The Canada Organic Trade Association (COTA) released the Canadian Organic Aquaculture Standard late last week.

Aquatic farming relies on plant and animal husbandry, so it is possible to apply organic growing and rearing principles to this system of food production, says the COTA.

Just like its organic terrestrial counterpart, the organic aquatic sector can use specific farming protocols that minimize the input of synthetic substances and maximize local environmental quality.

Organic standard

COTA says the organic aquaculture standard prohibits:
• the use of antibiotics;
• herbicides; and
• genetically modified organisms.

It also severely restricts the use parasiticides, allowed only under veterinary supervision as a last course of treatment.

The standard sets measurable requirements for practices that minimize the impact of waste. These include:
• defining stocking rates;
• cleaning procedures; and
• the cleaning and feed materials that must be used.

The Canadian General Standards Board and a stakeholder committee of industry members, consumer advocates, regulators and environmental organizations developed the new standard.

The draft standard went through two extensive public reviews and countless changes before being published this week.

To qualify

To qualify for organic certification, Canadian aquaculture products must have been grown on farms operating in accordance with organic aquatic farming methods established by the new standards. Third-party certifying bodies will inspect farms to ensure that the standard has been followed.

The new national standard does not currently fall under the scope of Canada’s Organic Products Regulations or Canada’s trade equivalencies for organic products with the U.S. or E.U.

The Canada Organic Trade Association is the membership-based trade association for the organic sector in Canada, representing growers, shippers, processors, certifiers, farmers’ associations, distributors, importers, exporters, consultants, retailers and others in the organic value chain. COTA’s mission is to promote and protect the growth of organic trade to benefit the environment, farmers, the public and the economy.

The Canadian Aquaculture Industry Alliance is a national association representing Canada’s seafood farmers. With membership comprised of finfish, shellfish and aquatic plant farmers, feed companies and suppliers, as well as provincial aquaculture associations, CAIA is a passionate advocate for the quality and sustainability of farmed seafood.

The longer the federal government waits to clamp down on emissions and business continues as usual, the more difficult and costly it becomes to meet environmental targets, the research concludes.

The new research comes from the soon-to-be-defunct National Round Table on the Environment and the Economy, the federally funded advisory group formed to give advice and research on sustainable development.

The Harper government is in the process of abolishing the agency.

It’s likely the first time analysts have measured the country’s shrinking room to manoeuvre as a result of investments made while businesses wait for governments to crack down on emissions.

The research also shows that electricity could be the salvation, as long as that sector can attract huge investment.

The research will be included in one of the advisory body’s final reports to be published in a few weeks, but was presented by the round table’s president, David McLaughlin, at a conference earlier this month. His slide presentation was obtained by The Canadian Press.

“We have said consistently that delay is costly,” McLaughlin said.

Now, he says, the research shows just how costly.

His charts and graphs show that as Ottawa waits to implement regulations on emitters, investment in coal, oil, gas, electricity and buildings will be guided by the high-emission standards, which have been the norm.

The effects could be felt for decades, since the lifespan of much infrastructure is about 40 years – compounding the stock of emissions already in the atmosphere.
So any infrastructure built after the new regulations eventually come into place will have to be extra-efficient in order to make up for the delays of the past, McLaughlin said.

“The more and more of those (locked-in) investments that are made, the less and less options they (governments) have for actually finding emissions reductions in the economy,” explained Alex Wood, senior director at Sustainable Prosperity, the think-tank that hosted the conference where McLaughlin presented his findings.

“And with less and less options available, they become more expensive.”

The International Energy Agency has been sounding the alarm about locked-in global emissions for months now. In its November report, the IEA warned that on world scale, it will be impossible to meet climate-change targets unless radical changes are undertaken in the next five years.

The IEA said the world has a difficult task in limiting global warming to 2 degrees C because existing infrastructure already produces 80% of the carbon that would be consistent with such a target. That leaves little room to do anything else.

Canada faces a similar conundrum, the Round Table research shows.

There is a growing consensus that Ottawa’s regulatory approach is moving too slowly to meet the government’s 2020 target to reduce emissions to 17% below 2005 levels. The federal environment commissioner’s audit of the government’s regulations confirmed that reaching the target would be “unlikely.”

So far, Ottawa’s regulations have tackled just one sector out of eight.

So the Round Table research focuses on how Canada can meet its 2050 targets instead. Canada and other G8 countries have committed to cutting emissions to 65% below 2005 levels by that year.

It’s possible that Canada could meet this target, McLaughlin said, but the longer Ottawa waits to put a clear price on carbon, the harder and more costly it will be.
The lack of clear details on what the federal government will expect has already caused casualties, added Wood.

Two major, emissions-friendly developments have recently collapsed, mainly because Ottawa has not put forward enough information about how its carbon regime will function, Wood said.

Investors pulled out of the Pioneer carbon-capture and storage project in Alberta, despite having $779 million in federal and provincial subsidies. Ottawa-based Iogen cancelled plans for a biofuel plant in Manitoba.

McLaughlin sees hope in electricity.

He says his research shows it will take massive investment – up to $16 billion annually – to meet the 2050 target. That money would be in addition to what is already invested in the carbon-producing sectors of Canada’s economy.

Most of that would have to be in electricity, especially in hydro. His presentation showed that to meet the 2050 target, current investment of $12 billion a year in electricity would have to double.

But in order to attract that kind of money, McLaughlin said governments need to issue “strong, sustained, properly oriented price signals” that give policy certainty to investors.

© 2012 The Canadian Press

More countries are demanding that their imports meet environmental standards, with Europe’s fuel-quality directive the most obvious example.

But the National Round Table on the Environment and the Economy says there is little information in Canada for businesses to determine what kind of environmental footprint their production is making.

With no organized effort to deal with such analysis, the round table says Canada’s competitiveness and reputation in global trade are at risk.

