opportunity in estevan...in 2016, roughly 350,000 acres seeded to pulse crops, the bulk of that in...
TRANSCRIPT
Opportunity in EATC
EATC Region Value-Added Agriculture Processing
Lead Generation Project
About Siray Consulting
● Western Canada’s leading investment attraction consultancy
● Headquartered in Medicine Hat, Alberta to meet the needs of small urban and
rural communities
● Experienced team qualified in all aspects of business and economic
development including land development, private investing, lead generation,
sales and marketing
Project Purpose
Identify firms in the
value-added agriculture
processing sector with
high growth potential
looking to establish a
processing facility in the
Eastern Alberta Trade
Corridor region.
Project Phases
● Phase 1 (October – December)○ Confirm opportunities in canola, barley, pulse crops, oats, flax, hemp and quinoa
● Phase 2 (January – February)○ Company identification – people and projects
● Phase 3 (February – March)○ Outreach strategy
● Phase 4 (March - April) ○ Marketing content & submit final report
Reviewed and analyzed background information
● PEP Bio-industrial and Meats Business
Opportunity Study (2006)
● Agri-food Industry in SE Alberta (2009)
● Opportunities in Pulse Processing (2013)
● EATC Value Added Investment Attraction
Strategy (2016) PEP website and PDFs
● Hemp Alberta Northern Advantage
Transportation Study (2018)
● Various planning documents, strategic plans,
website material, etc.
Identified and Analyzed EATC Assets
● Demographics○ Total population of ~320,000
○ Available, educated and growing workforce
○ Nice mix of small urban, small town, and rural communities
● Logistics○ Strong market access provided by Canada’s two major east-west highways, a high load
corridor, CP and CN railways, various short line operators, and various regional airports
○ Located within an 8 hour drive of more than 5,000,000 people
● Real Estate○ Developed industrial parks located throughout the region offering low-cost land, highway and
rail access, proximity to feedstock, industrial utilities, and more
EATC Assets (con’t)
● Education○ Post secondary institutions including Lakeland College, Portage College, University of Blue
Quills University of Alberta Augustana Campus, and Medicine Hat College
● Research and Innovation○ Food Sciences Centre at Portage College, Lakeland Agricultural Research Association,
Lakeland College, InnoTech Alberta, Crop Diversification Centre
● Utilities○ Fully serviced throughout the region
● Quality of Life○ Affordable housing, safe communities, recreational opportunities
EATC Region Value Proposition
● Skilled Labour
● Competitive Business Environment
● World Class Agriculture
Must be industry specific!!
Canola
● One of Canada’s primary canola producing regions
● Northern region is heavy production, southern region is light production
● In 2016, more than 2,000,000 acres seeded to canola, the bulk of that in the
North
● Home to a crushing facility in Lloyd; in close proximity to facilities in
Edmonton and Lethbridge
● Nationally, Canola contributes $26.7 billion to Canadian economy, generates
25% of all farm cash receipts, with projected CAGR of 6% through 2024
● 14 crushing and refining plants transform canola into oil for human
consumption and meal for animal consumption○ Research into canola meal for human consumption is ongoing
Barley
● Major barley producing region
● In 2016, nearly 900,000 acres seeded to barley
● Barley market is segmented into five grades – malt, food, feed, pharma and
cosmetic – with malted grade at 40% market share
● Commercial malting companies active in Alberta include Canada Malting,
Rahr Malting
Pulses
● All major pulse crops including beans, chickpeas, lentils and peas
● In 2016, roughly 350,000 acres seeded to pulse crops, the bulk of that in the
South
● Canada exported $4.1 billion of pulse crops in 2016○ U.S. exports growing at 13% CAGR over past five years
● Canada’s various pulse processing facilities export to global markets
● Recent major announcements include Cut Knife, Moose Jaw, Portage la
Prairie, North Dakota○ Pulse fractions include fibre, flour, powder, protein and starch
Oats
● EATC region grows significant quantities of oats for food and feed
● In 2016, seeded oats on nearly 300,000 acres of land
● Nationally, Canada is the world’s largest exporter of oats, 60% to the US
● 55 commercial wheat and oat mills operate in 8 of Canadas’ 13 provinces,
with wheat milling concentrated near urban centres, and oat milling
concentrated on the Canadian prairies
Flax
● Niche crop, with roughly 30,000 acres in 2016
● Produced for food and fibre, the CAGR for flaxseed is roughly 3%
Hemp (Cannabis)
● Niche crop, with roughly 18,000 acres seed in AB in 2016
● Harvested for food, fibre and fractions, hemp and cannabis industry is
expected to grow rapidly with some forecasts calling for 100% CAGR
● Recent years have seen an explosion of hemp and cannabis producers and
processors in the EATC region
● High risk, high reward
Quinoa
● Niche crop with just under 12,000 acres seeded in Canada in 2016, a
massive increase from 312 acres seed in 2011
● In Alberta, there were 1,000 acres seeded in 2016
● No known processors in Alberta
● Forecast to see 26% CAGR
Value-Added Agriculture Critical Success
Factors
● Access to commodities to produce ingredients
● Access to markets to produce consumer consumer packaged goods
● Access to skilled labour force, utilities, and “shovel-ready” land
● Welcoming community
EATC Region Constraints
● Railroad capacity
● Generally low unemployment rate / tight labour market
● Small internal market and long distance to large consumer markets
● Time and resources required to play the “investment attraction game”
EATC Region SWOT Analysis
Strengths Weaknesses
• Quality production
• Market access
• Land and utilities
• Pro-business & flexibility
• Market size
• Distance to market
• Serviced land (awareness)
Opportunities Threats
• New markets and market
segments
• Niche crops and value added
agriculture
• Foreign competition (US)
• Global uncertainty
• Changing market opportunity
Craft Distilling (Barley)
● Globally, forecast ~30% CAGR through 2025
● Increasing number of establishments suggests “craft” industry is growing at
expense of “corporate”
● Critical success factors include management team, access to capital, market
access, feedstock access
● Economic impact varies from $500,000 to $5,000,000 creating <5 jobs to >15
jobs
Extraction (Hemp)
● Globally, forecast to grow 25% up to 100%, depending on category, through
2023
● In Canada, hemp-derived CBD is regulated under Cannabis Act, creating
significant barrier to entry, alongside complex path-to-market
● EATC communities throughout the region have seen investment promises,
with many capital projects underway
● Critical success factors include access to feedstock, access to capital, access
to markets, management team, etc.
