Canadian innovation key to building resilient food supply chains: report

Canada must invest more heavily in domestic processing, technology adoption and supply chain infrastructure to protect food affordability and strengthen national food security, according to a new report from the Canadian Food Innovation Network (CFIN).

The report, Building Food Supply Chains Through Canadian Innovation, argues that the country’s food system remains vulnerable to global disruptions because much of the midstream processing that turns agricultural commodities into finished food products takes place outside Canada.

“Canada’s food supply chains are a matter of national security, economic productivity and grocery affordability — and all three are under threat,” the report states.

Canada is one of the world’s largest agricultural producers but has historically exported much of its output as raw commodities rather than processing them domestically. The report notes that Canada exports 88 per cent of its dried pea production as raw product, limiting opportunities for value creation and leaving the country exposed to global supply disruptions.

The food sector is also dominated by small and medium-sized businesses. Of roughly 6,900 food and beverage processing establishments in Canada, about 92 per cent employ fewer than 100 people, according to the report.

That structure makes it harder for companies to invest in automation, digital tools and infrastructure needed to modernize operations and respond to supply shocks.

The report highlights several Canadian companies developing technologies intended to strengthen supply chain resilience, including ingredient producer Maia Farms, automation developer Relocalize and traceability technology firm Index Biosystems.

Since 2021, CFIN says it has invested $22.6 million in 122 food technology projects, matched by $25.9 million from industry partners. Companies supported through those initiatives have raised a further $82 million in private investment.

The organization says greater and sustained investment will be required to deploy new technologies across Canada’s food sector and reduce long-term price pressures.

“Food affordability is a supply chain problem,” the report states. “When disruption hits an undercapitalized food sector with minimal domestic processing and little operational flexibility, the cost has nowhere to go but to the consumer.”