The round table wants to see Ottawa and business set up a database for Canadian business, and develop some rules and standards.

The advisory body on sustainable development is releasing a barrage of research and reports now that it lost its federal funding and has been given a year left to live.

Industry backed oil sands education program questioned

© 2012 The Canadian Press

“Confectionery is definitely about indulgence and happiness,” says John Phillipson, vice-president for Confectionery at Toronto, Ont.-based Kraft Canada. “In tough times, small indulgences are often what consumers turn to for happiness.” Still, as Canadians become more concerned with healthy foods, the confectionery space is undoubtedly being affected in a couple of interesting ways: one being the desire for smaller portions and bite-size treats; and the other being the “worth it” factor. “People are saying, ‘If I’m going to indulge in something, it really better be worth it,’” says Phillipson, noting that today’s confectionery consumer is frequently looking for very high quality and unique flavour combinations.

To answer the call for compelling flavour combinations in a high-quality product, Kraft has recently introduced three new premium Cadbury Dairy Milk chocolate bars that combine sweet and salty tastes: Pretzel & Peanut Butter, Toasted Coconut & Cashews, and Honey Roasted Cashews & Hazelnuts. “We’ve had great success with all of these,” says Phillipson.

At Vancouver, B.C.-based Purdy’s Chocolates Ltd., head chocolatier Gary Mitchell has also been working hard to come up with some new and interesting – not to mention quite sophisticated – flavour combinations. “We’re working on a tiramisu dessert chocolate with mascarpone cheese and whipped cream, Kahlua, and it’s made in a dessert cup,” says Mitchell. “Cheese and chocolate is one of my new frontiers.” The chocolatier recently introduced a Milk Chocolate Pear Lemon Caramel for spring, and he speaks with great pride about his award-winning Savory Brie Cheese and Fig Truffle. “Today’s consumers are looking for unusual tastes, unusual textures – they want to be entertained,” he adds, noting that this is a trend that’s evident in every aspect of the food business these days, from high-end gourmet meals to baked goods and snack foods.

Following this same trend toward unique, upscale flavours, in January the Allan Candy Company Ltd. introduced a new chocolate and candy line called Dessert Bites. These small treats – either coated in chocolate or a yogurt candy coating – have “a flavoured soft and chewy candy core that tastes exactly like that dessert,” says James Benson, director of Marketing and Innovation for Mississauga, Ont.-based Allan’s. Filling varieties include Chocolate Raspberry Cheesecake, Key Lime Pie, Apple Pie and Strawberry Shortcake.

Allan’s Dessert Bites also reflect the other big trend that’s sweeping the confectionery sector – the trend toward smaller, bite-size indulgences. “It’s an indulgence-first item, but with portion-controlled pieces. So you can have a handful, and you can enjoy that indulgent moment without feeling like you’ve overdone it,” says Benson. While the portion-controlled snack trend started with the 100-calorie chocolate bars and candy packs that were first introduced a few years ago – which remain very popular in the segment – Benson feels that bite-size treats are the next evolution of the trend. “If you can deliver indulgence but in a portion-controlled size, it takes a little bit of the guilt out of it,” he says, “and that’s why the ‘pieces’ segment is growing so substantially.”

Many of these “pieces” come in resealable packages, so consumers can grab a handful of chocolate treats and then just reseal the pack and put them away. “They may not contain a specific calorie count against them [like the 100-calorie bars], but consumers know how to navigate and say, ‘I’ll just have a little piece of that,’” adds Phillipson. Kraft has been enjoying great success with its Cadbury Pieces line, featuring Caramilk Secrets, Dairy Milk Buttons and Cadbury Crunchie Clusters, all of which come in resealable packages. This year the trio of bite-size products were recognized with a Product of the Year award in the Confectionery category.

Sweet Georgia Browns from Purdy's Chocolate. (Top photo) Purdy's Brie Cheese and Fig Truffles

Interestingly, despite the trend toward healthier eating, chocolate sales are actually increasing overall in Canada. According to a 2011 Euromonitor International report called Confectionery in Canada, sales of chocolate in Canada grew by almost three per cent in 2010 to $2.5 billion. The report predicts the chocolate category will continue steady growth of about two per cent per year until 2015, with sales growth being driven primarily by bite-size chocolates in resealable packages, as well as by premium chocolate products, including dark chocolate and chocolate made with higher-quality cocoa beans.

Mitchell can attest to the increasing popularity of dark chocolate. “We used to sell way more milk chocolate than dark chocolate,” he says, but the dark chocolate sales are quickly catching up. “It’s not 50/50 yet, but getting close.” Mitchell is fairly certain that this is because of the purported health benefits of dark chocolate, such as its high antioxidant content. “It also makes you feel good,” he adds. “It acts as a natural anti-depressant; it’s good for all things.”

To appeal to those interested in chocolate with health benefits, Purdy’s offers a 70-per-cent dark chocolate bar with dried goji berries and cocoa nibs, as well as a 70-per-cent dark chocolate bar with blueberries and almonds. Goji berries are high in antioxidants and various nutrients, as are blueberries, so the combination of purer dark chocolate and these superfruits makes them very appealing on a health level. Mitchell says these have been available for several years now, and are selling quite well, although they’re by no means a top seller for Purdy’s. The top sellers for the company remain their classics: Sweet Georgia Browns (roasted and salted Georgia pecans topped with caramel and milk chocolate) and Hedgehogs (milk chocolates with hazelnut).

While chocolate in general is trending upwards, it seems the sugar confectionery market, including licorice, chewy candy, lollipops and mints, is trending down. The Euromonitor report projects a steady decline overall in sugar confectionery sales of about one per cent per year until 2015. According to the report, this is largely attributable to health concerns – both dietary and dental – as well as to a declining population of children in Canada, who tend to be the main consumers of candy products.

