La Belle Province (the Beautiful Province, aka Quebec) is an agricultural force to be reckoned with in Canada’s fresh produce pipeline. Despite a barrage of challenges, the region’s growers, wholesalers, and retailers continue to thrive. Key to their success is Montreal and its many resources.
To Move or Not to Move? Quebec and its siblings Ontario and British Columbia account for more than 90 percent of Canada’s total cultivated vegetable acreage and 65 percent for fruit. In 2016, Quebec raked in more than $3 billion in crop receipts, according to Agriculture and Agri-Food Canada.
The province’s top produce commodities include apples, cranberries, blueberries, carrots, radishes, beets, leeks, and green onions. The bulk of these Quebec-grown fruits and vegetables move through la Place des Producteurs, Montreal’s long-standing terminal market. In addition to locally grown products, the market also handles imports from the United States, Mexico, Chile, Turkey, China, Spain, and other countries across the globe.
La Place des Producteurs, the largest fruit and vegetable wholesale market in Eastern Canada, is open all year and home to more than 150 tenants during peak season (May to October). Its prime location, however, remains a subject of heated discussion. As the market’s timeworn buildings continue to age, there is still much debate over whether it should rebuild or move to a more modern facility. The potential costs of either option concern tenants, who worry they will have to shoulder the financial burden.
For almost anyone in the fresh produce industry this is not a new subject, as the same conundrum faces merchants about 375 miles due south, at New York’s Hunts Point terminal market in the Bronx.
Location Matters The Quebec Produce Growers Association (QPGA), which runs the market, is still in negotiations for a move. “We’re still looking for a site near the market, between five and ten kilometers away, and we continue our negotiations with the owners on a monetary agreement,” explains André Plante, general manager for the QPGA in Montreal.
Plante says moving to a new terminal market would offer tenants numerous advantages. “The benefits are that our platform would be operational year-round in a food safety environment,” he explains, adding that the market could also offer more services, such as warehousing, delivery, and transshipment. There is, however, a downside: “The disadvantage is that we will have to learn to work in more restricted spaces due to the cost of the building,” Plante admits.
As market tenants await a resolution, some have already relocated to more modern facilities. “We left the market about three years ago and bought our own place,” comments Gabriel Jacques, buyer and seller with Global M.J.L. Ltd. in Montreal. “We’re still near the market, but it’s the ideal spot for us.”
La Belle Province (the Beautiful Province, aka Quebec) is an agricultural force to be reckoned with in Canada’s fresh produce pipeline. Despite a barrage of challenges, the region’s growers, wholesalers, and retailers continue to thrive. Key to their success is Montreal and its many resources.
To Move or Not to Move? Quebec and its siblings Ontario and British Columbia account for more than 90 percent of Canada’s total cultivated vegetable acreage and 65 percent for fruit. In 2016, Quebec raked in more than $3 billion in crop receipts, according to Agriculture and Agri-Food Canada.
The province’s top produce commodities include apples, cranberries, blueberries, carrots, radishes, beets, leeks, and green onions. The bulk of these Quebec-grown fruits and vegetables move through la Place des Producteurs, Montreal’s long-standing terminal market. In addition to locally grown products, the market also handles imports from the United States, Mexico, Chile, Turkey, China, Spain, and other countries across the globe.
La Place des Producteurs, the largest fruit and vegetable wholesale market in Eastern Canada, is open all year and home to more than 150 tenants during peak season (May to October). Its prime location, however, remains a subject of heated discussion. As the market’s timeworn buildings continue to age, there is still much debate over whether it should rebuild or move to a more modern facility. The potential costs of either option concern tenants, who worry they will have to shoulder the financial burden.
For almost anyone in the fresh produce industry this is not a new subject, as the same conundrum faces merchants about 375 miles due south, at New York’s Hunts Point terminal market in the Bronx.
Location Matters The Quebec Produce Growers Association (QPGA), which runs the market, is still in negotiations for a move. “We’re still looking for a site near the market, between five and ten kilometers away, and we continue our negotiations with the owners on a monetary agreement,” explains André Plante, general manager for the QPGA in Montreal.
Plante says moving to a new terminal market would offer tenants numerous advantages. “The benefits are that our platform would be operational year-round in a food safety environment,” he explains, adding that the market could also offer more services, such as warehousing, delivery, and transshipment. There is, however, a downside: “The disadvantage is that we will have to learn to work in more restricted spaces due to the cost of the building,” Plante admits.
As market tenants await a resolution, some have already relocated to more modern facilities. “We left the market about three years ago and bought our own place,” comments Gabriel Jacques, buyer and seller with Global M.J.L. Ltd. in Montreal. “We’re still near the market, but it’s the ideal spot for us.”
