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One of the hardest parts of finding alternatives to plastic packaging is financing. Innovations that replace plastic are often more costly in the short term, or may need expensive adjustments to fit exact product requirements. But there are options available to food and beverage operators looking for funding. We asked for input from professionals helping food and beverage operators access funding. 

Participants 

• Bonnie Bain, senior relationship manager, Corporate & Commercial Financing (Manitoba), Farm Credit Canada 
• Alex Barlow, director of programs, CFIN 
• Kyle Burak, senior economist, Farm Credit Canada 

• Nathan Chick, marketing specialist, Mentor Works, a Ryan Company 
• Alex Lau, senior relationship manager, Corporate & Commercial Financing (BC), Farm Credit Canada 
• Graham Legge, senior relationship manager, Corporate & Commercial Financing (Ontario), Farm Credit Canada 

Q: Many food and beverage operators say lack of financing and time to research alternatives are the key reasons they haven’t removed plastic from their operations. Where should they start in their search to access funds and research their options? 

Alex Barlow: This is definitely a tough challenge, with upcoming regulations on Single-Use Plastics many businesses will be scrambling to address plastics, especially in food service. I think we can expect to see some new federal funding be released to help develop new solutions in this space, or to help operators trial new solutions as these new regulations roll out. In terms of resources, the first one I would point out is the Canadian Plastics Pact, which has a number of resources and tools for food and beverage operators to consult and consider integrating to address this issue. There are a lot of simple solutions that can take place at the design level to help improve recyclability and recovery of plastics, and lots of non-plastic solutions out on the market already (paper straws, bioplastic take-out materials, and more). Secondly, not to toot our own horn, but I would encourage operators to sign up for CFIN’s digital member platform, where we have a lot of upcoming content and discussions about plastics. It’s a good spot to potentially find a supplier, hear from other operators, and members can also connect with their local Regional Innovation Director to hopefully facilitate some meaningful connections. We’ve also developed a call under our Food Innovation Challenge, opening September 1, 2022 for collaborative research, development, and demonstration projects titled Plastics Solutions for Foods: Reduction, Replacement, and Recyclability. We’re looking for projects that either improve the recovery/recyclability of plastics, reduce their use, or replace them with bioplastics or bio-based solutions that meet industrial composting certifications. Funding is 50 per cent up to $2 million per project in grant funding from CFIN. There are lots of new and scaling firms in Canada offering solutions, so I encourage operators to get connected with CFIN, their local innovation hubs, Natural Products Canada, Ignite Atlantic, etc. to tap into these up-and-coming firms and evaluate their solution. 

Nathan Chick: The government funding landscape is complex and changes often. That’s why many Canadian businesses use the Government Funding Directory to easily filter through the top Canadian programs available today. This free directory allows filtering by region and business activity. If your business is trying to search for programs by industry, please visit the Government Funding Programs by Industry Directory for more specific opportunities. For businesses that are looking to get started with government funding, it is always important to establish what your business is trying to achieve, as well as what resources and capital will be required to achieve your desired outcome. Once you have determined your desired outcome, we encourage businesses to learn how to create a smart funding plan by using our free Build a Government Funding Plan slide deck. It’s crucial that you contact a government funding professional prior to beginning the application process to receive industry expertise on the current funding landscape and key application support to ensure the best chance of success. If your business is a startup, there are certain criteria that you must meet to apply for many government funding programs. To see if you qualify, please use our free Startup Funding Checklist. We also recommend that readers visit our article on How to Stack Canadian Government Grants, Tax Credits, and Loans to learn how some programs can be used collectively to maximize funding potential. 

Alex Lau: At Farm Credit Canada we can provide support. We have a team specialized in supporting food and beverage companies across Canada. We have customers who are already making changes and moving to alternatives to plastic, using other recyclable, recycled, and compostable packaging materials. We also have connections we can support you with. We work closely with other associations. We can share our knowledge and connect you to those who have walked in your shoes or have the expertise that can help you. 

Q: Are alternatives to plastic as expensive as operators believe?  

Alex Barlow: That is a good question. In terms of strategies to make plastics more recyclable, I believe there are some cost-effective design strategies that can be implemented, and the Canada Plastics Pact has released its Golden Design Rules for Plastics Packaging which is an excellent place to start. When it comes to bioplastics, my experience is that producers of these products have yet to reach that critical scale point where they achieve economies to their pricing. This is one of the reasons CFIN is funding our plastics themed call, to support the demonstration of these technologies, reduce the financial pain of pilots of demonstrations, and support scalability of sustainable national solutions that meet consumer, operator, and retailer expectations of safety, aesthetics, and performance. This issue is messy; there are inconsistent recycling and composting practices across the country, and a lack of consumer knowledge about recycling and industrial composting generally. There is a lot of work to do, but as prohibition and a cost model comes into place, and funding is available to help make the transition, hopefully there will be enough carrots and sticks to motivate change on all levels. 