Because of this, “manufacturers are placing a greater emphasis on product differentiation through natural ingredients,” says Benson. For example, Allan’s has reformulated its classic Big Foot candy to include real fruit juice in the recipe. “So it’s a little ‘better for you.’ Moms can buy it for their kids and feel better about it,” he says. The other change to Allan’s Big Foot product also fits the concurrent confectionery trend toward interesting flavour combinations. “We’ve expanded that line and added a set of unique and very trending flavours like Sour Berry Lemonade and Orange Cream Pop,” adds Benson.

Kraft has done something similar with its popular Trident Layers line – a three-layer sugar-free gum with a colourful candy layer in the middle, first introduced in 2010. The original flavour combinations included Cool Mint and Melon Fresco, Wild Strawberry and Tangy Citrus, and Green Apple and Golden Pineapple. This June the company will introduce two new flavours: Mango Peach and Cherry Lime. Such flavour combinations really reflect a modern consumer’s tastes, says Phillipson, who adds that he can’t imagine these flavour combos succeeding 20 years ago when countless Canadians hadn’t even tried a real mango before.

Across the board, from chocolate to candy to gum, unique flavour combinations and high-quality, portion-controlled indulgent treats are what most Canadians are now looking for when it comes to confectionery. Are health concerns an issue? Of course – but only to a certain extent. “From all the research that we’ve done, it’s pretty apparent: consumers tell us straight out, in very clear terms, that a treat is a treat and you need to be careful about how far you move into a healthier space,” says Benson. “In this space, generally, it’s more about the sinful indulgent moment than it is the healthy benefit.”

The show hosts more than 700 exhibitors and draws 13,000 visitors from 60 countries over the course of three days each year.

In addition to its free conference program, the show has several competitions for food processors.

Trends, innovations

One of which is the Trends & Innovations competition. On May 9, during the Canadian

Maple Pearls from Citadelle Maple Producers' Cooperative won the Grand Prize in the Trends & Innovations competition.

Agri-food Export Gala, the 10 winning products were declared, including:

• Maple Pearls (Citadelle – Canada), which won the Grand Prize. Maple Pearls are jelly pearls containing pure maple syrup.

• Balsamic Vinegar and Olive Oil products in a spray bottle (Maison Orphée – Canada). The flavoured extra virgin olive oil in spray bottles are great for basting or marinating.

• Gourmet caramel spread in several varieties (Vergers Duhaime – Canada). These caramel spreads come in flavours like Butter & Rum, and Maple & Sea Salt.

• Maple sap water (de l’Aubier – Canada). This natural still water is stemmed from maple sap that is separated from its sugars to keep only the water.

• Greek-style probiotic yogurt (Skotidakis Goat Farm – Canada). This fat-free Greek probiotic yogurt offers a good source of protein.

• Le Complait without lactose– milk beverage (Nutrinor – Canada). This enriched dairy product with probiotics and prebiotics is suitable for people who are lactose-intolerant.

• Basilur Winter Book (Basilur Tea – Sri Lanka, represented by Global Business Network – Canada). This tea comes in a book-shape package.

• Effet Bleu frozen treat (Opti Bleu inc. – Canada) is a blueberry juice ice bar that contains 90 per cent blueberry juice and is rich in antioxidants.

•Anti + (Novidev Santé Activ – Canada) is a fruit drink with bioactive compounds intact and has no additives or preservatives.

• Ninette Ice Cream varieties (Ninette Ice Cream – Canada). This ice cream comes in flavours such as Thyme & Lemon, Raspberry Truffle, and Crunchy Gingerbread.

Coffee

There was also the Coffee Cup competition, a contest designed to seek out the best coffee in the world. On May 7, a jury went through 13 submissions from countries ranging from Brazil to Bolivia and Canada to Honduras.

The winners are:

• Certified category: Golden Bean: Kaloko, Mountain Thunder Coffee from Hawaii

• Regular category: Golden Bean: Panama Finca Hartmann, Mocassin Jo Coffee Roasters from Panama

Olive oil

SIAL Canada also held the Olive D’Or competition, which awards the nine best extra virgin olive oil submitted by producers from around the world. There were more than 100 submissions from 15 different countries. The oils were divided into three categories, light, medium and intense. The winners in each category gain the titles of Golden Drop, Silver Drop and Bronze Drop.

The winners included:

• Light
Golden Drop:
Ottobratico, Olearia San Giorgio from Italy
Silver Drop:
Olave Organic Extra Virgin Olive Oil, Valle Grande S.A from Chile
Bronze Drop:
San Pietro, San Pietro Foods from Chile

• Medium
Golden Drop:
Sand Pietro Foods Chile
Silver Drop:
Olio Extra Vergine Oliva Titone, D.O.P. Vallie Trapanesi Biologico, Azienda Agricola Biologica Titone from Italy
Bronze Drop:
Sofra, Sarra Huiles from Tunisia

• Intense
Golden Drop:
Rinón de la Subbética Alamoda, Almazaras de la Subbética from Spain
Silver Drop:
Melgarejo Gourmet, Aceites Campolive, S.L., from Spain
Bronze Drop:
Extra Virgin Olive Oil Tradizionale, Planeta from Italy

Back in the early 1990s, we were faced with the implementation of the North American Free Trade Agreement (NAFTA). Many of you will remember that. We feared that the potential for loss of jobs and closing of plants in the processing sector was inevitable. As a result, the Agri-Food Competitiveness Council (AFCC) was created to assess the situation and develop operating strategies and policy change recommendations that needed to come about to halt that possibility. It was chaired by Dr. Larry Martin of the George Morris Centre, and I was honoured to be one of the members of that council. When I look back on the outcomes of that project, so many things seem to still be very appropriate for the sector despite the very different market place – including it being more global vs. North American, with more focus on the environment and energy and a more diverse market. So if I go back to a rough summary of the AFCC and compare it to today, here are the results:

AFCC Overall Results: “Unlimited Horizons.” I believe this is in line with what I have said up to now about our current opportunities.

