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January/February 2008<br />
Canadian Food Industry<br />
2007 Review<br />
Send in the<br />
<strong>Clones</strong><br />
FDA OK’s Meat From<br />
Genetic Copies<br />
Canadian Publications Mail Product Sales Agreement 40854046<br />
Alberta’s Federal Livestock<br />
and Meat Research<br />
meatbusiness.ca<br />
Guest Editorial:<br />
Clare Schlegel,<br />
Canadian Pork Council<br />
pg.5<br />
$6.00
Volume 7, Number 1 January/February 2008<br />
5 Guest Editorial by Clare Schlegel<br />
6 Send in the <strong>Clones</strong> by Alan MacKenzie<br />
8<br />
8 Expanded Canadian Emphasis at NAMP<br />
Conference<br />
10 From Early Pioneers to Current Issues<br />
by Debbie Lockrey-Wessel<br />
12 Canadian Food Industry 2007 Review<br />
by Kevin Grier<br />
14 Cross Country News<br />
16 $12 Million Turnaround by Alan MacKenzie<br />
18 Industry Roundup<br />
20 Meat-Friendly Weight Loss by Alan MacKenzie<br />
21 Events Calendar<br />
22 Ethanol as Public Policy in Canada<br />
by Al Mussell and Larry Martin<br />
24 Assembly Line<br />
20<br />
27 Business Spotlight<br />
28 Product Showcase<br />
30 Meat Industry Business Watch<br />
by James Sbrolla<br />
10<br />
22<br />
meatbusiness.ca<br />
January/February 2008 Canadian Meat Business
| Guest Editorial |<br />
January/February 2008 Volume 7 Number 1<br />
PUBLISHER<br />
Ray Blumenfeld<br />
ray@meatbusiness.ca<br />
MANAGING EDITOR<br />
Alan MacKenzie<br />
alan@meatbusiness.ca<br />
CONTRIBUTING WRITERS<br />
Clare Schlegel, Debbie Lockrey-Wessel,<br />
Kevin Grier, Al Mussell, Larry Martin,<br />
James Sbrolla<br />
ART DIRECTOR & DESIGNER<br />
Donna Endacott<br />
DESIGNER<br />
Correna Saunders<br />
CIRCULATION/ADMINISTRATION<br />
Kerry Freek<br />
kerry@meatbusiness.ca<br />
FINANCE<br />
Jane Addie<br />
Canadian Meat Business is published<br />
six times a year by We Communications Inc.<br />
PRESIDENT<br />
Todd Latham<br />
todd@wecommunications.ca<br />
We Communications Inc.<br />
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Canadian Meat Business subscriptions are<br />
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ISSN 1715-6726<br />
meatbusiness.ca<br />
Why Canadian Pork Producers<br />
Need Government Support<br />
As part of a fifth generation<br />
farming family, I have seen<br />
many ups and downs in<br />
agriculture. Particularly in the hog<br />
business, highs and lows in the average<br />
four-year price cycle are the norm.<br />
Nothing, however, could have prepared<br />
Canadian pork producers for what we<br />
experienced in 2007.<br />
Over the past twelve months our<br />
export-dependent sector has been<br />
assaulted by “the perfect storm”<br />
– a combination of a high Canadian<br />
dollar, skyrocketing feed costs, and low<br />
market prices for our hogs.<br />
Our industry was also weakened<br />
in 2005/06 by disease challenges,<br />
such as circovirus (PCVAD), for<br />
which producers had no effective<br />
tools. Thankfully, excellent vaccines<br />
have now been developed to combat<br />
PCVAD.<br />
The high cost of grain alone<br />
has caused not only Canadian hog<br />
producers, but also those in other<br />
countries – including Australia, New<br />
Zealand, Britain and France – to<br />
suffer severe losses. Even the U.S. felt<br />
the impact of these increased costs.<br />
This truly is a global reality.<br />
We are seeing serious challenges in<br />
hog production worldwide, but Canada<br />
is particularly vulnerable because of<br />
the record highs of our dollar (which<br />
have increased more than 70 per<br />
cent over four years), thus directly<br />
affecting our competitiveness with the<br />
U.S.. Our producers are now faced with<br />
making extremely difficult business,<br />
financial and family decisions for their<br />
farms.<br />
For months, we have been meeting<br />
with federal politicians, including<br />
Agriculture and Agri-Food Minister<br />
Gerry Ritz, as well as many political<br />
and bureaucratic staff, to create<br />
awareness about the plight facing our<br />
farmers and to look for solutions to get<br />
us through this crisis.<br />
We asked for a repayable loan to<br />
help hog producers transition through<br />
the difficult coming months, as well as<br />
improvements to the present suite of<br />
business risk management programs.<br />
In order to be competitive within<br />
the current reality, costs will have to<br />
be cut dramatically across the supply<br />
chain. This takes time. Not everyone<br />
will be able to accomplish this,<br />
including some of our supply chain<br />
partners. However, over the long term,<br />
the Canadian hog sector cannot afford<br />
to pay more for their inputs than our<br />
competitors and expect to maintain<br />
the current production levels.<br />
In late December, Minister Ritz<br />
announced “help” for producers in<br />
the form of currently existing business<br />
risk management programs. While we<br />
appreciate this, it will not be enough,<br />
soon enough for our producers –<br />
including some of our very best.<br />
The good news is that, with time,<br />
markets will adjust to the new cost<br />
conditions. We are confident that<br />
Canadian producers will be among the<br />
most competitive in the world.<br />
Factors that point to a brighter<br />
future for Canadian pork sales include<br />
growth in Chinese pork consumption<br />
that exceeds China’s ability to increase<br />
hog production, and positive signs that<br />
the WTO negotiations will succeed at<br />
further liberalizing world trade.<br />
There is no doubt some producers<br />
will exit the business. Our proposals<br />
for dealing with the crisis are not<br />
designed to preserve our industry in<br />
its current state. Instead, we need to<br />
provide conditions in which rational<br />
long-run business decisions can be<br />
made. We are fighting to avoid the total<br />
destruction of a viable Canadian pork<br />
production, processing, distribution<br />
and exporting value chain.<br />
But the bottom line is, in order to<br />
succeed in the future, we need to still<br />
be in business when things get better<br />
again for hog production.<br />
We need the support of the federal<br />
government right now to see us through<br />
the tough times we’re facing. We need<br />
a government that supports farmers.<br />
We need them to realize the severity of<br />
our crisis before it’s too late.<br />
- Clare Schlegel, president, Canadian<br />
Pork Council<br />
January/February 2008 Canadian Meat Business
| Cover Stor y |<br />
Send in the<br />
<strong>Clones</strong><br />
The U.S. FDA says eating meat from<br />
cloned animals is safe. Will Canada be<br />
next to say ‘copy that’ to cloned food?<br />
By Alan MacKenzie<br />
It sounds like science fiction. Some<br />
call it unnatural. And it may soon<br />
be on your plate.<br />
Cloning – the process of using DNA<br />
technology to create a genetically<br />
identical copy – was generally<br />
considered the subject matter of<br />
outlandish stories until 1996 when<br />
Scottish scientists gained worldwide<br />
attention by famously cloning a<br />
sheep, Dolly. Now, a little over a<br />
decade later, the U.S. Food and<br />
Drug Administration (FDA) has<br />
announced that consuming meat<br />
and milk from clones of cattle, swine,<br />
and goats – and their offspring – is<br />
as safe as from conventionally bred<br />
animals (interestingly, the FDA said it<br />
needs more time to come to the same<br />
conclusion about sheep).<br />
FDA made its announcement Jan. 15,<br />
making three documents – a “risk<br />
assessment,” a “risk management plan”<br />
and “guidance for industry” – available<br />
on its website. They were originally<br />
released in draft form in December<br />
2006.<br />
“After reviewing additional data and<br />
the public comments in the intervening<br />
year since the release of our draft<br />
documents on cloning, we conclude<br />
that meat and milk from cattle, swine,<br />
and goat clones are as safe as food we<br />
eat every day,” said Stephen F. Sundlof,<br />
director of FDA's Center for Food<br />
Safety and Applied Nutrition.<br />
The controversial announcement<br />
was quickly followed by statements<br />
from leading U.S. meat processors<br />
– including Smithfield Foods and<br />
Tyson Foods – that they do not plan<br />
to produce products from cloned<br />
animals. U.S. consumer and animal<br />
protection groups were also quick<br />
to criticize, noting that the science<br />
remains insufficient and that many<br />
consumers are against cloning for<br />
religious or ethical reasons.<br />
Although cloning has been approved<br />
by the FDA, it doesn’t necessarily mean<br />
it will be widely used to produce food<br />
in America any time soon. The United<br />
States Department of Agriculture<br />
(USDA) undersecretary for marketing<br />
and regulatory programs, Bruce I.<br />
Knight stated the department “fully<br />
supports and agrees with” the FDA's<br />
findings, but asked for a “voluntary<br />
moratorium” on letting product from<br />
cloned animals enter the market,<br />
noting the domestic agriculture and<br />
international trade implications of using<br />
cloned food needs to be studied first.<br />
But the FDA is not alone in its<br />
stance. A week prior to its statements,<br />
the European Food Safety Authority<br />
released a draft scientific report<br />
stating, “healthy clones, their offspring<br />
and products from them do not show<br />
any significant differences from their<br />
conventional counterparts.”<br />
So can Canada be far behind?<br />
According to Health Canada spokesperson<br />
Paul Duchesse, there are<br />
currently no foods from cloned<br />
animals approved for sale in Canada.<br />
He noted the release of the FDA<br />
documents “does not necessarily mean<br />
there will be a change” in Canada’s<br />
existing policy towards foods derived<br />
from clones.<br />
“While the U.S documents provide<br />
some important information that<br />
fills gaps in current knowledge about<br />
cloned animals, Health Canada must<br />
still do its own evaluation of new<br />
information considered by the U.S. FDA<br />
before a Canadian policy specifically<br />
related to foods from cloned animals<br />
can be developed,” Duchesse said.<br />
“Fundamentally the cloned animal is no different – it’s just<br />
a copy. There’s nothing sinister in what’s been done to<br />
its genetic material.”<br />
- Gary Crow, associate professor, University of Manitoba<br />
Department of Animal Science.<br />
“Before a policy on how these<br />
products will be regulated in Canada<br />
can be finalized, work must first be done<br />
to assess all of the science available,”<br />
he added, noting that Health Canada<br />
is looking to have a policy in place “as<br />
soon as possible.”<br />
He urged that developers wishing<br />
to produce cloned animals for human<br />
food withhold submissions to Health<br />
Canada until scientific requirements<br />
are determined and the required<br />
guidance is published.<br />
Bruce Cran, president of the<br />
Consumers Association of Canada<br />
(CAC) said that when the time comes<br />
for food from clones to make its<br />
Canadian Meat Business January/February 2008<br />
