1. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Canada Initiative

2. New and Noteworthy

3. Canada’s new political landscape

4. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org  October federal election = vast change. New majority Liberal government  Engagement was strong; largest voter turnout since 1993 (68%)  Change: 200 first-time Members of Parliament with record number of indigenous Members of Parliament (MPs) and women MPs elected  Transparency: the tone reflects change National media will gain more access to Prime Minister and his policies Gender parity achieved in Federal Cabinet Public release of Ministerial mandate letters as an historic first Canada’s new political landscape

5. Trans Pacific Partnership Agreement May open door to dairy and poultry imports – previously high-tariff categories Canada would give TPP members – including the United States – duty-free access to 3.25 per cent of its dairy market and 2.1% of its poultry market Still needs to be ratified. Generally supported by in-coming Liberals; new Minister of Agriculture and Agri-food, Hon. Lawrence MacAulay, has publically stated his support “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org

6. Exporting to Canada

7. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org 1.Geographic proximity 2.Duty-free trade (most products) under NAFTA/TPP 3.Canadians consider U.S. food as ‘next best to local’ 4.Similar tastes and trends 5.Canada’s limited growing season Top Five Reasons to Export to Canada

8. United States’ Number Two Export Market Source: Global Trade Atlas CanadaMexico Japan EU China

9. Top U.S. Consumer-Oriented Product Markets (2014 CY ) Consumer-Oriented Products

10. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Size of the Canadian Market Population: 35.1 million. Two-thirds of population lives within 200 miles of U.S. border 62% of population lives in Ontario & Quebec (eastern Canada) Canadian market size is 11% of U.S. market size Canada is officially bilingual (French/English). French population is primarily in Quebec Statistics Canada projects that, by 2031, approximately 28% of the population will be foreign-born

11. Market Food Trends Value, including private label Better-for-you foods Convenience: fast & easy Sustainable practices Ethnic foods Innovation: unique flavours, packaging, taste

12. Total agricultural exports to Canada: $21 billion (15 per cent of total U.S. food & agriculture exports) Red meat ($2.2 billion) Prepared foods ($1.9 billion) Fresh fruits ($1.8 billion) Fresh vegetables ($1.8 billion) Snack foods ($1.3 billion) Non-alcoholic beverages ($1.2 billion) Fishery products ($906 million) Source: USDA FAS GAIN Report Number CA 14021: An Overview of the Canadian Retail Landscape U.S. Exports to Canada “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org

13. Challenges to Entering the Canadian Market

14. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Regulatory: Bilingual packaging Metric measures Different nutrition and ingredient label requirements Different health and nutrition claim regulations Some regulated package sizes (e.g. honey) Challenges

16. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Financial: Cost of doing business: listing fees, broker fees, distributor markups, exchange rate Structural: Consolidated retail market, fewer buyers Geographic: Dispersed population, high marketing and distribution costs Quotas: Restricted imports in some categories (dairy, poultry, eggs) Challenges

17. Basics for a New Exporter

18. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Question: Is there an opportunity to compete in Canada?

19. Build and stabilize your U.S. business before considering export markets Complete market research: Competition, target audiences, regulatory requirements Establish objectives: What do you want to achieve in Canada? Ensure production and distribution capacity: Can you serve the market? Question: What steps must a small U.S. exporter take to be competitive?

20. Access to sources of funding and support: SUSTA, state programs Product’s unique selling proposition: Innovation, appeal to specific audiences Pricing strategy: Can you enter the market at a competitive price point? Customs procedures and documentation Regulatory compliance: Claims, packaging, labeling requirements Question: What do small companies need to know before considering Canada?

21. Costs vary based on many factors: Size and weight of product affects shipping costs Complexity of label (translation, adaptation, redesign) Chosen partner (broker/distributor/ importer) Customs broker or agent expenses Cost of product samples (including duties) Product stability (is it perishable?) Listing fees, if applicable Nature of product (e.g. regulated package size) Currency rate Question: What is the cost breakdown?

22. NAFTA certificate: For products with preferential tariff treatment Commercial invoice Cargo control document Canada customs coding form Health certificates, or other federal government forms (e.g. meat inspection certificate) “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Question: What documentation is required?