AFCC Statement of Strategic Intent: “There is nothing to stop us from being the premier agri-food sector in the world.” Again, this is in line with what I believe is the Mission/Vision/Strategic Intent we should have for the industry.

AAFC Key Focal Points to achieve the Strategic Intent:
1. “Attitude: We can be the best in the world because we have shown there are no barriers to competitiveness, only challenges and opportunities.” As I have maintained in my articles, we can be the best in the world.

2. “Customer Focus: All stakeholders in the value chain have customers and are customers.” This emphasizes two things we have talked about. The first is that we need to collaborate along the value chain with our customers and suppliers much better than we do. The second is that we need to understand the consumer markets much better and where we can best focus for success by “commodity business unit.”

3. “Collaboration: With strong strategic alliances and vertical and horizontal collaboration within the value chain, we can satisfy customer needs and realize greater efficiencies.” Again, this points to continuous process improvement and value chain collaboration, not just in productivity gains, but also in product innovation, sustainability and more.

4. “Technology: With technology we can reduce the vulnerability of Canada’s heavy dependence on undifferentiated exports.” This highlights the ongoing need for innovation, not just in product characteristics, but also improved efficiency and improved sustainability.

5. “Human Resources: We must develop a life-long learning culture to compliment the adoption of new technology.” I haven’t spoken specifically about the human resource element, but it is clear that continuous improvement in all areas is very dependent on the quality of human resources we have working at all levels and aspects of the value chain and continually developing those resources.

6. “Prompt Policy Resolution: Only once we resolve long-standing domestic issues will we realize the full potential to be gained by the emerging clarity in trade policy.” Again, the issues now may be different than they were 20 years ago, but there are many policy areas that need to be addressed and resolved if we are to be competitive. Government needs to promptly and efficiently address such issues with proper industry consultation and collaboration.

7. “Environment: Environmental issues are not barriers to competitiveness.” In fact, solving the environmental issues and other social responsibility issues are key factors in our success. If you want an interesting point of view on this, read Richard Branson’s book Screw Business As Usual, in which he strongly maintains that only by addressing environmental and social issues will we have a long-term chance of business success and profitability. This is especially true in the food industry that is fully reliant on natural resources.

I strongly believe that the results and recommendations of the AFCC are very much ongoing, long-term ideas that haven’t changed much over the past 20 years and likely won’t over the next 40 years.

The key then is what are the specific strategies we need to agree on and embark on to achieve success in these focus areas and lead us to global success? I say that a group similar to the AFCC needs to be implemented. The commodity roundtables go part of the way, but we need an overall Competitiveness Council for the Agri-Food Sector, and we need it now.

Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at gfread@sympatico.ca

Alliance Grain Traders says the project announced last October by Prime Minister Stephen Harper has been put on hold until 2013.

The company says in a news release it wants time to monitor developments in the North American grain industry.

Harper said the pasta plant proved the benefits of dismantling the Canadian Wheat Board’s single-desk market.

The chair of the Canadian Wheat Board Alliance says the delay of the project is directly linked to the end of the board’s monopoly.

Bill Gehl says that small grain processors such as Alliance Grain Traders need the fairness of a single-desk market to survive.

“Our wheat board had a policy of treating all processors equally, so large processors could not obtain volume discounts from farmers and push out smaller operations, and now that fairness will end with the single desk,” Gehl said in a release.

Murad Al-Katib, CEO of Alliance Grain Traders, said management believes it’s wise to focus on the company’s balance sheet and “improve our business metrics” before proceeding.

“Pending developments, such as the de-monopolization of the Canadian Wheat Board and the proposed sale of Viterra to Glencore, as well as the free-trade negotiations between Canada and the European Union, will continue to reshape the landscape of the industry,” he said.

Al-Katib added that planning and design work for “larger projects” such as the pasta plant “will continue so that they are ready for implementation when we feel it is the right time to do so.”

© 2012 The Canadian Press

Results from the 2012 survey that shows a global appetite for mergers and acquisitions (M&A) over the past 24 months, despite economic challenges, show that 42% of Canadian businesses plan to grow through acquisition.

The overall proportion of businesses seeking to grow through M&A globally has risen significantly from 26% in 2010 to 34% in 2012.

Canadian companies say they are doing so primarily to access new geographic markets (69%), but also to build scale (48%), access lower cost operations (39%) and acquire new technology or an established brand (34%).

Survey results reveal 70% are looking domestically, while 23% are looking outside Canada’s borders, while global results show an overall increase in the number of companies seeking to expand through a cross-border transaction – from 28% last year to 33% in the 2012 survey.

“Canadian merger and acquisitions activity is being driven by growth-hungry companies in a tepid economic environment, the ageing population of the Western world and strong access to funding,” says Troy MacDonald, corporate finance partner in Grant Thornton LLP’s Toronto office.

The advisory firm says most Canadian companies plan to finance their growth through retained earnings (68%), bank finance (55%) and private equity (31%).

Only 12% of Canadian companies foresee a change in their own ownership over the next three years, and of these, 31% said they expect an acquisition by a competitor.

Regions most interested in making an acquisition in the next three years are North America (37%) and the BRIC economies (35%). This compares to only 28% in mainland Europe, 25% in Asia Pacific and in particular companies in the troubled economies of Greece, Ireland and Spain where only 16% indicated an interest in M&A activity in the coming three years.

Click here for the report.

The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) made the announcement in Montreal at the SIAL 2012 food tradeshow last week.

At the 2012 SIAL Canada food tradeshow in Montreal, Ted McMeekin, Ontario minister of Agriculture, Food and Rural Affairs, recognizes two finalists and the winner of the Ontario Food Exporter Award. Pictured from left to right: finalist Charles Pillitteri (Pillitteri Estates Winery); Minister Ted McMeekin; award winner Boris Serebryany (Fiera Foods); and finalist William Taylor (Erie Meat Products Limited).

