeing development of a Grocery Industry Code of Conduct. On November 18, 2022 Food and Beverage Canada withdrew from that process as it became clear the system being proposed would not be mandatory and would be ineffective at addressing the needs of small and mid- sized suppliers, who make up the majority of Canada’s food and beverage manufacturing sector. In short, the system being developed will place few limitations on specific retailer activities and rely heavily on retailers and suppliers negotiating clear contracts, without actually addressing the underlying imbalance of negotiating power that has led to the current industry dynamics and problems. It was agreed by the board of FBC, that our strongest negotiating power comes from withdrawing from the process and continuing to advocate to the Competition Bureau about the fundamentally imbalanced power dynamic between processors and retailers.

As a member of FabMB, you become part of a larger advocacy and government relations strategy that supports the long-term health of the sector. We are able to do this work because of your investment in the association and your support of time, treasure and talent.