Calgary·Analysis

From cocktail bitters to canola oil: why Alberta's oldest industry has people excited

Alberta's agri-food sector has big ambitions.

The agri-food sector is undergoing a ‘renaissance’ but some fear rising costs are holding back competitiveness

Riders pass through a canola field near Cremona, Alta. A growing global middle class means a growing appetite for products like canola oil. (Jeff McIntosh/Canadian Press)

Say the word "farming," and most people think of bucolic notions of wide open fields of golden grain, horses grazing slowly near the creek, and cattle lowing as the sun sets over an old hip-roof barn.

But agriculture now involves cutting-edge genetics, high-end drone technology and in-depth metrical data analytics.

No. This ain't Old MacDonald's Farm.

This is the future of Alberta's agri-business as it looks toward feeding a booming global population. Rob Kaczanowski is an example of the new agricultural ambitions. He lives in Calgary, works in the oilpatch, and raises cocktail bitters.

The new agri-business

Kaczanowski has turned a hobby into a small, thriving business selling his handmade, locally sourced concoctions to 75 retailers in three countries.

"If you can have fun doing it and create a business why wouldn't you do that?" said Kaczanowski, who founded Black Cloud Bitters with his wife, Brandy Newman, three years ago.

"We've got sales in the U.S. We've got sales in Australia. If we had to pick countries, there's a lot of interesting themes coming out of Japan. I think there's a real liking for Canadian products there."

Brandy Newman and Rob Kaczanowski, who founded Calgary's Black Cloud Bitters in 2015. The company ships to 75 retailers in the U.S., Australia and Canada. (Tony Seskus/CBC)

Though small scale for the moment, Kaczanowski's company is representative of the breadth and aspirations of a much larger agri-food industry, a sector undergoing a cultural and technological revolution. While this year will no doubt prove difficult for many farmers — the result of drought and an early snow — there's great hope for the future of the business of agriculture.

While Alberta's provincial and civic leaders are banging the drums of diversification — hunting for new energy industry markets and attempting to woo the likes of Amazon — there's also a new-found focus on the agri-food industry.

The watchword for agriculture isn't survival, these days it's expansion.

An agricultural renaissance

"This is a very exciting time for agriculture and food," said Stan Blade, dean of the faculty of agricultural, life and environmental sciences at the University of Alberta.

"There really has been sort of this renaissance of people that are re-engaging and obviously they're doing it because they see there's a real economic opportunity that they are pursuing."

"This is a very exciting time for agriculture and food," said Stan Blade, dean of the faculty of agricultural, life and environmental sciences at the University of Alberta. (John Robertson/CBC)

Sounds hopeful. But for some longtime members of the agriculture sector these are words and ambitions with a history — a history that often overlaps with the times that the oilpatch is in trouble, and talk of diversification is all the rage. They say that if Alberta is really going to get serious about agriculture, and reach its full potential in the field, then all levels of government have to match the enthusiasm with action.

"I've heard other people say we should be a food superpower, and we should actually be that," said Ray Price, president of Sunterra Group, an Alberta-based business that owns farm, food processing and retail operations in the province.

"The difficulty is we put up barriers, internal barriers, our own barriers."

A quiet keystone

To think of Alberta is often to think oil. But agriculture has long been an economic pillar.

"It's one of those keystone economic sectors," said Rob Roach, director of insight on ATB Financial's economics and research team.

Agri-food contributed $6.5 billion to Alberta's gross domestic product in 2017, according to provincial figures. Though a fraction of the provincial total (Alberta's real GDP was pegged at $305 billion last year) it's a sector that punches above its weight.

It attracts economic activity, supports rural businesses and is known globally for its beef, wheat and canola. Its ranks encompass a wide swath that includes farmers, ranchers, food processors and beverage manufacturers.

All told, agri-food industries employ more than 75,000 people. Food and beverage manufacturing, which accounts for 23,000 of the total, was the largest among all manufacturing industries in Alberta. Nearly half of the jobs in food processing in 2017 were in meat.

"You might say, 'Well, it's only a small slice … of GDP,' [but] it's still significant," Roach said.

Last year, Alberta agri-food exports to 140 countries reached a record $11.2 billion. Of that tally, $5.6 billion was from value-added exports, up nearly 11 per cent, due to higher exports of crude canola oil, canola cake and meal, as well as beef, pork and other products. Exports for primary commodities — like wheat, barley, pulses and canola seed — was the biggest contributor to agri-food exports, totalling $5.7 billion, up 14 per cent from 2016.

A lot of numbers which add up well.

Big Rock has been exporting beer to South Korea since 2006 and last year to Japan as well. The company is looking at other markets too, including the U.S. (Kyle Bakx/CBC)

"The future is quite good," said Ward Toma of the Alberta Canola Producers Commission.

"The last decade or so we've had a steady increase in sales overseas and domestically as well. As the population of the world grows, [so does] the demand for food products. And oil — vegetable oils, canola oils — is part of that."

Yes. The world is getting bigger, and it's hungry.

Feeding a growing world

The federal government's advisory council on economic growth reported last year that by 2050 the global demand for food is expected to rise by 70 per cent. And it says, "the world will need to produce as much food in the next 45 years as in the previous 10,000."

Let that number sink in for a moment.