meatbusiness.ca
| Cover Stor y |<br />
way into Canadian grocery stores,<br />
consumers should have the opportunity<br />
of choosing whether they want to use<br />
the product – something that may not<br />
happen south of the border/(the FDA<br />
already stated labels will not be required<br />
on food derived from clones).<br />
“If they don’t label the food, people<br />
could stop eating meat altogether<br />
and become vegetarians,” Cran said.<br />
“That’s one of the things that’s come<br />
up in conversations I’ve had in the last<br />
year on this particular issue. There are<br />
people who would rather eat no meat<br />
than think they’re eating cloned meat.”<br />
He added the CAC has lost a few<br />
battles for food labelling in recent<br />
years, particularly for labels on<br />
genetically modified foods. But, he<br />
said, the issue of cloning may be<br />
upsetting to enough people to make<br />
a difference, noting that concerned<br />
consumers should contact their local<br />
member of parliament or the CAC.<br />
“In the case of genetically modified<br />
food, the request for labelling was in<br />
the 90 percentile range on many polls,<br />
and I would expect cloned animal<br />
products would be somewhere around<br />
the same level,” he said.<br />
But Gary Crow, an associate professor<br />
with the University of Manitoba’s<br />
Department of Animal Science, said<br />
people shouldn’t let sci-fi associations<br />
with the word “clone” scare them<br />
off. He said meat from cloned cattle,<br />
for example, would be the same as<br />
if it came from the original cow that<br />
provided the DNA.<br />
“A cloned animal is not much<br />
different from an identical twin, in<br />
the sense that they have equal genetic<br />
material to some other animal,” he<br />
said. “Fundamentally the cloned<br />
animal is no different – it’s just a copy.<br />
There’s nothing sinister in what’s been<br />
done to its genetic material.”<br />
He noted he is not familiar with<br />
the studies the FDA conducted, but<br />
said there is nothing in the cloning<br />
process that would make a genetic<br />
copy something that shouldn’t be<br />
consumed.<br />
“The process, as it stands now, is just<br />
the insertion of DNA from the sister<br />
animal into a new embryo and having<br />
that embryo develop and grow in a<br />
surrogate mother,” he explained.<br />
He added, however, that sometimes<br />
the genes are “expressed differently” in<br />
clones, resulting in accelerated growth.<br />
“There’s a pattern of imprinting that<br />
tells which genes should come in at<br />
which times,” he said. “Some of that is<br />
lost in cloned animals.”<br />
He said this does not change the<br />
animal’s genetic make-up and doesn’t<br />
make it any less safe to eat, but admitted<br />
consumers might still find the idea<br />
hard to swallow.<br />
Crow added he doesn’t expect to see<br />
a huge impact on the meat market in<br />
the near future. Because of the expense<br />
“If they don’t label the food,<br />
people could stop eating meat<br />
altogether and<br />
become vegetarians.”<br />
- Bruce Cran, president,<br />
Consumers Association<br />
of Canada.<br />
of making a cloned animal – some<br />
reports peg the cost of a cloned cow at<br />
US$15,000 to US$20,000 – meat from<br />
genetic copies will not likely be sold to<br />
consumers, at least not in a large-scale<br />
way. Instead the animals would be used<br />
for breeding and their offspring would<br />
be used in food production.<br />
Crow said a way in which cloning<br />
could become an advantage for the<br />
industry is in the creation of “specialized”<br />
animals, pointing to Nexia Biotechnologies<br />
Inc., a Montreal-based<br />
company that spliced the genes of a<br />
spider and a goat to create a goat that<br />
can secrete spider silk through its milk.<br />
“Once you have this specialized<br />
animal, cloning can be used to create<br />
more of them,” he said, noting that, in<br />
theory, an animal could be created to<br />
make an especially tender source of<br />
meat. “That’s where cloning might be<br />
valuable. But my feeling is that using<br />
animals that have genes transferred<br />
from other species isn’t something that<br />
is going to happen in the short term.”<br />
How do you feel about meat from cloned<br />
animals making its way onto store shelves?<br />
Should the products be labelled? Would<br />
you eat it? Tell us your opinion. Contact<br />
alan@meatbusiness.ca.<br />
meatbusiness.ca<br />
January/February 2008 Canadian Meat Business
North American Meat Processors Association<br />
Chicago’s historic<br />
Drake Hotel.<br />
Expanded<br />
Canadian<br />
Emphasis<br />
NAMP 51st Management Conference<br />
offers timely E. coli session, greater<br />
Canadian perspective.<br />
An increased Canadian focus will be among the<br />
highlights of the North American Meat Processors<br />
Association's (NAMP) 51st Management Conference,<br />
March 28 to 30, at the Drake Hotel in Chicago, Illinois –<br />
the most ambitious program NAMP has ever put together.<br />
Always an intense, fact-filled event, the conference has been<br />
expanded with additional sessions, topics and speakers to fit<br />
four separate special interest tracks designed to appeal to a<br />
meat processing company’s entire management team.<br />
An important and timely session bringing new information<br />
and perspective on E. coli O157:H7, the industry's rapidly<br />
changing number one food safety issue, will be aimed at top<br />
management and quality control experts.<br />
Featured speakers include the USDA's top policy maker,<br />
Dr. Dan Engeljohn, and the Canadian Food Inspection<br />
Agency's (CFIA) Dr. Bill Anderson, who heads its recently<br />
established E. coli Working Group.<br />
A blue ribbon roundtable panel features respected experts<br />
on E. coli, including:<br />
• Dr. Kerri Harris, associate professor of meat science, Texas<br />
A & M University, and president & CEO of the International<br />
HACCP Alliance;<br />
• Bob Hibbert, partner, Kilpatrick & Lockhart Preston<br />
Gates Ellis LLP and a USDA regulatory expert attorney;<br />
• Ann Wells, NAMP director of scientific and regulatory<br />
affairs;<br />
• Dr. Jim Marsden, NAMP senior science advisor, Kansas<br />
State University;<br />
• Dr. "Reddi" Thippareddi, NAMP science advisor, University<br />
of Nebraska;<br />
• Robert de Valk, NAMP Canadian government<br />
representative.<br />
The conference also will focus on what slaughterers are<br />
doing to combat this pathogen before it reaches further<br />
processors – and how to manage a recall.<br />
NAMP also will introduce seven noted authorities as<br />
members of the association's recently formed College of<br />
Experts. On hand for the forums and for private one-onone,<br />
members-only consultations will be Dr. Kerri Harris,<br />
Bob Hibbert, Dr. Jim Marsden, Dr. "Reddi" Thipareddi,<br />
as long with Dr. Melvin Hunt (professor of meat science,<br />
Kansas State University), Dr. Chance Brooks (assistant<br />
professor of meat science, Texas Tech University), and<br />
Dr. Rich Mancini (assistant professor of meat science,<br />
University of Connecticut).<br />
NAMP is also expanding the conference's emphasis on<br />
Canadian issues with a special forum designed to address<br />
specific Canadian food safety issues with Dr. Bill Anderson<br />
and Robert de Valk.<br />
The conference also will focus on what<br />
slaughterers are doing to combat this<br />
pathogen before it reaches further processors<br />
– and how to manage a recall.<br />
Human resources professionals will learn how to avoid<br />
costly mistakes by hearing about changes to the U.S. Fair<br />
Labor Standards Act directly from Jim Kessler of the U.S.<br />
Labor Department. Topics will include the controversial<br />
“donning and doffing” rule.<br />
Sales professionals will hear Merit Gest talk about how to<br />
generate more sales by blending effective selling techniques<br />
with the principles of human potential.<br />
Marketing pros will hear case histories of companies<br />
that have succeeded by differentiating their business from<br />
the competition. Industry leaders like Corey Check of<br />
Smithfield Beef, Charlie Moore of Maverick Ranch, and<br />
Mike Satzow of North Country Smokehouse will talk about<br />
how their companies stepped ahead of the pack through<br />
savvy marketing.<br />
The keynote speaker will be Notre Dame Football Hero<br />
“Rudy” Reuttiger, immortalized in the 1993 movie Rudy.<br />
A highly sought after speaker, he brings a message of<br />
achievement through determination that comes from his<br />
personal experiences with overcoming adversity.<br />
For more information, visit namp.com.<br />
Canadian Meat Business January/February 2008<br />
meatbusiness.ca
AAFC’s Lacombe centre is internationally<br />
recognized for its red meat research.<br />
Agriculture and Agri-Food Canada<br />
From Early Pioneers<br />
to Current Issues<br />
The evolution of federal livestock and meat research in Alberta.<br />
By Debbie Lockrey-Wessel<br />
From pioneer times to modern day, livestock has<br />
been an important part of agriculture and a key<br />
component of federal research in Alberta. Recent<br />
centennial celebrations at two of Agriculture and Agri-Food<br />
Canada’s (AAFC) research centres provide an opportunity<br />
to recall the history of livestock and meat research in this<br />
prairie province.<br />
One hundred years ago, research centres were established<br />
in Lethbridge and Lacombe, Alta. to develop farming<br />
practices and help farmers produce crops and animals in a<br />
relatively harsh environment with a somewhat short growing<br />
season. Early research was closely aligned with the farming<br />
community and dealt with pioneer problems such as wind<br />
erosion, livestock, irrigation, and selecting crop varieties<br />
suitable to the region.<br />
Over the years these centres made significant contributions<br />
in crop research and the research on animals evolved into<br />
animal breeding and genetics, meat quality and safety.<br />
Today, animal-related research at these two AAFC centres<br />
has moved past the local farm gate and now provides valuable<br />
information to the national livestock and meat industry.<br />
Researchers in Lethbridge have developed range<br />
management and cross-breeding systems to increase beef<br />
production. Today the centre has facilities for sheep and<br />
beef cattle, including a research feedlot that is supported by<br />
a commercial-sized feed mill for preparing and optimizing<br />
animal rations.<br />
Specialized facilities and equipment allow scientists to<br />
study animal nutrition and disease prevention, and look<br />
inside the rumen stomach and closely examine metabolic<br />
systems, digestion and nutrition.<br />
Scientists in Lethbridge are tackling issues such as<br />
E.coli, the behaviour and welfare of cattle, working with<br />
the Canadian Food Inspection Agency to find a way to<br />
safely dispose of/compost dead livestock, and finding new<br />
strategies and techniques to preserve and enhance beef<br />
quality. Research is also developing new technologies to<br />
advance the efficiency, profitability and environmental<br />