● Potential economic impact varies <$5,000,000 to >$25,000,000 creating <5
jobs to >25 jobs
Craft Brewing (Barley)
● Globally, forecast ~15% CAGR through 2025
● Nationally, number of breweries increased ~18% from 2016-2017
● Slowing number of establishments suggests industry is maturing, market is
becoming saturated
● Critical success factors include management team, access to capital, market
access, feedstock access
● Economic impact varies from $500,000 to $5,000,000 creating <5 jobs to >15
jobs
Bio-composites (Hemp, Flax)
● Globally, forecast 12.5% CAGR through 2025
● Interest in bio-composites is growing in terms of industrial applications for
automobiles, railway, aerospace, military, construction and packaging
● Critical success factors include access to feedstock (plant fibre), access to
markets, and access to skilled labour
● Potential economic impact >$5,000,000 creating >25 jobs
Plant-based Protein (Pulses, Canola, Hemp)
● “The type of opportunity that only comes once in a generation.” – Canada
West Foundation
● Globally, forecast 10% CAGR through 2025
● Plant-based ingedients such as protein, starch and fibre in high demand for a
variety of industries including food, pharma, cosmetics, and livestock
● Critical success factors include serviced land, logistics infrastructure, labour
force, business environment
● Potential economic impact >$5,000,000 creating >25 jobs
Gluten Free Food (Oats, Hemp, Flax, Quinoa)
● Globally, forecast 10% CAGR through 2024
● Target health conscious consumers, celiac disease, etc.
● Critical success factors include serviced industrial land, access to certified
feedstock and supply chains, skilled labour force, management, etc.
● Potential economic impact varies <$500,000 to >$5,000,000 creating <5 jobs
to >25 jobs
Craft Malting (Barley)
● Globally, forecast to grow at ~5% CAGR through 2025
● Currently dominated by multinationals – Canada Malting, Prairie Malting,
Rahr Malting
● Increasing number of establishments suggests “craft” is growing at expense
of “corporate”
● Critical success factors include management team, access to capital, market
access and feedstock access
● Economic impact varies from $500,000 to $5,000,000 creating <5 jobs to >15
jobs
Cold Pressed Oil (Canola, Flax, Hemp)
● Globally, forecast 5% CAGR through 2026
● Niche market, catering to health conscious consumers; ingredient for food
and cosmetics
● Critical success factors include access to feedstock, serviced land, and
markets
● Potential economic impact <$5,000,000 creating <5 jobs
Compound Annual Growth Rate Ranking
0
10
20
30
40
50
60
Hemp Fractions(CBD)
Craft Distilling Craft Brewing Biocomposite Plant Protein &Dairy
Gluten Free Craft Malting Cold Pressed Oil
CAGR
Economic Impact Ranking
0
2
4
6
8
10
12
14
16
Hemp Fractions(CBD)
Craft Distilling Craft Brewing Biocomposite Plant Protein &Dairy
Gluten Free Craft Malting Cold Pressed Oil
Economic Impact
Local Control Ranking
0
2
4
6
8
10
12
Hemp Fractions(CBD)
Craft Distilling Craft Brewing Biocomposite Plant Protein &Dairy
Gluten Free Craft Malting Cold Pressed Oil
Local Control
Opportunity Analysis
0
20
40
60
80
100
120
140
160
Hemp Fractions(CBD)
Craft Distilling Craft Brewing Biocomposite Plant Protein &Dairy
Gluten Free Craft Malting Cold PressedOil
Total Score
CAGR Local Control Impact Total
Summary of Findings
● Proceed to identify companies in hemp and cannabis, craft alcohol, and plant-
based protein sectors
● Proceed to develop outreach strategy and marketing content
Questions?