Food processors set to address industry changes

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This article was published 12/01/2024 (948 days ago), so information in it may no longer be current.

Sobeys is highly lauded for its local program where small local companies with great food products get a chance to show off and sell their wares on the shelves of a national retailer.

But as a national company, Sobeys, like most of its peers, is starting to implement policies to align with the country’s net zero goals by 2050.

That process will be just one more reminder for those small companies — and not-so-small ones — that they, too, are going to have to figure out how to be compliant.

It’s one of the issues that will be addressed on Feb. 6 at Cultivate Sustainability, Food & Beverage Manitoba’s second annual conference and trade show.

The organization that represents the province’s food processing industry — the largest part of the manufacturing sector — wants to ensure it supports and provides important information to all sectors of the industry, big and small.

“I’m always surprised just how hard this industry is. It is heavily regulated. Food safety is hard to achieve and everyone has to invest a lot,” said Food & Beverage Manitoba executive director Michael Mikulak.

The thinking is that as the regulatory environment around mandatory environmental, social and governance (ESG) disclosures comes into effect and the large national companies such as grocery chains and banks start implementing them, it could leave a lot of the smaller players at risk.

Mikulak’s organization suggests “the food and beverage manufacturing and processing industry is on the cusp of a momentous transformation.”

The conference features keynote speeches from senior officials from Sobeys and Maple Leaf Foods, along with the leader of a Saskatchewan First Nation who will talk about successful Indigenous agricultural projects.

“As an association we are trying to provide the information to our members so they can make the best decision that they can,” Mikulak said.

“We’re bringing together the speakers, the decision-makers, government, all the different components together to really allow members to start to think about this in way that is more effective.”

While grocery chains such as Sobeys and Costco are dealing with those ESG issues with their large suppliers first, Mikulak said every company has to start thinking about what to do.

“Unfortunately I think people are still kicking the bucket too far down the road and still not taking this quite as seriously as they should be. We are trying to make sure our members have the information they need to be successful. This is one of those issues. Everyone knows it’s important but they often struggle to understand how to implement and how to prioritize things, when to do things and in what order,” he said.

For instance, many small food companies, such as the ones who might participate in Sobeys’ local program, are doing many of the right things, such as sourcing their inputs locally, but they need to start thinking about things such as how they’re going to verify their data, Mikulak said.

“I’m really happy with the response from Sobeys. They’ve said they don’t want their efforts to comply with the environmental mandates to hurt the small local companies,” he said.

While there might be some recession-proof dynamics in the food business — everyone has to eat — there is plenty of discretionary spending, and with economic growth grinding down, it will be another challenge for companies to overcome.

“It’s especially the case since the industry is still struggling to modernize,” Mikulak said. “Two years ago when we did a survey the sentiment expressed was that they would invest in automation to deal with labour challenge. But that’s tough to do with interest rates so high.”

martin.cash@freepress.mb.ca