sustainability of beef production. Several environmental<br />
projects focus on the impact of manure on soil and ground<br />
water quality and the impact of feedlot industry greenhouse<br />
gas production.<br />
Today, animal-related research at these two<br />
AAFC centres has moved past the local farm<br />
gate and now provides valuable information<br />
to the national livestock and meat industry.<br />
While research at Lethbridge concentrates on the live<br />
animal, Lacombe is internationally recognized for research<br />
on ante- and post-mortem factors that influence red meat:<br />
yield, quality, safety and preservation.<br />
Notable achievements from Lacombe include the<br />
development in the 1950s of non-destructive, electronic and<br />
physiological techniques to estimate carcass lean and fat in<br />
live animals, and collaboration with the industry to develop<br />
and revise national grading standards for beef (1972) and<br />
pork (1968) including the design and testing of novel<br />
instrumental grading technologies.<br />
Scientists at Lacombe also developed methods to detect<br />
and treat antemortem stress, ante- and post-mortem methods<br />
to evaluate and improve meat yield, colour, tenderness and<br />
eating quality, and hygienic processing procedures and<br />
preservation strategies to help the industry improve the safety<br />
10 Canadian Meat Business January/February 2008 meatbusiness.ca
and storage life of meats. A patented<br />
hot water hog carcass pasteurizer,<br />
now an integral component of swine<br />
processing, helped facilitate a 100-<br />
fold reduction in bacterial numbers,<br />
including E. coli.<br />
Today the centre at Lacombe contains<br />
a federally inspected slaughter and<br />
processing facility and meat research<br />
laboratories, 400-head beef herd and<br />
research feedlot, a 100-sow farrowfinish<br />
swine unit, kitchen and taste<br />
panel area for sensory analysis. These<br />
specialized facilities allow scientists to<br />
conduct research on factors affecting<br />
meat quality throughout the entirety of<br />
the meat production continuum from<br />
animal conception to consumption.<br />
Researchers continue to provide<br />
information to the production and<br />
processing sector on systems for<br />
producing meat of predictable and<br />
consistent quality and safety for the<br />
benefit of the meat industry, Canadian<br />
consumers and international trade<br />
partners.<br />
Current projects include research<br />
on the ways in which meat and meat<br />
products are processed, produced,<br />
packaged and distributed, and how<br />
these factors influence consumer<br />
acceptance for taste, flavour and<br />
appearance. Strategies are being<br />
developed to improve the safety and<br />
extend the storage life of meat, and<br />
prevent meat contamination during<br />
processing and distribution.<br />
Always striving to improve meat<br />
quality, scientists in Lacombe continue<br />
the tradition of finding new ways to<br />
estimate carcass yields and grading,<br />
evaluate and control variations in the<br />
composition and quality of carcasses<br />
and meat, and look for ways to reduce<br />
livestock stress and the resulting effects<br />
on the quality and yield of meat and<br />
meat products.<br />
Research from these two centres<br />
will continue to strengthen the<br />
Canadian meat industry and move<br />
Canada forward into another century<br />
of cutting-edge livestock and meat<br />
research in Alberta.<br />
Debbie Lockrey-Wessel is a<br />
communications advisor<br />
at Agriculture and<br />
Agri-Food Canada.<br />
meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 11
Canadian Food Industry<br />
2007 Review<br />
Food manufacturer profits<br />
up 10 per cent over 2006.<br />
According to Statistics Canada’s<br />
Quarterly Financial Statistics<br />
for Enterprises, food manufacturer<br />
profits were up 10 per cent by<br />
the end of the third quarter of 2007,<br />
compared to same time in 2006. A<br />
special statistical run for the George<br />
Morris Centre by StatsCan shows that<br />
operating margins (operating profits/<br />
revenues) were just over six per cent,<br />
compared to a five per cent average<br />
between 1999 and 2006.<br />
While the final fourth-quarter<br />
Statistics Canada profit reports were<br />
not available at the time of printing,<br />
the first three quarters of the year<br />
provide an adequate perspective of<br />
performance.<br />
Food manufacturer margins over<br />
the past eight to nine years have seen<br />
a gradual improvement. Sales for 2007<br />
should increase by about three per<br />
cent to settle over $74 billion. That<br />
expected three per cent sales increase<br />
is right around the five-year average.<br />
In contrast, total manufacturing sales<br />
will likely only increase by one per<br />
cent. Food manufacturer sales as a<br />
share of total manufacturer sales have<br />
held steady at around 12 per cent for<br />
the last few years.<br />
Perhaps surprisingly, given the difficulties<br />
imposed by the Canadian dollar,<br />
it appears that food manufacturers<br />
enjoyed a relatively good year in<br />
By Kevin Grier<br />
2007. From a sales and marketing<br />
perspective the 2007 performance will<br />
be average or better than recent years.<br />
Another relatively positive sign is that<br />
the industry is continuing to actively<br />
invest in capital expenditures. In fact,<br />
investment actually soared in the third<br />
quarter, likely made easier by the<br />
appreciation of the Canadian dollar.<br />
Supermarkets are gradually losing food sales to general<br />
merchandisers, such as Wal-Mart and Costco.<br />
Food retailer margins are telling a<br />
different story, undergoing a not-sogradual<br />
reduction. The once strong<br />
spread of food over total retail is<br />
diminishing. Food retailing margins<br />
from 2005 to 2007 averaged three per<br />
cent, compared to four per cent from<br />
1999 to 2006.<br />
Supermarket sales were above yearago<br />
levels for almost every month in<br />
2007 through September. Based on<br />
sales during the first nine months of<br />
the year, total 2007 sales are likely to<br />
increase by three per cent to around<br />
$65.4 billion.<br />
While total supermarket sales<br />
increased, the share of supermarket<br />
sales as a percentage of total retail<br />
sales (not counting motor vehicle<br />
sales) continues to decline. In 2007,<br />
supermarket sales will likely amount<br />
to less than 21 per cent of total retail<br />
sales, which compares to more than<br />
21 per cent last year and nearly 25 per<br />
cent in 1997.<br />
Perhaps more worrisome from the<br />
grocer’s perspective is data published<br />
in Grocery Trade Review that showed<br />
supermarkets are gradually losing<br />
food sales to general merchandisers,<br />
such as Wal-Mart and Costco. While<br />
supermarkets still have the lion’s share<br />
of food sales, at about 88 per cent, that<br />
share has declined by two per cent<br />
since 2002, representing about $400<br />
million in sales each quarter.<br />
Clearly, the food retail industry in<br />
Canada is under margin and sales<br />
stress. Nowhere is the stress greater<br />
than in Ontario. Leading grocers<br />
have called Ontario a “blood bath,”<br />
and a “battle ground.” The difficulties<br />
are spreading across the rest of the<br />
country. Retailers are squeezed at both<br />
pricing and cost ends of the picture.<br />
On the cost side, manufacturers are<br />
pushing for pricing increases. Hardly<br />
a week goes by in the financial press,<br />
particularly in the U.S., without some<br />
leading manufacturer announcing or<br />
planning a price increase.<br />
Of course grocers are pushing back<br />
on the manufacturers. CIBC World<br />
Markets notes that, as reported in<br />
early October, Loblaw is asking for<br />
substantial incremental discounts from<br />
its suppliers, suggesting an overall 1.5<br />
per cent reduction in costs of goods in<br />
order to fund promotional campaigns.<br />
This comes on the heels of its 2007<br />
“cost freeze” edict issued back in<br />
February. CIBC World Markets notes<br />
this is another example of blanket<br />
attempts by management to mitigate<br />
the margin damage from its campaign<br />
to lower prices. The analysts go on to<br />
say that grocers are usually fooling<br />
themselves if they believe that suppliers<br />
will instantly fork over an extra 1.5 per<br />
cent just because they are ordered to.<br />
This is similar to how grocers<br />
sometimes fool themselves into<br />
thinking that a “cost freeze” really<br />
freezes costs. Some suppliers have<br />
made modest gains on the Canadian<br />
dollar, and Loblaw is right to focus on<br />
those. But even if Loblaw just deducts<br />
the targeted discounts off invoice,<br />
suppliers have plenty of ways to make<br />
this back. Reduced promotional<br />
support, substituted offerings, modest<br />
participation in events, a pullback on<br />
discretional trade spending or other<br />
types of effective cost increases will<br />
be implemented to claw back dollars.<br />
With commodity and input costs rising<br />
12 Canadian Meat Business January/February 2008 meatbusiness.ca
all year, suppliers are compelled to<br />
concoct methods to ease the pain.<br />
The Industry Price Index shows there<br />
was clearly some upward pressure on<br />
food pricing in late 2006 and early<br />
2007. Pricing undoubtedly stabilized<br />
for most of the year and in fact, began<br />
to decrease in the summer and fall.<br />
Looking at the specific commodity<br />
price indexes, there were three main<br />
areas that helped push pricing higher<br />
- meats, grain milling and dairy.<br />
Dairy generally exhibits a relatively<br />
steady year-over-year increase, so it is<br />
not the major influence of any change.<br />
Meats, on the other hand, showed a<br />
strong upward momentum in the latter<br />
half of 2006 and into 2007, but began<br />
a steady decline in the summer, which<br />
continued through October. Oilseeds,<br />
as well as flour, however, have been<br />
rising fairly steadily since mid 2006.<br />
Those are the items that have been<br />
most rapidly taking the brunt of grain<br />
and wheat cost increases. It will be<br />
important to see whether the increases<br />
there manage to flow through to further<br />
processed items such as breads, cereals<br />
and other goods. With those noted<br />
exceptions, at this point the key to note<br />
is that food manufacturing items have<br />
not generally moved higher in price by<br />
the end of the third quarter.<br />
On the consumer side, once again,<br />
pricing has not been favorable to<br />
retailers.<br />
After some fairly dramatic increases<br />
late in 2006 and early 2007, pricing<br />
stabilized and then backed off. Most<br />
of the increase, however, was due to<br />
big increases in fresh vegetables and,<br />
to a lesser extent, fruit. Those prices<br />
were related to winter freezes and have<br />
quickly fallen through the year.<br />
The key message is that the pricing<br />
of food purchased from stores is<br />
decreasing, not increasing.<br />
The primary reason for these<br />
