Perreault says it’s too early to tell how these chains will affect local produce businesses. “The Loblaw stores just recently opened, and as for Walmart, most people don’t really feel an impact now. Here in Montreal, it’s not in our habit yet to shop for groceries at Walmart—but they do have fruits and vegetables, and the prices are amazing.”
According to Pitsikoulis, the influx of chain stores has not had an impact on Canadawide. “I can’t say that we’ve been affected in any way, and our customers are not saying it’s negatively impacting their sales.”
Plante believes these big box stores are actually a very positive development for the Montreal produce market. “For us, it’s not bad news,” he says. “It’s good news because we have a larger service to offer. And for our growers, instead of having just three customers, now we have Loblaw and Walmart and Target and Giant Tiger. So it’s good for us, and we’re happy about it.”
However, produce suppliers that want to work with these new chain stores will face some incredibly stringent requirements. “Within the past year or so there has been an emergence of various different specifications requested by the chain stores,” explains Emmanuel Eveno, co-owner of FE Produce Inspection, Inc., based in Berthierville, about fifty miles northeast of Montreal along the St. Lawrence River.
“With an increasing market share, chain stores are seeking more customized and detailed inspections to include specifications such as sugar (brix) and acidity levels,” Eveno notes. “Moreover, commodities today [must be] remarkably traceable, from pallet IDs to grower identification and pack dates.”
The Future
Despite the many challenges, the Quebec produce industry continues to thrive thanks to the province’s high-traffic market, abundance of locally grown fruits and vegetables, and burgeoning export business.
“We love doing business in Quebec,” Rubini enthuses. “It truly is La Belle Province.”
Page 6 of 6« First«...23456
The most expansive province in Canada, Quebec’s fertile land stretches for nearly 600,000 square miles and encompasses more than eight million French-speaking residents. The largest city within Quebec’s borders is Montreal, named after Mount Royal—the triple-peaked hill that towers over the bustling city. Together, Montreal and Quebec are vital to Canada’s agriculture industry.
Quebec’s Prolific Produce Industry
The agri-food industry is a major contributor to Quebec’s economy, employing nearly 12 percent of the province’s workforce. Each year, Quebec growers harvest a bounty of fresh vegetables, including tomatoes, corn, potatoes, lettuce, squash, turnips, and cabbage.
Together, growers in Quebec and Ontario account for more than three-quarters of Canada’s total vegetable sales. In 2011, Quebec growers planted 18,420 acres of corn that generated more than 12,000 tons of total production. The province also produced nearly 110,000 tons of carrots, more than 87,000 tons of cabbage, 58,000 tons of lettuce and nearly 64,000 tons of dry onions.
Also a leading fruit grower, Quebec is responsible for a quarter of Canada’s annual fruit sales. The province is the world’s third largest cranberry producer and a major supplier of wild blueberries and strawberries. In 2011, Quebec produced nearly 121,000 tons of apples, almost 56,000 tons of cranberries, 31,000 tons of blueberries and close to 12,000 tons of strawberries.
With a production capacity that greatly exceeds the province’s consumption requirements, Quebec ships half of its produce to outside markets—and has surpassed Canadian and worldwide growth rates for the past ten years.
Thanks to its central location, Quebec can quickly and easily ship to provinces throughout Canada as well as to Maine, Vermont, New Hampshire, New York, Illinois, and throughout the U.S. Midwest. “Montreal is close to the important [U.S.] markets, and it’s central to the rest of Canada,” says Sophie Perreault, executive director of the Quebec Produce Marketing Association (QPMA). “Being in Montreal, we can ship to our major partners in six hours.”
A Thriving Terminal Market
Montreal’s terminal market, known as the Place des Producteurs, is the largest fruit and vegetable wholesale market in Eastern Canada. As a key market, it’s open year-round and the heart of Quebec’s produce sales, serving retailers, wholesale distributors, public markets, restaurants, and an array of other institutions from across the province. During Quebec’s peak growing season (May to October), the market hosts more than 150 growers who sell an array of locally grown and imported fruits and vegetables.
Run by the Quebec Produce Growers Association (QPGA), the terminal market is located at the corner of Metropolitan and L’Acadie boulevards—yet there has been much discussion about a potential move in the future. The market is currently based in the Marché Central, a massive retail center that has exploded in growth over the past several years.
Last year, André Plante, general director of the QPGA, said the market had been under pressure to relocate. The landowner, Bentall Kennedy, had completed construction on the first two phases of Marché Central and was eyeing the terminal market’s space when planning the launch of Phase Three.
Since then, however, there have been no new developments. “We are still looking for land around the market where we could move,” Plante says, explaining that the only offers the market has had are in eastern Montreal, and terminal merchants don’t want to move away from their customers in the western part of the city.
Although the landowner would like to edge out the terminal, the Place des Producteurs still has 40 years remaining on its lease. “Nobody wants to move,” Plante explains. “The problem is we’re worried because the Marché Central is a big shopping center, and it’s going to be very complicated for us to work and deal on the market with all these retail stores around us. But legally, they cannot move us, and we’re going to wait and see what’s going to happen in the future. We want to do the right thing.”
