Canada keeps presence among smaller turnout
The coronavirus pandemic continues to play havoc with business and trade around the world, yet the food and drink sector in Canada appears to have shrugged off negative impacts better than might have been expected. The flow of imports to the significant Japanese market are holding up well.
Companies able to take part in the annual Foodex trade show, at Makuhari Messe convention center in Chiba, agreed that the fair was quieter than it had been two years ago, when last staged. Nevertheless, given that the event has grown to be the biggest of its kind in Asia, participants found the conversations they had were most instructive.
“We’re all in this together and that’s exactly how we are going to get out of it.”
As well as being able to catch up with long-standing partners in the industry and make new contacts — who in the future may well turn into clients — exhibitors were able to speak at length with others in the business, due to the relatively low footfall at this year’s event.
Participants thus were able to identify emerging Japanese trends, from which Canadian companies are in a strong position to benefit.
“The meetings that I have had so far have been really serious, and I would much rather have one good business meeting than deal with 100 tire-kickers,” said Mary Beth Takao, senior commercial officer for the Alberta Japan Office.
“As well as those solid conversations, I also think that our existing partners are really glad to see us here again,” she said. “It’s a sign that we’re committed to the market — they truly appreciate that, and it goes a long way in a country where it takes a long time to build up strong business relationships and gain traction.
“Yes, business has been challenging and the restaurant sector has been struggling, but I’m getting a sense of empathy from the people that I’ve been speaking to, the sense that we’re all in this together — and that’s exactly how we are going to get out of it, too,” she said.
Those discussions have also been the source of inside information, notably that Japanese consumers are increasingly looking for healthy and organic products. The sector has been strong in North America and Europe for nearly 20 years, and Japan is catching on to the idea, Takao believes.
“People are definitely looking for healthy products and maybe that is a reflection of everything that has been happening with the coronavirus, but they are, suddenly, really into it,” she said.
Canola oil and flax seed products were in demand at Foodex, along with low-salt products, while Japanese food importers “want more honey than we can send them,” Takao added.
Alberta honey is one product that is benefitting from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade pact, she explained, with the tariff of 25.5 per cent on natural honey slashed to 12.7 per cent as of April 1 this year. It will be completely eliminated as of April 1, 2023.
Other winners under the trade deal include cherries, with the tariff cut from 8.5 per cent to 1.7 per cent as of April 1 this year and due to be abolished in two years’ time. Canadian exports of cherries have risen in value from about C$20,000, after the fruit was granted preferential access to Japan in 2018, to have been worth C$1.7 million in 2020.
With prices about to drop further, the outlook for Canadian exporters is positive. Meanwhile, the 12 per cent tariff on frozen cherries has already been removed and the 13.8 per cent tax on frozen sour cherries will also go in 2023.
Canadian meat products have also fared better under the CPTPP, with Japan easing tariffs on pork and beef imports. Beef tariffs were cut from 38.5 per cent prior to the agreement to 25 per cent on April 1. This has helped to make Canada the third-largest supplier of beef to Japan, after the United States and Australia.
Overall, in 2020 agriculture and seafood products accounted for nearly 40 per cent of all Canadian exports to Japan, for a total of C$4.9 billion, up 3.48 per cent on the previous year. The figures are impressive and encouraging, especially given the trying circumstances.
Exports of oilseeds, primarily canola and soy seed, rose C$139.8 million, a 10.1 per cent jump year on year, while grains climbed 14.8 per cent, marking an increase of C$124 million.
Most impressive, however, was the performance of beverages. This was led by whiskey, exports of which soared 90.8 per cent or C$12.8 million in value.
At the other end of the scale, Canadian exports of frozen french fries fared badly in 2020. Sales of the product fell more than 31 per cent, reflecting the closures or dramatic cut in operations that Japanese restaurants experienced as a result of the health crisis.
Jamie Paquin together with his wife and business partner, Nozomi Mihara, run Heavenly Vines. It is the world’s only all-Canadian wine store.
They were at Foodex as part of an ongoing campaign to convince wine aficionados that Canadian terroirs can be just as good as those in wine-growing regions of the world generally still considered traditional.
“Canada has sold itself as a land of maple syrup and the northern lights, but we want to show that Canada also has soil that is capable of producing wines that really are the equal of many others around the world,” Paquin said.
“Our winters can be a challenge, of course, but many of our reds compare very favourably with Burgundies and Bordeaux,” he said. “And Canada also has a quite remarkable range of climates, going all the way to the near-desert regions of the Okanagan Valley in British Columbia.”
The problem, however, is communicating the quality of Canadian wines to the wider Japanese audience, many of whom simply assume that labels from France, Italy or Spain are what they should be buying.
“A lot of what we have to do is simply education, and we are working with a number of restaurants and recognized wine experts here to get that message across,” he said. “And while I don’t think that Japanese will be huge buyers in the future, I do believe that we can convince a lot of people of the quality of Canadian wines, particularly at the higher end of the market.”
With the Canada-based representatives of food and drink manufacturers unable to enter Japan because of the coronavirus restrictions, promotion was largely left to local partners, such as Masashi Tanigawa, president of Inochinomoto Co., who was at the trade show to promote the various products of Innofoods Inc.
Only founded in 1981 and still based in British Columbia, the company produces snacks that are vegan-friendly, gluten and genetically modified organism-free, and only use the best ingredients, Tanigawa said. And he believes they are ideal for the Japanese market because of producers’ commitment to quality and the incorporation of superfoods, including quinoa, hemp and flax seeds, as well as such other products as cranberries, cherries, cinnamon, pecans and, of course, maple syrup.
“We have had a good reaction from the people who have stopped by our display and tried some of the samples that we have,” he said. “Companies here are looking for products that are healthy and from verified sources, but they also need to appeal to the Japanese palate to work.
“We are seeing rising demand for our products in Europe and the US, but Japan is a little behind this interest in organic and healthy foods and snacks,” he said. “I’m sure these products can help to open the door and encourage more people to try organic foods. And as soon as they have tasted them, I’m sure they would buy them.”
Innofoods products are currently available through Costco outlets across the country, but Tanigawa was hoping the food expo would introduce him to potential new partners.
“We came here to speak with supermarkets, distributors, retailers, café and restaurant operators and, after only the second day, I think we have found a new partner to work with,” he said. “For us, it looks like being here has paid off.”