Fiera Foods has 1,000 employees in four manufacturing facilities, all in the Toronto area.

The company manufactures bagels, croissants, danishes, puff pastry, cookies, cinnamon rolls, muffins and cakes. It also offers clients several production methods, such as proof & bake, par-bake, freezer-to-oven, or thaw & sell. The company also offers a range of Kosher-certified products.

Innovative technologies

Fiera’s two latest innovative technologies include Freezer-to-Oven and Stress Free Dough.

Freezer-to-Oven allows retailers and restaurants to bake products directly from frozen, saving time and labour. Stree Free Dough allows the production of bread products with a very light, yet moist texture and provides an artisan-style product.

OMAFRA says companies like Fiera helped Ontario’s agri-food exports hit a record high of nearly $10 billion in 2011, a 5.4 per cent increase over the previous year.

For the 2012 Ontario Food Exporter Award there were two other finalists: Pillitteri Estates Winery, and Erie Meat Products Limited.

The Ontario Food Exporter Award, launched in 2011, celebrates Ontario exporters. This annual award recognizes a business’s successful expansion into new export markets, as well as their creativity and excellence in working with international markets.

If successful, counting on machines can help preserve this nation’s technological power – not the stereotype of machines snatching assembly line jobs from workers, said Canon spokesman Jun Misumi.

The move toward machine-only production will likely be completed in the next few years, perhaps as soon as 2015, said Misumi, although he declined to give specific dates.

Japanese manufacturers have been moving production abroad recently to offset the earnings damage from the soaring yen. And fears are growing about a hollowing-out of Japan Inc. as jobs move to China, India and the rest of Asia, where labour costs are cheaper.

Misumi was adamant that jobs won’t be cut at Canon.

“When machines become more sophisticated, human beings can be transferred to do new kinds of work,” he said.

Toyota Motor Corp. is also working on beefing up automated production not only to cut costs but also achieve better quality.

In a recent plant tour for reporters, Toyota showed how welding got much faster and more precise through instantaneous laser-welding.

Toyota used that technology to make Lexus luxury models move and withstand sharp turns better.

Despite growing pressure from the high yen, Toyota is innovating production efficiency to keep annual Japan production at 3 million vehicles, about a third of its global production, by reducing costs through boosting robotics use.

Akihito Sano, professor at Nagoya Institute of Technology, said Japan needs to do more to fine-tune its sophisticated technology so robotics can become more practical, and was doing some soul-searching lately about practical applications.

Japan has tended to focus on research and come up with razzle-dazzle humanoids and then get been beaten in simple but practical products like the Roomba vacuum cleaner by iRobot Corp. of the United States, he said.

Honda Motor Co.’s walking and talking Asimo human-shaped robot comes with voice recognition, pours juice into a cup and can run around on two legs. But, unlike Roomba, it has yet to enter a real living room to do actual vacuuming and it merely plays mascot at events.

Since the late 1990s, like other manufacturers, Canon began using the “cell” production method, in which a team of workers or one worker puts together a major part, rather than doing a simple task over and over.

In recent years, robots have become so much a part of this cell production, Canon calls it “man-machine cell.” Eventually, human involvement will be phased out in making some products, according to Canon.

In the US, Amazon.com Inc. is buying Kiva Systems, which makes robots and software to help companies fulfil orders, for $775 million.

Amazon has been using automation at its order fulfilment centres for some time, but Kiva’s technology is designed to lower costs and will be used to help workers pick and pack books.

Sano, the academic, stressed the need for a system so workers can communicate with robots. He also stressed that there will always be room for human intelligence, using the Japanese for “craftsmanship,” or “takumi.”

“Human beings are needed to come up with innovations on how to use robots,” said Sano. “Going to a no-man operation at that level is still the world of science fiction.”
___

The USDA made the announcement last week.

The aim of the measures is to improve the ability of both food processing plants and the USDA to trace contaminated food materials in the supply chain, to act against contaminated products sooner, and to establish the effectiveness of food safety systems.

The policy measures include:

• the USDA’s Food Safety and Inspection Service (FSIS) plans to implement new trace-back measures in order to control pathogens earlier and prevent them from triggering foodborne illnesses and outbreaks.
FSIS is proposing to launch traceback investigations earlier and identify additional potentially contaminated product when the agency finds E. coli O157:H7 through its routine sampling program.
When FSIS receives an indication of contamination through presumptive positive test results for E. coli, the agency will work to identify the supplier of the product and any processors who received contaminated product from the supplier, once confirmation is received.
This proposed change in policy gives FSIS the opportunity to better prevent contaminated product from reaching consumers.

• FSIS is implementing three provisions included in the Food, Conservation and Energy Act of 2008. The new regulations require establishments to prepare and maintain recall procedures, to notify FSIS within 24 hours that a meat or poultry product that could harm consumers has been shipped into commerce, and to document each reassessment of their hazard control and critical control point (HACCP) system food safety plans.

• FSIS is announcing the availability of guidance to plants on the steps that are necessary to establish that their HACCP food safety systems will work as designed to control the food safety hazards that they confront. This process, called validation, enables companies to ensure that their food safety systems are effective for preventing foodborne illness.

In the past two years, FSIS has announced several measures to safeguard the food supply, prevent foodborne illness, and improve consumers’ knowledge about the food they eat.

These initiatives support the three core principles developed by the President’s Food Safety Working Group: prioritizing prevention; strengthening surveillance and enforcement; and improving response and recovery.

Still, the unemployment rate edged up one-tenth of a point to 7.3%, but that was because even more people were looking for work last month.

The big gains, following a stunning 82,000 increase in jobs in March, changes the picture for Canada’s labour market, which until two months ago had been mostly stagnant since the summer.

