November 15, 2012 presentation by Food Export Northeast

1. CANADIAN MARKET
OVERVIEW

2. Consider Canada
Opportunities
#1 bilateral trading partners
$1.6 billion trade crosses Canada - U.S. border daily
Windsor/Detroit border – most trade flow in world
U.S. Top 5 Trading Partners
2010 2011
Country Growth
$B $B
Canada $249.1 $280.9 12.8%
China $163.5 $198.4 21.4%
Mexico $91.9 $103.9 13.1%
Japan $60.5 $65.7 8.6%
Germany $48.2 $49.2 15.4%

3. Consider Canada
Opportunities
U.S. Exports of “Agricultural Products”
Top 5 Countries ($US)
2010 2011
Country Growth
$B $B
Canada $16.9 $19.0 12.7%
China $17.5 $18.9 7.7%
Mexico $14.6 $18.3 25.7%
Japan $11.8 $14.1 31.4%
Korea, South $5.3 $7.0 13.3%

4. Consider Canada
Opportunities
2011 Total Agri-Food Imports from U.S. - $19.5 Billion
Province Imports % Increase
(Million) 2010
Ontario 18,068 8.5
Quebec 5,823 22.8
British Columbia 5,257 6.2
Alberta 2,131 11.0
Manitoba 1,095 18.7
Atlantic Canada 983 10.1
Saskatchewan 399 13.1

5. Consider Canada
Opportunities
5,000 mile shared
border with over 120
border crossings
Close shipping
corridors
Similar time zones
Increasing shipping
costs
80% of imports by
truck

6. Consider Canada
Opportunities
Common culture &
language
300,000 cross shared
border every day
Snow birds
Positive perception of U.S.
products among
Canadians
Strong Canadian $
Benefits of NAFTA – duty
free (excl. poultry, dairy)

7. Consider Canada
Demographics – July „11
Canadian population: 34.5 million
Ontario population = 39%
Quebec population = 23%
Prairie population = 18%
British Columbia = 13%
Atlantic Canada = 7%
62% of Canadians live in Ontario and Quebec
majority of Canadians live within 140 miles of border

8. Consider Canada
Demographics – July „11
Metropolitan area Population (000’s)
Toronto, ON 5,838.8
Montreal, QC 3,908.7
Vancouver, BC 2,419.7
Calgary, AB 1,265.1
Ottawa–Gatineau, ON-QC 1,258.9
Edmonton, AB 1,196.3
Winnipeg, MB 762.8
Quebec City, QC 761.7
Hamilton, ON 750.2
Kitchener-Cambridge-Waterloo ON 498.5
London, ON 496.9
Halifax, NS 408.2

9. Consider Canada
Demographic Trends
Median age is 40 years
People over 50 make up 36%
of population / control over
half of the nation’s
discretionary spending
66% of Canada’s growth from
immigration
35% of population &
73% of new immigrants -
Toronto/Vancouver/Montreal
+100 languages in major cities

10. Consider Canada
Opportunities
Immigrants represent 20% of total Canadian population
Group Current Worth Annual Growth +/-
Total Non-Ethnic $200 billion $125 million Decelerating rate
Total Ethnic $50 billion $1 billion Accelerating Rate
Total Present Projected
Group Approx 1/3 of
Value Annual Growth
total ethnic
Chinese $200 billion $125 million
growth
South Asian $50 billion $1 billion

11. Consider Canada
Demographic Trends

12. Consider Canada
Regional Diversity
Region Traits
Healthier lifestyle, slower pace, higher
disposable income, higher frequency visits to
British Columbia
upscale restaurants, specialty foods, Asian
influence
Alberta fastest growing area, baked goods,
Prairies comfort foods influence from German /
Ukrainian / Polish / Scandinavian backgrounds
Multi-cultural, fast-paced, convenience, ready-
Ontario
to-go, international cuisine
European heritage, family centric, less spicy,
Quebec
sweet-tooth, specialty foods
British / Irish / Scottish influence in foods,
Atlantic Canada
seafood, working class