Three billion people are expected to enter the middle class in emerging markets between 2010 to 2030, the report says. That means billions of new consumers wanting value-added food.

"Beer and pastas, processed foods, frozen foods — all that stuff," Roach said.

"That's what the world and that global middle class would like to buy more of. We're in a really good position to keep supplying them, and grow that."

But being in a good position doesn't guarantee anything and there's a race among food-producing nations to cement themselves as suppliers.

"That's why there's some urgency," Roach said. In other words, Alberta has a narrow window to set itself up to capture market share.

Experts believe the province's strengths are considerable.

It has a long history, knowledge and experience in agriculture. It's got access to overseas markets via the West Coast, as well as close ties to the United States. There's also a "significant" amount of land capable of supporting a diversity of crops and livestock. And the sector has got much better at adding value to the food it produces.

There's significant research going on in Alberta on unmanned aerial vehicles and GIS mapping, which can help in crop and livestock management and monitoring. (Carolyn Dunn/CBC)

"We've been really good at exporting commodities for 100-plus years," Blade said.

Now, he said, there is more thinking, and new work, being done to help small and medium-sized companies develop new food products.

Like putting the cows back in Cowtown?

Cities of (agri)culture

Well. Maybe not literally. But…

Calgary Economic Development (CED) partnered with Olds College earlier this year to develop a 100-kilometre corridor where companies and entrepreneurs will be able to experiment with developing new agricultural technologies. It's part of CED's broader effort to attract new agri-food business to Calgary. The organization also wants to give new and established firms a boost.

"Agriculture has been a real staple of the Alberta economy for well over a century, and so primary commodities and value-added products are really vital to this province and Calgary as a whole," said David Ghoris, CED's business development manager for agribusiness.

So, while many think of Calgary as the heart of Canada's oilpatch, Ghoris said it's still an agricultural hub, too. One with several big players like Bayer Crop Science, Cargill and Alta Genetics.

Now, those names might not be as sexy as Apple, Amazon or Google, but they are a serious part of the economy.

CED also hopes to build out its homegrown agri-tech. Ghoris said there's significant research going on in Alberta on unmanned aerial vehicles and GIS mapping, which can help in crop and livestock management and monitoring.

New tech, which could lead to new markets. But we may need to also expand how we think of agriculture and its opportunities.

Brewing a better future for foodstuff

Farmers and ranchers will always be at the core. But add chocolatiers, brewers and distillers to the mix.

To grow, the agri-food sector needs to develop markets for its products. While traditional agriculture continues to evolve and grow, new products are adding to Alberta's offering. Take Kaczanowski's Black Cloud Bitters or Big Rock Brewery.

Big Rock has been exporting beer to South Korea since 2006, and last year, with the help of Alberta Agriculture, sold their popular suds in Japan as well. The company is looking at other markets too, including the U.S.

Economic Development and Trade Minister Deron Bilous (centre) addresses a Chinese trade delegation, joined by Canada's ambassador to China, John McCallum (right). China is a key market for Alberta's agri-food industry. (CBC)
 

Alberta beef is a thing. A big thing. A cultural expression of something we market as unique and high quality. And now barley is making a name for itself.

"There's a value proposition to American consumers when you say I'm from Alberta making it with Alberta barley," said Brad Goddard, Big Rock's director of business development.

"I'm glad that Alberta stands for quality ingredients, much like Alberta beef has done an amazing job of having Alberta stand for quality beef."

The Alberta and Canadian governments are getting in the game through trade offices.

Alberta Economic Development Minister Deron Bilous said the government has placed agriculture experts at international trade offices, including China and Japan, where they work with Alberta companies to help them break into markets or expand market share.

During talks in Dubai, Bilous said he met with a company that wants to increase its footprint in food processing in the province.

"There's growing demand from countries worldwide for high-quality, safe food supply but also to participate in the supply chain," Bilous said.

But some argue that supply chain is chained down.

Costs, burdens and barriers

Ray Price's family has farming roots that stretch back decades in the province. He's currently the president of Sunterra — a company with a hand in all aspects of the agriculture sector, from field to fork, including retailer Sunterra Market.

Fundamentally, he said, Alberta has its agricultural advantages, but there are costs hurting competitiveness in a global market. He says the carbon tax increases the cost of fuel and transportation, as does rail capacity problems — the trickle-down effect of having to ship more oil by rail.

Price would like to see cities zone areas for agri-food processing, which would simplify the development process and create jobs. It would also help with developing the high-income, high-tech, smart agriculture sector.

"You can't have higher-value agriculture without having the base agriculture here," Price said. "You can't leap past and say 'We're just going to have high-tech agriculture,' without having the ag processing and ag production side."

So, support the base, build up the tech.

"The opportunities are amazing," said Price.

ATB's Roach says agriculture and agri-food can't replace the "golden goose" of the Alberta oilpatch, but that its contribution shouldn't be overlooked, nor should its potential for growth.

"That translates into billions of dollars in economic activity and that can make the difference between a good year in the province and a bad."


Calgary: The Road Ahead is CBC Calgary's special focus on our city as it passes through the crucible of the downturn: the challenges we face, and the possible solutions as we explore what kind of Calgary we want to create. Have an idea? Email us at calgarytheroadahead@cbc.ca


More stories from the series:

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.