Теги: Канада
Exports of organic products to Canada: what has changed over the past year

The demand for organic products is increasing worldwide. Canada is no exception. It is precisely this conclusion that can be made after reading the World of Organic Agriculture 2019 Report, which was recently published by the leading organizations FIBL and IFOAM.

Global trends

Thus, according to the 2017 results, sales of organic food and beverages reached a record high of 90 billion euros. Since 2000, this figure has grown 5.5 times, and compared with the year 2016 – by 8%.

North America and Europe remain leaders in the consumption of organic products – they account for 90% of total global sales. The United States occupies the first place with the rest of the world considerably lagging behind; about half of the world organic produce market is in the United States. Germany and France follow.

Canada with 3 billion euros of its organic market volume is no more within the world’s top five organic markets. Now it ranks sixth in the global ranking.

Australia, Argentina and China have become leaders with the largest areas of organic farming.

Sales of organic products in supermarket chains in 2017

Specifics of the Canadian organic market

Major Canadian organic producers are located mainly in the provinces of Ontario, Quebec and British Columbia. The reason is simple. It is these regions that are characterized by the bigger size of the market (population density) and its maturity, that is, willingness to pay more for organics.

Understanding the prospects of the organic market, Canadian government officials are taking steps to support it. For example, the province of Quebec set a goal to double the area of land under organic farming by 2025 compared to 2015.

Canada produces organic products mostly in such segments as dairy, ready-made food and bakery products. Of course, a lot of organic maple syrup is produced.

Food and drinks account for 93.5% of Canada’s organic market. Due to the strong consumer demand, the Canadian organic market is growing faster than the average food industry. In the period of 2012-2017, the sector’s average annual growth rate was 8.4%.

According to statistics, two thirds of Canadians bought organic products weekly in 2017. In 2016, only 56% of them did.

Millennials are fans of organic goods. More than 83% of people born in 1981-1999 buy organic products every week.

Canada imports a lot of organic goods, which is a great opportunity for Ukrainian companies. In particular, Canada imported organic goods for 637 million Canadian dollars in 2016.

At the moment, Ukraine primarily exports organic raw materials to Canada, although it would be more profitable to export processed products. The best prospects on the Canadian market are for such groups of goods as dried and frozen vegetables, vegetable oils, juices and drinks, jams, pastilles, honey, and the like.

According to the Open Register of the Organic Standard Certification Company nine Ukrainian producers have successfully passed certification under Canadian COR organic standards as of May 2019.

Some Ukrainian organic producers already have successful cases selling their own products to this market. For example, PE “Agroecology”, one of the largest Ukrainian organic producers (more information can be found from the video https://youtu.be/zsVQUao58Dc).

If your company is also interested in obtaining a Canadian organic standard, please, be informed that the CUTIS Project co-finances such certification (for more information, follow the link https://cutisproject.org/news/new-opportunities-from-cutis-project/).

Changes in Canadian legislation

On January 15, 2019, the Safe Food for Canadians Regulations (SFFC) entered into force, which in fact prescribe a policy for the production and sale of foodstuffs. This is a new document that combines food sector regulations.

The issues of producing, importing and exporting organic products are regulated by Section 13 of the SFFC. Thereunder, any food products, seeds or animal feed claimed as organic are subject to control by the Canada Food Inspection Agency (CFIA) regulatory authority.

However, CFIA does not control the flow of organic cannabis, cosmetics, food for pets and biologically active additives. The mention of cannabis in this list is an attempt to clarify the situation with its legalization in Canada since the fall of 2018.

Starting from January 15, 2021 organic products from the organic aquaculture sector will be subject to the SFFC provisions as well.

Regulatory changes in the field of organic production will come into force not immediately but gradually over the next 12-30 months (by January 2020 – July 2021). Obviously, this is due to the smooth transition of Canada’s organic sector to the new regulatory regime.

Attention of Ukrainian exporters of organic products to Canada: production of organic products eligible for sale in Canada is governed by the following Canadian organic standards (CAN/CGSB 32.310 – Organic Production Systems – General Principles and Management Standards; CAN/CGSB 32.311 – Organic Production Systems – Permitted Substances Lists). It is important to keep in mind, however, that there are plans to revise them in 2020.