13. Consider Canada
Consumer Trends
Health & wellness
Convenience
Variety
Ethnic
Regional
Sustainability

14. Consider Canada
Retail Market

15. Consider Canada
What‟s Hot - Retail
Healthy foods – snacks, whole
grains, functional, gluten-free, sugar-free, trans fat
free, low sodium
Meat, fish & seafood – marinated, pre-seasoned
Fresh categories – perimeter of store
Ethnic foods
Natural/organic - value-added, artisanal
Uncommon spins on common foods
Gourmet comfort foods
Environmentally friendly
Raw Food
Portable Foods

16. Consider Canada
Retail Trends
Consolidation of market
Blurring of boundaries -
food and non-food retailers
One-stop-shopping
gaining popularity
Importance of private label
18% of market
Environmentally conscious

17. Consider Canada
Retail Differences: Canada vs U.S.
Canada operates on lower
margins
Most food is less expensive
than in the U.S.
25% of Canadians shop at
discount supermarkets
Supermarkets are well-braced
against Wal-Mart
Franchised independents buy
from one of the major chains
Specialty retail not as
developed

18. Consider Canada
Food Store Sales – 2011
Channel % Share
Grocery 63.5%
Mass
11.7%
Merchandisers
Warehouse Club 7.8%
Drug Stores 7.2%
Convenience 6.0%
Specialty Stores 2.0%
Gas Stations 1.8%

19. Consider Canada
Food Store Sales - 2011
Province % Market % Chain’s Independent
Share Share of Share of Units
Units
Ontario 37.3% 39.3% 60.7%
Quebec 25.6% 28.7% 71.3%
British Columbia 14.7% 31.3% 68.7%
Alberta 10.9% 42.4% 57.6%
Sask/Man 5.2% 40.6% 61.0%
Atlantic 6.1% 38.6% 61.4%

20. Consider Canada
Trips Per Household
Retail Format Trips Per Trips Per % Change
Shopper Shopper of Trips
2010 2009
Grocery
82.5 83.8 -1.6
Supermarkets
Drugstores 16.5 17.0 -2.9
Mass Merchandiser 17.2 16.9 1.8
Warehouse Clubs 11.4 11.0 3.6
Convenience/Gas
9.4 9.7 -3.1
Bars
Total Channels 137.0 128.4 6.7

21. Consider Canada
Private Label in Canada
National Grocery Banner and Mass Merchandiser
Private Label Share
40
34.4
35 30.8
30 27.4 26.1
25
18.2 19.7
20
15
15 11.3
10
5
0

22. Consider Canada
Retail Landscape
2011 food sales: $85.5 billion (+1.2%)
top 3 control +69% retail market
Retailer 2011 Sales % Market
(Billions) Share
Loblaw $31.5 38.7
Sobeys $16.3 20.0
Metro Inc. $11.5 14.1
Costco $7.0 8.6
Canada $6.8 8.3
Safeway
Wal-Mart $5.2 6.4
Co-ops $3.4 4.2

23. Consider Canada
Retail Profile: Loblaw Cos. Ltd.
39% market share
Development of “market”
stores to provide one-stop-
shopping
1,027 corporate and
franchised stores
376 affiliated independents
1,564 independent accounts

24. Consider Canada
Retail Profile: Loblaw Cos. Ltd.
LOBLAW BANNERS – EASTERN CANADA
No Frills (discount) 136 Your Independent Grocer 53
Loblaws 131 Super Valu 2
Axep 128 Zehrs Markets 50
Maxi & Co. 106 Real Canadian Superstore 32
Provigo 70 Fortinos 20
L’Intermarche 63 Dominion 15
Valu-Mart 58 IGA 3
Fresh Mart (Atlantic 58 Real Canadian Wholesale 3
Wholesalers) Club
Save Easy 42 Atlantic Superstore 53
T&T Supermarket 7

25. Consider Canada
Retail Profile: Loblaw Cos. Ltd.
LOBLAW BANNERS – WESTERN CANADA
Lucky Dollar 113
Extra Foods 67
Real Canadian Superstore 71
Shop Easy 63
Super Valu 20
T&T Supermarket 20
Real Canadian Wholesale Club 29

