Plante says the region is currently seeing expansion of its greenhouse operations, in part because of a possible government subsidy that would offset energy-related costs. “One company is investing $10 million in cucumbers and peppers this year, and all the major greenhouse growers are expanding. If we assume the exchange rate will stay the same for the next three to five years, we see an increased opportunity to grow produce for export.”
Plante expects about 40 percent of the region’s crops to be exported during the year, a level not seen since the mid-1990s. Typical export volume for the past 15 to 20 years has been closer to 25 percent, primarily because of the currency fluctuations and the unfavorable exchange rate.
“The expansion in greenhouse growing will meet increasing demand for local produce, as well as the export market,” Gosselin agrees. “I think growers are well aware of what’s going on in California, and looking to take advantage of this opportunity.”
In addition to local loyalty from Montreal and Quebec consumers, Canada produce is gaining in popularity in the nearby U.S. market, in part due to its quality as well as the now-favorable exchange rate. “Our local produce had built a good reputation in years past, which eroded when the Canadian dollar and U.S. dollar came on par,” remarks Pitsikoulis. “But this has been revived as the Canadian dollar has weakened, and the quality of our produce is second to none.”
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Exporting and consumer trends dominate the fresh produce industry in Montreal and Quebec. Despite a population of more than 4 million, the Montreal area and Quebec are strong growing regions, both in seasonal field crops and the country’s expanding greenhouse industry. Over the past year, currency fluctuations have brought an advantage to exporters as the value of the Canadian dollar dropped relative to the U.S. dollar. While there is no central terminal market per se, a handful of wholesalers have warehouses and sales centers within a 10-mile region of downtown Montreal in the Place des Producteurs at the Marché Central. The wholesale marketplace, though extremely competitive—in part due to increased produce sales by large chains such as Loblaw, Sobeys, and Walmart— continues to report robust sales and growth. Retailers are also doing well, and using packaging and other marketing strategies to differentiate themselves and generate customer loyalty.
The Marché Central
Montreal’s Marché Central, or Central Market, was a terminal market and produce hub in the 1960s. Today, one wholesaler remains in a complex that has been revamped into more of a retail mall. The other wholesalers are located nearby in individual, privately-owned and operated locations.
“By the 1990s, there were only a few wholesalers left at the Marché Central,” confirms George Pitsikoulis, president of Canadawide Fruit Wholesalers, Inc. “Up until three years ago, there were two wholesalers left, including us, and now there is only one. The rest is retail—Costco, Best Buy, a movie theater, and such. It’s only called the Marché Central because it is in a central location.”
Canadawide moved out of the Marché Central two years ago, motivated by a buyout offer from the owners of the property. “The landlords made us an offer to release the lease which enabled us to move and build a new facility with a 30,000-square-foot showroom, a warehouse that can hold 7,000 pallets, and space for our packaging program all in one location,” Pitsikoulis explains.
Wholesalers and Retailers
Overall, wholesale business seems to be doing well in the region, despite tough competition and more retailers setting up their own distribution networks. “It’s very competitive,” Pitsikoulis agrees, but “no more or less than New York or Chicago or anywhere else. The chains mostly source direct, but do use a number of local distributors to fill gaps and help with some programs. We participate in [these programs] along with other wholesalers.”
“It used to be the chains bought quite a bit off the wholesalers,” comments Mario Ceccarielli, president at Golden Garden International, “but now, they only use the wholesalers when they’re extremely short, and then they want it for almost nothing. The wholesalers are all fighting over the same smaller retail stores. As a broker who works with wholesalers, the chains have impacted my business, too. I rely on wholesale business.”
Even with the stiff competition and the changing buying patterns of chain stores, wholesale business appears to be relatively healthy and even poised for growth. “The wholesalers are reporting that their business continues to grow,” notes Marie Gosselin, president and interim CEO at the Quebec Produce Marketing Association (QPMA), based in St.-Leonard, a borough located about 20 miles from downtown Montreal.
“We know Loblaw and Walmart buy directly from the growers and generally don’t use the wholesalers,” continues Gosselin. “However, many of the specialty fruit stores and smaller retailers that have closed in recent years are or will be reopening, and they will provide more business for the wholesalers.”
Selling Local
The Marché Central, however, is still where local growers bring their harvests for increasingly popular seasonal direct-to-consumer sales.
André Plante, general director of the Quebec Produce Growers Association in Montreal, says that until growers find a more suitable location for a market, they plan to stay at the Marché Central.
“There is a platform for about 100 growers,” Plante says. “The owner of the property would like us to move, to build the last phase of the proposed retail market, but until there is a better place for us to go, we will not go.” Plante says the association has a 40-year lease and with nowhere to relocate, they’re drawing up plans for a redesigned platform to better serve customers.
The buy-local trend remains a bright spot in selling fresh produce, both in Montreal and throughout Quebec, and is supported by all levels of the industry, including the press.
“The biggest trend everyone is talking about is buy-local,” says Gosselin. “Local produce tastes better, is good for the economy and good for the environment. New stores opening up are capitalizing on this trend and offering both specialty and local products.”
Even the chains advertise and sell local produce throughout the season, confirms Plante, which is good for growers and business in general.
Export Opportunities
This year, in addition to a better exchange rate, the Montreal-Quebec region experienced exceptional weather.