Kyle Burak: For most, alternative packaging remains more expensive, but this is expected to change over time and consumers appear willing to pay an additional cost for sustainably packaged items. Businesses need to also take into account related costs. Does it require a change to production? Will it change transportation costs? For example, plastic is durable, light and often compact, but some alternatives could offer savings. Another thing to consider is whether product shelf life will change. If so, what are the potential impacts of additional shrink? There is more to consider than the cost of the new packaging itself and some may require changes to pricing. 

Nathan Chick: Finding new and innovative ways to improve a product, such as with alternative packaging, can pose challenges that may increase costs, resources, and more. However, there are often ways to reduce these costs for businesses that strategically implement government funding strategies. 

Alex Lau: I recently worked with a vegetable production company which packed in plastic clamshells. Because of a drive towards sustainability and environmentalism, they decided to make a change to use less hard plastics. They are now packaging in soft plastic bags that use four times less plastic and a cardboard shell on the outside for durability. There was cost to that. They needed new equipment for the new packaging system. Ultimately, they have reduced their environmental impact (less plastic used), they did pay for equipment, but the cost of alternative packaging materials was comparable. In addition, they can market their products and business in a way that aligns with consumer preferences. 

Q: Can operators access funding for retooling equipment to new packaging specifications? 

Bonnie Bain: For retooling equipment or specialized equipment needs, FCC can provide standard term financing for equipment (terms depend on the type of equipment and its useful life). We can offer an interest-only period during the installation and commissioning stage. We can offer fixed interest terms and flexibility to repay the loan at any time without penalty. And for those companies who have long-term annual needs for financing cap ex, we have a solution for that too. 

Alex Barlow: There are certainly several funds targeting the manufacturing sector, either for food and beverage manufacturers, or for those who make plastics and packaging alternatives. I would encourage operators to look at their local Regional Development Agencies and contact their provincial government economic development folks to chat about their project. Some of the groups who tend to be left behind by these funds are the foodservice and retail players, but I do feel these groups are further along in the availability of plastics replacements. We’ve seen some good progress made in single use plastics and circular economy practices in food take out.  

Nathan Chick: There are government funding programs available to assist in innovation for food and equipment costs, such as: FedDev Ontario Business Scale-up and Productivity (BSP) Program; Eastern Ontario Development Fund (EODF) / Southwestern Ontario Development Fund (SWODF); Bioenterprise FoodShift Program; and Scientific Research and Experimental Development (SR&ED). Lastly, the Canadian government has recently announced a new agreement to replace the current Canadian Agricultural Partnership (CAP) program, which will be called the Sustainable Canadian Agricultural Partnership (SCAP). SCAP will start its five-year initiative in April 2023 with $500 million in new funding designed specifically for addressing sustainability in agriculture and food. Therefore, there are likely to be many more future government funding opportunities available to address sustainable packaging challenges in the new year. To learn more about SCAP, review our recent SCAP blog today. 

Alex Lau: 100 per cent! FCC is a financial institution 100 per cent committed to supporting Canadian food and beverage. We can absolutely support these types of requests. We are here to support Canadian food processors, agriculture producers and agribusinesses. In addition, we are here to help the industry meet the federal government’s goal to reduce plastic waste and transition to a national circular plastics economy. 

Graham Legge: We have flexibility in what we offer. Whether that means tradition capex, or solutions that are tied to R&D or sustainability. 

Q: Anything else you need operators to know about accessing funds? 

Bonnie Bain: Stay in touch with your local food and beverage associations, industry publications and events to stay on top of the latest developments. Talk to your customers to see what they want. Use social media to learn how important it is for your customers to eliminate plastic. 

Alex Barlow: The best strategy is to have one – think about what your pain points are, look at the existing resources, get connected with your peers in industry to understand best practices, even engage a consultant if you feel that will help you take charge in this area. Industry associations and groups such as CFIN can help you understand your options, and potentially connect you with partners. This pre-funding work is critical to success; government grants and their applications need to be approached with a clear plan and identified solutions. Have your numbers ready – how much plastic do you use, and what would be the impact post-project? 