26. Consider Canada
Retail Profile: Loblaw Cos. Ltd. – Private Label
Stores offer more than 5,000
private-label products
45% coverage
No Name
President‟s Choice
PC Organic
President‟s Choice Blue Menu
President‟s Choice Black Label
Additional names by category

27. Consider Canada
Retail Profile: Loblaw Cos. Ltd. – Private Label

28. Consider Canada
Retail Profile: Sobeys Inc.
2nd largest player
National coverage
Thrifty Foods purchase
Smaller communities
Banner consolidation ON to BC
Sobeys, Foodland, Price Chopper
IGA – Quebec
1,337 corporate & franchise

29. Consider Canada
Retail Profile: Sobeys Inc.
SOBEYS – NATIONAL
Kwik-Way 65 Lawtons Drugs 79
Sobeys 284 Sertard 37
Boni Soir 229 Tradition 29
Foodland 196 Rachelle-Bery 19
IGA 212 Cash & Carry 9
Needs 140 IGA Garden Market 49
Price Chopper 44 Foodtown 27
Le Dépanneur 99 Thrifty Foods 26
IGA Extra 106 Fast Fuel 9
Boni Choix 82 Freshco 57

30. Consider Canada
Retail Profile: Sobeys Inc. – Private Label
27% coverage
Compliments
Compliments Organic
Compliments Balance
Compliments Sensations
Compliments Greencare
Signal
Gourmet Minute

31. Consider Canada
Retail Profile: Metro Inc.
3rd largest player
2nd largest player Ontario/Quebec
Quebec – franchised
Ontario – corporate/franchise
+1,400 corporate & franchise

32. Consider Canada
Retail Profile: Metro Inc.
METRO BANNERS – ONTARIO/QUEBEC
Metro 370 Clini Plus 46
Gem 259 Super C (discount) 78
Extra 206 Service 38
Brunet 124 SOS Depanneur 2
Food Basics 115 Les 5 Saisons 1
Marché Extra (Metro) 206 Marché Richelieu 86
Ami 84

33. Consider Canada
Retail Profile: Metro Inc. – Private Label
15% coverage
Overhaul of private label
 Selection
 Irresistible
 Irrestistible Life Smart

34. Consider Canada
Retail Profile: Costco Canada Inc.
Costco West Costco East
British Columbia – 14 Ontario (Excl Thunder Bay) – 25
Alberta – 13 Quebec – 18
Saskatchewan – 2 Nova Scotia – 2
Manitoba – 3 New Brunswick – 3 bn
Ontario (Thunder Bay) – 1 Newfoundland - 1

35. Consider Canada
Retail Profile: Wal-Mart
328 stores
146 Super Centres
Pantry Departments
Sam‟s Clubs Closed

36. Consider Canada
Retail Profile: Target Canada
Purchased 189 Zellers stores
1st 25-35 stores Spring 2013
125 – 135 stores by 2014
Sobeys to supply
dairy/frozen/perishables/chocolate

37. Consider Canada
Specialty Retail Market
 63,000 specialty stores), 72%
independents
 2011 – 47% of stores with increased sales
 Gourmet food – 12% growth
 34% of stores are stocking gourmet food,
30% gift baskets with 31% increasing
presence
 Average price for gourmet food in
specialty stores is $6-10
 British Columbia leader in specialty
foods
 Quebec second largest buyer of specialty
foods

38. Consider Canada
Foodservice Market

39. Consider Canada
Foodservice Profile - 2011

40. Consider Canada
What‟s Hot - Foodservice
What‟s Growing What‟s Slowing
Smoothies Carbonated Soft Drinks
Bagels Hot Coffee
Deli Meat Sandwich Doughnuts
Iced/Frozen/Slush Coffee Juice
Tap Water All Other Sandwiches
All Other Entrees (ex Has Browns
pork/beef/seafood)
Muffins Pork Entrees
Breakfast Wrap/Burrito Cookies
Chinese/Cantonese/Szechwan Beef Entrees (ex burgers)
Hot Chicken Sandwich Seafood/Fish