The details in the April jobs report were even stronger than the headline, with all the new workers coming in the employee category rather than self-employment. They were also mostly in the private sector and mostly full time.

The agency says employment rose in manufacturing, construction, natural resources and agriculture, as well as the education sector. And, unlike in March, when most of the new jobs were concentrated in Central Canada, this time the winners included the Atlantic region, Quebec and the West.

Manufacturing is continuing to add jobs. Employment increased 24,000 continuing an upward trend that started in December 2011. However, Statistics Canada says the gains offset declines in previous months, leaving employment in manufacturing little changed from 12 months earlier.

Employment in natural resources, the fastest growing industry, continued on an upward trend that started in September 2011, with gains of 11,000. Year-over-year employment growth is 12.5%.

More people were searching for work in Ontario as the unemployment rate increased 0.4% to 7.8%. While employment was up compared with 12 months earlier, Statistics Canada says it was entirely the result of notable gains in March.

The April gains brought the number of jobs created over the past year to 214,000, all in the full-time work category.

Derek Burleton, Vice President and Deputy Chief Economist fro TD Economics said the pace of hiring trend is consistent with economic growth running at a steady but modest pace of around 2% nation-wide.

“April’s figures suggest that construction, manufacturing and natural resources are well-positioned to take on much of the heavy lifting, supported by condo construction, rising US demand for autos and other exports and relatively high commodity prices,” he said in a commentary.

However, he noted that while the rebound in the labour force participation rate was a positive development, it doesn’t erase a continued downtrend evident since the recession ended, despite a flood of older workers entering the job market.

“This downtrend in the participate rate suggests that there may still be room for the jobless rate to fall, notwithstanding a relatively lacklustre growth picture.”

He said historically, 2.5% to 3% growth has been consistent with a declining unemployment rate.

I’m here as part of a trade media delegation hosted by Machines Italia and the Italian Trade Commission.

FluidTrans is hosted by Feddermacchine’s ASSOFLUID, an association of Italian fluid power and transmission equipment and component firms. The show, which this year has focused on applied innovation (a common theme on the trip so far), is spread across 40,000 square meters, and features 340 exhibitors, 47% of which are from abroad.

Italy’s fluid power and transmissions industry has shown significant growth sine the global economic crisis, catching up on losses since 2007. The hydraulics industry has grown domestically by almost 25%, while the country’s pneumatic sales are up by 10.6%, according to Assofluid.

Also, the association says Italy’s production of power and motion systems posted an increase of 37.2%, while industrial automation is expected to grow by 15% this year. The association says it’s hopeful it will soon reach the export-driven, pre-crisis levels.

ASSOFLUID represents 197 companies that employ more than 14,000 people, representing more than 70% of the country’s fluid power and transmission industry.

An Applied Innovation Area is also featured at this year’s show, showcasing industrial and manufacturing-led prototypes designed by Italian think-tanks and university R&D centres, which include the Politechnico di Torino and Ferrara-based Imamoter from Italy’s National Research Institute. University exhibitors include the universities of Brescia, Genoa, Modena and Parma.

Some of the technologies on display this week include:

• The ASIU-Active steering input unit, which was developed to advanced motor gearing systems with wires equipped with active feedback capabilities.
• Mesap, a mechatronics and advanced system production pool. It introduced the EHA-INAVICO, an electro-hydrostatic actuation system for power actuation, automation and vibration control applications.
• Easy Robotics introduced a software developed by the University of Brescia designed to control pneumatic components in machinery assembly, conveyor and packing applications. The system allows static and dynamic calculations to occur, which then identifies the picking and verification of specific components best fit for specific material handling operations – an innovation truly dedicated to fulfilling the dreams of Italian OEMs to maximize personalization services.

This week also marks the return of the Feddermacchine’s PLAST, Italy’s largest showcase for the world’s plastic and rubber manufacturers and OEMs. This year’s show features 1,500 exhibitors and 3,500 machines from 58 countries, 30 of which are foreign businesses.

Italy’s plastics and rubber industry exports enjoyed a 20% growth in 2011, earning more than $5 billion. The industry’s trade surplus has also risen by more than $2.3 billion thanks to increased demand for extruders, moulds and forming machines, according to Italy’s association of plastics producers, ASSOCOMOPLAST.

On Tuesday night, we had the opportunity to have dinner with the president of ASSOCOMOPLAST, Giorgio Colombo, who is also the managing director of a Milan-based extruder manufacturer ICMA San Giorgio.

Colombo stressed the success of his industry was dependent on continued innovation and personalization services to increase the value-added component of the Italian manufacturing industry.

“To be innovative means more than being big,” he says. “We want to make sure our equipment works in ways that maximizes our customers’ efficiencies, and would rather focus on bettering our products and services than boosting production that could compromise quality.”

Italian OEMs have shown, based on statistics, that they’ve been able to grow without making a huge case for improving productivity, instead focusing on bettering innovation and R&D activities and ramping up the value-added component. It’s a strategy that appears to be working. Italy’s manufacturing exports represent 70% of production in an industry worth more than $34 billion to the national GDP.

That’s a model productivity challenged Canadian companies should note.

Check out pictures from the show floor below.

Until tomorrow, arrivederci!

PLANT takes on Milan: Day 1

PLANT takes on Museo Ferrari [PHOTO GALLERY]

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The agency says exports edged down 0.4% to $39.5 billion with shipments of energy products leading the decline, down 8.9%, with dips recorded in forestry (0.3%) and automotive (0.7%).

Exports of industrial goods and materials were up (6.2%) as were machinery and equipment (3.4%).

Imports decreased 0.6% to $39.1 billion amid lower imports of energy products and industrial goods and materials.

Exports to the US – Canada’s biggest market – fell 2.1% to $28.7 billion, the third consecutive monthly decrease.

