If you are interested in exporting to Canada, check out the following tips to make sure your food business is set up for success right from the start:
- Analyze the local market and focus on one or two provinces or urban areas first. Canada’s population may seem very homogenous on first sight, however, it is very diverse. For example, Quebecers spend more on food per household even though their disposable income is lower than the national average. As for Vancouver, it has a large Asian population and is also very health conscious. In fact, Vancouver was one of the first cities that has embraced organic food. However, organic products are becoming increasingly popular in the rest of Canada as well. Furthermore, 2/3 of the Canadian population live in Ontario and Quebec, which may be a reason to focus on these two provinces first. Toronto certainly represents an interesting market since it is Canada’s biggest city
- Familiarize yourself with the requirements for exporting food to Canada, which may be different from the requirements in the US. For example, the fact that a food additive is allowed in the US does not necessarily mean it is also allowed in Canada. Certain controlled products, such as dairy or meat also require special consideration. The Canadian dairy sector operates under a supply management system, which plans domestic production and administers pricing, and import controls based on quota. An import permit issued by Global affairs Canada is required for shipment of cheese to enter Canada. Swiss cheese in Canada also got more competition from quota allocated to EU cheese under the CETA agreement. Whereas cheese originating from the EU has been allocated a new quota, Swiss cheese is part of Canada’s World Trade Organization (WTO) tariff rate quota for non-EU originating cheese. Find more information on controlled products here.
- Make sure you comply with Canadian food regulations maintained by Health Canada and the Canadian Food Inspection Agency (CFIA). CFIA enforces Health Canada policies and standards governing the safety and nutritional quality of all food sold in Canada and verifies industry compliance with federal acts and regulations. In general, Health Canada does not require a pre-market notification (Exceptions are food additives, infant formulas and novel foods). However, the food that is being sold in Canada needs to conform with the requirements set out by Health Canada, such as meeting general food safety requirements and having been manufactured, prepared, stored and labelled under sanitary conditions. The food also needs to comply with Canadian labelling requirements (more info below). In addition, Canadian distributors and foreign manufacturers need to comply with the Safe food for Canadian Act and the Safe Food for Canadian Regulations.
There are three major components of the regulations:- Licensing: Canadian importers as well as non-resident importers must have a license or apply for one if they don’t already have one.
- Preventative Control Planning: This document shows how food safety will be guaranteed and how the company will comply with regulations. This includes all aspects such as manufacturing, hygiene, transport, storage, etc.). Every importer has to develop such a plan, document it, maintain it and implement it.
- Recall Traceability: System that includes information about a product, such as origin, shipping, reception dates, as well as contact information throughout the entire production cycle. This plan must be available electronically in Canada (in English and French) and allow to trace the product(s).
- Make sure that any food additives are on the list of permitted food additives. A list of permitted food additives can be found here. For any food additive that does not appear on one of the lists you must file a food additive submission with Health Canada for assessment.
- Ensure your labels comply with Canadian regulations. By law most packaged food must be labelled with a nutrition facts table, an ingredient list, and some packaged food may also have nutrition and health claims such as low sodium. Mandatory information on consumer packaged food must be shown in English and French. The following checklist provides a good overview of the labelling requirements. If you are planning to sell in Quebec, you also need to take into account Quebec’s labelling requirements. You will find more information in this brochure published by “Quebec’s Office de la langue française” (in French only). We recommend getting your labels checked by an expert before entering the Canadian market, to make sure that you are compliant with the regulations.
- Be careful about the claims you make. When a health claim is made, such as a disease risk reduction claim or a therapeutic claim, then this may mean that the food is considered a drug – which may require a pre-market assessment.
- Find the right distribution partner. There are only a couple of national wholesale distributors in Canada that operate coast to coast. According to IBISWorld over 80% of the market is served by smaller more local distributors, who serve specific markets. For example a distributor could be focused on Ontario and Quebec only, or only serve the Western provinces. IBISWorld also projects that retail chains with their own distribution facilities are projected to increase in number and size. However, a lot of smaller specialty stores still work with distributors as they don’t have the capacity to work directly with retailers. Importers are required to have a license to import food into Canada. When choosing a distribution partner, make sure that your partner has a license in place and complies with the other requirements set out in the Safe Food for Canadians Regulations.
- Leverage your Swiss organic certification, if you have one. Organic products are becoming increasingly popular Canada and are commanding premium prices. If you have an organic certification it’s certainly an advantage. Canada and Switzerland have an agreement in place that mutually recognizes organic certifications. Organic products must be accompanied by an organic certificate issued by a Swiss Certification/ Inspection Body. Organic products certified in accordance with the Swiss organic system and exported to Canada may bear the Canada Organic Logo. A copy of the logo must be requested from the Swiss certification/inspection bodies responsible for the certification. For more information, please consult the following guidance document.
- Consider private label as a potential entryway into the Canadian market. Canadian Grocer‘s July 2018 article “The Rising Power of Private Label” indicates that private label store brands are rising in popularity, reporting five years of consistent growth and retail sales of $14.4 billion (or 18.6%) in 2017. According to Grow Trade’s Joanne Walsh, if supplying major grocery retailers like Loblaws, Sobeys, or Metro, private label can get your product on the shelf without having to pay listing fees. Since the portfolios of these retailers are already well-developed, they need products to fill in the gaps, unique items that are on trend or lower cost alternatives. Learn more about the opportunities through private label here.
- Attend tradeshows to meet with potential business partners. SIAL Canada which takes place alternately in Toronto or Montreal is one of the largest national tradeshows in the agri-food sector, where manufacturers, distributors, importers, wholesaler and retailers meet, and present their products and innovations. As for the health food sector, it is regionally fragmented, which is why the Canadian Health Food Assocation (CHFA) organizes tradeshows in Toronto, Vancouver & Montreal. To attend you need to be member of the CHFA.