41. Consider Canada
Top Trends – Menu Importance
Top 10 Foods Top 10 Beverages
French Fries – 15.7% Hot Coffee – 30.6%
Chicken/Poultry Entrees – 14.1% Carbonated Soft Drinks – 21.3%
Burgers – 10.7% Alcoholic Beverages – 6.4%
Salads – 9.3% Tap Water – 6.0%
Seafood/Fish – 6.6% Hot Tea – 5.7%
Donuts – 6.2% Juice – 5.5%
Pizza – 5.8% Bottled Water – 4.2%
Hot Chicken Sandwich – 5.3% Milk – 3.5%
Chinese/Cantonese – 5.2% Iced Tea – 3.1%
Breakfast Sandwiches – 5.2% Iced/Frozen/Slush Coffee – 2.2%

42. Consider Canada
Foodservice Trends
Sustainability
Artisanal Cheeses
Simplicity/Back to Basics
Nutritional/Healthy Cuisine
Bite Size / Mini Desserts
Food Trucks/Street Food
Ethnic Street Food Inspired
Appetizers
Gluten-Free/Food Allergy conscious
Locally Sourced Food
Farm/Estate Branded Ingredients

43. Consider Canada
Foodservice Trends – Up and Coming
African Cuisine
Black Garlic
Gluten-Free Beer
Red Rice
Peruvian Cuisine
Vegetable Ceviche
Micro-Distilled/Artisan Liquor
Goat
Game Bird Appetizers (duck,
quail)
Savoury Ice Creams

44. Consider Canada
Foodservice Profile - 2011
$65.5 Billion Sales
Sales
($B)
Quick service $22.1
Full service $21.9
Contract / social $4.2
caterers
Tavern, Bars, Pubs, $2.4
Nightclubs
Total non $12.7
commercial

45. Consider Canada
Foodservice Profile
 68% of food is prepared and eaten in-home
 Approx 8% meals/snacks sourced from restaurant
 Average Check / person $7.16
 Average Household spent $1,857 at restaurants
Type of Service Average
Check/Person
Quick Service $4.95
Family/Midscale $11.29
Casual Dining $16.17
Fine Dining $41.51
Retail $4.21

46. Consider Canada
Foodservice Profile - 2011

47. Consider Canada
Foodservice Profile - 2011
#1 #4
#2 #5
#3 #6
Top 6 Chains in Canada

48. Consider Canada
Foodservice Profile
Province Foodservice Sales 2011 Sales Growth
Units (Millions) in ’11
Ontario 30,412 $18,381.6 3.2%
Quebec 20,847 $9,876.1 3.0%
British
11,984 $7,893.5 1.9%
Columbia
Alberta 8,843 $6,741.6 3.0%
Atlantic
4,981 $3,046.6 1.2%
Canada
Man/Sask 4,230 $2,818.5 3.4%

49. Consider Canda
Navigating Canada - Retail

50. Consider Canda
Navigating Canada - Retail

51. Consider Canada
Navigating Canada - Foodservice

52. Consider Canada
Navigating Canada
Distributors and Brokers
 More than 800 brokers & distributors
 Regional or national focus
 Cover retail and/or foodservice
 Many require exclusivity
 Pioneering/retainer fees

53. Consider Canada
Navigating Canada
Distributors
 Take ownership of product
 Warehouse products
 Important for products with
limited shelf life (DSD)
 Distribution channel for
smaller retailers
 Catalogue / online sales
 Fees: 25 to 35%

54. Consider Canada
Navigating Canada
Brokers/Brand Managers
 Your dedicated Canadian
sales representative
 Represent fewer principles
 Exclusivity
 Expertise – regions/stores/
relationship marketing
 Brokerage fees: 5%
average
 Start-up / retainer fees:
Usually first 6 months

