Before Montreal and Quebec City became the two largest urban centers in Quebec, these areas in the St. Lawrence River Valley were particularly well-suited to growing corn, beans, and squash. Drawing from this long history of cultivation, the region continues to offer the Quebeçois, and Canadians as a whole, a vibrant and expanding produce industry. Find out what’s new and trending with growers, wholesalers, and retailers.
Demographics & Food Distribution
A few of the trends shaking things up in the Quebec perishables industry include changing demographics and the quest to provide better access to fresh produce. Members of the industry are not only trying to better serve diverse ethnic groups, but are hoping to reduce the incidence of food deserts in the province.
The “Dépanneur Fraîcheur” is one such program, conceived by several Montreal nonprofits to stock fresh produce at local dépanneurs or convenience stores to improve local health. Similar programs were piloted in Toronto and Ottawa, and although less than a dozen stores are currently participating, proponents hoped to expand throughout the city.
Another way to distribute food and cut down on waste is BonApp, a mobile app to connect Montreal residents and businesses with extra food to those in need. The program has five refrigerated drop-off points for bulk fresh produce and unopened food products. BonApp hopes to provide an alternative to the trash bin for unspoiled fruits and vegetables across the city.
When it comes to demographics, Quebec is a melting pot. In addition to the growing population of Hispanic buyers, Middle Eastern consumers are predicted to become the province’s largest minority in just a few years, by 2020. Studies also show that both Arab and Hispanic consumers tend to buy groceries more often than their neighbors, making both key demographics for suppliers to target over the next few years.
Most merchants no longer consider ethnic foods outside the mainstream. Canadawide Fruit Wholesalers Inc.’s president George Pitsikoulis agrees, but points out that this is not a new phenomenon from just a few years ago. He credits demand for ethnic fruits and vegetables with not only driving sales but increasing awareness among all buyers and sellers. “The influx of diverse ethnic immigration has driven our industry’s offerings and varieties of fresh produce for decades.”
La Place des Producteurs
As the largest province in Canada, Quebec was on pace to bring in over $2.5 billion in crop receipts for 2016, a slight increase over the previous year according to Agriculture and Agri-Food Canada. Much of this bounty makes its way to la Place des Producteurs, Montreal’s well known marketplace.
La Place des Producteurs (la Place) is located at the corner of Métropolitain and l’Acadie boulevards at the Marché Central, and is the largest wholesale market of fruits and vegetables in Eastern Canada. Although the primary season is from May to October, la Place is open year-round and features as many as 150 tenants during peak season. Vendors supply a wealth of customers, including area wholesalers and distributors, retailers, other markets, restaurants, and public institutions across Quebec, eastern Ontario, and the Maritimes.
Before Montreal and Quebec City became the two largest urban centers in Quebec, these areas in the St. Lawrence River Valley were particularly well-suited to growing corn, beans, and squash. Drawing from this long history of cultivation, the region continues to offer the Quebeçois, and Canadians as a whole, a vibrant and expanding produce industry. Find out what’s new and trending with growers, wholesalers, and retailers.
Demographics & Food Distribution
A few of the trends shaking things up in the Quebec perishables industry include changing demographics and the quest to provide better access to fresh produce. Members of the industry are not only trying to better serve diverse ethnic groups, but are hoping to reduce the incidence of food deserts in the province.
The “Dépanneur Fraîcheur” is one such program, conceived by several Montreal nonprofits to stock fresh produce at local dépanneurs or convenience stores to improve local health. Similar programs were piloted in Toronto and Ottawa, and although less than a dozen stores are currently participating, proponents hoped to expand throughout the city.
Another way to distribute food and cut down on waste is BonApp, a mobile app to connect Montreal residents and businesses with extra food to those in need. The program has five refrigerated drop-off points for bulk fresh produce and unopened food products. BonApp hopes to provide an alternative to the trash bin for unspoiled fruits and vegetables across the city.
When it comes to demographics, Quebec is a melting pot. In addition to the growing population of Hispanic buyers, Middle Eastern consumers are predicted to become the province’s largest minority in just a few years, by 2020. Studies also show that both Arab and Hispanic consumers tend to buy groceries more often than their neighbors, making both key demographics for suppliers to target over the next few years.
Most merchants no longer consider ethnic foods outside the mainstream. Canadawide Fruit Wholesalers Inc.’s president George Pitsikoulis agrees, but points out that this is not a new phenomenon from just a few years ago. He credits demand for ethnic fruits and vegetables with not only driving sales but increasing awareness among all buyers and sellers. “The influx of diverse ethnic immigration has driven our industry’s offerings and varieties of fresh produce for decades.”