“For about 2 years, we’ve had very stable weather,” Plante observes. “No major storms or heat waves, and this has produced a very good yield. When combined with the exchange rate, this year has been the best year for growers in the last 10 years.”
Plante says the region is currently seeing expansion of its greenhouse operations, in part because of a possible government subsidy that would offset energy-related costs. “One company is investing $10 million in cucumbers and peppers this year, and all the major greenhouse growers are expanding. If we assume the exchange rate will stay the same for the next three to five years, we see an increased opportunity to grow produce for export.”
Plante expects about 40 percent of the region’s crops to be exported during the year, a level not seen since the mid-1990s. Typical export volume for the past 15 to 20 years has been closer to 25 percent, primarily because of the currency fluctuations and the unfavorable exchange rate.
“The expansion in greenhouse growing will meet increasing demand for local produce, as well as the export market,” Gosselin agrees. “I think growers are well aware of what’s going on in California, and looking to take advantage of this opportunity.”
In addition to local loyalty from Montreal and Quebec consumers, Canada produce is gaining in popularity in the nearby U.S. market, in part due to its quality as well as the now-favorable exchange rate. “Our local produce had built a good reputation in years past, which eroded when the Canadian dollar and U.S. dollar came on par,” remarks Pitsikoulis. “But this has been revived as the Canadian dollar has weakened, and the quality of our produce is second to none.”
“The main market for our produce is the East Coast,” Plante says. “The majority of our crops are similar to those from California. We have a similar climate that is good for growing field crops such as lettuce, broccoli, and cauliflower. The drought-related shortages in California have created an opportunity for us to increase our market share on the East Coast.”
With water issues in California a longer-term problem than too little rain or snow pack, as increases in demand for both residential and agricultural water tax the state’s aquifers and inadequate infrastructure, there exists a clear opportunity for the Montreal-Quebec region to boost its sales to the vastly populated East Coast region and its many grocery retailers, restaurants, and consumers.
An Export Hiccup
Even with the boon, not everyone is reaping all the rewards. More export sales are certainly good for the fresh produce supply chain, but fewer imports take their toll on transportation companies, who are bringing back trucks with less-than-truckload lots or empty.
Canada is also facing some self-imposed obstacles as well. According to Plante, growers are frustrated with recurring delays due to necessary inspections by the Canadian Food Inspection Agency (CFIA).
“Every year, they cut staff and we have more and more problems getting timely inspections. There’s a lot of pressure on growers to ship within 24 hours, but without CFIA inspections, we can’t send anything across the border,” Plante laments.
“This is impacting our potato crop, and we’re also struggling with getting timely phytosanitary inspections on commodities such as green onions and leeks. Conversely, because of a new regulation, there are more random farm inspections, while [CFIA personnel] are unable to perform crop inspections for exports,” Plante says.
Trends in Packaging
Packaging is a hot and growing trend both on the wholesale and retail side. Gosselin says precut, prewashed, and ready-to-eat-produce continues to gain in popularity, particularly in Quebec.
“Growers and stores are getting in on the trend,” Gosselin enthuses, “including new offerings with seasoned vegetables in microwavable bags. I think consumers want more fresh produce, but also want ease.”
The more urban-working Quebec crowd is a better target for prepared, packaged food. In Montreal, however, a significant ethnic population continues to buy bulk vegetables at smaller stores and neighborhood shops to prepare family favorites at home from scratch. Wholesalers such as Canadawide have a packaging division that caters to this trend, and provides produce packaging options to retailers.
“This trend is really about traditional items presented differently,”Pitsikoulis explains. “Grapes in stand-up pouches, different sizes and weights for bulk, and prepacked and ready-to-eat are all part of it. These help retailers differentiate their offerings from competitors and meet the wants of their core customers.”
Environmental Awareness
Consumers want fresh, local (when possible), and convenience as needed, but they also want environmentally-friendly packaging and higher-quality produce at reasonable prices. “We see some consumer confusion, because they want pesticide-free, organic produce, but they will buy it in a plastic bag,” Gosselin contends. “However, more and more, consumers are demanding that packaging is made from recycled materials, and can be recycled after use.” Currently, she notes, “There are also compostable packages made from corn.”
A number of positively-themed, widely distributed advertising campaigns have contributed to increased consumption of fruits and vegetables in the region. The QPMA’s “I Love 5 to 10” fresh produce-serving initiative is still going strong after a decade.
“We’ll continue the campaign for another year, and are considering what the next campaign might be,” states Gosselin, who says the organization has been concentrating on its website and social media initiatives, including its Facebook page. She notes QPMA is also working on raising consumer awareness about fresh fruits and vegetables through direct-to-consumer surveys that discuss various food items and healthy eating habits.
While the population of the region isn’t surging, demand for fresh produce continues to rise. Part of this is a loyalty to locally produced items, which are further supported by educational campaigns and promotions from trade associations and commodity groups. And as demand stimulates the growth of new, smaller stores in the shadows of the chain giants, it is good news for the wholesalers who depend on small-to-midsize retailers and independents for their business.
Meanwhile, growers in Quebec and throughout Canada are expanding crops and yields to meet climbing demand for local fruits and vegetables, and to capitalize on an export opportunity driven by a lower Canadian dollar and shortages out of California. For la Belle Province’s produce suppliers, and the many consumers in and around Montreal, the forecast remains bright for a robust produce industry.
Photograph courtesy of the Quebec Produce Growers Association.