55. Consider Canada
Market Builder
Education is the key to success
Market Scan Rep finder
 Competitive product shopping  Market visit
 Category Review  One-on-one meetings
 Distribution analysis  Retail tour
 Importation analysis &
regulations
 Packaging/labelling
regulations
 Distributor referrals
 Importer evaluations

56. Consider Canada
2013 Activities
Activity Date
CRFA Show – Food Show Plus! March 2011
Toronto
SIAL Canada – Food Show Plus! May 2011
Toronto
Specialty/Natural/Organic September 2011
Focused Trade Mission
Toronto
Market Builder Year-round

57. CANADIAN PACKAGING /
LABELLING REQUIREMENTS
An Overview of
Canadian Packaging and
Labeling Requirements
2011 Food Export Marketing Forum

58. CANADIAN FOOD INSPECTION AGENCY
 Investigating consumer and industry
complaints
 Taking appropriate compliance and
enforcement actions related to food safety,
labelling and deceptive practices
 Recall of unsafe products
 Undertaking preventative measures using a
risk based approach

59. CANADIAN FOOD INSPECTION AGENCY
Agriculture & Agri-Food
Food and Drugs Act* Administrative Monetary Penalties
Act
Consumer Packaging & Labelling Act* Seeds Act
Canada Agricultural Products Act Feeds Act
Fish Inspection Act Fertilizers Act
Canadian Food Inspection Agency
Meat Inspection Act
Act
Health of Animals Act Plant Breeders’ Rights Act
Plant Protection Act
* as it relates to food

60. LABEL REQUIREMENTS
BASIC
LABELLING
REQUIREMENTS

61. LABEL REQUIREMENTS
 Common name
 Net quantity – metric units
 List of ingredients
 Best before date with a durable life span of
less than 90 days
 Nutrition information
 Company name & address

62. BILINGUAL PACKAGING
 English & French
Canadian
 Everything on a label
must be bilingual and
of equal size

63. BILINGUAL PACKAGING

64. COMMON NAME
 Name prescribed by a regulation -
examples: orange juice, sausage,
chocolate, fish sticks, canned peas
 If the name is not prescribed by a
regulation, then the name by which
the product is commonly known –
examples: orange drink, chocolate cake
64

65. NET QUANTITY DECLARATION
The net quantity declaration must appear in
metric units:
 By volume for liquids; e.g., millilitres, or
litres (for amounts more than 1000 ml)
 By weight for solids; e.g., grams, or
kilograms (for amounts more than 1000
g)
 By count for certain foods, such as
hotdog buns.
65

66. BEST BEFORE DATE
 Must appear on foods with a durable life
of 90 days or less
 Must be accompanied by the storage
instructions, if different than the ambient
conditions
 Prescribed format
 Best Before / Meilleur Avant: 2012 Fe 21
66

67. LIST OF INGREDIENTS
Must appear in decreasing order by weight,
except :
 spices, seasonings, fine herbs
 flavourings
 flavour enhancers
 food additives
 vitamins and minerals

68. LIST OF INGREDIENTS
 The components of the ingredients
must be shown, with certain exceptions
(such as flour, butter, etc.)
 Some ingredients may have class
names (flavour, herbs, milk ingredients)

69. LIST OF INGREDIENTS

70. LIST OF INGREDIENTS
Ensure your ingredients are allowable in
Canada.
 Some additives or colours may not be allowed.
 The enrichment of food with vitamins, minerals
and amino acids is only permitted in some
foods such as:
 Vitamin C in apple juice
 Fluoride in bottled water
 Vitamin D in milk
 Folic acid in flour
70

71. ALLERGENS
An allergen statement must be made on
packaging that contain any of the following
products or may contain traces of:
Peanuts Sesame seeds
Tree nuts (specify) Shellfish
Eggs Fish
Wheat or gluten source Crustaceans
Soya Milk & milk ingredients
Mustard seed Sulphites
(more than 10 ppm)

72. NUTRITION FACTS TABLE
Mandatory on pre-packaged foods with the
following exemptions:
 Products with nutrient & energy values
expressed as “0”
 Beverages with more than 0.5% alcohol
 Fresh vegetables or fruits or
combinations
 Raw, single-ingredient meat, poultry, fish
& by-products (except ground meat and
poultry)