In addition, organic products will be separated within the Automated Import Reference System (AIRS). What is this system? This is a resource for obtaining information on the terms of import of certain categories of agricultural products into Canada. By entering the product category name, you will receive detailed information about the terms of import. In 2019, organic fresh fruits and vegetables will be the first categories to apply this approach. This will make life easier for importers to Canada: they will have access to detailed regulatory instructions for certain categories of organic products.

This is to remind that the Canada-Ukraine Trade and Investment Support Project (CUTIS Project) is a 5-year (2016-2021) initiative of the Canadian government aimed at increasing exports from Ukraine to Canada and investments from Canada to Ukraine. The Project is funded by the Canadian Government through Global Affairs Canada. The Project is being implemented by the Conference Board of Canada in cooperation with the Canada-Ukraine Chamber of Commerce.

Zoya Pavlenko, Environmental Expert, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: Agroportal.ua

Why Ukrainian IT companies have great prospects on the Canadian market

Canada is a major player in the global IT industry. There is well-developed educational and research infrastructure that promotes innovation. R&D centers, commercialization and manufacturing are concentrated in high-tech clusters in major cities of Canada. The common features of these clusters are federal and provincial initiatives and grants, powerful research programs, collaboration with academic institutions and incubator resources for small high-tech startups. Such an innovative environment is particularly attractive to foreign investors who want to enter the market, become key players and minimize their training costs. Prosperous high-tech clusters also attract world-class talent from abroad.

Continued decline in the world oil prices is gradually shifting the balance of economic power in Canada from oil and mining to high-tech sectors of the economy. Thanks to the “soft” rate of the Canadian dollar, high-tech companies interested in economy and political stability started moving to Canada from the United States. The flagship in this process is undoubtedly the province of Ontario.

In fact, the Greater Toronto Area (Toronto with 25 smaller neighboring municipalities) is considered to be the country’s main high-tech hub rated next to the Silicon Valley of California, Boston, Seattle and Washington in the United States.

Thus, in January 2016, Google opened new ultramodern headquarters in the suburbs of Toronto – Kitchener, and Cisco Systems recently opened its new Innovation Center in Toronto. Blackberry also has its headquarters in GTA. In November last year, Microsoft announced its intention to open new headquarters in downtown Toronto and invest more than $ 570 million over the next three years. This is apart from the IBM, DELL, OpenText, Amazon, AMD, CityBank, TD, RBC, Accenture, CIBC and other offices, plus hundreds of high-tech startups lumped around Toronto.

IT industry clusters in Canada are concentrated in Montreal, Quebec, Ottawa, Toronto and Kitchener Waterloo in the East, as well as in Calgary and Vancouver in the West. The Toronto Waterloo Corridor is the second-largest IT cluster in North America (after California).

The sector’s rapid development generates certain competition among individual regional centers. For example, Montreal is currently ready to host IT professionals even by granting a permanent resident status. The only additional requirement here is the knowledge of French.

Canada’s IT sector is significantly different from that of Ukraine. Here, for example, there are many old men and women who still remember punch cards and floppy disks and can talk for hours about PL/I and Ada programming features that were used back in the 1990s. However, they are also well familiar with modern technologies and systems. Local experts are professional virtuosos in their narrow sphere, while Ukrainian specialists are do-it-all workers that see everything in a different way.

Also, the Canadian IT sector has a large proportion of women – about 63.4% according to official statistics. Most Canadian employers understand that the more diverse is labor force, the more innovative the company is and the better is its performance.

Diversity is a company’s large competitive advantage on the market and a guarantee of its successful development and welfare of its workers. The number of young people who work in the IT sector in Canada is only 6% (aged 15-24), while the share of people over 55 years is 13%! That is, Canadian employers are quite conservative and prefer more experienced employees.

The rapidly growing demand for technology specialists absorbs all talent in the country and is also fueled by immigration. In general, immigration in Canada is an integral part of strategic economic development, especially immigration through education, as this is the way to attract the most talented and promising specialists. According to some experts, approximately 216,000 new jobs will be created in the sector by the year 2021. Due to immigration and involvement of students from Canadian universities, the country will be able to meet only 30% of these needs. Thus, the conclusion is obvious: Canadian companies will look for opportunities to attract foreign professionals, companies and outsourcing. And this is a great chance for Ukraine!

