Ottawa-Finding new international customers for Canadian food and beverage products requires dealing with a variety of challenges, says Farm Credit Canada.

More processing, stronger infrastructure and higher productivity can help Canadian agriculture and food businesses compete in more markets.

“Capturing that demand requires the ability to make the right products, at a competitive cost, and deliver them reliably over much longer distances.”

A top priority must be adding more value before products leave Canada, FCC said. Currently about 50 per cent of Canada’s primary agriculture outputs are exported to be processed.

“Expanding domestic processing capacity could turn more of this output into higher-value ingredients and finished foods.” Canada can remain a leading supplier of primary agricultural products while also expanding the range of processed products it sells.

A larger processing base can support product diversification, reduce dependence on individual markets and allow more of the economic value generated by Canadian agriculture to remain in domestic businesses and communities.

Food and beverage manufacturers must use more efficient equipment, automation, upskilled employees, improved management and reduce waste.

“It is essential to maintain global export competitiveness – it helps businesses control costs, improve quality and operate at greater scale.

Boosting productivity to achieve 3 per cent annual GDP growth in food and beverage manufacturing between 2024 and 2035 could generate $40 billion in additional GDP, create 217,000 additional jobs and add $16 billion in labour income.

“The investment foundation already exists. Capital spending in Canadian food manufacturing more than doubled from $1.89 billion in 2017 to $4.2 billion in 2024,” FCC said.

“The next step is to focus investment on the capacity and capabilities that can serve growing domestic and international markets.”

International customers need confidence that a shipment will arrive safely, consistently and on time. That makes trade infrastructure including processing plants, warehouses, refrigerated storage, roads, railways, ports and intermodal connections all part of Canada’s export network.

Yet Canada ranked 32nd globally in 2019 for transportation infrastructure. Port congestion and delays – due to weather, rail and labour disruptions, among other issues – create further challenges.

Canada’s cold chain storage and transport systems that keep perishable food safe suffer from gaps in backup power and emergency preparedness and limited monitoring.

Modern infrastructure also includes information and technology. Traceability, logistics, automation and real-time data can help producers, processors and transportation providers respond faster when demand, inventories or shipping conditions change.

These tools can improve transparency and coordination but their benefits depend on skills, broadband access and the ability of businesses to adopt them.

Overall, there is a shortage of supply chain investment in Canada, particularly around commerce, data and technology. Addressing these gaps will require significant investment.

Canada needs to sustain market development for continued growth as trade agreements lower barriers but do not create customers on their own.

Businesses need market intelligence, regulatory knowledge, local relationships, product adaptation and continuing promotion. Canada’s free trade agreements can reduce tariffs and make rules more predictable, while the Trade Commissioner Service and other partners can help businesses understand specific markets.

The new federal AgriMarketing Program for small and medium enterprises includes support for market research, trade missions and international marketing with a committed $75 million during the next five fiscal years.

Diversification will take sustained work from producers, processors, manufacturers, governments, investors and supply-chain partners. The next step is to align market opportunities with practical investments, then build the capacity that allows Canadian businesses to compete and grow wherever demand emerges.