A Prosperous Port Thanks to its auspicious location and thriving container port, Montreal enjoys a booming international trade sector. With more than 5,500 miles (9,000 km) of coastline, Quebec borders the U.S. states of Maine, New Hampshire, Vermont, and New York to its south. This prime position allows for exports to markets across the U.S. East Coast, Midwest, and beyond.
As the top agri-food exporter in Canada, Quebec’s exports (which include fruit and vegetables) reached $8.2 billion in 2016, growing 9.4 percent over the previous year. More than 70 percent of the province’s agri-food products are exported to the United States. Quebec’s second largest agri-food importer is China, followed by Japan and the European Union.
A hefty portion of these agri-food exports pass through the Port of Montreal. Positioned along the St. Lawrence River, the Port of Montreal serves as a direct link between northeastern North America and the markets of Northern Europe, Asia, and the Mediterranean. Operated by the Montreal Port Authority (MPA), the Port is the second largest in Canada and handles both container and noncontainer cargo. Home to five container terminals, it connects Montreal to more than 140 countries across the globe.
The Port of Montreal also includes its own dockside rail network, connected to two national railroads and a highway system. Imports arriving at the port are ultimately distributed to 40 million consumers one day away by truck and 70 million consumers less than two days away by train. The port’s activities support 16,000 jobs and generate $2.1 billion in economic benefits each year.
In 2016, the MPA set a record for a third year in a row when 35.4 million metric tons of cargo moved through the port—a 10.4 percent jump over 2015. The port handled 13.1 million metric tons of containerized cargo that year, including fresh fruit and vegetables.
The Port of Montreal celebrated its golden anniversary in April 2017—50 years since it received its very first container. In 1967, the Port handled a total of 11,300 TEUs [20-foot equivalent units] for a single shipping line. Just a year later, the Port of Montreal established Canada’s first container terminal and Manchester Liners Ltd. launched a weekly container transport service to the United Kingdom.
Since then, nearly 35 million TEUs have passed through the port’s facilities. Today, the Port of Montreal is the only container port on the St. Lawrence River and the largest port in Eastern Canada.
All the Rage: Trends Putting the move or remodel aside, the Quebec perishables trade has plenty going on to keep up with prevailing trends, such as skyrocketing demand for ethnic and specialty produce and sourcing local (though this time of year is scarce except greenhouse products).
The locally grown movement is certainly not a new development, but demand for Quebec-harvested fruits and vegetables soared over the summer and early fall months, and the majority of Montreal-based suppliers prefer local produce whenever they can get it. “Consumers want local products,” confirms Plante, “and retailers respond well to demand with a nice supply of local products.”
Chief among these local favorites are blueberries—native to Canada—and highly popular throughout the provin-ces. Annually, fresh blueberry sales generate a quarter of the country’s farm-gate fruit revenue, valued at CAD$260 million in 2016. They are also the True North’s top fruit export by both value and tonnage.
Quebec produces millions of pounds of blueberries each year. The Saguenay-Lac-St.-Jean region is home to the largest wild blueberry grower in Canada, which contributes nearly 80 million pounds of blueberries to the country’s total supply. In turn, the majority of shipments go to buyers in the United States; the rest of the top export markets are Switzerland, Germany, Japan, and Belgium, though blueberries also go to 24 other countries around the world.
Climbing Production Higher demand has spurred more cultivation for several fruits and vegetables in Quebec, which is second only to Ontario in production of most crops and yields. The province has seen cultivated production areas devoted to fruit climb over the last five years from just over 39,400 hectares in 2012 to 41,600 in 2016, accounting for 32 percent of Canada’s total—more than any other province, as reported by Agriculture and Agri-Food Canada. Two fruits, both berries—blueberries and cranberries—saw production acreage climb in 2016.
When it comes to planted vegetables, Quebec ranks second at 35 percent to Ontario’s 49 percent, and was valued just shy of CAD$428.5 million. In 2016, there were nearly 36,200 hectares devoted to vegetables in Quebec, up from 2012’s 35,400 but down slightly from 2015’s 36,256.
The ever-popular protected agriculture trend is also rising in Quebec; the prov-ince has nearly 250 greenhouses, following the lead of Ontario, North America’s leading greenhouse grower.
In addition to usual tomatoes, peppers, cucumbers, and lettuce, greenhouse growers are also trying their hand at eggplant, Chinese vegetables, herbs, and green beans.
Ethnic and Specialty Items Like its sibling provinces, Quebec is home to an incredibly diverse population. Statistics Canada predicts that by 2036 half of all Canadians will be immigrants or the children of immigrants, and more than 25 percent of the country’s population will speak a language other than English or French. Nearly 15 percent of these future immigrants are expected to settle in Montreal.
