In an exclusive interview with Steena Joy, Annie Dubé, Consul General of Canada in Mumbai, elucidates about the trade between Indo-Canadian agri businesses and why India holds great promise for Canadian food companies
How has the trade in agriculture and food products grown between Canada and India?
Agriculture and food processing are key components of the Canadian economy and of Canada’s international trade portfolio. As the world’s fastest-growing major economy, India offers tremendous opportunities for Canadian business owners and entrepreneurs. We have been key supplier of India’s agricultural imports, including pulses and potash. Cold chain management, animal husbandry, dryland farming, food processing technologies and agricultural sustainability are priority areas for bilateral cooperation.
In 2018, the two-way trade of goods between Canada and India totalled more than US$ 9.4 billion. Agrifood trade figures, which used to account for nearly a third of Canada’s exports to India, are down a little due to regulatory challenges on the pulses file. India remains focused on food security and marketing initiatives such as “nutritional security,” which is a tagline used to increase health-conscious product consumption. This offers high opportunities for Canadian companies looking to enter the Indian market.
The hospitality sector also offers many high-value opportunities for Canadian companies to provide niche products for consumption, including meat products, canola oil, seafood, healthy snack foods, ice wine, frozen fruit, maple syrup and health products. From a commercial perspective, agricultural equipment, machinery, storage (including cold storage), and bulk handling or processing machinery are all examples of high-demand technologies. Training in fields such as herd management, veterinary practices, genetics, breeding, and animal and plant husbandry practices that reduce endemic spoilage are also deemed of value by the Indian market.
As they say “Countries don’t trade, firms and people within countries do”. Canada and India have strong social ties, aided by Canada’s large Indian diaspora; they have a common language for business, similar legal frameworks and democratic political institutions. What we are trying to do is trying to foster an environment that allows Canadian firms to engage in Indian market and take advantage of the opportunities it presents. We have eight missions in India at which trade commissioners are working to provide Canadian companies with on-the-ground intelligence on agri food file and practical business advice about doing business in India.
While maple syrup is synonymous with Canada in India, which other Canadian agri products have great potential for the India market?
Apart from iconic maple syrup, several niche categories from Canada have been growing organically in Indian market. One such category is edible oil where Canada offers canola oil to global markets. India is the world’s biggest importer of vegetable oils, buying nearly US$ 10 billion worth a year; currently palm oil accounts for two-thirds of India’s vegetable oil imports. However, people are becoming more and more health conscious. Canola oil is one of the best oils for heart health. Made from crushed canola seeds, it has less saturated fat than any other oil commonly used in Indian households. In addition, its light flavour, high smoke point, and smooth texture, makes it the most versatile cooking oil and an ideal fit in Indian kitchens. Canola is growing organically in India with a stable sales growth year on year.
Canadian berries have gained the reputation of a wonderful superfood in India in the last few years. If you walk around the supermarket fruit aisle, you will find several varieties of imported berries from Canada like the blueberries, cranberries that have had everyone talking. We also see a huge potential for fresh Canadian cherries in India.
Another big file for us in India has to do with pulses. Canada is a world leader in the production of pulses and is a trusted trading partner for India. Canadian lentils, peas, chickpeas and dry beans are known for their excellent quality throughout the world. There are significant opportunities for Indian companies to partner with Canadian industry and pulse processors to address India’s growing demand for protein from vegetable sources. In the not too distant past, Canada was fulfilling almost 40 per cent of the total Indian pulses consumption. Despite present regulatory challenges, imports of lentils from Canada are still at their peak. Oats is another category which can be seen growing leaps and bounds along with other breakfast cereals.
Changing food habits in India are driven by convenience, growing concerns on health and awareness on food safety. They are leading to a demand for new and innovative products on the shelf and this presents a great opportunity for the Canadian food processing industry.
What strategy does Canada have for the HoReCa sector in India? What promotional campaigns are in the pipeline for developing this market?
