Why Ontario food processors struggle to source Ontario produce

Canners, peelers, dicers, and freezers big and small want to source local fruits and vegetables — but it’s becoming an expensive enterprise
By Mary Baxter - Published on Mar 17, 2017
Melanie Miller is production manger at the Garlic Box, a small processing outfit based in southern Huron County. (Photo by Mary Baxter)

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Nearly three years ago, Toronto resident Jackie Kwitko started making baby food from fresh organic fruit — and whatever leftovers she didn’t sell, she froze, vending them as popsicles at a local farmers market. The lollies — which come in flavours like strawberry pear, sour cherry pear, and peach — caught on, and since then, Kwitko’s company, Fressy Bessie Foods Inc., has taken off. Now she’s hoping the product that began as an afterthought will end up in stores across the country.

Kwitko is among the growing number of people who’ve joined the local-food movement and are now taking it to the next level, processing — canning and freezing, and making jams, seasoning, and sauces. Yet Ontario processors face a common challenge: sourcing locally grown produce at prices low enough and volumes high enough to keep their businesses viable.

At first, Kwitko says, it was easy — she bought produce at Costco or at organic-food stores. But as her business grew and she required ever-greater volumes of fruit, she ran into problems. She could find local apples, for example, but not local pears. “I think it’s because I’m just not big enough yet,” Kwitco says. “Ten bushels to me is huge, but to the growers it’s not that big.”

For Jackie Rowe, who owns the Hensall-based Garlic Box, which makes salad dressings and seasonings, the biggest difficulty in finding Ontario garlic is the bulb’s demanding crop cycle. While most vegetable crops mature in a few months, the heirloom garlic variety her company uses takes a year in the ground — and it can’t be grown in the same place again for years due to the risk of spreading a parasitic pest called bulb and stem nematode, which can destroy garlic plants.

That drives up costs — something Rowe needs to reduce if she hopes to keep her products competitively priced as she moves from niche to mainstream markets. She and her suppliers “have to work smarter,” she says. “We have to work bigger and more collectively to create sustainability, or we’re not going to compete.”

When it comes to large-scale processors, the cost of conventional (that is, non-organic) Ontario-grown vegetables is an ongoing concern, according to Steve Lamoure, president of Ontario Fruit and Vegetable Processors. The organization represents several primary processors, including Campbell Company of Canada, Bonduelle Americas Inc., and Sun-Brite Foods Inc. — Lamoure’s employer.

Every year, the processors and their association representatives sit down with the Ontario Processing Vegetable Growers association — which bargains collectively for 450 growers — to negotiate minimum prices for crops such as tomatoes, peas, corn, carrots, and onions, as well as other terms of sale.

Lamoure says the group of Ontario processors who peel, can, dice, and freeze products in their factories is tiny — just 14 processing companies hold the required licences — and their business is in danger of decline. Companies in this province simply can’t compete with the prices that processors in places like California offer for their products, he explains.

Electrical, labour, and raw product costs all drive expenses up, but Lamoure says the real stickler is collective bargaining with growers. The bargaining process with growers means no processor involved pays more than any other for the vegetables it buys — but the process doesn’t allow companies to negotiate any individual deals for the produce it purchases.

Most of these companies use the Ontario produce they’ve prepared to make other products — a company that dices tomatoes might use those vegetables to make ketchup, for example. And not only is it harder for Ontario processors to compete with lower-priced imports, Lamoure explains; it’s also tough to compete with other processors within the province that buy imported ingredients to make similar products.

“They don’t have to negotiate anything through the marketing board because they are buying manufactured products,” he explains. (Fruit and vegetable processors are not legally required to buy Ontario products the way dairy, egg, and poultry processors are under supply management.)


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Ontario Processing Vegetable Growers says processors already contract directly with growers and receive price breaks. Eliminating the collective bargaining process would destabilize the industry, it noted in a recent newsletter, “as pricing transparency disappears and relations within the industry become more fractured.”

In early March, the provincial government got involved in the issue, assigning Elmer Buchanan — a former minister of agriculture and a member of the Ontario Farm Products Marketing Commission — as the grower association’s trustee, tasked with negotiating contracts with the processors.

As well, it seems as if changes intended to help small and start-up processors cope with the costs of buying local are coming: a proposed provincial regulation would exempt processors who buy less than a tonne of any one regulated fruit from having to pay the fruit growers’ licence fees and minimum price rates.

In the meantime, though, some processors are trying to find their own solutions. Julian Katz, who co-owns Toronto’s Stasis Preserves Deli & Pantry, says Ontario-grown ingredients are what separate their preserves from the competition in a crowded marketplace. “We try to buy organic as much as possible, but it’s hard to get local and organic,” he says. “I think a lot of people end up choosing either local or organic,” he adds.

For now, Stasis avoids high prices and sourcing troubles by striking arrangements with farmers to buy seconds — perfectly good but aesthetically flawed produce not considered suitable for retail sale by the big grocery chains.

As for Kwitko, whose business continues to scale up, the question of whether to prioritize localness or price remains unanswered for now. “I like to cross every bridge as I come to it,” she says. “So far I haven’t had to deal with that.”

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