Value-added agriculture: much more than wheat and potatoes

Posted on November 15, 2016

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The way we think about farming is changing. Canada’s agri-business is poised to take the lead.

In 2015, global investment in food and agriculture technology start-ups reached UA$4.6 billion, nearly doubling the 2014 levels. Why are fund managers so interested in this market? A look at recent trends provides some clues. 

Demographics are leading the change in how we approach food and diet. Many countries in the developed world are facing aging populations, an intensified focus on personal health and wellbeing, and in increased demand for sustainable food practices. 

Consider these staggering stats on the growth of supposedly niche food markets.

Probiotics, touted for their beneficial impact on the gut microbiome, reached sales of $1.4 billion in the US in 2014. In the same year, US sales of herbal dietary supplements reached $6.4 billion. In fact, projections for all functional foods –products that have added health ingredients and that usually claim to provide health benefits beyond their nutritional value – is expected to reach $54 billion by 2017.

Canadian companies recognize this opportunity, and are delivering quality products designed to meet the needs of these consumers.

Take Bioriginal, a Saskatoon-based company that transforms raw materials from crops such as flax and hemp into nutrition-packed oils, proteins, dry blends and many other products designed with the health-conscious customer in mind. With facilities throughout the US, Europe and Asia, Bioriginal serves others in the food industry, providing value-added ingredients and ready to market, finalized products that are then incorporated under global food brands. 

In PEI, Nature’s Crops International has developed a seed oil extraction and refining facility that produces specialty oils for industrial, personal care and nutritional markets. Crambe, for example, is grown and processed in PEI and used in the production of polymers, surfactants, and personal care products. The company has also developed a novel, proprietary nutritional oil called Ahiflower, which has the highest commercially available content of omega fatty acids of all plant species, and is gaining attention globally as a non-marine source of omega-3. These are specialty crops that most people have never heard of, which are providing high-value opportunities for Canadian farmers and agri-businesses.

Thinking beyond the crops to how they are produced, the global market for agricultural biologicals such as natural alternatives to pesticides and fertilizers is estimated to grow at a compound annual growth rate of 14.6% from 2014 to 2019.

Other industries are also benefitting from innovations derived from the agriculture sector – particularly those looking for ways to reduce their environmental footprint and maximize their outputs. For instance, the bioplastics market, fuelled by consumer interest and demand for things like biodegradable packaging, is expected to reach $30 billion by 2020.

In Guelph, researchers at the Bioproducts Discovery and Development Centre, in collaboration with industry partners, are coming up with solutions to meet these kinds of demands. Car parts, planters, storage bins, and compostable coffee pods are being produced with plant ‘waste,’ reducing the use of carbon-based materials, and in the case of the coffee pods, reducing the amount of plastics that end up in the landfill.

The common denominator among all this growth is agriculture, an industry that has made Canada the bread basket of the world. The examples mentioned above show that we can do much more than just produce the raw materials and ship them off to foreign markets to turn into high value products. Through the development of specialty crops, the extraction of key compounds, the development of new formulas and recipes, and the pursuit of environmentally-friendly processes and products, Canada is already taking a top spot in this burgeoning sector.

Natural Products Canada (NPC) is one the strategic organizations across the country that are focused on helping companies turn our vast natural and agricultural resources into a gold mine of opportunity that provides jobs, revenues, and economic stability. Born out of the 2016 competition of the Networks of Centres of Excellence, NPC aims to help Canada reap the benefits of a faster, cheaper, and more efficient process for commercializing validated natural products.

NPC leverages the country’s history, expertise, and outputs, world-class research and development, regional and national innovation and economic development agencies, and a wealth of entrepreneurs who are passionate about the benefits of natural products for the health of humans, animals and the planet.

By partnering with members from all these communities, and connecting them to human and financial resources around the world, NPC supports a vibrant and connected ecosystem of companies, researchers, regulatory experts, business consultants, and investors who can help streamline the commercialization process and ensure that more of Canada’s great ideas turn into scientifically validated products and technologies that provide real value to real customers.

The companies and countries that seize this growing opportunity to produce innovative products from the agriculture sector have a long and fruitful road ahead of them. Investment – both public and private – in the businesses and programs pursuing these opportunities is a sign of a smart planning and a strategic long-term view. 

Shelley King is the CEO of Natural Products Canada, a commercialization centre funded through the federal Networks of Centres of Excellence and focused on establishing Canada as a global leader in research, development and commercialization of natural products.

Republished with permission from The Hill Times. 

Hill Times Policy Briefing Agriculture, November 14, 2016 (pdf)

 

Shelley King
CEO, Natural Products Canada