La Place des Producteurs
As the largest province in Canada, Quebec was on pace to bring in over $2.5 billion in crop receipts for 2016, a slight increase over the previous year according to Agriculture and Agri-Food Canada. Much of this bounty makes its way to la Place des Producteurs, Montreal’s well known marketplace.
La Place des Producteurs (la Place) is located at the corner of Métropolitain and l’Acadie boulevards at the Marché Central, and is the largest wholesale market of fruits and vegetables in Eastern Canada. Although the primary season is from May to October, la Place is open year-round and features as many as 150 tenants during peak season. Vendors supply a wealth of customers, including area wholesalers and distributors, retailers, other markets, restaurants, and public institutions across Quebec, eastern Ontario, and the Maritimes.
One of the main challenges facing la Place—like the United States’ largest wholesale terminal, Hunts Point in New York—is the decision of whether to rebuild its aging buildings or relocate to another larger, more modern facility. Estimates on the cost of la Place reconstruction fall between $50 to $60 million and a relocation bid back in 2011 came in at $47 million. A more contentious issue is funding: as most of the burden for either project would fall onto current tenants.
In response to this challenge, some tenants have already relocated and upgraded facilities on their own. Canadawide, for example, moved several years ago, back in 2013, to a new centrally-located distribution center.
Sylvain Mayrand, co-president of Global M.J.L. Fruits et Legumes Ltd., also opted for a warehouse a few blocks away from the central market. “Most importers in our city have now moved into facilities that they own outright.” Independent facilities provide owners with plenty of options for customization, and to better adapt for tighter food safety measures. As Mayrand puts it, wholesaler-owned properties “allow our businesses to plan forward, which terminals do not.”
Grocery Wars
Turning to the escalating grocery war, U.S. behemoth Walmart continues to gain market share from Canada’s domestic competitors, such as Sobeys, Provigo (formerly Loblaw in Quebec), and Metro Inc. Sobeys for one is fighting back—against Walmart and others—by lowering prices. The retailer slashed prices by 5 to 7 percent on up to 8,500 grocery items to compete more effectively with its rivals.
In an interesting turn of events, Metro Inc. was recently named the second best-performing public grocery chain in North America behind U.S.-based Kroger Company. Citing a 2016 investment report, Canadian Grocer touted homegrown favorite Metro as matching Kroger in what it considered the true measure for success: discipline.
As competition between Canada’s big supermarket names continues to heat up, many are watching Metro as it holds its own against both Sobeys and Provigo, as well as discounters like Walmart and Costco in Quebec. In addition, there is also rising pressure from the dépanneurs and higher-priced specialty shops, creating a hypercompetitive retail environment in the province.
One way Metro is hedging its bets is with online shopping. Though most Canadians have not embraced online grocery shopping (less than 4 percent of online purchases were for food or groceries from a sampling of 1,000 respondents, according to a Canadian Grocer survey)—and far fewer buy fresh produce—Metro believes its new ‘fast and fresh’ service will be different.
Rolled out in Quebec last October, the bilingual service offers either in-store pickup within a designated area or home delivery. And while Metro is a newcomer to online shopping—both Loblaw and Sobeys have had such services for some time, as do Costco, independents, and providers without physical stores like Grocery Gateway—the grocer has high hopes for its success, especially with younger shoppers.
Legislation & Results
For Quebec’s struggling retailers, recent legislation is also creating waves. In August 2016, the City of Montreal passed legislation banning the distribution of single-use plastic bags, following success in several American cities including Washington DC, Chicago, Los Angeles, Seattle, and Austin.
The province also lifted what was considered a ridiculous ban on “ugly” or imperfect fruit and vegetables last July. The Minister of Agriculture announced the change—which was welcomed by retailers and consumers alike—as a way to combat food waste.
Heavily touted in social media, the official lifting of the ban was more an afterthought than news—especially since Loblaw and Provigo stores were already carrying ugly fruit on their shelves under the “Naturally Imperfect” line. With prices roughly 30 cents less than other more aesthetically-pleasing fruits and vegetables, the program was already a success with shoppers and environmental groups alike.
Local & Organic
The organic and locally grown movements continue to demonstrate staying power in Quebec, though not everyone considers it a trend or even a movement at all. “Locally grown has always been part of our province’s DNA,” insists Pitsikoulis. Indeed, the L’Union de Producteurs Agricoles finds that roughly 55 percent of food purchased by distributors in Quebec comes from local suppliers. Of course, this is tempered by seasonal weather and availability, but most suppliers agree they prefer local products whenever they can get them.