We fully understand that for imported food categories, HoReCa is an important distribution channel. It has a huge potential. Mumbai alone has more than 88,000 restaurants and most importantly, unlike modern retail, food service market has already grown beyond the top eight cities in India. In fact it outnumbers the mom and pop stores in India. According to a recent report, the HoReCa segment accounts for nearly 1.3 crore organisations against 1.2 crore kirana stores across the country. That led us to start looking beyond retail distribution channel for Canadian agribusinesses.
Understanding the requirements of this segment makes our approach toward them convenient.
Through our all India network of Trade commissioners, we are adopting a variety of approaches like participation in networking and trading platforms like SIAL, AAHAR, Food and Grocery forum, etc. to help stakeholders explore business to business opportunities. We are also building relationships with top chefs at big hotels and providing them with the required assortments, backed by our Canadian suppliers. At the same time, we are also proactively reaching out to food industry suppliers, distributors and importers with Canadian agrifood capabilities so that any possible opportunities of collaboration could be tapped upon.
Canada is delighted to be partnering with the Indian Express Group for their upcoming edition of Great Indian Culinary Challenge (GICC) in Kolkata and Mumbai, to showcase Canadian blueberries and maple syrup. To team up with platforms like these, we want to generate more awareness and engagement in the Hotel, Restaurants and Institutional (HRI) segment and the chef community.
Is India a mature market for Canadian ice wines? Creating awareness about Indian food pairings with ice wines?
Wine is still quite a young category in India, with corresponding niche consumer demand. However, wine consumption is picking up due to rising income levels in major cities. With the Canadian ice wines, the pricing is slightly on the higher end and it is still catching up with current market demand and awareness.
In order to create more awareness, we are planning to enhance our engagement with on-trade channels, restaurants and five-star hotels this year by organising curated wine tasting events. Ice wine is really sweet and fruity, naturally acidic, and that’s the reason why it makes for a really good food match with the Indian sweet tooth. Through these small but targeted events, we will not only disseminate knowledge about ice wine, but also bring Indo-Canadian fusion cuisines that pair best with ice wine.
Rather than going down the retail route, we believe these distribution channels will be important for ice wine distribution in value terms, with consumption by the glass being the preferred option. The on-trade channels can play an important role in exposing consumers to ice wines, as the range of products on offer through such channels is often wider than that through smaller independent off-trade outlets.
Your insights on tapping the Tier 1 and Tier 2 markets in India?
Imports of consumer-oriented foods, are among the fastest growing segments of imported agricultural products in India and reached $5.3 billion in 2018, even though India remains a complex market to navigate. Indian retail has evolved over the years, modern retail formats are gaining popularity across metro cities in India. However, traditional retail still dominates food, grocery and allied products sector, with grocery and staples largely sourced from the “Kiranas” and pushcart vendors. This is especially true if you move beyond metros in India.
In recent years, E-commerce has played a significant role in bringing luxury to the forefront. The Indian gourmet food market, which had earlier been restricted to consumers in metro cities like Delhi and Mumbai for years, is now witnessing a change in its consumer base – the well-travelled and informed Indian middle class.
In the past few years Tier II cities have come up as important marketplaces – these include Nagpur, Indore, Chandigarh, Thane, Jaipur, Surat and Vadodara among others. Significant factors that have increased consumption in these markets are the growing market access through the internet and the rise of food delivery apps. It was fascinating to learn that in 2019 alone, Swiggy and Zomato have launched operations in 185 towns and 300 cities. These factors are greatly contributing and altering purchasing habits in these locations.
With frequent international travel and media awareness, more and more people are becoming brand conscious and want to consume the best of global brands. The rising aspirational class has definitely added to the numbers of consumers in these cities.
This has created excellent avenue for Canadian brands as E-commerce model is an ideal fit for Canadian agrifood companies. It presents quick access to the Indian market and the right audiences. All E-commerce companies are eager for imported fast-moving consumer goods (FMCG) and grocery listings. There a lot of headroom for growth for Canadian agribusinesses in this segment. By partnering with a distributor, most of the business risks are averted for the Canadian companies and they gain access to established marketing and distribution setups – all leading to speedier execution.
Canadian brands now venturing into India will surely tap the niche markets and leverage their set of opportunities in the smaller, but full of potential, interior markets. We certainly hope there will be greater #AppetiteForFusion and for Canadian products!