Though some prefer to stay, others like Canadawide Fruit Wholesalers, Inc. have already moved to a new facility near the market. Although Canadawide had eight years remaining on its lease, the wholesaler came to an agreement with the landowner to leave sooner. According to George Pitsikoulis, president and a buyer at Canadawide, the move turned out to be a boon for the company. “It consolidates our operation which used to be fragmented between three different warehouses; now everything is under one roof,” he says.
Sylvain Mayrand, co-president of Global M.J.L. Ltd. says the opportunity to relocate the market came and went two years ago when all of the wholesalers turned it down. “Since then, most of the wholesalers have bought, renewed, or renovated their buildings, so I don’t see [a move] happening in quite a while,” he adds.
Tony Bono, vice president and an owner of Chenail Fruits et Legumes, says he isn’t too concerned about the possible terminal move. “Whether the market is relocated or stays where it is, I don’t believe it will change my business,” he remarked. “I believe my business is what it is because of the service we provide.”
Budding Trends & Opportunities
Quebec produce businesses have noticed a few predominant trends in the past year, including unprecedented growth in greenhouse operations as well as higher demand for organics, locally grown, and ethnic produce.
“There has been continuing growth in the organic produce trend,” Perreault says. According to the Canada Organic Trade Association, the total value of the country’s organic food market has tripled since
2006, reaching $3.7 billion a year in 2012. Although only about two percent of Canadian farms are currently certified as organic, this number continues to grow.
Locally-Grown
In addition to organics, Quebec produce businesses have also noticed a surge in demand for locally grown produce.
“The local-grown trend is very strong, and it was even bigger this year,” Perreault remarks. “Our Quebec government has launched a local food policy to make it even more popular.” She says many companies are placing the “Made in Quebec” logo on their locally grown products to attract consumers.
“More and more, Montreal consumers want locally grown product,” Plante confirms, adding that the QPGA spends $500,000 annually on its EatQuebec.com campaign, created in 2007 to promote Quebec-grown produce.
Back in 2003, the QPMA launched its “I love 5 to 10 servings a day” campaign to encourage Quebec children to eat more fruits and vegetables. Plante says a number of organizations continue to do “promotions and advertising to sensitize consumers to buy local, and it works.”
To feed this locally grown trend, Plante says the QPGA (which already owns a public produce market in southwest Montreal) is in the process of building a second public market in southeast Montreal and has plans to build a third north of the city.
“We started two years ago with temporary ‘tent’ markets in these areas to see if customers were interested, and these markets were very, very popular,” Plante explains. “And with our other public markets, it’s full capacity every weekend. So in the future, we’re going to invest a lot of money in these kinds of markets, where consumers can buy locally grown product.”
Greenhouse-Grown
Because of the province’s cool climate and rather short growing season, many wholesalers are turning to greenhouses to fill the ever-increasing demand for Quebec-grown produce. Statistics Canada reports that Quebec now has the third largest greenhouse industry in Canada (after Ontario and British Columbia), with 2.6 million square meters of total greenhouse space.
“Every time there’s an investment in our market, it’s an investment in greenhouse,” Plante remarks, adding that the Canadian government has been providing more subsidies for greenhouse projects. “We see more and more variety in the greenhouse market in addition to the usual greenhouse tomatoes and lettuce.” He says some of Quebec’s major greenhouse growers also sell peppers and cucumbers—items that were not readily available five years ago.
“Not only are Quebec growers extending their greenhouses, but we also have rooftop greenhouses popping up in Montreal,” Perreault says. One such facility is Lufa Farms, a 32,000-square-foot hydroponic greenhouse perched on the roof of a commercial building near Marché Central.
The world’s first commercial rooftop greenhouse, Lufa Farms grows 40 different types of vegetables and herbs, including lettuce, tomatoes, squash, and peppers. Unfortunately, experts say only about 10 percent of commercial rooftops in Canada could safely support the weight of a greenhouse farm, so growth in this segment is somewhat limited.
Ethnic Commodities
Thanks to the province’s increasingly diverse population, produce professionals have also noticed substantial demand for ethnic produce. Today, immigrants make up about 12 percent of the province’s total population, with some 50,000 new residents arriving annually, many from Algeria, Morocco, France, China, and Colombia.
“We have a very ethnic community here,” Perreault points out. “As a result, the retailers and wholesalers areselling more ethnic varieties.” She and Plante say the most popular ethnic items include Asian vegetables, including bok choi, Chinese cabbage, and kale.
This is backed up by a QPGA survey conducted in the summer of 2012, to determine where Quebec’s immigrants came from and the types of specialty produce they wanted to buy and eat. Beyond confirming the popularity of ethnic vegetables, Plante says the survey’s results will help the association “find a way to support the growers who want to harvest these vegetables.”