decreases is the strong competition<br />
at the supermarket level. Wal-Mart’s<br />
influence in that area is likely the<br />
predominant reason. Wal-Mart has<br />
made 2007 the year of the rollback and<br />
has taken price focus to a whole new<br />
level. Furthermore, the gradual growth<br />
and spread of the “supercenter” format<br />
has all grocers on edge with regard to<br />
price. For its part, Loblaw has publicly<br />
stated that it needs to get its prices<br />
down. Other market share and square<br />
footage factors are also at play. The<br />
rapid appreciation of the Canadian<br />
dollar has forced retailers to lower<br />
prices, as consumers are increasingly<br />
aware of values and options in the U.S.<br />
There is no doubt that the retail pricing<br />
performance is due to competitive<br />
forces in Canada.<br />
One way to demonstrate that it is<br />
domestic competition, as opposed to<br />
overall pricing levels, is to compare<br />
performance in Canada and the<br />
U.S. From January 2006 through<br />
October 2007, Canadian food prices<br />
have increased about one per cent.<br />
U.S. food prices, on the other hand,<br />
have increased by nearly six per cent.<br />
Canada has clearly broken away from<br />
the U.S., and if you are a Canadian<br />
grocer that is not a good thing.<br />
Kevin Grier is a senior market analyst with<br />
the George Morris Centre.<br />
meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 13
| Cross Countr y News |<br />
North-Central B.C. Meat Processing Plant<br />
Gets $4K in Funding<br />
Northwest Premium Meats Co-op in Telkwa recently<br />
received over $400,000 in funding.<br />
Northern Development Initiative Trust is providing a<br />
$433,000 loan guarantee to facilitate local financing by<br />
agricultural producers, investors and the Bulkley Valley<br />
Credit Union for the $1.6-million project.<br />
The facility will handle 3,000 animals per year starting<br />
in early 2008, with chill coolers, meat processing and<br />
custom packaging for local restaurants, retail outlets and<br />
consumers. The plant will create 13 jobs initially, with two<br />
more expected in the next two years.<br />
The project is the 100th for the trust in just over two<br />
years.<br />
opinion250.com<br />
Calgary Trims Trans Fats<br />
Calgary became the first city in Canada to regulate trans<br />
fats on New Year’s Day.<br />
Trans fats have become a top target of health advocates in<br />
recent years, but Calgary is the first Canadian municipality<br />
to set limits – following the example of Chicago and New<br />
York, which put similar regulations in place last year.<br />
The city launched a two-phase plan, the first phase<br />
requiring the use of oils and spreads that contain less than<br />
two per cent trans fat.<br />
Phase two, will require that all processed or manufactured<br />
foods contain less than five per cent of their total fat content<br />
as trans fats and should be effective by mid-January, 2009.<br />
Restaurants in the city are given a five-month grace<br />
period to institute the changes before risking health code<br />
violations and having their operating permits pulled.<br />
According to the Heart and Stroke Foundation of Canada,<br />
the consumption of trans fats accounts for between 3,000<br />
and 5,000 deaths every year in Canada alone.<br />
ctv.ca<br />
Livestock Industry Legislation<br />
Streamlined<br />
Alberta has taken a step toward a more effective and<br />
efficient livestock industry with the introduction of Bill 47,<br />
the Livestock Commerce and Animal Inspection Statutes<br />
Amendment Act.<br />
The proposed legislation clarifies the requirements and<br />
refines the legal language of the Livestock Identification<br />
and Commerce Act (LICA) regarding security interest<br />
disclosure and payment for the sale of livestock. It also<br />
adds inspection authority over livestock market facilities<br />
and provides for regulation-making authority for facilities<br />
licensed under the Animal Health Act.<br />
The LICA, developed with extensive industry consultation<br />
to address industry concerns and issues, consolidates<br />
and revises three existing acts – the Brand Act, the Livestock<br />
Identification and Brand Inspection Act and the Livestock<br />
and Livestock Products Act. LICA received Royal Assent on<br />
May 24, 2006.<br />
Upon proclamation, the livestock industry will see such<br />
changes as mandatory livestock security interest disclosures,<br />
greater protection for personal property in livestock,<br />
streamlined documentation, and enhanced consumer<br />
protection.<br />
Alberta Agriculture and Food and Livestock Identification<br />
Services (LIS) jointly developed LICA and<br />
the Livestock Commerce and Animal Inspection Statutes<br />
Amendment Act.<br />
LIS is a not-for-profit company established in 1998 as the<br />
delegated authority for provincial livestock identification<br />
and inspection legislation. It is governed by a board of<br />
directors comprised of livestock industry representatives<br />
from various Alberta cattle and horse associations.<br />
peacecountrysun.com<br />
Province Announces Programs to Aid Hog<br />
and Cattle Producers<br />
Saskatchewan Agriculture Minister Bob Bjornerud<br />
14 Canadian Meat Business January/February 2008 meatbusiness.ca
announced a new program to provide<br />
financial assistance to Saskatchewan<br />
hog and cattle producers.<br />
The Saskatchewan Short-Term Hog<br />
Loan Program and the Saskatchewan<br />
Short-Term Cattle Loan Program will<br />
provide an estimated $90 million in<br />
funding to those who are struggling<br />
during this current price downturn,<br />
the province announced in a press<br />
release.<br />
It is estimated the hog industry will<br />
access about $30 million in loans,<br />
while $60 million will be accessed by<br />
the cattle industry. Both sectors have<br />
been suffering from low prices brought<br />
on by an increase in the value of the<br />
Canadian dollar and very high feed<br />
grain prices.<br />
The province also announced it has<br />
signed onto the national AgriInvest<br />
and AgriStability programs, providing<br />
further assistance to livestock<br />
producers.<br />
Applications for the Saskatchewan<br />
Short-Term Hog Loan Program and<br />
Cattle Loan Program will be made<br />
available to producers early in the New<br />
Year. Deadline for applications is June<br />
10 for the hog program, and March 31<br />
for the cattle program.<br />
agriculture.gov.sk.ca<br />
Restaurant Chain to Cut<br />
Trans Fats<br />
As of Jan. 15, Manitoba restaurant<br />
chain Salisbury House has cut trans<br />
fats from its menu, according to a CBC<br />
News report.<br />
Salisbury House owner Earl Barrish<br />
said his restaurants spent two months<br />
testing new products to determine<br />
what could be used as an alternative. So<br />
far, he's had trouble finding a suitable<br />
replacement for the fats used in baked<br />
goods. It could take some time before<br />
those products are trans fat-free, he<br />
said.<br />
Winnipeg has not made a move<br />
to ban the compound, although the<br />
provincial government plans to ban<br />
the sale of any food containing trans<br />
fats in schools.<br />
cbc.ca<br />
NAMP Offers Center of the<br />
Plate Training in Guelph<br />
For the first time, the North American<br />
Meat Processors Association (NAMP)<br />
is offering its popular Centre of the<br />
Plate Training course in Canada. The<br />
course takes place Feb. 19 to 21 at the<br />
University of Guelph in Guelph, Ont.,<br />
and covers all the major center of the<br />
plate protein items: beef, veal, lamb,<br />
pork, and poultry.<br />
NAMP’s Center of the Plate training<br />
is a first-hand look at how carcasses<br />
are converted into portioned items<br />
commonly traded in the foodservice<br />
business, covering all the major center<br />
of the plate protein items – beef, veal,<br />
lamb, pork, seafood and poultry.<br />
Participants will learn:<br />
• The international trading numbering<br />
system (IMPS/NAMP), purchase<br />
specified options, and standards<br />
common to the industry<br />
• A knowledge of meat items as<br />
described by IMPS and by NAMP's<br />
Meat Buyer's Guide<br />
• Where meat products originate and<br />
how this affects their use<br />
• Current trends in the food service<br />
industry including new menu ideas<br />
and options<br />
• How value is determined for different<br />
meat products and how this is affected<br />
by quality parameters.<br />
Course presentations will be made<br />
| Cross Countr y News |<br />
primarily by Steve Olson, meat<br />
marketing specialist at USDA's<br />
Agricultural Marketing Service (AMS).<br />
One of the main objectives in the<br />
course, according to Olson, is to teach<br />
people how to “identify variations in<br />
quality and eliminate them.”<br />
namp.com<br />
Aylmer Meat Packer Fined<br />
$125K<br />
Butch Clare of Aylmer Meat Products<br />
was convicted Dec. 14 of selling meat<br />
unfit for human consumption and fined<br />
$125,000, according to local news reports.<br />
Appearing in a London courtroom,<br />
Clare admitted to selling meat that<br />
hadn't been inspected and agreed to<br />
a statement that outlined evidence the<br />
meat came from cows that died before<br />
reaching the slaughterhouse.<br />
But despite his guilty pleas, Clare<br />
insisted the meat was safe, telling the<br />
judge, “I never, ever sold a piece of<br />
meat I wouldn't eat myself.”<br />
As part of his conviction, Clare<br />
was ordered not to take any role in a<br />
slaughterhouse for a year. Charges<br />
against his sons, who helped run<br />
Aylmer Meat, were dropped.<br />
Aylmer Meat Packers was shut down<br />
Aug. 21, 2003, after a probe by Ontario's<br />
Natural Resources Ministry. Meat<br />
inspectors said there were rampant<br />
abuses in meat inspection in Ontario<br />
and pressure by regulators to look the<br />
other way.<br />
lfpress.ca<br />
meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 15
$12 Million<br />
Turnaround<br />
Government funding saves Atlantic<br />
Beef Products.<br />
By Alan MacKenzie<br />
Atlantic Canada’s only federally inspected beef<br />
processing plant received a much needed boost<br />
in December as the federal government and<br />
three provincial governments announced a $12 million<br />
investment in the facility.<br />
Atlantic Beef Products (ABP), located in Albany, P.E.I.,<br />
opened its doors in December 2004 and has struggled<br />
“It’s fair to say we struggled from a financial standpoint<br />
pretty well from the time we opened our doors,” Baglole<br />
said of the plant. “With the three provincial governments<br />
coming together and then being able to access some dollars<br />
through ACOA, we believe it’s going to have the cash<br />
infusion it needs to put it on the right path.”<br />
ABP is owned by the Atlantic Beef Producers Co-operative,<br />
a group of 200 beef producers from across the region, and<br />
minority shareholder Co-op Atlantic of Moncton, N.B., for<br />
which ABP supplies product for the Atlantic Tender Beef<br />
Classic brand.<br />
Baglole noted the Atlantic Beef Producers Co-operative<br />
was formed after Maple Leaf Foods bought the Hub Meat<br />