Is Ukraine attractive for IT outsourcing from the point of view of Canadian companies? No doubt, it is! These are just a few arguments. First of all, Ukraine offers a good value for money. In Ukraine, labor costs are relatively low.

For example, Canadian ICT sector employees earn $ 80,074 per year on average, while the wages in the IT industry in Ukraine are about 20,000 – 30,000 dollars per year. In our country, IT sector is developing extremely fast. This means that companies can offer their customers competitive prices along with the highest quality.

For instance, the respectable international ranking of Global Innovation Index has included Ukraine in the top 50 countries in the IT field in 2017 putting it ahead of such popular IT outsourcing countries as India, Philippines and Brazil.

Another advantage of Ukraine is its startups. According to AngelList statistics, there are now 1,600 Ukrainian technology startups with an average value of $ 2.5 million and nearly 3,000 investors. With regard to Canada, these figures are more modest – 600 startups with an average value of $ 5.2 million and slightly more than 500 investors. Not only investors but also industry giants believe in startups of Ukrainian origin. For example, Amazon recently bought a startup called Ring with an R&D office in Ukraine. Another example is the startup called Looksery, which was founded in Ukraine and acquired by Snapchat. In addition, such well-known companies as Grammarly, Petcube, People.ai and CleanMyMac have also emerged in Ukraine and are used by clients from around the world.

Ukraine has a large number of highly qualified professionals, most of them are fluent in English. Today, our country ranks fourth in the world among the countries with the largest number of technical workers. In Ukraine, there are more than 90 thousand IT specialists, of which 50 thousand are software developers.

In addition, Ukrainian universities annually produce more than 38 thousand technical specialists. In general, 79% of people in Ukraine have higher education, and 57% of technical specialists have STEAM education (science, technology, engineering and mathematics).

According to experts, the number of web and mobile developers in Ukraine by 2020 will exceed 200 thousand. The community of Ukrainian developers is also very active as they regularly attend dozens of international conferences, exhibitions and training forums.

Therefore, despite the fierce competition from countries such as India and China, Ukrainian ICT companies have great chances to succeed in establishing partnerships with Canadian companies. For example, the successful collaboration of Canadian business and Ukrainian IT helped the Canadian Tire’s technological redevelopment. Established in 1922, Canadian Tire today offers residents of Canada a wide range of goods for home and entertainment, household repair and improvement, automotive and seasonal goods. In total, the company employs about 85,000 people, and its retail network consists of 1,700 stores. The corporation includes retail companies, financial services subdivisions and a national charity fund for engaging children in sports. The Company EPAM has developed the Canadian Tire Digital Commerce Project and provided a new experience for consumers who make online purchases through mobile applications and stores.

Today, many Ukrainian companies are interested in finding partners in Canada. There are many ways to do this including personal contacts and participation in various industry events: exhibitions, conferences, forums, etc., wherever there is an opportunity to present a company and its services and get new contacts (networking); as well as active use of social networks – LinkedIn (first and foremost) and Facebook – by participating in closed thematic groups of the geographic area where a company has interest. However, the company’s best advertising is its satisfied customers – better in Canada but also in the US, Australia or the UK. You do not have to ignore good old cold calls or emailing because you never know where you will meet a partner. The main things, however, are perseverance and consistency!

The first ICT mission in the framework of the CUTIS project (Canadian-Ukrainian Trade and Investment Support Project) will be held in April this year when 15 Ukrainian companies will visit Canada. Hopefully, they will be able to learn by their own experience of the existing increased demand for professional services and ICT sector specialists in Canada, contribute to the development of fruitful cooperation between the two countries and find reliable partners across the ocean.

Olha Shtepa, Coordinator, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: AIN.ua

Ukrainian manufacturers of clothing and footwear on the Canadian market: everything is just starting

The Canadian market is getting closer to Ukrainian business. According to the Ministry of Economic Development and Trade of Ukraine, Ukraine exported goods to Canada for $ 45.5 million during the first eight months of 2018. This is almost half (+ 45,8%) more than for the same period in 2017.