For now, wholesalers import the vast majority of ethnic produce to fill mushrooming demand. Yet some growers are conducting crop trials to see if these items will thrive in Quebec’s cool climate.
Les Obstacles
While Quebec produce businesses enjoy bountiful opportunities, they have also faced quite a few challenges in the past year. For one, the province’s unpredictable weather caused major issues for growers and wholesalers in the summer of 2013.
“The weather last summer was really upside-down,” Perreault says. Because of an unusually cool and soaking wet summer, crops fell way behind schedule and yields were far lower than usual. As a result, too many commodities arrived at the market at the same time, driving prices to rock-bottom levels. In June, Plante says leaf lettuce and romaine were selling for a meager $7 a case.
On top of the fluctuating summer weather, Quebec’s growers—like many of their U.S. counterparts—were contending with extreme labor shortages. “The Canadian law is changing for foreign workers, so this is causing a lot of labor problems,” Perrault explains. “There have been delays with foreign workers coming in, so there weren’t enough people working in the fields.”
Food Safety
Of course, food safety is also a major concern and continuing challenge for Quebec produce businesses. “In the beginning, it was more the growers that were concerned and implementing Canada GAP (good agricultural practices), but now there are programs that can be applied by the wholesalers and repackers,” Perreault says. “I think the growers are continuing to be very proactive on this now that they know it’s mandatory, and are still improving their systems. And now the wholesalers and the repackers are joining in.”
In an effort to improve food safety, Bono says that Chenail Fruits et Legumes recently expanded its warehouse and completely renovated the company’s building. There’s a new camera system that sees every corner of the facility for oversight and security. In addition, Chenail also replaced its refrigeration system to better maintain the cold chain, and upgraded its computer hardware and software.
“Our new refrigeration system is all computer-controlled, so we can do everything with our iPhones,” Bono enthused. “When there’s a problem with a fridge, an alert pops up on the phone immediately—it helps
us keep the right temperature for all the different products.”
Freight Rates
To add to the exorbitant expenses related to food safety and traceability requirements, produce businesses are also dealing with elevated fuel prices. “It’s not a secret that a large portion of our carrier expenses are directly related to fuel costs,” says Joe Rubini, president of Rally Logistics Inc., a third-party logistics provider. Although the company is based in Ontario, Rubini says Rally has greatly increased its presence in the Montreal and Quebec market in recent years.
“In the produce business, since we work off market rates, fuel prices have a direct relation to our rates,” Rubini states. “During the slowest times of the year our carriers work at a loss or break even, but they usually make up the difference during peak seasons.” Rubini goes on to add that Rally prides itself on understanding these hurdles and addressing them on a load-to-load basis.
“Carriers can rest assured that Rally will always be competitive during the slow season and in turn will be competitive for our customers during the busy season—we’ve never been of the opinion that rates should fluctuate as much as they do from day to day because this puts our customers in a bad position.”
Cutting Out the Middleman?
To complicate things even more, Montreal produce businesses are also facing some tough competition on the retail front. Last summer, Provigo, a member of Canada’s Loblaw Group, opened two produce-focused stores in Quebec—one in Montreal and one in Sherbrooke. In recent years, Quebec has also seen an emergence of U.S. superstores, including Target and Walmart, which now offer fresh produce as well.
Perreault says it’s too early to tell how these chains will affect local produce businesses. “The Loblaw stores just recently opened, and as for Walmart, most people don’t really feel an impact now. Here in Montreal, it’s not in our habit yet to shop for groceries at Walmart—but they do have fruits and vegetables, and the prices are amazing.”
According to Pitsikoulis, the influx of chain stores has not had an impact on Canadawide. “I can’t say that we’ve been affected in any way, and our customers are not saying it’s negatively impacting their sales.”
Plante believes these big box stores are actually a very positive development for the Montreal produce market. “For us, it’s not bad news,” he says. “It’s good news because we have a larger service to offer. And for our growers, instead of having just three customers, now we have Loblaw and Walmart and Target and Giant Tiger. So it’s good for us, and we’re happy about it.”
However, produce suppliers that want to work with these new chain stores will face some incredibly stringent requirements. “Within the past year or so there has been an emergence of various different specifications requested by the chain stores,” explains Emmanuel Eveno, co-owner of FE Produce Inspection, Inc., based in Berthierville, about fifty miles northeast of Montreal along the St. Lawrence River.
“With an increasing market share, chain stores are seeking more customized and detailed inspections to include specifications such as sugar (brix) and acidity levels,” Eveno notes. “Moreover, commodities today [must be] remarkably traceable, from pallet IDs to grower identification and pack dates.”
The Future
Despite the many challenges, the Quebec produce industry continues to thrive thanks to the province’s high-traffic market, abundance of locally grown fruits and vegetables, and burgeoning export business.
“We love doing business in Quebec,” Rubini enthuses. “It truly is La Belle Province.”
Amy Bell is a professional freelance writer with more than ten years of writing and marketing experience.
