SWOT ANALYSIS OF THE ORGANIC INDUSTRY

Transcription

1 SWOT ANALYSIS OF THE ORGANIC INDUSTRY PRESENTATION-POGI MONTHLY MEETING JUNE, 08 Marie-Eve Levert (USC CANADA) Chair, OVCRT Strategic Planning Task Force

2 Value Chain Rountables What: The VCRTs are sectorspecific groups jointly led by Industry and government. Why: Work together to enhance Canadian competitiveness and profitability. Members: industry leaders, federal departments, federal/provincial/ territorial policy makers.

3 Organics Value Chain Roundtable Mandate: The mandate of the OVCRT is to bring together all stakeholders to share information and work collaboratively on strategies to address regulations, increase Canadian organic capacity, support development of markets, and help guide research and innovation. Representatives from The Prairies Industry ü Becky Lipton Organic Alberta ü Connie Kehler Canadian Herb, Specialty Ag ü Keith Everts Diamond Willow Range ü Lisa Mumm Mumm s Sprouting Seeds ü Marion McBride Farmer Direct Coop Provincial Government ü Dunling Wang Saskatchewan ü Keri Sharpe Alberta ü Laura Telford Manitoba

4 PROFILE OF RESPONDENTS RESPONDENTS - PROVINCE ORGANIZATIONS Certification Body % % % % % British-Columbia Alberta Saskatchewan Manitoba Ontario 6% %% % 6% 6% 9% Consultant Inspectors Primary producer (Conventional) Researcher Government 7% % % Quebec New Brunswick Nova Scotia 7% % % Provincial Association Industry National Association Primary producer (Organic)

5 CHALLENGES THAT INHIBIT THE Top Challenges/Weaknesses Limited access to extension services for organic management. Limited knowledge and technical expertise in Canada of best practice management for organic practices (soil fertility, weed control, pest or disease control). Prohibitive cost to transition to organic system management. New entrants have limited knowledge about organic practices. Limited access to certified organic inputs (e.g. certified organic inputs available in USA, EU, but not in Canada). GROWTH OF THE SECTOR Key Risks Organic Transition ü Understanding the Certification Process ü Record Keeping ü Weed Management ü Non-Allowable Inputs ü Few Buyers *SERECON And Groupe AGÉCO (08).Transitioning to Organic: A Risk-Based Analysis. Research commissioned by Canadian Organic Growers (Publication pending)

6 CHALLENGES THAT INHIBIT ACCESS TO NATIONAL MARKET Top Challenges/Weaknesses Little to no availability of organic processing facilities in some regions. Regional distribution channels not well adapted to the organic markets. Supply insecurity - Difficulty having reliable sources and enough quantity of Canadian organic ingredients for processors. Limited data available on organic production and price limits the understanding of the market and opportunities. Organic brand not well defined for/understood by consumer. Affordability of organic products for consumers. Challenges Organic Food Processors Import/not-sourcing local ingredients ü Shipping costs due to importing ingredients from regions far from their manufacturing locations Manufacturing facility ü High cost of manufacturing segregation ü Sub-contracted facilities tend to charge higher costs SMEs Tia Loftsgard, ED, COTA Testimony in front of Senate Committee of Agriculture and Forestry

7 CHALLENGES RELATED TO STANDARDS, REGULATION AND POLICY Top Challenges/Weaknesses Inconsistent organic regulations across provinces. Cost associated with the national organic standards revision. No organic check off system in place at the provincial and/or federal level. Discrepancies between provinces in the implementation and enforcement of current provincial organic standards. Enforcement of the organic standards by CFIA.

8 THREATS RELATED TO TRADE AND THE ECONOMY Top Threats Emerging low-cost competitors (Ukraine, Mexico, China, India, Argentina, Russia). Increased competition with nonregulated label(s) (e.g. free-range, pasture-raised, regenerative agriculture, etc.). Massive importation of organic grain, soybean and other key field crops to supply the processors in the country.* An economic downturn would affect consumer capacity to buy organic. Possible international market loss related to introduction of Alfalfa GE in Canada. Threats to the Canadian Organic Food Processors ü Currency fluctuation due to sourcing outside of Canada ü Duties costs due to importing ingredients from regions far from their manufacturing locations ü Risk of successful company displacement of Manufacturing facilities in the USA because the the major market demand itia Loftsgard, ED, COTA Testimony in front of Senate Committee of Agriculture and Forestry

9 STRENGTHS OF THE CANADIAN ORGANIC INDUSTRY TOP STRENGTHS There are clear and documented environmental benefits of organic production. Organic goals fit with federal policy priorities: Barton Growth Target; policy on soil health, Water quality, etc. Organic is one the fastest growing agricultural sector in the world. High value sector with potential for high profitability. Millennials are buying organic. Canadian Organic Trade Market Report 07 Total Organic market is estimated at $. B up from $. B in 07 Canada Organic Trade Association

10 OPPORTUNITIES FOR THE CANADIAN ORGANIC INDUSTRY TOP OPPORTUNITIES Maintain strong standards nationally, including the integrity of the system. Develop agronomic tools and extension services to retain current and new farmers under organic system management. Improve the enforcement of the organic standards in collaboration with relevant federal agencies (e.g. time of service delivery, fine and/or institution of legal procedures in case of fraud). Improve the organic brand marketing campaign and key messages to increase demand for organic production in Canada. Support the development of provincial standards.

11 THANK YOU! Marie-Eve Levert