Packers plant in Moncton – which processed both beef and<br />
pork products – in 2002.<br />
“Maple Leaf bought it for the hog side, because that’s the<br />
business they’re in, and then exited the beef business, which<br />
left the industry down here without a federally inspected<br />
plant,” Baglole said.<br />
ABP, he noted, was originally designed to process 500<br />
cattle a week on a single shift, five days a week, a goal that<br />
was met – and slightly exceeded – by last spring, before<br />
increased financial pressure caused the plant to scale back<br />
to only 100 cattle per week. Now, with the new support, the<br />
business is on its way to meeting its goal once again by the<br />
end of January.<br />
Atlantic Beef Products<br />
financially, losing approximately $10 million since.<br />
According to interim general manager Dean Baglole, the<br />
funding came at the right time.<br />
“The plant was in a crisis mode and there was a very real<br />
possibility that we’d have to shut it down,” he said.<br />
The federal government made a $6 million investment<br />
through the Atlantic Canada Opportunities Agency<br />
(ACOA), an outfit that aims to improve the economy of<br />
communities in Atlantic Canada through the development<br />
of business and job opportunities. The ACOA funding will<br />
assist the company to undertake marketing initiatives for<br />
diversified and value-added products, purchase specialized<br />
equipment and provide advanced training.<br />
“This one-time investment will help the Maritimes’ only<br />
federally inspected beef plant improve efficiency and<br />
expand capacity and markets,” Peter MacKay, Minister of<br />
ACOA and of National Defence, said at a press conference<br />
on Dec. 9.<br />
The remaining funds come from the three Atlantic<br />
provinces, which will each contribute $2 million. Previous to<br />
the funding announcement, P.E.I. was the only government<br />
that had invested in the plant. In June the province provided<br />
$1.5 million and said it would be its last subsidy until other<br />
governments also contribute.<br />
The company boasts a state-of-the-art European-designed<br />
traceability system that can track each piece of meat back to<br />
the animal it came from, making for increased food safety.<br />
Part of the role of the funding, Baglole said, is to develop<br />
a new business and marketing plan to better position the<br />
company within the industry and take advantage of the<br />
right opportunities, including more value-adding from the<br />
plant side.<br />
“We’re a small enough company that we feel we can<br />
potentially offer niche products or something that a larger<br />
plant would have trouble doing,” he said.<br />
Baglole noted ABP has gone through several management<br />
and operational changes in 2007, but with the new funds<br />
the company is now in the right position to move forward.<br />
Baglole and Shane Murphy have been interim managers<br />
since general manager Lance Warmington left his position,<br />
prior to the funding announcement, to return to his native<br />
New Zealand.<br />
“Because we didn’t have the comfort level that we were<br />
going to secure funding, we felt it wasn’t fair to find a new<br />
GM and put him in here when the funding was not in<br />
place,” Baglole said.<br />
Atlantic Beef Products currently employs about 80 staff<br />
and has an annual payroll of $3 million.<br />
16 Canadian Meat Business January/February 2008 meatbusiness.ca
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| Industr y Roundup |<br />
Bison Meat Exports Double<br />
Over Five Years<br />
According to a Statistics Canada,<br />
the number of bison on Canadian<br />
farms has increased over a third in the<br />
last five years, and exports of bison<br />
meat have doubled in the same time<br />
period.<br />
The study, titled “Bison on the<br />
comeback trail” and based on Census<br />
of Agriculture data, says that nearly<br />
2,000 farms reported they had a<br />
total of 195,728 head of bison on<br />
their operations on May 16, 2006, an<br />
increase of 34.9 per cent since the<br />
previous census in 2001.<br />
The number of farms raising bison<br />
increased more than 6.5 times since<br />
1991. The number of bison continues<br />
to increase, responding to the rise of<br />
consumer demand both domestically<br />
and internationally, the report says.<br />
The number of bison slaughtered in<br />
federally and provincially inspected<br />
establishments in Canada climbed<br />
from 11,168 in 2001 to 25,613 in 2006.<br />
Exports of bison meat totalled over<br />
2,075,000 kilograms in 2006. Live<br />
bison exports also increased, peaking<br />
at 13,255 in 2006.<br />
The report outlines some of the<br />
advantages bison have over other<br />
livestock. As an indigenous species,<br />
bison are naturally adapted to the<br />
climate and able to survive blustery<br />
winter storms and sweltering summer<br />
heat.<br />
It also notes that the number of<br />
bison in Canada is on the rise “partly<br />
because health-conscious consumers<br />
perceive bison as being a more natural<br />
food product" and that bison tends<br />
to "yield a meat that is low in fat and<br />
calories and high in iron.”<br />
Canadian bison producers are<br />
concentrated in British Columbia,<br />
Alberta, Saskatchewan and Manitoba<br />
– areas that are the traditional home<br />
for the animal.<br />
Meat Cutters Included in<br />
Expansion of Temporary<br />
Foreign Worker Program<br />
Twenty-one new occupations were<br />
added to the Expedited Labour<br />
Market Opinion pilot project, a<br />
temporary program designed to speed<br />
up the process for employers in British<br />
Columbia and Alberta to hire foreign<br />
workers, including industrial meat<br />
cutters and food service supervisors.<br />
“The 33 occupations now included<br />
in this pilot represent 50 per cent of<br />
the total volume of labour market<br />
opinion applications from employers<br />
in B.C. and Alberta,” said Federal<br />
Minister of Human Resources and<br />
Social Development Monte Solberg.<br />
The program will continue to run<br />
in B.C. and Alberta until September.<br />
It will allow eligible employers needing<br />
workers in the 33 specific occupations<br />
to receive their Labour Market<br />
Opinions much faster than in the past.<br />
The pilot project originally covered 12<br />
specific occupations.<br />
hrsdc.gc.ca<br />
VC999 Packaging Systems<br />
Opens New Canada<br />
Logistics Centre and<br />
Offices<br />
VC999 Packaging Systems, a<br />
leading international packaging<br />
equipment manufacturer, has<br />
announced the completion of a new<br />
20,000 square foot logistics centre in<br />
St-Germain de Grantham, Que., just<br />
outside Montreal, that will house its<br />
Canada location.<br />
The new building is equipped to<br />
handle international customs shipping<br />
and inspection. VC999 plans on using<br />
the warehouse to handle much of its<br />
international shipping.<br />
The warehouse was specifically<br />
designed to meet LEED (Leadership<br />
in Energy and Environmental Design)<br />
criteria. The company said it chose the<br />
finest materials for the project in order<br />
to ensure better air quality for the<br />
warehouse. The building also meets<br />
CT-Pat standards and HACCP rules for<br />
warehousing.<br />
The centre will formally open on<br />
Feb. 22 and will employ 12 people.<br />
vc999.com<br />
New Western Canadian<br />
Value Chain Initiative<br />
Agriculture councils across Western<br />
Canada have joined forces to form<br />
a new initiative designed to encourage<br />
the development of inter-provincial<br />
value chains.<br />
The Agriculture Council of<br />
Saskatchewan, the British Columbia<br />
Investment Agriculture Foundation,<br />
the Alberta Agriculture and Food<br />
Council, the Manitoba Rural<br />
Adaptation Council and the provincial<br />
governments of all four western<br />
provinces will form the Western<br />
Canadian Value Chain Initiative.<br />
The organizations recognized a<br />
need for a collaborative approach in<br />
promoting the value chain model,<br />
delivering a consistent series of<br />
workshops across Western Canada that<br />
will encourage more inter-provincial<br />
value chains to develop.<br />
The initiative will be based on the<br />
Saskatchewan Agri-Food Value Chain<br />
Initiative.<br />
U.S. Actress Launches<br />
Campaign Against Horse<br />
Meat in Canada<br />
American actress and one-time<br />
Playboy model Bo Derek launched<br />
a campaign against the slaughter of<br />
horses for meat in Canada, saying<br />
that Canada needs to modernize and<br />
toughen its 115-year old animal cruelty<br />
laws.<br />
A press release issued by Derek said<br />
there is no law specifically protecting<br />
wild horses in Canada, though the U.S.<br />
has offered legal protection for its wild<br />
horses since 1971.<br />
The closure of major American<br />
slaughter operations in the face of an<br />
impending ban has meant an increase<br />
of over 40 per cent in the number<br />
of horses crossing the border to be<br />
slaughtered in Canada. She said the<br />
U.S. ban on horse slaughter could<br />
result in 100,000 horses being killed<br />
here in the next year.<br />
“I was surprised to discover that<br />
Canada has cruelty laws that were<br />
18 Canadian Meat Business January/February 2008 meatbusiness.ca
| Industr y Roundup |<br />
written a century ago, that there is no protection at all<br />
here for wild horses and that 300 horses a day could face<br />
death in a trade most Canadians would want no part of,”<br />
Derek said.<br />
Foodservice Suppliers Embrace Canada's<br />
Largest-Ever Hospitality Event<br />
More than 700 exhibitors are now expected to welcome<br />
a record-breaking audience of Canadian chefs,<br />
restaurateurs, bar experts and foodservice professionals<br />
during the CRFA Show's three-day run, March 2 to 4 at the<br />
Direct Energy Centre in downtown Toronto.<br />
The original plan for 1,442 exhibit booths at the CRFA<br />
Show has been expanded to more than 1,600, thanks largely<br />
to the return of many former exhibitors from the HostEx<br />
and Food & Beverage shows.<br />
To meet strong demand, a limited number of exhibit<br />
booths are being made available in the Direct Energy<br />
Centre's Heritage Court, adjacent to the main building.<br />
crfa.ca<br />
Silliker Acquires JR Laboratories<br />
Silliker, a world leader in food safety and quality services,<br />
has acquired 70 per cent of the Burnaby, B.C.-based food<br />
testing and technical consulting company JR Laboratories.<br />
Founded in 1988 by Ray Cheung and Jimmy Chang,<br />
JR Laboratories serves many of the country's major food,<br />
beverage, natural health, and pharmaceutical companies.<br />
Under terms of the acquisition, Ray Cheung and Jimmy<br />
Chang will assume the roles of division president and<br />
division vice president, respectively, in the renamed Silliker<br />
JR Laboratories, ULC.<br />
The expertise and capabilities of Silliker JR Laboratories<br />
and Silliker Markham in Ontario, are complementary,<br />
and will ensure full testing services in Canada while also<br />
covering the Northwest United States region.<br />