73. NUTRITION FACTS TABLE
Exempted products must provide a Nutrition
Fact Table if:
 Product has added vitamins, minerals
etc.
 Product has health claims, nutrient
claims
 Artificial sweeteners are added
73

74. NUTRITION FACTS TABLE
Nutrient information based on
Specified quantity of food as sold
List of calories & mandatory
specified nutrients
Amounts listed as % daily value
May have one bilingual table or two tables:
one English / one French

75. NUTRITION FACTS TABLE
Size of Nutrition Facts Table is determined by package face

76. NUTRITION FACTS TABLE
Foodservice packages and products for
industrial use do not require Nutrition
Facts Table on packaging.
A Nutrition Facts Table must be available
on paper and sent to customer to have on
hand. May be faxed or shipped with
product.
76

77. NUTRITION FACTS TABLE –
U.S. VS CANADA

78. NUTRITION FACTS TABLE –
U.S. VS CANADA
Differences in mandatory elements
 Rounding rules
 Recommended daily intake for
calcium, iron & vitamin A
Mandatory in U.S. / Optional in Canada
 Number of servings per container
 Calories from fat
 % daily value for cholesterol
 % daily value foot note

79. NUTRIENT CONTENT CLAIMS
 47 allowable claims (i.e. source of omega-3,
trans fat free, low in sodium)
 Specified wording for a claim
 Qualification of claims can be different from U.S.
(i.e. trans fats claim)
 Cannot use the word healthy or imply a claim
with a disease
 Carb free claims are not allowed
79

80. HEALTH CLAIMS
7 permitted health claims only with prescribed
wording
 Sodium and hypertension
 Calcium and osteoporosis
 Saturated and trans fat and heart disease
 Vegetables and fruit and cancer
 Fermentable carbohydrate and tooth decay
 Replacement of saturated fat with mono- and
polyunsaturated fat and blood cholesterol lowering
 Beta glucan oat fibre and heart disease

81. HEALTH CLAIMS
Prescribed wording for health claim of
vegetables and fruit and cancer
 “A healthy diet rich in a variety of
vegetables and fruit may help reduce the
risk of some types of cancer”

82. PROCESSED PRODUCTS
REGULATIONS
Fruits, vegetables, sauces, condiments, juices:
 Have standards of identity
 Have standardized containers that must be adhered
to
Examples:
 Jams/jellies – 250, 375, 500, 750 mL, 1, 1.5, 2, 3, 4 L
 Peanut butter – 250, 375, 500, 750 g, 1, 1.5, 2 kg

83. ORGANIC PRODUCTS
 Product must have at least 95% organic
content
 Mandatory certification, by a CFIA accredited
certification body – Canada recognizes U.S.
accreditors such as QAI
 Product must bear the name of the
certification body that has certified the
product as organic
 Canadian organic logo is permitted

84. LABEL APPROVALS
 Meat & poultry products must have labels
approved by Canadian Food Inspection
Agency
 Natural health products must go through
the Natural Health Product Directorate to
be licensed and a number is issued that
must be on an approved label (i.e. energy
drinks, natural supplements)
 Other products do not require approval

85. RESOURCES
Canadian Food Inspection Agency (CFIA)
www.inspection.gc.ca
Guide to Food Labelling and Advertising
 Chapter 5 – Nutrition Labelling
 Chapter 6 – The Elements Within the Nutrition Facts Table
Nutrition Labelling Tool Kit
 www.inspection.gc.ca/english/fssa/labeti/nutrikit/nutrikite.shtml
Questions about Packaging & Labeling
 labelwindow@inspection.gc.ca

86. KATHY BOYCE
FOOD EXPORT - CANADIAN REPRESENTATIVE
MARKETING / TRADE SPECIALIST
731 Laurier Ave. Milton, ON L9T 4R1
T 416.523.1470 | F 905.864.4899
kboyce@boycemarketing.com