The success of the local and organic movement also drives growth at multiple public year-round farmers’ market venues in Montreal, bringing millions of annual visitors to Marché Jean Talon, Atwater Market, and Maisonneuve Market, as well as smaller suburban markets in Longeuil, Lachine, and Sainte-Anne-de-Bellevue.
Local produce and organics are also emphasized in all major retail chains, including Walmart Canada. Like its American sibling, Walmart has put its might behind a greater push for locally grown products, raising awareness through advertising and promotions, and by offering information about these items on its website.
Canada’s big three retailers are responding in kind. Loblaw/Provigo, Sobeys, and Metro Inc. have all also committed to more deals with small, local producers to expand product choices. While consumers are happy for a wider selection of products, some may balk at the cost, as retailers try to overcome slim margins with higher pricing.
In a related move, supply of organics may rise steeply in the years to come as some of the costs associated with switching from conventional to organic growing may be offset by federal dollars. The Canadian government recently unveiled a new incentive program, with funding of $700,000, to encourage interested growers to transition from conventional to organic production.
Challenges du Jour
A common and enduring challenge among Quebec’s suppliers is availability. One factor, according to Mayrand, is the shrinking number of growers both in and outside the province. “Consolidation on the farming end,” he shares, “is restricting access to certain products.”
To combat this challenge Pitsikoulis finds that creative sourcing “has opened Canadawide up to suppliers pretty much anywhere in the world.” This does come with some caveats, however, including supply and seasonal need coinciding: “logistics have to be practical, and shippers must adhere to our packaging and safety requirements.”
Other issues suppliers contended with this year included pests and disease and food safety concerns. The apple fire blight encouraged by last year’s hot, humid spring affected approximately 80 to 100 orchards in the Laurentians region. The blight left trees leafless, shriveled, and brown or black in color. Unfortunately, the only way to combat the blight is to remove all infected branches. In some areas, young trees were particularly hard hit, with the potential to affect supply problems in the future.
On the retail side, there were two significant outbreaks: listeria related to packaged salad mixes and a Cyclospora outbreak across four provinces, including Quebec, likely linked to imported foods from tropical regions.
Production
Nationally, Quebec accounted for 40 percent of total vegetable value in Canada, and expected to bring in over $2.5 billion in total crop receipts for 2016, a slight increase from 2015 according to Agriculture and Agri-Food Canada.
Among the vegetable crops showing gains were radishes, carrots, beets, leeks, and green onions, while lettuce, broccoli, cauliflower, and melons also continue to sell well. When it comes to fruit, apples, cranberries, and blueberries continue to dominate Quebec production, with strawberries, grapes, raspberries, and pears rounding out the top fruits produced in the province.
Greenhouse production continues to expand in the region, with tomatoes, peppers, lettuce, and cucumbers as the usual fare. Mayrand is a major supporter when it comes to sourcing greenhouse product: “Always have, always will,” he says.
In a twist on protected agriculture, Quebec is experimenting with a rather unusual way to grow vegetables. A new project in the province deploys carbon capture technology at a pulp mill to power an adjacent greenhouse. The technology will be used in a new 34-hectare complex in the Lac-Saint-Jean region, which will become fully operational in 2019. As Quebec’s largest greenhouse, the $100 million project will produce year-round vegetables and contribute 400 jobs to the community. The success of this project could pave the way for a new wave of more efficient, green, and profitable greenhouses.
Macro trends such as the depreciation of the Canadian dollar and the low global crude oil prices have made Canadian agricultural exports particularly profitable internationally. As a result, farm income in Canada is expected to grow and possibly set a new record for the 2016 season.
Conclusions and Outlook
New and pending trade agreements should have an impact on Canada’s produce industry in the coming years. The now-signed Comprehensive and Economic Trade Agreement (CETA) with the European Union should open doors, but has its critics as well, many of whom believe food safety will be affected by the elimination of trade barriers, particularly in Europe.
The oft discussed Trans Pacific Partner-ship, which agriculture ministers (in Quebec and across Canada) were hoping would still pass, will be an unrealized trade dream due to changes in the American political arena.
Pitsikoulis offers his own insight on the future: “The most important trend for all involved in our beloved produce industry is consumers eating more and more fresh produce.” Consumer trends are indicating that fresh produce whether local, organic, ugly, greenhouse, or even waste- or container-free remains an integral part of healthy lifestyles across Quebec.
Images: Africa Studio, Artem Furman, Richard Cavalleri, Denis Roger, Marc Bruxelle, Alina R, julie deshaies, Darmency, BakerJarvis/Shuterstock.com