23. Visit the Canadian Food Inspection Agency (CFIA)’s automated import reference system (AIRS) for specific import requirements. Question: What documentation is required?

24. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org A broker/distributor/importer is recommended Distributors/importers: Typically import and take title of product before storing and selling Brokers: Act as sales agents pitching the product to potential buyers and setting up a network of food distributors Direct sales are possible but may be difficult due to lack of knowledge, contacts, etc. Question: Will U.S. exporters need a broker?

25. Products

26. Dry Grocery: Asian sauces, tortillas & wraps, cracker chips, bagels, high-fiber pasta, nuts, healthy snack bars, cereals Beverages: Premium vegetable & fruit juices, chilled smoothies, coffee Confectionery: Chocolate Chilled & Frozen: Soy-based dessert, noodles, oven-baked potato chips, soup, salad dressings, soy milk, thin-crust pizza, processed vegetables Products – Value-Added Opportunities

27. Challenges: Saturated market, high price for some of the products, listing fees Target: Food brokers, distributors, retail (branded or private label), foodservice “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Products – Value-Added

28. Opportunity: Growing demand for sustainable seafood Challenges: Rapid penetration of Chinese, Thai seafood, increasing aquaculture (farmed salmon, trout, steelhead, arctic char, mussels, oysters, clams) Target: Seafood importers, retailers “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Products – Seafood

29. Opportunity: Canada’s limited growing season (reliance on imports from Nov. to June). Growth in bagged salads, onions, kale, yams, kohlrabi, artichokes, okra Challenges: ‘Buy Local’. Mexico and Chile competitive due to low prices. Regulated container sizes Target: Produce importers & distributors, retail, processed or packaged produce companies Products – Produce

30. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Opportunity: Canada relies on floriculture & nursery plant imports Challenges: Ornamental horticulture sector is mature. Plant hardiness zones (typically zone 3-7) Target : Horticulture brokers, wholesalers, retailers, nurseries, garden centers Products – Horticulture

31. Products with tariff rate quotas: (changing under TPP) Chicken Turkey Dairy Eggs & Egg Products Margarine Wine, Spirits and Beer: Liquor boards in most provinces are regulated monopolies Products with Barriers

32. Retail vs. Food Service

33. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Retail – Steps to Export SupplierCustomsImporter Broker Distributor Wholesaler Retailer Specialty

34. Hotel Restaurant Institution “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Foodservice – Steps to Export SupplierCustomsImporter Broker Distributor Wholesaler Re-packer

35. Upcoming Events

36. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org SIAL Canada Show (April 13-15) FIHOQ Expo (October) Events – Canadian Trade Shows

37. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Inbound Horticulture Mission (January 5-8) Inbound Mission to Seafood Expo North America (March 6-8) Inbound Mission to TX, OK and KY (September 25 – October 1) Inbound Mission to the PMA Fresh Summit (October 12-16) Events – Inbound Trade Missions

38. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Canada Outbound Mission to Toronto (Sept. 6-9) Events – Outbound Trade Missions

39. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Events by Product Category

40. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org SIAL Canada Show (April 13-15) Inbound Mission to TX, OK and KY (Sept. 25 - Oct. 5) Canada Outbound Mission to Toronto (September 8-11) Events – Value Added/Packaged Products

41. Inbound Mission to Seafood Expo North America (March 6-8) Inbound Horticulture Mission (January 6-10) FIHOQ Expo (October) Events – Horticulture Inbound Mission to the PMA Fresh Summit (October 12-16) Events – Seafood Events – Produce

42. Thank you

43. Thanks “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Contact SUSTA 701 Poydras Street, Suite 3845 One Shell Square Phone: (504) 568-5986 Fax: 504-568-6010 www.susta.org SUSTA’s Canadian In-Country Consultant Alison George, Senior Vice President + Graeme Morrison, Coordinator Argyle Public Relationships 175 Bloor Street East, South Tower, Suite 1007 Toronto, ON M4W 3R8 416-968-7311 ext 230 / ext 222 ageorge@argylepr.com / gmorrison@argylepr.com