silliker.com<br />
Maple Leaf Foods Completes Strategic<br />
Review of Rendering Operations<br />
Maple Leaf Foods Inc. announced it will retain its<br />
Rothsay rendering operations. Rothsay recycles<br />
inedible animal by-products, generated by Maple Leaf<br />
operations or collected from other customers, into valueadded<br />
products including animal feed, amino acid<br />
supplements, biodiesel and other industrial uses.<br />
In October 2006, Maple Leaf announced a change in its<br />
strategy to focus on growth in its value added meat, meals<br />
and bakery businesses. At that time, management indicated<br />
the role of its rendering operations was under review.<br />
Management has since concluded that the business is an<br />
integral part of managing the disposition of by-products<br />
from its remaining primary processing operations.<br />
investor.mapleleaf.ca<br />
BSE Case Confirmed in Alberta<br />
The Canadian Food Inspection Agency (CFIA) confirmed<br />
the diagnosis of bovine spongiform encephalopathy<br />
(BSE) in a 13-year-old beef cow from Alberta on Dec. 18.<br />
The animal's carcass is under CFIA control, and no part of<br />
it entered the human food or animal feed systems.<br />
The age of the infected animal falls within the age range<br />
of previous cases detected in Canada under the national<br />
BSE surveillance program. The animal was born before the<br />
implementation of Canada's feed ban in 1997.<br />
The CFIA stated this case will not affect Canada's status as<br />
a controlled risk country for BSE.<br />
inspection.gc.ca<br />
PM Announces New Food and Consumer<br />
Safety Action Plan<br />
Prime Minister Stephen Harper recently announced the<br />
Food and Consumer Safety Action Plan, a set of proposed<br />
new measures that will legislate tougher federal regulation of<br />
food, health, and consumer products.<br />
The proposed legislation will transform the government's<br />
approach to regulating product safety. New measures will<br />
include:<br />
• Mandatory product recalls when companies fail to act on<br />
legitimate safety concerns<br />
• Making importers responsible for the safety of goods they<br />
bring into Canada<br />
• Increasing maximum fines under the Food and Drug Act<br />
from $5,000 up to current international standards<br />
• Better safety information for consumers and guidance<br />
to industries on building safety throughout their supply<br />
chains.<br />
meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 19
Meat-Friendly<br />
Weight Loss<br />
High protein diet developed by Toronto<br />
doctor treats metabolic syndrome,<br />
Type 2 diabetes.<br />
By Alan MacKenzie<br />
When Keith Young visited<br />
his doctor on the day after<br />
his 72nd birthday, the Yes<br />
Group chairman and CEO found out<br />
the number 72 had more significance<br />
than just his age – it was also the amount<br />
of weight he’d lost since starting a new<br />
high-protein, low-carb diet just five<br />
months earlier.<br />
On the recommendation of a<br />
physician he was seeing for high blood<br />
pressure, Young met with Torontobased<br />
doctor Pat Poon and started<br />
following his specialized metabolic<br />
diet on July 28. At the time Young<br />
weighed 284 pounds. Within two weeks<br />
the meat industry veteran lost over 13<br />
pounds, and as of Dec. 28 he weighed<br />
211 pounds – just 11 pounds away from<br />
the target weight initially set out by Dr.<br />
Poon.<br />
But the weight loss was not the most<br />
dramatic change Young saw as a result<br />
of the diet. “Prior to the start I was<br />
taking 78 units of insulin a day, and<br />
for the last couple of months I’ve taken<br />
none – absolutely zero,” says Young,<br />
who was diagnosed with type 2 diabetes<br />
15 years ago. He also now takes about<br />
half the amount of high blood pressure<br />
medication that he used to.<br />
Poon has been running his diet<br />
program since 2000. The doctor says<br />
the diet was designed to treat metabolic<br />
syndrome and type 2 diabetes, not just<br />
weight loss. Poon notes that metabolic<br />
syndrome is a cluster of three of<br />
the following five signs: abdominal<br />
obesity, high blood sugar, high serum<br />
triglycerides, low HDL cholesterol<br />
and high blood pressure. His book,<br />
Dr. Poon’s Metabolic Diet, says that,<br />
according to a study, men aged 42 to<br />
60 that suffer from the syndrome are<br />
2.9 to 4.2 times more likely to die from<br />
a heart attack than those who don’t.<br />
According to the American<br />
Heart Association, 47 million U.S.<br />
residents have metabolic syndrome.<br />
While current Canadian data on the<br />
syndrome is not available, the Heart<br />
and Stroke Foundation of Canada says<br />
the prevalence rate for the syndrome<br />
in 2004 was 25.8 per cent, noting that<br />
thousands of Canadians are affected.<br />
People over the age of 50 are more<br />
at risk, as are certain ethnic groups<br />
(Heart and Stroke said the prevalence<br />
rate among First Nations people is 41.6<br />
per cent, compared to 11 per cent for<br />
Chinese).<br />
“If you’re just overweight you can go<br />
on any diet and you will lose weight, but<br />
not every diet is for certain conditions,”<br />
“If someone has high<br />
cholesterol it is because they<br />
are eating too much starch, not<br />
too much meat. People have<br />
to understand that – then they<br />
won’t be scared of eating meat<br />
anymore.” – Dr. Pat Poon.<br />
Poon says, noting that many commercial<br />
low-fat diets emphasize eating very little<br />
meat. “What happens if you go on that<br />
kind of diet? The patient loses muscle<br />
as well as fat. That is the big difference<br />
between this diet and any other– it has<br />
a high protein content so you gain the<br />
muscle that you have lost.”<br />
That makes Poon’s diet very meatfriendly.<br />
In fact, Young says he is able<br />
to eat an “almost unlimited” amount of<br />
meat. However, the doctor stresses that<br />
the emphasis is on lean meats, such as<br />
chicken, sirloin steak and beef or pork<br />
tenderloin – unlike other low-carb<br />
diets that allow salty items like bacon.<br />
“This is not just a low-carb diet,” Poon<br />
says, noting the difference compared<br />
to popular programs such as the<br />
Atkins and South Beach diets. “It is a<br />
low-carb, low-fat and low-sodium diet<br />
– all three things at the same time.”<br />
Dr. Poon holds regular seminars for<br />
individuals and medical professionals<br />
wanting to learn more about the<br />
program, but notes that there is a<br />
three-month waiting list to see him or<br />
any of the other eight doctors working<br />
at his two clinics (one in Toronto, the<br />
second in Richmond Hill). Among the<br />
topics covered in his seminar is the<br />
“misconception” that beef is high in<br />
cholesterol.<br />
“If you go for a piece of fatty meat,<br />
of course (the cholesterol) is high, but<br />
try to eat lean,” he says, noting that,<br />
according to data obtained by the U.S.<br />
Food and Drug Administration, lean<br />
red meat is actually lower in cholesterol<br />
than in fish, which he notes many see<br />
as a healthier alternative to red meat.<br />
“If someone has high cholesterol it<br />
is because they are eating too much<br />
starch, not too much meat,” he says.<br />
“People have to understand that – then<br />
they won’t be scared of eating meat<br />
anymore.”<br />
Poon’s book is available exclusively<br />
through his website, poondiet.com.<br />
Much of its content is written for<br />
medical professionals, he notes, but<br />
the section on how to follow the three<br />
phases of the diet is easy for all patients<br />
to understand.<br />
The amount of time spent on each<br />
phase of the diet will differ from<br />
individual to individual, Poon notes. In<br />
the first phase a patient’s metabolism<br />
is changed from “fat forming” to “fat<br />
burning” – then they determine how<br />
much carbohydrate they can tolerate<br />
while still burning fat. The final phase<br />
is a life-long program that allows<br />
patients to eat a variety of foods, but<br />
still emphasizes that too many carbs<br />
can be problematic.<br />
Young, who is about to enter the third<br />
stage of the diet – notes the weight loss<br />
has made him more active, adding<br />
that he recently joined a gym to work<br />
out. “Obviously after you lose all that<br />
weight you need to tone yourself up,”<br />
he says.<br />
An increased level of energy is a good<br />
thing for Young, who still works full<br />
days at the meat processing supplies<br />
company he founded in 1987. “I should<br />
be retired but I still come in here at<br />
6:30 in the morning,” he says.<br />
20 Canadian Meat Business January/February 2008 meatbusiness.ca
events calendar<br />
February<br />
14 - 15 AMI Animal Care and<br />
Handling Conference<br />
Westin Crown Center, Kansas<br />
City, Missouri<br />
meatami.com<br />
anuttall@meatami.com<br />
15 - 17 Ontario Independent<br />
Meat Processors Conference<br />
Niagra Falls, Ont. oimp.ca<br />
19 - 21 NAMP Center of the<br />
Plate Training<br />
University of Guelph, Guelph, Ont.<br />
namp.com<br />
20 Canadian Council of Grocery<br />
Distributors 2008 Atlantic<br />
Conference<br />
Halifax, N.S. ccgd.ca<br />
23 – 27 American Frozen Food<br />
Institute Convention<br />
San Diego, California affi.com<br />
25 Food Safety 2008 Forum<br />
Toronto, Ont. foodsafetyforum.ca<br />
March<br />
2 - 4 CFRA Show<br />
Toronto, Ont. crfa.ca<br />
9 - 11 AMI Annual Meat<br />
Conference<br />
Gaylord Opryland Resort and<br />
Convention Center, Nashville,<br />
Tennesse meatconference.com<br />
anuttall@meatami.com<br />
10 – 14 Canadian Cattlemen’s<br />
Association Annual General<br />
Meeting<br />
Ottawa, Ont. cattle.ca<br />
12 Ontario Pork Producers<br />
Annual Meeting<br />
London Convention Centre,<br />
London, Ont. ontariopork.on.ca<br />
28 - 30 North American Meat<br />
Processors Association 51st<br />
Management Conference<br />
The Drake Hotel, Chicago,<br />
Illinois namp.com<br />
smoore@namp.com<br />
Visit meatbusiness.ca for more<br />
event listings.<br />
please visit us at: www.sperlingind.com<br />
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meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 21
Ethanol as Public Policy<br />
in Canada<br />
Understanding the broader<br />
policy context.<br />
By Al Mussell and Larry Martin<br />
Biofuel development has recast the horizon in North<br />
American agriculture. Throughout 2005 and 2006,<br />
ethanol production margins in the U.S. were very<br />
strong, given high oil prices, relatively low corn prices,<br />
and unfilled ethanol blend targets. This led to major<br />
expansion in ethanol plants and production in 2006<br />
and 2007, driving a powerful bull market in corn and<br />
feedgrains.<br />
However, as the U.S. harvests a historically large corn<br />
crop in 2007, and as corn prices have retreated from last<br />
summer’s highs, we are witnessing the long overdue backlash<br />
against grain-based ethanol. The basic criticisms are:<br />
• Ethanol is reliant on massive subsidies and border<br />
protection to be economically viable – it does not have<br />