It is important to note the positive trend. Even 5-10 years ago that was large business that considered entering the Canadian market, while now more and more domestic small and medium-sized enterprises want to try their hand in Canada.

The growth of export performance was also facilitated by the introduction of the Canada-Ukraine Free Trade Agreement (CUFTA), which has opened up additional opportunities for domestic companies to export to the promising Canadian market. The agreement, which entered into force on 1 August 2017, in particular, provides for the abolition of import duties for 98% of Ukrainian goods.

Focus at small and medium businesses

The Canada-Ukraine Trade and Investment Support (CUTIS) Project is a powerful auxiliary tool for development of exports to Canada. CUTIS is a five year (2016 – 2021) international technical assistance project funded by the Canadian Government through the Global affairs Canada and implemented by the Conference Board of Canada in partnership with the Canada-Ukraine Chamber of Commerce.

Currently, CUTIS is implementing U CAN EXPORT – the first wave of the program to support exports to Canada in five priority sectors: clothing, footwear, furniture, confectionery, and the IT sector. The project focuses on small and medium-sized enterprises (SMEs), which, according to the project, have good prospects in the Canadian market.

After receiving applications from interested companies, there were two stages of selection. As a result, 8 clothing manufacturers and 8 shoe manufacturers were selected, which, in collaboration with the project, were presented in Toronto in August 2018. For the selected companies, training was conducted with the participation of leading Canadian experts. The experts accompanied the participating companies and provided them with professional advice both during the trip and during the preparation for exhibitions.

Toronto Shoe Show

Toronto Shoe Show was held in Toronto on 19 – 21 August 21. More than 700 brands of European footwear and accessories were represented at the exhibition.

Ukrainian shoe industry was presented by well-known brands:

  • Belsta (Bilhorod-Dnistrovsky, one of the largest producers of indoor footwear in Ukraine;
  • Caman (мBrovary, producing stylish men’s and women’s shoes, as well as specialized sports shoes);
  • InBlu (a joint Ukrainian-Italian company producing footwear at the Kyiv Shoe Factory);
  • KaDar (Lutsk, focusing on the production of casual men’s shoes);
  • Kredo (Khmelnytskiy, specializing in winter shoes on EBA sole);
  • Krok (Zhytomyr, one of the largest manufacturers of industrial and military footwear);
  • Litma (Khmelnytskiy, an extremely wide range of rubber footwear);
  • Olteya (Zhytomyr, specializing in the production of women’s leather shoes).

Toronto’s trade show was another proof that Ukrainian shoes are a great combination of comfort, quality and contemporary design.

What conclusions can be drawn from the exhibition?

Firstly, everyday footwear is most in demand, as it is light, flexible and comfortable. More formal models belong to the niche products. Sneakers is the most popular kind of shoes for both sexes and all age groups.

Winter boots is the most competitive segment of the footwear market, as they are a necessity in the Canadian climate. Moreover, Ukrainian producers should focus on products of high-quality raw materials. The importance of high-tech materials, such as waterproof leather, is growing.

Brand is a key factor in the footwear market for both sexes and all types of shoes: consumers generally have a high level of loyalty to shoes brands. Canadians are willing to pay a high price for good-quality branded shoes.

Therefore, it makes sense for Ukrainian companies to look closer at the possibility of manufacturing footwear under private label for Canadian companies, since the market introduction of a Ukrainian brand would require large marketing costs, which is not feasible for all enterprises.

Apparel Textile Sourcing Canada

Apparel Textile Sourcing Canada was held on 20-22 August and brought together more than 500 apparel manufacturers from more than 20 countries around the world. This is the largest exhibition in Canada designed to match representatives of the fashion industry, clothing and textile manufacturers, as well as retailers.

Ukrainian garment makers found themselves in a company with businesses from China, Canada, the USA, Switzerland, India, Bangladesh, Vietnam, Pakistan, Sri Lanka, Nepal, South Korea, Indonesia, Colombia, Guatemala, Mexico and Peru.