Meanwhile, imports from the US declined 1.4% to $24.1 billion as our trade surplus with the Americans decreased to $4.6 billion in March from $4.9 billion in February.

Exports to countries other than the US rose 4.5% to $10.8 billion and imports increased 0.8% to $15.1 billion, narrowing the trade deficit with those countries to $4.3 billion from $4.6 billion in February.

© 2012 The Canadian Press

The company says the propionic acid-based antimicrobial solution is proven to extend product shelf life more consistently in comparison to traditional lactate-based products.

BactoCEASE is applied using a lower application rate providing a lower cost-in-use as well as significantly reducing sodium levels. BactoCEASE formulations are available in economical, easy to use, liquid forms.

BactoCEASE NV is a liquid, buffered vinegar-based product that addresses consumers’ concerns over food safety, especially in processed meat and poultry products.

Listeria monocytogenes is ubiquitous to nature and can be present in soil, water, on food contact surfaces and within food processing facilities. Time-tested ingredients such as vinegar in BactoCEASE NV can be an effective means of intervention.

Typical applications include uncured turkey, cured turkey, deli ham, hot dogs, deli roast beef and frankfurters.

www.kemin.com

Ultima Foods made the announcement that it has signed a custom processing agreement with Yoplait SAS/General Mills – the U.S. owners of the Yoplait brand – this week.

Ultima Foods also announced that it will launch its own brand of yogurt in Canada this year and that it has plans for a major investment in its Granby manufacturing plant.

Custom-processing agreement

The agreement Ultima signed with Yoplait SAS/General Mills will last six years and sets out that, in addition to manufacturing its own brand, Ultima Foods will manufacture Yoplait products in Canada.

As of September 2012, the company’s Granby plant will produce the same volume of Yoplait products that it currently manufactures.

New launch

With the support of its two shareholders, Agropur and Agrifoods – two of the largest dairy cooperatives in Canada whose membership includes 4,500 producers – Ultima Foods will launch its own new brand of yogurt and fresh dairy products in Canada starting in mid-August 2012.

This brand will be entirely created and manufactured in Canada and will include a full and original line of products and flavours geared to the palate of Canadian consumers.

“I am very proud to announce the arrival of our own brand on the market,” says Gerry Doutre, president and CEO of Ultima Foods. “The Canadian yogurt market is in full growth, and we will solidify our place in this market.”

Major investment

To adequately meet demand, Ultima Foods will invest $10 million in its Granby plant starting this fall to increase the facility’s production capacity by 15 million kg per year. The total capacity of the plant will reach 130 million kg. Further investment will be made depending on the company’s production needs.

Ultima Foods was established 40 years ago and is owned by Agropur and Agrifoods dairy cooperatives. The company has 750 employees across Canada. The company also owns and operates Olympic-brand dairy products.

Of the Canadian executives responding to the Global Capital Confidence Barometer survey, 48% are looking at pursuing acquisitions, up from 32% from April 2011 and ahead of both the global results (31%) and the US (34%), both of which dropped from October 2011 results.

Confidence in the Canadian economy has more than doubled, says Tony Ianni, a partner in Ernst & Young’s Transaction Advisory Services practice. “While there is still volatility and corporate executives are still cautious, their outlook is more positive than many global respondents who operate in a more challenging environment.”

Of the Canadian participants surveyed:

• 31% of Canadian businesses are looking to divest, up from 23% in October 2011.

• 80% believe the number of deal opportunities is increasing, and more than three-quarters believe the likelihood of closing deals is greater than it was six months ago.

• 75% view credit availability as stable or improving.

• 72% believe the Eurozone crisis has affected their businesses.

The Canadian’s top investment destinations include the US, China, Hong Kong, Singapore and India and favoured acquisitions are in financial services, life sciences (including healthcare), consumer products, oil and gas, and technology.

Click here for the full report.

I’ll also head to Bologna, reporting live from the LAMIERA trade show later this week.

I’m in this picturesque city with eight other journalists, all from North America, as part of a delegation hosted by the Italian Trade Commissions of both Canada and the US, and Machines Italia, an initiative designed by the commission to promote Italian-made machinery and technology to manufacturers in North America.

The food and drink have been “fantastico,” but the businesses we’ve visited and the people that run them are the true stars.

Italy is the second largest (to Germany) OEM producer in Europe. Seventy per cent of its industry is driven by exports, according to UCIMU, Federmacchine’s machine tools, robots and automation manufacturers’ association. Just to put the size of Italy’s manufacturing community into perspective, Federmacchine represents 6,300 companies and more than 182,000 people—and that’s not everybody.

Innovation and adding value are topics that have come up in almost every conversation I’ve had here with company and association leaders. Italians see both of these proponents as crucial to business, no matter how well the economy is doing. For instance, one of the businesse we visited (which will be the topic of a post later this week) continues to invest up to 12% of its revenues in R&D, despite losing $90 million worth of business last year.

In terms of value-added, which will also be featured in a post this week, it’s clear the Italians care about providing impecable after-sale and personalized services to ensure their machines operate at the right efficiencies for individual customer needs.

As the week goes on, stay tuned for more content from PLANT takes on Milan.

We’ll look at a number of topics, including company profiles, tradeshow bulletins from the floor at Assofluid and PLAST 2012, a photo and video gallery of innovative products, plus an interview with AMUT president Milani Piergianni.

And I almost forgot…a photo gallery from the Museo Ferrari in Bologna to satisfy our car enthusiasts.

Until tomorrow, arrivederci.

PLANT takes on Milan: Day 2

PLANT takes on Museo Ferrari [PHOTO GALLERY]

One reason for the change is the shaky economy, which has consumers cutting what they spend on groceries and other items. But there are further factors at play. For example, outbreaks of foodborne illness such as Listeria and E. coli have some consumers questioning the safety of meat and poultry products. A 2010 Mintel report noted that, in proprietary research on the topic, 63 per cent of respondents indicated worries about the safety of these products. In addition, the study found that red meat carries negative health perceptions for some people, with 48 per cent of respondents saying they believed red meat to be a less healthy, higher-fat option.