economic value without them<br />
• Ethanol does little to reduce CO2 levels, and is among the<br />
more expensive ways of reducing greenhouse gas emissions<br />
from automobiles<br />
• Ethanol is only marginally energy efficient<br />
• Ethanol production consumes large volumes of fresh<br />
water<br />
• Ethanol growth will drive inflation in food and in the<br />
broader economy, and is generating a food security issue<br />
in some countries, such as Mexico<br />
• Further ethanol growth is being hampered by significant<br />
technical and distribution problems<br />
• The ethanol plants’ margins have collapsed relative to<br />
historic levels and the profit outlook is very tight, both<br />
short and long term.<br />
These findings apply equally in the U.S. and Canada – but<br />
the bigger picture question is how, or whether, ethanol fits<br />
strategically within Canada’s broader agri-food policy.<br />
Before 1990, Canada was a leading grain exporting<br />
country, particularly of wheat and, to a lesser extent,<br />
feedgrains. Feed-Freight Assistance and the Western<br />
Grain Transportation Act (or Crow Rate freight subsidy)<br />
were leading agricultural marketing policy instruments.<br />
Ethanol development in the U.S. has<br />
depleted livestock feeding margins in both<br />
the U.S. and Canada. This, along with a<br />
strong Canadian dollar and lower livestock<br />
prices, has resulted in Canadian livestock<br />
producers facing extremely tight margins.<br />
Then, as liberalization in international trade occurred,<br />
these programs were removed. With the removal of<br />
transportation subsidies, wheat and feedgrains in Western<br />
Canada were suddenly out of export position, wheat<br />
acreage fell significantly, and feedgrains at prairie points<br />
became cheap. This provided incentives for livestock and<br />
meat development; major investments occurred in livestock<br />
feeding and meat processing, and dual marketing of hogs<br />
was undertaken in Western Canada. Viewed in retrospect<br />
the change was dramatic.<br />
Thus, Canadian agricultural policy evolved quickly from<br />
a strategic focus on grain exports to livestock and meat<br />
22 Canadian Meat Business January/February 2008 meatbusiness.ca
exports. Canadian export data would suggest that this has<br />
been concurrent with dramatic restructuring in the nature<br />
of products exported and phenomenal growth in export<br />
value. It’s hard to avoid the conclusion that this strategic<br />
shift has been a success for Canadian agri-food.<br />
Ethanol Development Now<br />
There are several reasons to be skeptical about the<br />
benefits of ethanol. However, what is uniquely Canadian<br />
is that future ethanol development will affect the “basis”<br />
for corn and feedgrains, or the level of prices in Canada<br />
relative to the U.S. price. Absent an ethanol industry,<br />
Canada would be an exporter of feedgrains, and grain<br />
prices would be below the U.S. or other points, generally<br />
by the amount of freight cost. This is consistent with our<br />
strategy to be competitive in meat exports on the basis of<br />
feed cost. However, as Canada develops subsidized ethanol<br />
production, the demand for grains will increase, raising<br />
their prices relative to the U.S. For livestock producers who<br />
purchase feedgrains this means that, rather than having a<br />
small relative advantage in feed cost, they have a relative<br />
disadvantage.<br />
As it stands, ethanol development in the U.S. has depleted<br />
livestock feeding margins in both the U.S. and Canada. This,<br />
along with a strong Canadian dollar and lower livestock<br />
prices, has resulted in Canadian livestock producers facing<br />
extremely tight margins. At least one provincial government<br />
has initiated an estimated $165 million program to assist<br />
cash flow, mainly for livestock producers, and several other<br />
governments are reported to be considering programs.<br />
Subsidizing ethanol production in Canada and further<br />
supporting strength in grain prices, thereby exacerbating<br />
the livestock margin issue, will only raise the cost of<br />
assisting livestock producers (and increase the liability on<br />
the treasury). This is in addition to the basis-strengthening<br />
effect.<br />
It is hard to see how Canadian ethanol development is a<br />
winner for Canada. Its effects on the Canadian livestock and<br />
meat industry threaten hundreds of millions of dollars of<br />
investment, and certainly discourage new investment. It will<br />
do little to assist the environment. It produces a product that<br />
can only be profitable with subsidies, thereby ensuring that<br />
there is no added market value for the product. Therefore,<br />
just because the U.S. is developing ethanol does not mean<br />
Canada should.<br />
In reflecting on ethanol policy, Canadian policy makers<br />
should consider that Canada does not need to use ethanol<br />
to wean itself from foreign oil dependence when it is a net<br />
exporter. The public funding required for establishing an<br />
ethanol industry of sufficient scale to materially drive up<br />
grain prices further would be staggering. The environmental<br />
benefits of grain-based ethanol are just too modest to be<br />
taken very seriously, particularly when considered relative<br />
to the costs.<br />
Rather than attempting to drive ethanol as a solution<br />
to both farm marketing and environmental problems,<br />
governments should consider the policy goal of improving<br />
farm product markets. This could better be achieved through<br />
existing strategy by assisting the livestock and meat industry<br />
with its current difficulties, and by recapturing its historic<br />
competitive advantage with renewed investment, rather<br />
than by exacerbating the industry’s problems with policies<br />
that further drive up feed costs. The environmental issues<br />
that grain-based ethanol purports to address could more<br />
easily be solved by focusing conservation efforts through<br />
innovation, such as more fuel-efficient engines, or bio-fuels<br />
that are not injurious to our strategy as a meat exporter. In<br />
this regard, Canadian firms are already leaders in cellulosic<br />
ethanol production technology, and their further success<br />
might be leveraged as part of a uniquely Canadian biofuel<br />
strategy.<br />
Al Mussell is a senior research associate and Larry Martin is a<br />
senior research fellow at the George Morris Centre. To read the full<br />
report, visit georgemorris.org.<br />
meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 23
| Assembly Line |<br />
Assembly Line is an opportunity for companies to feature new products for the meat producing,<br />
processing, packaging and distribution industry. To include information about your new product<br />
e-mail alan@meatbusiness.ca.<br />
Mulvany Attard Associates<br />
Announces Food Industry<br />
Specific Software<br />
Toronto-based food industry<br />
software company Mulvany Attard<br />
Associates (MAA) is celebrating its<br />
30th anniversary in 2008 by launching<br />
its newest software offering, WinFDS<br />
SaaS (Software as a Service).<br />
“WinFDS SaaS represents the next<br />
logical extension of our software<br />
product,” company president Victor<br />
Attard says. “Customers can now<br />
decide which acquisition model works<br />
best for them – either the traditional<br />
model of purchasing our software<br />
outright, or our SaaS model. SaaS<br />
appeals to those clients who prefer to<br />
pay for their software on a monthly,<br />
per-user basis. With completely open<br />
Meat Processing<br />
Plant Auction<br />
We have been instructed to<br />
sell the assets of the former<br />
DenDekker Meats<br />
#404056 Union Road,<br />
Ingersoll, Ontario N5C 3J8<br />
Monday, February 25th<br />
10:30am<br />
Highlights include Vortron 2<br />
cage smoke house, generator<br />
& carts; several evaporators,<br />
condensers & compressors – as<br />
new; S/S blood tank; assorted<br />
scales; hog scalding tank;<br />
dehairing machine; tumblers;<br />
meat saws & slicers; 150 KW<br />
Cummins diesel generator;<br />
Caterpillar forklift.<br />
Shackelton Auctions Inc.<br />
Phone: (519) 765-4450<br />
For Full List & Details<br />
See Our Website:<br />
www.shackeltonauctions.com<br />
terms of agreement and the ability to<br />
write off the software as an operating<br />
expense versus a capital expenditure,<br />
significant savings can be achieved.<br />
We’re very excited about WinFDS<br />
SaaS and the positive reception it has<br />
received from the food industry prior<br />
to its official launch.”<br />
Adds Michael Benedick, MAA’s<br />
operations manager: “Over the years,<br />
we’ve noticed many companies tend<br />
to underestimate the amount of<br />
money they must spend in order to<br />
keep their software, computer systems<br />
and infrastructure current. This isn’t<br />
surprising, considering resources for<br />
new hardware and software is often<br />
quite limited. SaaS provides the perfect<br />
solution for companies in this position.<br />
The software provides all the necessary<br />
management tools a food company<br />
needs to expand their business within<br />
a short period of time. Since there is no<br />
up-front capital outlay, WinFDS SaaS<br />
contributes almost immediately to the<br />
company’s bottom line, with Mulvany<br />
Attard assuming all support, training,<br />
hosting and data security concerns.”<br />
mulvanyaa.com<br />
Making Linking and<br />
Cutting Natural Casing<br />
Sausage Easier<br />
Individual natural casing sausage<br />
links of identical length, weight and<br />
diameter can be achieved with the<br />
Vemag LPV802 Length Portioning<br />
Device and the Vemag TM203 Cutting<br />
Machine from Reiser and Vemag.<br />
The Vemag LPV802 is a casing<br />
holding device that attaches to the<br />
Vemag sausage stuffer and links fresh<br />
and cooked sausages in sheep and<br />
hog casings with identical length,<br />
weight and diameter. The Vemag<br />
filler precisely portions weight while<br />
the LPV802 simultaneously calibrates<br />
the sausage to automatically achieve<br />
identical lengths and diameters.<br />
Specially sorted casings are not<br />
required.<br />
The Vemag TM203 Cutting Machine<br />
allows processors to cut strings of<br />
fresh sausage into individual sausages<br />
quickly and precisely right on the<br />
filling table. The TM203 offers highly<br />
accurate cutting technology, reaching<br />
rates of up to 1,200 cuts per minute.<br />
The high degree of accuracy during<br />
cutting prevents damage to the ends of<br />
sausages.<br />
reiser.com<br />
Hyster Offers New Series<br />
of Lift Trucks<br />
Hyster Company recently announced<br />
its Fortis line of lift trucks.<br />
Incorporating proven design processes<br />
and systems, each Fortis lift truck<br />
is offered with multiple powertrain<br />
configurations to meet specific<br />
application requirements and business<br />
objectives and to optimize productivity,<br />
dependability and cost of operations.<br />
The Fortis line, which covers a<br />
capacity range of 2,000 lb to 15,500<br />
24 Canadian Meat Business January/February 2008 meatbusiness.ca
| Assembly Line |<br />