Nathan Chick: There are two main approaches to government funding, a proactive approach, and a retroactive approach. Proactive government funding programs include grants, loans, and more to plan projects in the future by applying for programs that fit your business activity. Retroactive government funding programs often include tax incentives that allow businesses to claim tax credits on projects that they have already completed, as long as the business followed proper protocol. Most government funding programs, retroactive and proactive, will focus on four major funding activities with varying criteria that businesses must meet to be successful. The four funding activities are: Hiring & Training; Research & Development; Business Expansion; and Capital & Technology Adoption. Watch our educational video to learn more about the four funding activities today. 

Alex Lau: Start asking questions now instead of waiting. It takes time to research, implement and put changes like this into action. Don’t wait. Start today. I encourage you to leverage FCC and your own financial institution in discussions for supporting this green initiative. 


This article originally appeared on YODL on July 6, 2022.

CFIN’s first Executive Roundtable looks at consumer demands and changing access to food, with input from Ken Keelor, CEO of Calgary Co-op, and Arjan Stephens, president of Que Pasa Mexican Foods and executive vice-president of Nature’s Path Foods. 

Q: How has technology such as ecommerce, QR codes and mobile apps changed how consumers access your products? 

Ken Keelor: Technology has greatly improved the customer experience and allowed for two-way communication with our members, so we immediately know what our members are looking for and how we can help them with their day-to-day shopping decisions. For example:  

• Digital communication was used by us throughout the pandemic for health and safety, as well as to share value/couponing/information/inspiration through regular communication such as social media channels, our flyer, website and member emails. 
• Apps: Our Calgary Co-op app allows members to stay in touch, update their own personal information, receive valuable offers exclusive to them through our Mewards program and access to exclusive member pricing on tickets including the Calgary Flames and Hitmen.  
• E-commerce makes it easy for our members to shop remotely and have their items delivered or picked up at a time and location that is convenient for them. Our shop online programs continue to evolve to offer even more convenience and choice on our Food, Wine Spirits Beer and Cannabis sites.  

Arjan Stephens: Ecommerce has allowed consumers to access our products through several channels including online marketplaces, grocery delivery apps like Instacart and our website. This has shifted the way we think about user experience. We are focusing on content creation and search optimization to ensure we’re giving the customer a robust user experience, which includes easily searching and accessing our products. QR codes on products and packaging create an easy, rapid and touch-free transaction for consumers. There are about twice as many scans of barcodes at points of sale each day as there are Google searches. Our customers currently use them to purchase our products through Amazon Fresh stores in the U.S., and we are currently looking at how implementing QR codes on our packaging could provide more product and brand information, ultimately building another channel for connecting directly with our consumers. Additionally, the sunset of Google’s third-party cookie in 2023 makes analytics less accessible. QR codes can significantly help our business identify important customer data to inform our overall business. 

Q: What new experiences are consumers looking for when they shop or dine in person? 

Keelor: Convenience, choice and freshness, along with local and healthy options. We are pleased to be re-opening our salad bars, curry and olive bars and self-serve kombucha stations. In many of our locations we have seating areas where members can enjoy a light lunch, coffee with friends, or a few moments to themselves. We are also pleased to see in-person events coming back, including our famous pancake breakfasts in the summer, our Grape Escape event in 2023, in-person tastings at our Wine Spirits Beer locations, and partnering with our vendors to offer unique sampling opportunities for our members. We are proud to offer a unique experience to members when they come into our stores and know that they are looking for more from us than just a simple shopping trip! 

Stephens: When it comes to dining, consumers are looking for elements that support the storytelling aspect of a dining experience. This creates a unique, memorable experience that is shareable with their friends and on social media. These elements could be part of the food itself, the restaurant space, the customer service or other methods. Examples include unique food creations, robot-waiters, personalized chef cooking-at-table and more. 

Q: What will grocery stores look like in 2035? 

Keelor: It’s hard to say exactly what stores will look like that far down the road but we certainly expect multi-channel shopping to continue to evolve with more choice, convenience, delivery options and support to help meal plan and budget accordingly. We have also seen a number of recent trends emerge from the pandemic that we expect will continue including: 

• Bigger baskets, but less trips to the stores 
• Less families shopping, more single-person trips for the household 
• More focus on health and wellness 

• More focus on value, budgets and “what do I need to prepare meals” 
• Even more focus on locally sourced products 
• Reduced assortment in some categories because suppliers have narrowed the number of lines they are manufacturing ie: paper category 

Stephens: The future of grocery stores will be focused on providing experiences versus things. It will be a seamless online/offline mobile enabled, high tech, high convenience food shopping experience. Touch-free transactions will become commonplace and Augmented Reality (AR) and Artificial Intelligence (AI) will be indispensable. The grocery store of the future will enable customers to use apps to input dietary needs and taste profiles to be connected to products through advanced AR features providing audible information about the products selected, almost like having a personal assistance accompanying you to the store. There will be a large influx of plant-based alternatives to animal products created through 3D printing and AI technologies. Grocery stores like Alibaba’s Hema and Amazon Fresh are really just the beginning of the grocery store revolution. 