The domestic light industry in Canada was introduced by both well-known trademarks and small startup enterprises:

  • Andre TAN (women’s designer clothes);
  • Berserk Sport (sportswear);
  • Bukvica (men’s and women’s clothing, accessories);
  • AnnaFoxy (women’s casual clothing, lingerie, accessories);
  • RITO (men’s and women’s knitted garments);
  • Soho Chic (women’s clothes);
  • Rubizhne Stocking Manufacture (socks);
  • Lagrand (Lesya Factory, women’s and men’s trousers).

For the first time, five Ukrainian brands (Andre TAN, Soho chic, Berserk Sport, Bukviсa and Rito) participated in the fashion show that took place within the framework of the exhibition. This indicates the high level of models developed and sewn in Ukraine.

Participation of domestic companies in the exhibitions of this level proves that Ukrainian products are an optimal combination of the best fabrics, audacious designer designs, solutions, affordable prices and the highest quality standards.

What should other Ukrainian clothing manufacturers that are interested in entering the Canadian market focus on? In fact, two opposite trends are visible. On the one hand, there is a growing demand for so-called “one-time” clothes – affordable clothing that you do not need to try on. Popularity of the sports style is growing: due to the dress code change, sportswear is becoming increasingly popular at work.

On the other hand, there are still many consumers who consider quality of fabrics as a priority. Organic cotton remains popular, but the focus shifts to recycled fabric.

As a summary, we would like to point out that, despite the fact that Canada is a highly competitive market, it can and must be approached. The main thing for the companies is to be ready for export and not to be afraid to change and adjust to the requirements and tastes of demanding Canadian consumers.

Natalia Pavlyuk, Senior Assistant, CUTIS Project in Ukraine

Source: magazine “All about the textile industry”

What Surprises Ukrainian Food Exporters to Canada Should Be Prepared for?

The Canada-Ukraine Free Trade Agreement (CUFTA), which entered into force in summer of 2017, may potentially open a wide range of opportunities for Ukrainian exports. Now, there is just a little left to do – to take advantage of these opportunities.

Taking into account the fact that Canada, as well as Ukraine, is an export-oriented country, the issue of veterinary and phytosanitary control of imports is a serious challenge.

Canadians strictly control agricultural products crossing their borders, since the importation of a product contaminated by plant pests or pathogens compromises Canada’s own export potential and undermines safety of its citizens.

The Way to Canada

Safety guarantee of the imported goods in Canada has to be supported by:

1) phytosanitary certificate (for products of plant origin that are subject to quarantine);

2) veterinary certificate (for products of animal origin) issued by the competent authority of the exporting country.

The central authority that establishes veterinary and phytosanitary regulations for Canadian manufacturers and importers at the federal level is the Canadian Food Inspection Agency. This is essentially an equivalent of the Ukrainian State Service for Food Safety and Consumer Protection (SSUFSCP).

How does it work in practice? For instance, Ukrainian beef producer sees good prospects for selling its products in Canada. But for the importation to the Canadian territory the Canada Border Services Agency (CBSA) requires that the products have veterinary certificates.

The producer itself or together with the representatives of the respective association of producers approaches the SSUFSCP asking it to initiate the procedure for the approval of veterinary certificates for beef with the Canadian regulatory authority.

In line with the current Canadian official procedure, the Ukrainian party has to provide comprehensive information (questionnaire responses) regarding the legal framework, the competent authority network, the existing state control system and procedures, statistics in Ukraine, etc. Once the Canadian party has processed the information provided to it, the SSUFSCP and the concerned exporters undergo an audit by the Canadian regulatory authority.

Only upon the receipt of positive audit findings and approval of the veterinary certificate form for a specific product category, the SSUFSCP will be given permission to export the appropriate type of product.

It is worth noting that this procedure will not occur automatically, but should be initiated by the concerned Ukrainian producers.

It should also be understood that elimination of these barriers takes time, sometimes years.

Phytosanitary and Veterinary Certificates Approval Procedures

  1. Producer or association of producers sees good prospects for its products in the Canadian market and approaches the SSUFSCP.

  2. The SSUFSCP approaches the appropriate Canadian regulatory authorities and initiates the procedure of certificate approval.

  3. The Ukrainian party provides the Canadian party with all appropriate information on the product safety control in Ukraine.

