The burgeoning global market for plant proteins presents a huge opportunity for Ontario soybeans, but new investments in research and local processing will be key to capturing that potential, industry officials say.
“We really want to drive towards more branded food products in Canada from the ingredients we produce here… As we get into this, there’s more opportunity for investments in soybeans,” says Bill Greuel, chief executive officer of Protein Industries Canada – an industry supercluster focused on developing Canada’s plant protein potential.
While Ontario has a reputation for producing high quality, food-grade soybeans, most are exported unprocessed.
Why it matters: Without a commitment to domestic processing, Canada will be unable to fully capitalize on the plant protein market.
Being a leader in the plant protein market requires dominance in crop production, but also the ability to process them, Greuel said.
Vast acres of high-value protein crops such as canola make Western Canada the dominant player on the production side. It’s also the reason why so much investment has been directed at the region to date.
Protein Industries Canada recently made its first investment in Ontario, but most of its funds have been directed to Western Canada.
“The reality is we need some investment in infrastructure, science and innovation, companies to set up shop, create tighter linkages,” says Greuel in reference to a five-year, $350 million investment going to the value-added sector.
“For someone to unseat us globally they have to grow 20 million acres of canola. We have to take advantage of this crop because of the value.”
For the east, the potential lies in further developing soybean markets.
“We’re already a plant protein powerhouse,” says Crosby Devitt, chief executive officer for Grain Farmers of Ontario, regarding the quantity and quality of specialty crops produced in the province.
Devitt says an ideal scenario for supplying domestic and wider regional demand for plant proteins would indeed include grown-in-Ontario speciality crops, like IP soybeans, moving through in-province processors. This might hinge, in part, on whether local demand could grow to a point where processing in Ontario makes sense.
Japan, for example, buys approximately 200,000 tonnes of food grade soybeans from Ontario annually. Processing, says Devitt, is done in that country because soybeans are mainstream food products. While Ontario does have some small-scale processing currently, local demand isn’t quite there.
As the market for plant proteins grows globally, he believes Ontario is well positioned to capitalize as opportunities reveal themselves.
“I’m quite confident the Ontario farmer will meet the demand. We’re in a global market. If we can already be competitive in Japan and other countries around the world, surely we can be competitive here at home.”
Distinguishing Ontario products
Rob Hannam, client director for Guelph-based consulting firm Synthesis AgriFood Network, agrees that soybeans — currently comprising over three-quarters of global plant-protein demand — offer the most obvious opportunity for the province. Edible beans are another.
“The highest protein crops are soybeans, edible beans, and hemp. We have an advantage with our climate. Being in the Great Lakes region, we have a more moderate climate and are able to produce higher protein content. We also have high quality growers, storage, and segregation,” says Hannam, whose father Peter was a pioneer in the development of food grade soybeans in Ontario.
But a clear challenge is staying competitive given large suppliers elsewhere, such as those in the United States. Value-added profit is also a missing piece, in that any Canadian processor would need to be price competitive with the American companies currently dominating the market.
Like Greuel, Hannam says capitalizing on Ontario producers’ ability to grow higher-quality crops would make a difference — but it’s not enough.
Additional value, such as that gained by producing crop varieties with specific traits, including higher oil levels or protein blends from different crops (such as combining soybean, dry beans, canola and pea meal) are required.
Processors moving into Western Canada are processing multiple kinds of plant proteins.
Attracting investment — a chicken or egg conundrum
Distinguishing Ontario commodities via quality and creative innovation is possible, says Dana McCauley, director of New Venture Creation in the University of Guelph office of research.
Doing so costs money, however, and Canada’s plant protein industry is not usually high on investor priority lists.
“It’s not terribly attractive to investors who can get in on things that have really low cost, really low risk… and a history of quite aggressive growth,” says McCauley, mentioning innovations in the tech-world as a comparatively attractive investment area.
It’s also a question of research capacity. McCauley says investors see opportunity, but they are not necessarily taking the plunge because Ontario — and Canada as a whole — does not have the right combination of research focus (such as actively developing protein cell cultures), nor the ability to derive protein isolates from raw commodities through processing.
“We get calls all the time from people who want to find those scientists, but they’re not largely in Canada yet,” she says. “There’s a misalignment between research priorities and industry priorities.
“We don’t have that capacity in any part of Canada that I know of. That’s a big cost barrier to achieving monetary success, and without that investment likely won’t come to Canada. It will go to those who can do it more efficiently.”
Optimism and the role of government
Research and processing capacity are required for investment, but investors won’t invest unless Canada has greater capacity. From McCauley’s perspective, government incentives are part of the solution.
Subsidies or rebates might encourage a company such as Maple Leaf to keep its money in Canada — rather than investing in the United States, as has been the case.
“We have the people; we have the product. I think some of the challenges are systemic, but some of them are just people have not necessarily responded to early market indicators,” McCauley says.
“I think it will follow. We’re still a very desirable place to come to for services.”
Greuel, Hannam, and McCauley all say Ontario’s plant protein sector has been receiving increased attention and financial backing from both government and members of the agri-food sector.
Griffith Foods, Persall Fine Foods, and K2 Milling, for example, have established a tri-company partnership to produce plant-based protein ingredients (specifically flours and protein blends), for the vegan and flexitarian markets.
According to a press release, the consortium will engage in product research and development, as well as marketing to processors. There will be further effort to help processors market novel products to foodservice and retail throughout Canada and the United States. With a $1.2 million investment, it’s the first Protein Industries Canada initiative specific to Ontario.
While the bulk of investments to date have been more westwardly oriented, eastern provinces are also likely to see greater momentum in time.
“The role of [Protein Industries Canada] is to help the sector identify and capitalize these opportunities,” says Hannam. “I’m optimistic it will be helpful for companies in Eastern Canada as well.”