By Sarah Pittman
Published in the Financial Post, Leader-Post, The Province, Vancouver Sun, Ottawa Citizen and Windsor Star
November 28, 2018
Farming has almost always been a brutal industry. Bad harvests happen, as Prairie farmers were unpleasantly reminded this year, and when they do they can threaten the financial viability of an operation. But one technology — plant ingredient fractionation — offers a huge opportunity for both Prairie farmers and a Western economy lately beset by bad news.
That is, if government and legislation can move as quickly as the conditions that created this opportunity.
Fractionation takes the bulk grains producers grow and processes them to provide the specific ingredients required by food processors and others, like protein, starch, fat and fibre. There is a big, and growing, demand for these products around the world. Last year, the global plant protein market was worth more than US$8 billion. In five years, this is supposed to nearly double, to US$15 billion. By 2054, plant protein is expected to be one-third of all protein consumed globally. That is a huge growth — and that is just one of the ingredients plants have to offer.
According to the World Economic Forum, by 2050, the projected global population of 9.8 billion will require an astonishing 70 per cent more food than is consumed today. This massive growth means that global agriculture is going to have to work hard to keep pace with demand. Plant ingredients can get people the key nutrients that they need efficiently, particularly protein.
Plant ingredients are more lucrative for farmers than shipping them off overseas in a bulk commodity. It makes more sense for plant ingredients to be processed close to the source — which is why plant ingredient processing facilities are popping up across the Prairies. Ingredient processing plants may also have the ability to offer higher prices for premium quality crops, which means that farmers have another option for where to sell their crops (and more options never hurt when you’re looking for the best price).
Current investment in fractionation facilities include a French-based global supplier of natural ingredients for food, cosmetics, pharma, and industrial applications, a Shanghai-based company that is one of the biggest buyers of pulses in the world, Maple Leaf Foods and even film director James Cameron and his wife. Vega, a Vancouver-based company that sells vegan protein products, and uses ingredients such as pea protein and fat from flaxseed (both widely grown across the Prairies), sold in 2015 for US$550 million.
Ottawa is finally starting to catch up: a federal supercluster will support the plant ingredient sector in the Prairies with funding for technology, market and talent development. The protein supercluster estimates that the sector will contribute over $4.5 billion to Canada’s GDP in 10 years and create more than 4,500 jobs.
But more is needed. The government must address outdated regulation, labour training and infrastructure. Officials marketing Canadian goods overseas also need education on these remarkable new products. All of these tasks are difficult. It is the hard, quiet work of aligning the potential of new technology with the realities of commerce. And this work is arguably even harder in places like the Prairies without demographics of business, media and politics to drive the attention that forces government action.
The plant ingredient industry is still nascent. In order for Prairie farmers to truly be able to capitalize, government needs to move on these issues. Now is the time to seize this opportunity: let’s not squander it.
Sarah Pittman is a policy analyst at the Canada West Foundation.