Canada Initiative. Helping southern U.S. companies export food & agricultural products around the world.

Transcription

1 Canada Initiative Helping southern U.S. companies export food & agricultural products around the world.

2 New and Noteworthy

3 Canada s new political landscape

4 Canada s new political landscape October federal election = vast change. New majority Liberal government Engagement was strong; largest voter turnout since 1993 (68%) Change: 200 first-time Members of Parliament with record number of indigenous Members of Parliament (MPs) and women MPs elected Transparency: the tone reflects change National media will gain more access to Prime Minister and his policies Gender parity achieved in Federal Cabinet Public release of Ministerial mandate letters as an historic first Helping southern U.S. companies export food & agricultural products around the world.

5 Trans Pacific Partnership Agreement May open door to dairy and poultry imports previously high-tariff categories Canada would give TPP members including the United States duty-free access to 3.25 per cent of its dairy market and 2.1% of its poultry market Still needs to be ratified. Generally supported by in-coming Liberals; new Minister of Agriculture and Agri-food, Hon. Lawrence MacAulay, has publically stated his support Helping southern U.S. companies export food & agricultural products around the world.

6 Exporting to Canada

7 Top Five Reasons to Export to Canada 1. Geographic proximity 2. Duty-free trade (most products) under NAFTA/TPP 3. Canadians consider U.S. food as next best to local 4. Similar tastes and trends 5. Canada s limited growing season Helping southern U.S. companies export food & agricultural products around the world.

8 China Canada Mexico Japan EU United States Number Two Export Market Source: Global Trade Atlas

9 Top U.S. Consumer-Oriented Product Markets (2014 CY) Consumer-Oriented Products

10 Size of the Canadian Market Population: 35.1 million. Two-thirds of population lives within 200 miles of U.S. border 62% of population lives in Ontario & Quebec (eastern Canada) Canadian market size is 11% of U.S. market size Canada is officially bilingual (French/English). French population is primarily in Quebec Statistics Canada projects that, by 2031, approximately 28% of the population will be foreign-born Helping southern U.S. companies export food & agricultural products around the world.

11 Market Food Trends Value, including private label Better-for-you foods Convenience: fast & easy Sustainable practices Ethnic foods Innovation: unique flavours, packaging, taste

12 U.S. Exports to Canada Total agricultural exports to Canada: $21 billion (15 per cent of total U.S. food & agriculture exports) Red meat ($2.2 billion) Prepared foods ($1.9 billion) Fresh fruits ($1.8 billion) Fresh vegetables ($1.8 billion) Snack foods ($1.3 billion) Non-alcoholic beverages ($1.2 billion) Fishery products ($906 million) Source: USDA FAS GAIN Report Number CA 14021: An Overview of the Canadian Retail Landscape Helping southern U.S. companies export food & agricultural products around the world.

13 Challenges to Entering the Canadian Market

14 Challenges Regulatory: Bilingual packaging Metric measures Different nutrition and ingredient label requirements Different health and nutrition claim regulations Some regulated package sizes (e.g. honey) Helping southern U.S. companies export food & agricultural products around the world.

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16 Challenges Financial: Cost of doing business: listing fees, broker fees, distributor markups, exchange rate Structural: Consolidated retail market, fewer buyers Geographic: Dispersed population, high marketing and distribution costs Quotas: Restricted imports in some categories (dairy, poultry, eggs) Helping southern U.S. companies export food & agricultural products around the world.

17 Basics for a New Exporter

18 Question: Is there an opportunity to compete in Canada? Helping southern U.S. companies export food & agricultural products around the world.

19 Question: What steps must a small U.S. exporter take to be competitive? Build and stabilize your U.S. business before considering export markets Complete market research: Competition, target audiences, regulatory requirements Establish objectives: What do you want to achieve in Canada? Ensure production and distribution capacity: Can you serve the market?

20 Question: Access to sources of funding and support: SUSTA, state programs Product s unique selling proposition: Innovation, appeal to specific audiences Pricing strategy: Can you enter the market at a competitive price point? Customs procedures and documentation Regulatory compliance: Claims, packaging, labeling requirements What do small companies need to know before considering Canada?