This melting pot of Quebec consumers is fueling demand for ethnic,exotic, and specialty produce. “Ethnic fruit and vegetable sales have been on the rise from year to year,” confirms Cesare Della Santina, president of Montreal-based CDS Foods Inc.
In particular, Montreal’s thousands of restaurants are often on the lookout for unique fruits, vegetables, or herbs. With nearly 95,000 restaurants across Canada, more than half are based in either Quebec or Ontario. “The food scene in Montreal is amazing,” enthuses Global M.J.L.’s Jacques. “The restaurants have a reputation for specialty items, and that’s very good for us. The business is very active, and chefs around here are very creative.”
FRESH FORUM Do you have concerns over the renegotiation of NAFTA?
Gabriel Jacques, Global M.J.L., Ltd. I haven’t followed the NAFTA deal very closely, but so far it seems like a lot of talk. I don’t feel like people are taking it too seriously at this point. For now, it’s business as usual.
André Plante, Quebec Produce Growers Association The fact that the trade balance favors Americans is not a big issue for us. If they decided to impose an import tax, they would be disadvantaged.
Mark Tekin, Mont-Cal Logistics Inc. Not really; somehow middle ground will be found.
Marie de Tarlé Salmon, Quebec Produce Marketing Association For the produce industry, the Canadian Produce Marketing Association takes part in the renegotiation of NAFTA to prevent issues with this vital trading relationship, and ensure the needs of the Canadian industry and consumers are met. The renegotiation of NAFTA is an occasion to modernize and strengthen this trading relationship.
But client requests for rare products can be tricky for suppliers. “It’s good for us, but it’s also a challenge to always say ‘yes’ [to] new products,” Jacques adds. “Whatever top chefs in New York City or around the world are using, whatever is trending, we need to keep up and find a way to source it.”
Specialty item requests vary by season, Jacques says, and range from hot peppers to exotic fruits. All in all, it’s a win-win. “We’re learning about new products every day as they pop up.” Demand comes from foodservice customers too, who would like Quebec growers to provide more locally-grown ethnic items to reduce imports. But in this case, there are barriers.
“Food chains would like us to produce more ethnic vegetables,” acknowledges QPGA’s Plante. “But producers are not interested because there are too many risks,” he points out. “Our crop insurance program does not provide protection for the cultivation of new products.”
Organics Organics, too, are enjoying higher demand across a few categories. One some might find surprising is garlic. “We’ve seen an increase in organic garlic sales,” says Della Santina. “Garlic has become a staple in every household—it can be used for cooking, even desserts—now there’s even garlic ice cream!”
Growers, too, have been taking note with new organic farms popping up across Quebec. La Belle Province is now home to 1,268 organic farms—more than any other province in Canada, according to Statistics Canada’s 2016 Census of Agriculture.
In all of Canada, total annual retail sales from certified organic products is approximately CAD$3.5 billion, with about 46 percent sold at mainstream supermarkets. Fresh fruit and vegetables account for 39 percent of all domestic organic food and beverage sales in the True North.
Supermarket Scene: Intense Competition The competition between food retailers in Montreal, Quebec, and throughout Canada remains fierce. For the time being, it appears the large national chains are continuing to dominate independent stores. “It feels like the big chains are taking over for sure,” reflects Jacques. “It’s hard for the independent retailers to compete with the giant deals they have.”
This is not to say independents and specialty stores aren’t among Montreal’s more popular destinations. Locals seeking a broad range of fresh food choices frequent La Vieille Europe for various European delectables; Milano Fruiterie for Italian fare; Epicerie Latina, Inc. for Latin-themed favorites and prepared foods; Bio Terre and Rachelle-Béry for organics; and a slew of IGA stores for everyday essentials.
The province’s chains—Sobeys, Provigo/Loblaw, and Metro Inc.—may be major competitors in Quebec and across the country, but are struggling to hold their own against U.S. giants Walmart and Costco.
U.S. Invaders Over the past five years, Walmart has opened more than 50 new “Supercentres” in Quebec, including six stores in Montreal, that offer plenty of produce and other groceries. Costco is also on the rise: there are now 10 wholesale club stores in the Montreal area and a total of 21 across Quebec, with plans to add more locations in the coming years. Across all of Canada, Costco operates 95 warehouses and Walmart runs 410 stores.