Another factor in the changing dynamics of meat and poultry is the growing number of consumers who include ethical considerations in their purchasing decisions — in particular, concerns about the environment and animal welfare. For example, consumers want to know if the meat they’re buying is free of antibiotics and synthetic hormones. Were the animals confined or raised outdoors on healthy pasture? Were they fed quality forage or animal by-products? Was good environmental stewardship practiced from gate to plate? Some of these issues overlap with consumers’ quest for healthy, flavourful food. For example, some maintain that pastured animals produce leaner, tastier meat because they’re less stressed than those raised in confinement.

Less meat, higher quality,  more choice

Put these factors together and you have a market in which people are buying less meat, but demanding higher quality and many more choices, including products they perceive as having a cleaner or more ethical provenance, such as natural, antibiotic-free, organic or locally raised. Estimating the size of the market for ethical meat is complicated, because different industry and regulatory bodies define terms like natural, organic and sustainable in different ways. However, the consensus seems to be that, while sales of these products remain a small proportion of the total, they have risen markedly in recent years.

As a result, notes Leatherhead Food Research, many leading producers  of meat and meat products now focus on food quality and safety as a core part of their strategy, removing artificial additives and working with the industry to develop quality-control procedures. Mainstream chains like Walmart and Safeway have introduced organic and locally produced foods, while organic grocers such as Whole Foods have strengthened their position. In addition, specialty businesses such as Cumbrae’s in Toronto — which sources sustainable beef, pork, lamb and poultry from local farmers — are building both a regional and national presence.
Choices Market is one of the retailers thriving in this segment. With outlets across metropolitan Vancouver and in Kelowna, B.C., the store sells a wide selection of natural, organic products and locally produced food, along with conventional products. According to CEO Mark  Vickars, almost all of the chicken and about 80 per cent of the beef Choices sells is organic, reflecting the expectations of the store’s key customers — women in the 35-to-55 age bracket, affluent and educated, for whom health is the main priority. There’s also a customer contingent Vickars calls “committed idealists,” aged 18 to 25 years old, who want food that’s been produced in an environmentally responsible way and who may have concerns about animal rights as well. The market for ethically raised meat is now sufficient that supply line issues are emerging, Vickars notes. “Demand is beginning to outstrip supply, especially with beef because it takes longer to raise.”

Opportunities for innovation

Meeting this demand offers opportunities for innovative producers such as Spring Creek, a provider of premium beef products raised without  antibiotics or added hormones. Located east of Edmonton, Alta., it’s  part of a family run operation that also comprises a cattle ranch and  an integrated bio-refinery to produce green power and bio-fertilizer.

Working with a team of 50 to 60 ranchers across Western Canada, Spring Creek ensures that cattle are raised according to strict protocols that include traceability measures for each cow produced, and a third-party audit process to monitor all aspects of animal care, explains president Kirstin Kotelko. Products are processed and packaged in federally inspected, HACCP-approved facilities, and sold to consumers through Sobeys, Safeway and Co-op stores in Alberta and B.C. They’re also supplied to Fairmont hotels in Lake Louise, Banff and Toronto, as well as to South Street Burger outlets in the Greater Toronto Area. To gain access to additional markets, Spring Creek recently signed a deal with Alberta-based packers XL Foods Lakeside.

“Demand for ethically produced meat is definitely increasing,” says Kotelko. “When Spring Creek was launched in 2003, you might have seen this type of product in one out of 10 grocery stores. Today, it’s more like eight out of 10.” Kotelko sees this as the result of media attention and greater health awareness on the part of consumers. “People also want to support food produced in their own country and in their own  communities by local businesses.”

Important as these attributes are, they remain secondary to quality and taste, Kotelko adds. “What our customers appreciate is that our products are great quality and great-tasting. It’s the icing on the cake that our beef is also raised in Canada and is antibiotic-free.”

Will the market for ethically raised meat continue to grow? The consensus seems to be that it will, though perhaps not as quickly as in recent years. “This is a niche that grows or shrinks with the economy,” says Robin Horel, president and CEO of the Canadian  Poultry and Egg Processors Association. “In tough times, price will trump ethical considerations. What’s important for all suppliers is to provide people with choice — a range of safe, quality meat and poultry produced in different ways and sold at different price points.”

Only 63% of Canadian CEOs expect to make changes to their companies’ research and development (R&D) and innovation capacity over the next 12 months, compared to 72% of their global counterparts.

“There appears to be a general perception that because of our focus and reliance on the natural resources sector, Canada has lagged behind other countries in terms of its investment and support to R&D. We are often seen as a ‘fast follower’ to other countries because that has traditionally been ‘okay’ in our market,” says Tracey Riley, PwC’s national consulting and deals leader.

R&D and innovation are more of a driving force in for future changes in BRIC countries. Eighty-two percent of their CEOs anticipate changes in R&D and innovation capacity in the next year.

Riley suggests proximity may have something to do with Canada’s level of investment.

“Canada is more distant from most of the emerging markets and low-cost markets that often contribute to, or are the target markets for, innovation,” he said, noting other reasons as business culture to geography and the political environment.

He says Canada is seen as more conservative in business, more isolated and contained geographically and not having undergone the same turmoil and volatility that has been felt in other countries which are under pressure to develop.

The scale and aggression of competitors is also ostensibly less intense in Canada.

According to the survey Canadian leaders are focusing on sustainable, long-term change and cost reduction.

“Two-thirds of them expect to change their business strategy over the next twelve months driven by factors like customer demand, the economy, competition and talent,” says Riley.

Click here for a copy of the survey results.