  4. The Canadian regulatory authority conducts audits of the SSUFSCP and the concerned exporters.

  5. If the audit has been successfully passed, the SSUFSCP is entitled to issue appropriate certificates that are recognized in Canada.

The procedure for recognizing the control system as described above is applicable to both Ukrainian exports to Canada and Canadian imports to Ukraine. Presently, competent Ukrainian and Canadian authorities have approved 15 international veterinary certificates for importing to Ukraine.

Who is Next

However, Ukraine’s trade potential with Canada is much higher. In Ukraine, there is a strong interest in exports of poultry, packages of bees (i.e. live bees) and confectionery and other products to the Canadian market.

Efforts to open the Canadian market for Ukrainian chicken meat continue. In October 2016, the SSUFSCP submitted to the Canadian Food Inspection Agency under the Canadian Ministry of Agriculture and Food three requests for the accreditation of Ukraine to export poultry and poultry products to Canada. While in April 2017, an additional request was sent for the assessment of Ukraine’s status with regard to the export of bee packages to Canada. So far, the only response including additional questions and clarifications that has been received is the one related to the poultry meat. It is currently being processed by the SSUFSCP experts.

The Ukrainian dairy product producers’ will benefit from learning more about the Supply Management System that operates in Canada. This system is based on monitoring the dairy product consumption and a milk quota system for the Canadian farmers.

Canadians strive to satisfy the demand by the local dairy products to the extent possible. Insufficient amounts of these products are compensated through import quotas. Thus, even regardless of sanitary restrictions, market opportunities for dairy products in Canada are very limited.

Communication with the Canadian Food Inspection Agency has revealed that, currently, a ban has been put on the Ukrainian cereals imports to Canada. This is due to the fact that a few years ago, pests were found in one of the lots of imported Ukrainian cereals, although appropriate phytosanitary certificate had been provided.

The lifting of the ban requires additional communication between the relevant authorities of both countries. It is worth noting that the SSUFSCP has not received any requests to resolve this issue from Ukrainian exporters.

Things You Need to Know

Systematically organized information on the documents required to import food products to Canada can be found in the Automated Import Reference System (AIRS) at the Canadian Food Inspection Agency’s website.

It is important to remember that in Canada it is the importer who is responsible for the compliance of the imported products with the local legislation. To this end, a Market Access Secretariat has been established under the Canadian Ministry of Agriculture and Food, which through an ‘open window’ service operating as a publicly accessible e-mail server processes inquiries from Canadian businesses and provides recommendations on ways to access both the domestic and foreign markets.

It is also important that in the second half of 2018 legislative changes will come into effect in Canada that will change the approach to food safety control. These will be based on the risk analysis principle and the need for importers to obtain import licenses for the controlled shipments in the future.

Ukrainian exporters already now need to pay attention to the new Canadian preventive food safety controls.

The implementation of the Free Trade Agreement requires a systematic cooperation between Ukrainian and Canadian government authorities, which has become more active now. In November 2017, with the support of the Canada-Ukraine Trade and Investment Support Project the SSUFSCP delegation visited Canada and established important contacts with local regulatory authorities.

We are sure that in 2018 our joint efforts will make the Canadian market closer to Ukrainian food exporters.

Authors:

Boris Kobal, Director, Food Safety and Veterinary Service Department, State Service of Ukraine for Food Safety and Consumer Protection

Olena Kuryata, Chief of Unit for Foreign Relations and European Integration Deputy Chief of Directorate for International Cooperation State Service of Ukraine on Food Safety and Consumer Protection

Source: European Pravda

Ukraine and Canada have developed cooperation in standardization

We have another great news! On September 25, 2018, the UkrNDNC (State Enterprise “Ukrainian Research and Training Center for Standardization, Certification and Quality”) and the Standards Council of Canada signed an agreement on cooperation.

The agreement was signed during the ISO Week in Geneva (Switzerland). It is the result of previous agreements reached during the visit of the Ukrainian delegation to Canada in November last year. The trip of the Ukrainian delegation was supported by the CUTIS project.

The Standards Council of Canada accredits standardization organizations and compliance assessment bodies. It has accredited 10 standard development organizations in Canada.

