Ready, Willing And Able
Quebec and Ontario suppliers seek to answer U.S. retailers' call for quality and value.
Store brands can be found in virtually every household in Canada. But according to a recent Nielsen global private label report, private label market share within Canada remains relatively static as national brands scramble to meet Canadians' thirst for value by driving more sales through feature pricing.
That reality — and others — means a number of Canadian manufacturers, particularly those in Quebec and Ontario, have excess capacity. And these manufacturers are actively seeking to partner with U.S. retailers to develop store brand food and beverage products that meet their unique needs.
That reality — and others — means a number of Canadian manufacturers, particularly those in Quebec and Ontario, have excess capacity. And these manufacturers are actively seeking to partner with U.S. retailers to develop store brand food and beverage products that meet their unique needs.
"It's a big country, and without much population," notes Andre Gelinas, president of Mystic, Conn.-based RSVP Brokers, which works to connect the Canadian manufacturers it represents to U.S. retailers. "So the advantage for them is to go south. They have access within an eight to 10 hours' drive to have 45 million people."
Retailers benefit, too
Canadian manufacturers aren't the only parties that stand to benefit from such a scenario. U.S. retailers that partner with Canadian manufacturers for certain store brand items also reap rewards in terms of product quality and value in comparison to exports from a number of other countries, Gelinas explains.
"Canada is perceived as a country that has very, very high credentials as far as quality, safety and manufacturing processes," he says. "It's part of NAFTA; it's pretty much a no-boundary market. "
Andrea Leiser, vice president of business development for RSVP Brokers, adds that Canadian manufacturers also have access to a number of certifications — for example, certification tied to the Heart & Stroke Foundation's Health Check program. And the country's organic program has a reciprocity agreement with the United States' National Organic Program.
"There's a Canadian version of the FDA," she adds. "If the products are going across the border … we know that the U.S. is very careful, and Canada is very careful."
Product labeling is not an issue, either. As Leiser explains, Canadian food manufacturers understand the difference between Canadian and U.S. requirements here. Once the store brand product and packaging are developed, it takes only about eight weeks to get FDA approval. Moreover, a number of government agencies and government-supported agencies are available to help these manufacturers — and, ultimately, their U.S. retailer partners — during the export process.
As for distribution, it is not difficult, Leiser notes.
"There are lots and lots of transporters," she says. "Sometimes, especially in the Quebec market, they'll consolidate the goods, so that helps with the shipping costs. If you work with a good customs broker, they are your eyes and ears, your agent to get products across the border."
While customs brokers ease the way for product transport, food brokers such as RSVP Brokers represent the manufacturers, Leiser explains, presenting their products to U.S. retailers in the United States. As a broker, RSVP also understands how U.S. retailers operate, what their needs are and more.
"Retailers could call us if they are looking for Canadian products," she says, "and there are government agencies that could help them, too. … Canada is still very much an untapped jewel. It's a marketplace that offers all kinds of products that we might not have in the U.S."
Look to Quebec and Ontario
Thanks in part to their proximity to densely populated areas of the United States, Canada's two most-populated provinces, Quebec and Ontario, have much to offer in the way of store brand food and beverage manufacturing capabilities.
For its part, Quebec boasts many specialty products that not only combine innovation and creativity, but also are inspired by the province's European heritage, notes Laurence Gagnon, who represents Quebec's Ministry of Agriculture, Fisheries and Food in Boston. She points to such products as artisanal bread and cheese, unique maple products such as maple sugar and maple flakes, apple ice wine and game meats as examples.
"Quebec is also known for our larger companies that sell to the world's largest retailers," she adds. "And a lot of companies in Quebec specialize in frozen meals, snacks, juices and sauces."
What's more, Quebec is very multicultural in terms of product offerings, thanks to the influx of new residents from across the globe each year, Gagnon says. That means U.S. retailers have access to such items as couscous and hummus that are created in the tradition from the countries of origin.
"We're also an important exporter of fish and seafood," Gagnon explains, noting that Quebec is well-known for its crab, lobster and northern shrimp. "The St. Lawrence [River] is a mix of fresh and ocean water … water that's very rich in nutrients, so we have a lot of high-quality fish and seafood. Some of our producers package the seafood for private brands, too."
Like all other Canadian companies, Quebec manufacturers are subject to stringent food safety standards, she adds. Another plus? Most of the province's food processors are located just north of the U.S. border, in the southern portion of Quebec, meaning products can be trucked to many American markets in a day.
As for Ontario, Canada's most populated province, it boasts a $33 billion food processing industry that employs more than 110,000 people directly — and at least another 100,000 people in related industries, according to the Alliance of Ontario Food Processors (AOFP). The province is "easily accessible to the entire North American market" — within a one-day drive of over 140 million consumers.
And innovation is a critical focus for Ontario food and beverage processors. In a 2008 strategy publication, AOFP outlined a goal to foster innovation by increasing investment in productivity, new product R&D and support for commercializing new ideas and new products.
Meet a few of Canada's finest
Quebec-based Decacer is SQF 2000 certified and a leading private label supplier in Canada. Products available for U.S. retailers' store brand programs include pure maple syrup, sugar and flakes packaged in formats ranging from glass bottles, plastic jugs and stand-up pouches to glass jars and paper boxes.
Louis Turenne, sales manager for Decacer, says the United States is the No. 1 market for Quebec maple products, comprising 62 percent of total exports.
"In fact, Quebec alone produces 77 percent of the world's maple syrup," Turenne says. "Demand is actually increasing, as maple syrup is considered as the new super food due to presence of essential minerals, antioxidants and the fact that it is 100 percent pure and natural," he says.
Because consumers are seeking a more natural way to sweeten their favorite meal, Decacer developed a unique dehydration process to make maple flakes and maple sugar.
"This exclusive dehydration process allows high production capacity, consistency and a very dry product that stays free-flowing," Turenne says.
Although maple syrup still accounts for most of the company's sales, Turenne believes that great growth opportunity exists for maple sugar and flakes because they are not widely available on the market.
And in response to international trade issues and product labeling, Turenne says Decacer hired a label specialist to review its U.S. labels and nutrition facts. He also notes that the company works with a customs broker and reliable carrier to ensure its clients are serviced the same way they would be by a local supplier.
Tina Lamontagne, vice president of Quebec's Lamontagne Chocolate, says her company offers a wide selection of high-quality chocolate bars, individually wrapped bite-size and miniature