Wake-up call amid unprecedented disruption

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This article was published 13/03/2025 (573 days ago), so information in it may no longer be current.

The old narrative that Canada is a powerhouse in agricultural production but not so much when it comes to processing took on a new level of urgency Thursday at Food & Beverage Manitoba’s annual Cultivate event.

It was further linked to a heightened level of concern about the country’s overwhelming reliance on the United States for export sales.

One agricultural processing specialist with Industrial Research Assistance Program said a looming trade war has people terrified.

“I was talking to one company with $100 million in revenue and 95 per cent of their sales are to the U.S. and they are trying to figure out what to do,” Kelly Beaulieu said at the one-day event in Winnipeg.

She said she knows of another company that had to close because it could not raise needed capital with all the uncertainty in the market.

While tariffs and the threat of tariffs are causing unprecedented disruption, many are also using it as wake-up call.

Michael Mikulak, executive director of Food & Beverage Manitoba, said the industry is energized with an outpouring of “buy local” enthusiasm that’s causing some of the smaller food companies in the province concern about keeping up with demand.

However, he said, the bigger picture includes the need for a greater emphasis on the importance of food production and support for the industry — if the U.S. market becomes no longer easily accessible.

“Something like food should be treated like national security,” Mikulak said. “You can put off buying a new car or a new phone, but you have to eat.

“We have taken for granted this profoundly integrated system that is beneficial in a lot of ways, but if Americans are creating a fortress, we have to look strategically at how we protect our citizens from the wild swings.”

When it comes to breaking into new markets, such as the European Union, Canadian producers need to step up their game, observers said. For instance, many are not compliant with EU regulations, including the EU Deforestation Regulation, which requires producers to show no deforestation occurred in their supply chain over the last five years.

Chris Bunio, founder and CEO of Winnipeg company TheoryMesh (which has a digital platform that can track data for certification and provide traceability for the agri-food system), said Canada is lagging.

“This would be the moment to invest in innovation to help get ahead,” he said. “Canada is well-positioned with water, land and climate and we could come out stronger after all this. But we have to learn to leverage those advantages. It is going to be critical.”

Meantime, the province’s food producers are getting a bump from more people interested in buying local.

Peter Fehr — promoter of the annual Love Local Manitoba beer, wine and food event (Saturday at the Victoria Inn) and the seasonal store of the same name at St. Vital Shopping Centre — said the patriotism should create a special vibe at this year’s event, its 10th anniversary.

“People are supporting local more than we have ever seen,” he said.

But if there is an economic downturn, it could hurt those local producers, who can’t compete on price.

Amanda Lynn DeSutter, owner of Amanda Lynn Gluten Free, which makes gluten-free perogies and pizza and cookie dough, does not have to import any ingredients and does not export.

“But I am a little nervous about consumer behaviour,” she said. “We did very well during COVID when people were trying to buy local, but we do sell premium-priced product.”

When it comes to supply chains, many small producers are becoming aware of the challenges in sourcing Canadian packaging. For instance, most aluminum cans and glass packaging is sourced from the U.S.

Michelle Leclair, owner of Wolseley Kombucha, has won sustainability awards for its refill stations, but most of the bottles for its product sold in the local grocery chains originate in America.

“It has been a hot topic,” Leclair said. “If the 25 per cent tariffs come, it (the cost of the bottles) will eat up a lot of the bottom line. It is a significant expense. We will have to look for another source.”

martin.cash@freepress.mb.ca