The signed agreement includes, inter alia, the following important points:

  • Exchange of information related to standards development activities
  • Exchange of experience and the best practices of the activities of national technical standardization committees
  • Cooperation in the development and adoption of international standards
  • Exchange requests for information on the adoption of international standards in Canada and Ukraine
  • Sectoral cooperation in the field of international standardization and free trade

In summer 2018, the UkrNDNC also signed a memorandum of understanding with the Canadian Standards Association (CSA Group), which is a non-governmental standardization and certification body accredited by the Standards Council of Canada.

Cooperation between the UkrNDNC and the Standards Council of Canada will support the implementation of the Free Trade Agreement between Canada and Ukraine (CUFTA), which entered into force on August 2017.

It is not a secret that after the abolition of tariff barriers, it is the non-tariff requirements that are sometimes rather difficult to overcome. Accordingly, the compliance of Ukrainian products with the regulatory requirements of the Canadian market becomes the key issue for exporters.

More about standardization in Canada you can find here.

How to sell organics to Canada

In August, a year has elapsed since the conclusion of the Free Trade Agreement with Canada. Among other things, this offers great opportunities for exporting organic products. 

It is most expedient to export organic processed products to Canada, while paying attention to territorial features, national standards, as well as tariff and non-tariff restrictions.

Canadian organic goods market is the fifth largest in the world. It is outweighed by China and France. And yet, it is also geographically close to the leader in the consumption of organics in the world – the United States. As to the cost volume of the Canadian organic market, it is worth EUR 3 billion. This is an interesting market opportunity. With regard to the volume of consumption, statistics show that people living in these two countries spend most money on organic products per year. For the US market, it is €121 per year, and Canada is slightly less than €83 per person annually.

As of 2017, the sales of organic products in Canada amounted to 4.2 million CAD. Interestingly, organic foods and drinks constitute the bulk of this market – about 90%. In particular, these are fresh vegetables and fruits (40%), beverages (13%), dairy products, eggs (12%), cereals, pasta, bread (9%). Despite the fact that the country is a powerful producer of organic products itself, its output is not enough. As of 2016, for example, 0.2 million tons of organic products were imported for the total of 637 million CAD. This is much more than produced within the country, which means a shortage and a market opportunity for Ukrainian producers. Of course, the Canadian government is trying to motivate domestic production: in 2017, the Canadian provinces of Manitoba and British Columbia launched significant farmer support programs, so the gap between supply and demand will gradually decrease over time. It is now quite a good time, however, to start exporting to this market.

Quite interestingly, Canada has become one of the first countries to track organic exports and imports. In particular, imports are tracked by 65 categories in a specialized system, while exports are represented in 18 categories. If you look at the imports statistics for the TOP-20 positions, organic coffee, bananas, strawberries, green salads, tomatoes and tomato paste, etc. are the most popular organic products.

Useful statistics are provided by the Canada Organic Trade Association (COTA) concerning a typical organic purchaser in Canada in order to direct producers towards their consumers, which can be both male and female (traditional purchases are usually made by both spouses), of a younger age (18-34 years old), a city dweller, with the greatest interest in organic produce among residents of British Columbia or Alberta. However, these provinces are not the most populated, and Quebec and Ontario should not be disregarded. There is also correlation between the level of income, education and activity in the organic market: people with higher earnings, therefore, are more aware of the details of organic products and more willing to pay for them. Also, families with children are more inclined to spend money on organic products, so organic food and goods for children is a very promising niche as well.

Regarding the regulation of the Canadian organic market, it also significantly differs from the Ukrainian and European approaches. Canada has national organic standards. As of today, the industry is guided by Canada Organic Regulations adopted in 2009. More detailed requirements for the manufacture and the list of permitted substances are provided by CAN/CGSB 32.310-2015 standards – Organic Production Systems – General Management Principles and Standards, CAN/CGSB 32.311-2015 – Organic Production Systems – List of Permitted Substances. However, Canada goes today through an active phase of deregulation; in June, a new regulatory act was published which combines more than 10 legislative acts and is called Regulation on Safe Food for Canadians. Likewise, it deals with organic products. A review of the above standards is scheduled for 2020. Therefore, it is important for organic producers to keep abreast, since the situation is changing quite dynamically. Certified organic products sold in Canada must bear the Canada Organic logo.