Data from Statistics Canada shows Costco and Walmart have gobbled up considerable market share from domestic retailers over the past decade. In the second quarter of 2004, traditional grocery stores sold about CAD$12.3 billion worth of food, accounting for nearly 90 percent of the market, while general merchandisers including Costco and Walmart sold about CAD$1.3 billion or roughly 9.8 percent. By the same quarter of 2016, market share for traditional grocers had plummeted to 79.2 percent, while that of the general merchandisers had more than doubled.
Canadian Favorites Fight Back Facing pressure from Walmart, Sobeys fought back by slashing prices by 5 to 7 percent on nearly 8,500 items. Yet this risky move ultimately led to lower sales and earnings for the retailer. In the fourth quarter of 2016, Empire Company Ltd., parent company of Sobeys, saw a 47.3 decrease in adjusted net earnings as compared to fourth quarter the year prior.
Metro’s trajectory has been twofold: bringing online grocery to Quebec shoppers with click-and-collect services, while expanding into delivery with the purchase of Montreal-based MissFresh, a meal kit provider, last year. A nonfood but convenience-related move was the acquisition of Jean Coutu Group’s extensive pharmacy network. Though the stores will operate separately in Quebec, there may be grocery-pharmacy hybrids in the future.
Canadian grocers are also adding more discount banners to help retain price-conscious shoppers. Loblaw, for example, now operates 500 discount stores, including No Frills, across the country. Its Quebec discount chain, Maxi, continues to thrive and was ranked among the most trusted in Quebec according to a recent National BrandSpark survey.
Changes & Challenges In recent years, Montreal suppliers have faced a number of stumbling blocks—from labor shortages to harsh weather to pests and diseases.
“The lack of labor remains, specifically for the processors during the summer,” says Marie de Tarlé Salmon, management and public affairs assistant for the Quebec Produce Marketing Association (QPMA) in St. Leonard in northern Montreal. “Foreign labor helps,” she notes, but administrative issues often make the process overly difficult.
Fortunately, some within the industry are noticing improvement with the labor situation. “Since the federal Liberal government has been in place, we’ve seen tremendous improvement, mostly in terms of delays caused by bureaucracy,” observes Plante. “Also, we are relieved by the government’s decision to abolish the 48-month stay limit for foreign workers.”
Outside of labor, Quebec growers have been contending with pests affecting crops. “In the Lanaudière region, carrot producers frequently have to deal with weevil infestations,” points out David Turcot, QPMA member and owner of Ferme A&R Turcot in St. Roch-de-l’Achigan, about 50 miles north of Montreal.
Early in the season, the insects nibbled at the foliage of planted carrots. “When the carrot grows, the wound heals and leaves a large black line,” Turcot explains. “Very often the wou-nd is deep, and the carrots must be discarded. Unfortunately, there is no treatment.”
Growers in southwestern Quebec have been struggling with the blueberry fruit fly. When a female blueberry fly lays eggs under the skin of a berry, the developing larva feed on the pulp, causing the fruit to become shriveled. Some growers have been working with agronomists to set traps and catch flies before they can harm the fruit.
Weather and Harvests Last season, weather caused some issues for Quebec growers and wholesalers. After a mild winter came plenty of temperature fluctuations and then hail and flooding. Montreal, situated along both the Ottawa and St. Lawrence rivers, saw record flooding in late spring, and rains extended into the province’s growing regions.
Before 2017, “the three previous years were stable, with a good balance of rain and sun that gave us record yields,” Plante recalls. But last year, he notes, “Several regions received hail [while others] on the south shore of Montreal were flooded by heavy rains.”
The torrential downfalls ended up preventing growers from planting some crops, then caused worries about pollination in some areas. The better news, however, was that the delays did not materially affect production for most crops as corn, apples, blueberries, and potatoes had good harvests, with higher yields for strawberries, but a lower haul for cranberries.
Transportation and Shipping Transportation brokers also encountered their share of bumps in the road last year. “The last two years were extremely difficult due to the economic downturn and driver shortages,” cites Mark Tekin, general manager of Mont-Cal Logistics Inc. in LaSalle, a southwest borough of Montreal. The shortage continued into early 2018, with many shippers scrambling to find trucks.
The mandate for electronic logging devices in the United States is also exacerbating the situation. Compliance began on December 18, 2017 with a 90-day waiver for agricultural shippers to meet the new federal standards. Combined with other U.S. food safety rules and implementations, cross-border buying and selling got much more complicated at the end of 2017 and into this year.
What’s to Come While buyers and sellers of Quebec’s fresh produce faced ups and downs this year, most would simply say “C’est la vie” or such is life—and maintain a positive outlook as the province’s residents not only love fresh produce, but are eating more of it.
“Montreal is a very ethnic city with so much diversity, and our people are known as produce consumers,” Della Santina shares. “I see a bright future for the produce industry.”