This article originally appeared on YODL on July 12 2022.

Topic: Should Start-ups treat their companies like products?
Dana McCauley recently began a lively discussion on YODL about merger and acquisition activity in the food industry, noting that for some time now larger food companies have chosen to expand into new categories and markets through acquisitions of innovative start ups and SMEs rather than through internal investment. As a result, some entrepreneurs are adopting an exit-strategy mindset as part of their initial start-up plans. If the trend continues, Dana believes it will result in great branding and marketing expertise being required to create new categories; and that more co-packers will be needed to provide plants and equipment for exit-minded entrepreneurs looking to keep their operations as simple as possible to make acquisition attractive. We wanted to know more about what YODLers thought about the topic, and how it will affect your businesses and the food industry in Canada. Here’s what some of you had to say. 

Participants: 

Gunjan Syal, founder and chief strategy officer, GoEmerald, ON 

Marc Wandler, co-founder/CEO, Susgrainable, Vancouver, BC 

Q: Does having an exit-strategy mindset limit the company’s potential in terms of innovation and growth? 

@Gunjan: I do not believe having an exit strategy mindset always limits the innovation or growth. It is practical for companies to have the worst-case options identified, including practical exit strategies to ensure the business can survive. On the other hand, it is important to note where the connections are between the firm’s overall growth strategy, the leadership, values and the skillset on the team. These are ingredients to create a culture of innovation. Circularity ensures the innovation culture can be resilient during the desperate times. Some businesses may create products or services with the intent of exiting from the start; others may be committed to drive long-term growth by investing in, what I call a culture of circular innovation. 

@Marc: I would argue it often has the opposite effect. Having an exit-strategy makes you focus on creating something valuable enough for someone else to want to purchase what you have created. This ensures you constantly have an end customer in mind. Having an exit-strategy can also indicate that your company has thought of innovation and growth up to a certain point and through the exit, the mission could potential be advanced even further with the resources from the acquirer. 

Q: Do difficult economic times push companies to become more efficient and innovative, or do they push more entrepreneurs to exit the industry? 

@Gunjan: The uncertainty during difficult economic times may propel companies to reflect back on their underlying values and mission. When resources are dwindling, companies will need to strategically choose where to focus for the greatest impact and alignment towards the right consumers – these are the consumers who will benefit from the services/ products. The difference in the post-pandemic world is that the rapid changes in consumer behaviours are creating a new layer of uncertainty. Inflation is also impacting drastic changes in supply chain operations. This will propel companies to invest in innovation, when resources are available and investments appear to drive long-term value. At the same time, innovation will suffer because ROI cannot always be calculated in advance – it requires trial-and-error to some degree. Novel partnerships, simplifying business models and solutions that can be pivoted quickly, will thrive in the difficult economic times. 

@Marc: It does both in my opinion. Difficult economic times push customers to really evaluate where their dollars will go. For those companies who don’t panic and focus on their core offerings it will push them to become more focused and efficient. Any company that becomes spread too thin is at risk during these difficult times. At the same time, other entrepreneurs may get pushed out for several reasons – sometimes for the better and sometimes for the worse. For those entrepreneurs whose mission or vision is completely wiped out, exit may be the best strategy. 

Q: Are M&As beneficial in the long run for the industry, or do they impede innovation? 

@Gunjan: M&As can be beneficial when there is alignment in product strategy as well as the end user impact among the firms. However, M&A strategy may also severely limit a company’s ability to innovate as the culture of circular innovation may dwindle over time, if not deliberately harnessed after M&A. It will be key to ensure special attention is allocated to developing and aligning a culture of circularity, human capital and profit along with the customer needs. 

@Marc: Again, it could be either. If the acquisition is between two values-aligned companies focused on growing the mission together, and they can leverage the skills and resources that each brings, then it will foster innovation. In other cases, it may be a strategic acquisition made by a bigger entity acquiring a smaller company that could be a threat in the future but isn’t quite there yet. Depending on how this acquisition is managed, especially when there are big differences in culture, this type of acquisition can impede innovation. 

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