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

2. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org U.S. is Canada’s number one trading partner. The United States is Canada's largest agricultural trading partner, buying 51% of Canadian exports and supplying 59% of Canadian imports. Agricultural exports from the United States to Canada accounted for 16% of total U.S. food and agricultural product exports of $98.5 billion. Consumer-oriented agricultural products accounted for 76% of total U.S. food and agricultural product sales to Canada in CY2009 with fresh and processed fruits and vegetables, snack foods, red meats, breakfast cereals, and fruit and vegetable juice products as the category leaders. The Big Picture Brief Description

3. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org The Big Picture Current Exports to Canada

4. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org The Big Picture Products Exported to Canada (2010) List of Products Amount ($US) ‘000 Preparations of Cereals, Flour, Starch or Milk (Including Bread and Pastry) 1,821,065 Edible Fruits and Nuts 1,735,663 Miscellaneous Edible Preparations 1,622,128 Edible Vegetables and Certain Roots and Tubers 1,548,078 Meat and Edible Meat Offal 1,363,206 Beverages, Spirits and Vinegar 1,348,050 Source: Statistics Canada

5. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org List of Products Amount ($US) Residues and Waste from the Food Industries, and Prepared Animal Fodder 1,257,166 Preparations of Vegetables, Fruit, Nuts or Other Parts of Plants 1,078,175 Fish, Crustaceans, Molluscs and Other Aquatic Invertebrates 666,176 Meat, Fish and Seafood Preparations 659,506 Fats, Oils, Their Cleavage Products and Waxes 606,133 Cocoa and Cocoa Preparations 527,499 The Big Picture Products Exported to Canada (2010), continued

6. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org List of Products Amount ($US) Cereals 516,256 Coffee, Tea, Maté and Spices 440,526 Oil Seeds, Oleaginous Fruits, Industrial or Medicinal Plants, Straw and Fodder 421,772 Sugars and Sugar Confectionery 362,857 Dairy Produce, Eggs, Honey and Other Similar Edible Products of Animal Origin 228,160 Live Trees and Other Plants (Incl. Cut Flowers and Ornamental Foliage) 167,050 The Big Picture Products Exported to Canada (2010), continued

7. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org List of Products Amounts ($US) Products of the Milling Industry; Malt, Starches, Inulin and Wheat Gluten 156,900 Live Animals 121,404 Products of Animal Origin Not Elsewhere Classified 61,776 Tobacco and Manufactured Tobacco Substitutes 57,202 Lac, Gums, Resins and Other Vegetable Saps and Extracts 41,913 Vegetable Plaiting Material and Other Similar Vegetable Products 3,727 The Big Picture Products Exported to Canada (2010), continued

8. The Big Picture: Opportunities and Challenges “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org

9. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Pressure is growing on Canada to dismantle the quotas and import restrictions that protect its dairy and poultry producers from foreign competition Geographic proximity Little language barrier (exception: Quebec) Due to NAFTA, there are limited tariffs and fee barriers Canadian food preferences tend to be similar to those of Americans The Big Picture Opportunities

10. Challenges to Export “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Market size: The relative market size is small, with a limited number of retailers, brokers, importers and distributors Changing Consumer and Societal Demands: Canadian consumers are demanding more variety, convenience, environmentally-friendly and healthier food choices Increased Government Support: Government support of domestic public R&D in agri-food innovation and competitiveness has increased Technical requirements (e.g. product nutrition labeling) may pose challenges for select SUSTA producers

11. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Health Canada must be notified with sufficient accompanying information prior to the sale or advertisement of novel foods which are products of genetic modification Voluntary claims on foods that are and are not products of genetic engineering may be made provided such claims are truthful, not misleading, not deceptive, and not likely to create an erroneous impression of a food's character, value, composition, merit or safety Challenges GMO Ingredients

12. Challenges Tariff Barriers “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org First Come, First Served (FCFS) Tariff Rate Quotas (TRQ): Import quota allocations are not issued to individual companies Products subject to FCFS TRQs Margarine Wheat and wheat products Barley and barley products

13. Challenges Tariff Barriers, continued “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Tariff Rate Quotas (TRQ) Subject to Allocations: importers must have a specific import permit issued by the Minister for International Trade Goods subject to these TRQs Broiler hatching eggs and chicks, chicken, turkey Eggs and egg products Cheese, butter, milk and cream Butter milk, yogurt, ice cream and other dairy products

14. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Alcoholic Beverages: Provinces and territories have full control over the importation of intoxicating liquor into their jurisdictions Dairy Products: Subject to Dairy Products Regulations under the Canada Agricultural Products Act Eggs and Processed Eggs: Subject to Egg Regulations and Processed Egg Regulations of the Canadian Agricultural Products Act Challenges Non-Tariff Barriers

15. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Fish and Fish Products: Subject to the Fish Inspection Act and Regulations, which contain requirements for wholesomeness, labeling, packaging, grading, and health and safety Food Additives: Must conform to specifications in the Food Chemicals Codex Food Colour: Regulations concerning food colours are listed in the Food and Drug Regulations and must be certified Challenges Non-Tariff Barriers, continued

16. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Foods for Special Dietary Use, including Weight Loss: Subject to Food and Drug Regulations Fresh Fruits and Vegetables: Regulated by the Fresh Fruit and Vegetable Regulations under the Canada Agricultural Products Act (includes nuts) Fruits and Vegetables, Processed: Subject to Processed Products Regulations under the Canada Agricultural Products Act Challenges Non-Tariff Barriers, continued

17. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Honey: Regulated by the Honey Regulations under the Canada Agricultural Products Act Infant Formula (Human Milk Substitutes): Regulated under the Food and Drug Regulations and manufacturers Low Acid Foods in Hermetically Sealed Containers (Canned Foods): To prevent and control any public health threat Maple Products: Subject to the Maple Products Regulations under the Canada Agricultural Products Act Challenges Non-Tariff Barriers, continued

18. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Meat and Poultry: Regulated by the Meat Inspection Act and Regulations, the Health of Animals Act and Regulations and the Export and Import Permits Act Novel Foods - Biotechnology: Subject to the Novel Food Regulations under the Food and Drugs Act and Regulations Sports Nutrition Products: Canada has very specific compositional and labeling requirements, with strict controls on the addition of vitamins, minerals and amino acids to foods Challenges Non-Tariff Barriers, continued

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

20. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Road Map Step 1: Contact SUSTA for possible financial assistance and marketing advice Step 2: Research the competitive marketplace Step 3: Locate a broker and distributor Step 4: Understand Canadian government standards and regulations that pertain to your product

21. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Documentation Two copies of cargo control document Two copies of invoice Two copies of completed Canada Customs Coding Form One copy of Certificate of Origin Any import permits, health certificates, or forms that other federal government deptments require Calculate and declare the value for duty of the imported goods (where necessary)

22. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Regulations Labeling Requirements: Bilingual labels, metric quantities, list of ingredients, common name of product, country of origin, etc. Nutrition Labeling: The U.S. nutrition panel is not permitted on labels of foods sold in Canada

23. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Regulations Packaging and Container Regulations: Canadian regulations govern package sizes for fruits and vegetables, processed horticultural products and processed meats that may differ from the U.S. sizes Food Additive Regulations: Most foods approved for sale in the U.S. would comply with Canadian additive regulations but differences can occur in the permissible levels and uses of food colorings and food preservatives

24. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org The Buying Process Majority is through brokers, importers, distributors or wholesalers A broker (or agent) sells your product without taking ownership A distributor (or wholesaler) buys your product at a discount from the retail price and resells it to other firms There are more than 800 brokers & distributors in Canada A regional and/or national focus Retail and foodservice Look for non-competing products, exclusivity, innovation Partial listing of Canadian food brokers is available on the Foreign Agricultural Service website http://gain.fas.usda.gov

25. Retail versus Foodservice Landscape “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org

26. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org There are only two nationwide grocery store chains in the country, Loblaw Cos. Ltd. and Sobeys Inc. Overall, 60.3% of retail food sales are from grocery store chains Chains are most important in the Atlantic provinces (77.8%) but much less important in Quebec (36.4%) Blurring of boundaries between food and non-food retailers Specialty retail not as developed Retail Landscape

27. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Retail Distribution Process ImporterBrokerDistributorWholesaler Retailer U.S. E xporter Customs

28. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Duties and Taxes Canadian Food Inspection Agency fees (for products containing items regulated by the CFIA) Import Permit Fee and Customs Brokers Fee (if applied through a customs broker) Broker/Distributor Fee (if required) Labeling Consultant Fee (if required) Trademark Application Fee (Approximately $500, but not necessary) Listing Fee: Ranges from $2,000/SKU to $124,000/SKU Other costs: Variable funding to drive sales (Flyer, Demos, etc.) Retail Costs

29. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Foodservice Landscape Top 5 Chains in Canada: Tim Hortons, McDonalds, Cara, Tricon and Subway Approximately 10% of the meals/snacks are sourced from restaurants Ethnic & specialty foodservice sector is growing Foodservice is the third-largest consumer services expenditure category

30. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Foodservice Distribution ImporterBrokerWholesalerRe-packer Restaurant U.S. E xporter Customs Hotel Institution Distributor

31. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org Duties and Taxes CFIA Fees (for products containing items regulated by the CFIA) Import Permit Fee and Customs Brokers Fee (if applied through a customs broker) Broker/Distributor Fee (if distributed through a broker or distributor) Foodservice Costs

32. 2012 Planned Activities “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org

33. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org We are Here to Help! Trade Shows SIAL Show, Montreal (May) Grocery Innovations Show, Toronto (September) Landscape Ontario’s Expo, Toronto (October) Wine Trade Show, Montreal (TBD) Outbound Trade Missions HVAP Mission to Ontario (September)

34. “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org We are Here to Help! Inbound Trade Missions Produce Mission, Florida (March) Seafood Mission, Virginia/Florida (June/October) Horticulture Trade Mission, Florida and Middle Tennessee (July) Fancy Foods Show, Washington DC (July) PLMA Show, Chicago (November)

35. Thanks “Helping southern U.S. companies export food & agricultural products around the world.” www.susta.org SUSTA 701 Poydras Street, Suite 3725 One Shell Square 504-568-5986 www.susta.org Argyle Communications 175 Bloor Street East, South Tower, Suite 1007 Toronto, ON M4W 3R8 Canada 416.968.7311 ageorge@argylecommunications.com