Alberta’s agri-food industry needs innovation and marketing expertise – and some imagination

Jun 1, 2010  

Meanwhile, Alberta Beef Producers chairman Chuck MacLean acknowledges that there isn’t much branded Alberta beef in supermarket showcases. While he says “It would be wonderful” if there was, he is less convinced that such branding would transform the industry. MacLean suggests that in any case, “Most products flow to the market of highest value.”

At the same time, MacLean points to a recent initiative that may help raise the Canadian profile in international markets. “The Canadian Beef Advantage” is a voluntary program that encourages packers to place a Maple Leaf emblem on all packed products coming out of Canadian packing plants in exchange for marketing assistance from associations like the Alberta Beef Producers, Canadian Beef Export Federation and Beef Information Centre. According to MacLean, the approach is having an impact. “Those guys in Mexico and Tokyo and Hong Kong, they like it,” said MacLean.

Meanwhile, Bouma points to small producers “at the margins” who are making progress in the area of premium branding. These include makers of brands like Canada Gold, Prairie Heritage and Spring Creek Ranch. For Spring Creek, the strategy has worked well, allowing the ranch to maintain stable profits –
avoiding the price fluctuations that plague commodity markets.

“It offers a really long-term sustainable option for us,” notes Kirsten Kotelko, part of the Kotelko clan that has been ranching in the Vegreville area for four generations. The Kotelkos also run a large commodity operation, but see Spring Creek as the future. “Being in Alberta, we have access to good quality cattle and good quality feed. But we’re definitely not low-cost producers. That is our challenge at being competitive – our inputs are high quality but we pay for that quality.”

Kotelko estimates her costs as a beef processor are roughly $100 more a head than her U.S. counterparts – a serious impediment in low-margin markets. But with Spring Creek, which raises its beef naturally, without the use of hormones, antibiotics and animal byproducts, brand loyalty becomes an overriding factor.

“The market and timing seemed right,” notes Kotelko, who had watched the development of consumer trends towards buying local, organic foods. In 2006, they launched the Spring Creek Ranch protocols and brand, at first making inroads in the food services sector with their beef finding its way onto the menus of restaurants in Calgary in Edmonton. This success got them noticed in the retail world and now they are selling fresh cuts into select Safeways, and boxed frozen products into retailers across Western Canada. In four years, Spring Creek has gone from processing 25 to 250 animals a month and is now looking into possibly selling product into the EU.

Small to medium-sized agri-food businesses like Kinnikinnick and Spring Creek offer valuable lessons in the possible. Others include the Sunterra Group, which uses a gate-to-plate approach, taking fresh local produce, meats and ready-to-serve foods directly to the consumer via eight market locations in Calgary and Edmonton. Blue Kettle Specialty Foods began with two Edmonton sisters, a bag of tomatoes and a good salsa recipe; today, riding a buy-local trend, Carol Olivieri and Marcy Mydlak have scaled up into a 3,800-square-foot production facility, and their products can be found throughout Alberta and into Vancouver.

Calgary-based Bassano Growers Ltd. primarily sells potatoes, carrots and cabbages, as it has for 30 years – but recognizing a growing demand for products that are convenient as well as fresh and healthy, they’ve diversified, starting a line of semi-cooked potato products, an innovation they’ve seen take Europe and Asia by storm.

Still, these niche players are only a part of the Alberta story – there remains the quiet majority. Bouma suggests the industry needs an injection of management-level marketing and branding skills. “There’s a lot of talk about branding,” says Bouma, “But it’s not that well understood. The assumption is that marketing is simple. It’s anything but.”

AARD’s Bosse sees similar problems at the small-business level, with agri-food entrepreneurs not always understanding how much time, money and effort it takes to implement an effective marketing strategy.

Vance Gough, an associate professor at the Bissett School of Business at Mount Royal University, suggests the skills are all there, that the men and women involved in the province’s agricultural industry are among the most creative he has known. He says what they need is a nudge toward innovative ways of thinking – an emphasis on problem-solving skills in an industry perhaps better known for its hands-on technical knowledge.

Whatever the solution, it will take time and commitment. But considering that we shipped $4.8 billion of primary commodities beyond our borders in 2008 – food that if processed locally would benefit the environment, satisfy consumers looking for local products and drive billions of value-added dollars into the economy, in a perfect world, $20 billion would be just the beginning.

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