21 Question: What is the cost breakdown? Costs vary based on many factors: Size and weight of product affects shipping costs Complexity of label (translation, adaptation, redesign) Chosen partner (broker/distributor/ importer) Customs broker or agent expenses Cost of product samples (including duties) Product stability (is it perishable?) Listing fees, if applicable Nature of product (e.g. regulated package size) Currency rate

22 Question: NAFTA certificate: For products with preferential tariff treatment Commercial invoice Cargo control document Canada customs coding form What documentation is required? Health certificates, or other federal government forms (e.g. meat inspection certificate) Helping southern U.S. companies export food & agricultural products around the world.

23 Question: What documentation is required? Visit the Canadian Food Inspection Agency (CFIA) s automated import reference system (AIRS) for specific import requirements.

24 Question: Will U.S. exporters need a broker? A broker/distributor/importer is recommended Distributors/importers: Typically import and take title of product before storing and selling Brokers: Act as sales agents pitching the product to potential buyers and setting up a network of food distributors Direct sales are possible but may be difficult due to lack of knowledge, contacts, etc. Helping southern U.S. companies export food & agricultural products around the world.

25 Products

26 Products Value-Added Opportunities Dry Grocery: Asian sauces, tortillas & wraps, cracker chips, bagels, high-fiber pasta, nuts, healthy snack bars, cereals Beverages: Premium vegetable & fruit juices, chilled smoothies, coffee Confectionery: Chocolate Chilled & Frozen: Soy-based dessert, noodles, oven-baked potato chips, soup, salad dressings, soy milk, thin-crust pizza, processed vegetables

27 Products Value-Added Challenges: Saturated market, high price for some of the products, listing fees Target: Food brokers, distributors, retail (branded or private label), foodservice Helping southern U.S. companies export food & agricultural products around the world.

28 Products Seafood Opportunity: Growing demand for sustainable seafood Challenges: Rapid penetration of Chinese, Thai seafood, increasing aquaculture (farmed salmon, trout, steelhead, arctic char, mussels, oysters, clams) Target: Seafood importers, retailers Helping southern U.S. companies export food & agricultural products around the world.

29 Products Produce Opportunity: Canada s limited growing season (reliance on imports from Nov. to June). Growth in bagged salads, onions, kale, yams, kohlrabi, artichokes, okra Challenges: Buy Local. Mexico and Chile competitive due to low prices. Regulated container sizes Target: Produce importers & distributors, retail, processed or packaged produce companies

30 Products Horticulture Opportunity: Canada relies on floriculture & nursery plant imports Challenges: Ornamental horticulture sector is mature. Plant hardiness zones (typically zone 3-7) Target : Horticulture brokers, wholesalers, retailers, nurseries, garden centers Helping southern U.S. companies export food & agricultural products around the world.

31 Products with Barriers Products with tariff rate quotas: (changing under TPP) Chicken Turkey Dairy Eggs & Egg Products Margarine Wine, Spirits and Beer: Liquor boards in most provinces are regulated monopolies

32 Retail vs. Food Service

33 Retail Steps to Export Supplier Customs Importer Broker Distributor Wholesaler Retailer Specialty Helping southern U.S. companies export food & agricultural products around the world.

34 Foodservice Steps to Export Supplier Customs Importer Broker Distributor Wholesaler Re-packer Hotel Restaurant Institution Helping southern U.S. companies export food & agricultural products around the world.

35 Thank you

36 Thanks Contact SUSTA 701 Poydras Street, Suite 3845 One Shell Square Phone: (504) Fax: SUSTA s Canadian In-Country Consultant Alison George, Senior Vice President + Graeme Morrison, Coordinator Argyle Public Relationships 175 Bloor Street East, South Tower, Suite 1007 Toronto, ON M4W 3R ext 230 / ext 222 ageorge@argylepr.com / gmorrison@argylepr.com Helping southern U.S. companies export food & agricultural products around the world.