lb, offers both cushion and pneumatic tire classes, with<br />
multiple engine choices consisting of gas, LP and diesel.<br />
The series also includes a Pacesetter VSM industrial<br />
onboard computer for adjustable performance to maximize<br />
uptime. The Fortis patented DuraMatch transmission<br />
systems include such features as an auto deceleration<br />
system, controlled rollback on ramps, controlled power<br />
reversals and auto-speed hydraulics with automatic<br />
inching control to help operators move loads more efficiently<br />
with less fatigue and product damage.<br />
Hyster counterbalanced lift trucks provide superior<br />
ergonomic features to ensure maximum operator comfort<br />
and control during a shift. Innovations of the Fortis series<br />
to help reduce costs related to fatigue include repositioned<br />
foot pedals, fatigue-reducing operator compartments<br />
designed to isolate vibrations and easily adjustable<br />
operator settings.<br />
hysteramericas.com<br />
Quality Management and HACCP<br />
Quality Management is a fully integrated feature of<br />
the business process solution of CSB-System. It is<br />
fully complaint with all industry standards for HACCP,<br />
ISO 9001:2000 and IFS. The QM and HACCP module is<br />
completely integrated into the materials management of<br />
CSB, to ensure that all tests can be recorded in process (e.g.<br />
right at receiving) and that the proper action is initiated<br />
instantly (e.g. ‘block in inventory’) as the results are<br />
processed. In extended options, the results can be used to<br />
dynamically adjust recipes based on raw material potential.<br />
csb-system.com<br />
vacuum package as far<br />
as moisture containment<br />
and shelf life. It also<br />
features a rigid traystyle<br />
presentation that<br />
denotes high quality.<br />
The VSP package is<br />
appropriate for a wide<br />
variety of products<br />
– fresh meat, processed<br />
meat, cheese, even fruits<br />
and vegetables. Any<br />
product that is firm and<br />
has a defined shape is a<br />
candidate for VSP.<br />
The Repak is capable<br />
of running vacuum<br />
packages at rates of 15-<br />
20 CPM, MAP packages<br />
at rates of 10-12 CPM,<br />
and VSP packages at 8-<br />
10 CPM depending on<br />
product and package<br />
size. Our customers can<br />
easily change over from<br />
one package style to the next, making the system ideal for<br />
a small to mid-sized producer or larger producers with<br />
varying package and product needs.<br />
reiser.com<br />
CSB-System Integrated Call Planning<br />
With CSB-System’s new Phone-master Technology, hand<br />
written notes can be eliminated. Users can plan all<br />
customer and vendor interactions and track completion of<br />
the calls, enter notes and schedule follow-up calls on screen<br />
as part of the order processing process in an integrated<br />
solution.<br />
The planning can be based on individuals or calling<br />
groups. Each operator will be automatically guided to<br />
the next person to be called. On the inbound side caller-<br />
ID recognition can be used in conjunction with the<br />
Phonemaster Technology to show the customer calling in,<br />
before users pick up the phone.<br />
All supportive information during the call are readily<br />
available, such as last orders, promotional pricing up to<br />
accounts receivable information with the goal in mind to<br />
optimize productivity of the sales department.<br />
csb-system.com<br />
Reiser Introduces Vacuum Skin Packaging<br />
Reiser’s Repak allows customers to produce everything<br />
from flexible vacuum packages (VSP) to rigid modified<br />
atmosphere packages (MAP).<br />
The Repak VSP has the same high performance of a<br />
meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 25
| Business Spotlight |<br />
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meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 27
| Product Showcase |<br />
STAINLESS STEEL TRUCKS / RACKS<br />
Let Beacon customize<br />
one of our standard Truck<br />
designs for your processing<br />
requirements. Our experts<br />
have 80 years of experience<br />
in engineering the right<br />
Truck for the right job.<br />
Whether it is a Nesting,<br />
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Rack, we will design the<br />
unit for your needs. We<br />
do not over design and<br />
add cost or under design<br />
and give our customers a<br />
Truck that will not perform.<br />
Hollymatic introduces the new<br />
All Hydraulic Portion Pro 320 Forming Machine.<br />
Basically designed as a 2-hole machine with<br />
state of the art technology, the Model 320<br />
answers the call for the medium size processor.<br />
Phone: 708-579-3700<br />
For more information, contact<br />
Hollymatic Corporation today.<br />
Website: hollymatic.com<br />
BEACON, Inc.<br />
100 S. Mannheim Road, Hillside, IL 60162<br />
Phone (708) 544-9900 Fax (708) 544-9999<br />
beaconmetals.com<br />
28 Canadian Meat Business January/February 2008 meatbusiness.ca
| Product Showcase |<br />
New<br />
One Piece Shovel from Remco<br />
• Deep scoop<br />
capacity<br />
• Multiple<br />
ergonomic grips<br />
• Secondary ‘blade’<br />
grip for heavy loads<br />
• Enlarged extra width<br />
D-grip<br />
• Textured shaft for<br />
secure hold<br />
• Molded footplate for<br />
extra scooping action<br />
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meatbusiness.ca<br />
January/February 2008 Canadian Meat Business 29
| Meat Industr y Business Watch |<br />
Angel Investors<br />
Do they have halos on their heads and<br />
pitchforks in their hands?<br />
By James Sbrolla<br />
An angel investor, or “angel”, is<br />
an affluent individual who<br />
provides capital for a business<br />
start-up. There are many different<br />
structures but usually the angel provides<br />
capital in exchange for convertible<br />
debt or ownership equity. A small but<br />
increasing number of angel investors<br />
are organizing themselves into angel<br />
networks or angel groups to share<br />
research and pool their investment<br />
capital.<br />
One of the most prominent and<br />
successful of these groups is the<br />
Maple Leaf Angels, a Toronto based<br />
association that was formed in 2007.<br />
They meet once a month to review<br />
deals and thus far have invested in eight<br />
transactions totaling approximately<br />
$3 million. Their meetings generally<br />
have three presentations by companies<br />
looking for money. These presentations<br />
are made to approximately 30 wellqualified<br />
angels.<br />
Ken Paige, chair of the Maple Leaf<br />
Angels explains, “We have attracted<br />
very interesting deals and they have<br />
been presented to a real cross section<br />
of the business world. We have a great<br />
group of minds that get together and<br />
evaluate deals. There is a consensus<br />
that we all feel that we are stronger<br />
together than the sum of the parts.”<br />
The term “angel” in this context<br />
originally comes from England where it<br />
was used to describe wealthy individuals<br />
who provided money for theatrical<br />
productions. In 1978, William Wetzel,<br />
a founder of the Center for Venture<br />
Research, completed a pioneering<br />
study on how entrepreneurs raised<br />
seed capital in the U.S. and began<br />
using the term “angel” to describe the<br />
investors that supported them. The<br />
name stuck. In Europe they refer to<br />
them as “business angels.”<br />
Rob Koturbash, managing director<br />
of the Maple Leaf Angels describes<br />
the reasons people get involved: “Our<br />
group is made up of investors who<br />
are often retired entrepreneurs or<br />
executives, who may be interested in<br />
angel investing for reasons that go<br />
beyond pure monetary return. These<br />
include wanting to keep abreast of<br />
current developments in a particular<br />
business arena, mentoring another<br />
generation of entrepreneurs, or making<br />
use of their experience and networks<br />
on a less-than-full-time basis. Thus, in<br />
addition to funds, angel investors can<br />
often provide valuable management<br />
advice and important contacts.”<br />
According to the Center for<br />
Venture Research, there<br />
were 234,000 active angel<br />
investors in the U.S. in 2006.<br />
According to the Center for Venture<br />
Research, there were 234,000 active<br />
angel investors in the U.S. in 2006.<br />
Beginning in the late 1980s, angels<br />
started to coalesce into informal groups<br />
with the goal of sharing deal flow and<br />
due diligence work, and pooling their<br />
funds to make larger investments.<br />
Angel groups are generally local<br />
organizations made up of 10 to 150<br />
accredited investors interested in earlystage<br />
investing. Whereas in 1996 there<br />
were only 10 angel groups in the U.S.,<br />
as of late 2007 there are more than<br />
250, with a roughly equal number in<br />
all other countries combined. The<br />
more advanced of these groups have<br />
full time, professional staffs, associated<br />
investment funds, sophisticated<br />
web-based platforms for processing<br />
funding applications and large annual<br />
operating budgets.<br />
Angels typically invest their own<br />
funds, unlike venture capitalists, who<br />
manage the pooled money of others in a<br />
professionally-managed fund. Although<br />
typically reflecting the investment<br />
judgment of an individual, the actual<br />
entity that provides the funding may<br />
be a trust, business, limited liability<br />
company, or investment fund.<br />
Angel capital fills the gap in start-up<br />
financing between “friends and family"<br />
(sometimes humorously called friends,<br />
family, and fools) who provide seed<br />
funding, and venture capital. Although<br />
it is usually difficult to raise more than<br />
a few hundred thousand dollars from<br />
friends and family, most traditional<br />
venture capital funds are usually not<br />
able to consider investments under<br />
US$1–2 million.<br />
Thus, angel investment is a common<br />
second-round of financing for highgrowth<br />
start-ups, and accounts in total<br />
for almost as much money invested<br />
annually as all venture capital funds<br />
combined, but into more than ten<br />
times as many companies.<br />
Geoff Simonett, one of the Maple<br />
Leaf Angels shares these thoughts:<br />
“I’ve noticed that many entrepreneurs<br />
initially believe they have a great idea<br />
and if they just meet the right VC and<br />
raise some money, they will be the<br />
next ‘big winner.’ The problem is that<br />
they are not prepared for VCs and<br />
often not even prepared for investors<br />
at all. Usually VCs won’t give them the<br />
time of day since, as representatives<br />
of investors, they have to focus on the<br />
right deals. Angels on the other hand<br />
are entrepreneurs first and will often<br />
help coach these companies before<br />
they are ready for financing in order<br />
to bring them to the table with the<br />
right tools. So, friendly but with good<br />
advice.”<br />
James Sbrolla is a Torontobased<br />
management<br />
consultant and can be<br />
reached at 416.234.5120<br />
or sbrolla@rogers.com.<br />
30 Canadian Meat Business January/February 2008 meatbusiness.ca