A separate topic is sanitary and phytosanitary regulations. If you use the “organic” prefix for the product, this does not mean a complete grace as a series of stringent requirements is applied anyway. Interestingly enough, the requirements for a particular food product in Canada can be traced back to the Automated Import Reference System (AIRS), which is something like the well-known European Export Help Desk.

With regard to the harmonization of certain sanitary and phytosanitary regulations and certificates, the wheel has set to motion only concerning chicken meat. For all other categories of quarantinable goods (such as beef, pork, eggs), the problems remain. Accordingly, if the business begins to demonstrate interest in the Canadian market the process will begin to harmonize those certificates between the governing bodies. Also, the ban on import of Ukrainian grain and wheat into Canada continues, because pests were found in the imports of one of the corn suppliers, and a precautionary measure was immediately taken. Therefore, there is a need for additional communication of state authorities to make this ban lifted.

With regard to dairy products, the principle of protection of domestic producers is applied, and there is a high import tariff for imported goods. Therefore, the opportunities for Ukrainian producers including organic manufacturers are limited in this segment. On the one hand, it would seem that with such a list of restrictions is not worth trying to supply to this market. Those looking for opportunities, however, will necessarily find them. Although Canada is far, for supplying the processed goods even logistics will not be a financial constraint. Moreover, there are significantly lower requirements for processed goods. Therefore, it is logical to recommend manufacturers of processed organic products to commence sales on this market. The most popular products are juices, confectionery products, dried and frozen vegetables, sauces, ketchup, vegetable oils and snacks.

U CAN Export: F.A.Q.

Want to export to Canada, but do not know where to start? We have prepared the answers to the most frequent questions exporters ask us.

I would like to join the export support program U CAN Export? What should I do?

The CUTIS project has now completed the selection of the first wave of the U CAN EXPORT Export Support Program participants in four priority sectors: clothing, footwear, furniture, and confectionery. The final stage of selection of participants from the IT services sector will take place in the spring of 2018.

The selected participants, with the support of Canadian industry consultants, are preparing to participate in exhibitions in Canada throughout 2018. Applicants who were not selected were included in the reserve of the participants of the U CAN EXPORT program. They will have a chance to take part in an integrated level of the program in the future, as well as take advantage of all the opportunities of its educational/consultational level. The rotation of the companies will take place after the project’s cooperation with the current program participants will be completed.

If your company is not among selected ones but wishes to enter the U CAN Export Support Program, please fill out a short application form here. The selection of companies from the reserve will be conducted on a competitive basis, by filling out special questionnaires, interviewing company representatives and visiting applicants’ production (if needed).

After completing the application, your company will also be included in the CUTIS project exporter database and will receive information and training materials, invitations to trainings and other project activities.

My company is not in the priority sectors. What should I do?

For companies in all other sectors, we have developed a step-by-step export guide to Canada I CAN EXPORT. It covers most of the issues faced by exporters, such as:

  • consumer preferences of Canadians
  • search for partners in Canada
  • the procedure of crossing the border and the requirements for the documentation
  • regulatory constraints on the Canadian market
  • logistics, etc.

Also, our project is currently developing an export portal with useful information for Ukrainian exporters.

We encourage you to subscribe to our Facebook page, where we constantly publish interesting information on trade with Canada and announce all our events. You can also subscribe to our e-mail newsletter.

I want to get a comprehensive help to enter the Canadian market. Who should I contact?

Unfortunately, our project does not have the resources to systematically help all the companies that contact us. However, there are other organizations that have a lot of experience in helping Ukrainian companies to enter the Canadian market.

For example, you can contact the Canadian-Ukrainian Chamber of Commerce (CUCC), which is a partner in implementing our project. CUCC has been supporting trade and investment development between Canada and Ukraine for more than 25 years and has offices in Toronto, Alberta and Ukraine. The Chamber organizes business forums, trade missions and conferences in Canada, promotes business contacts between the two countries, has partnerships with Governments of Canada and Ukraine, and provides a wide range of assistance services for Ukrainian exports to Canada.

Follow CUCC on Facebook

Useful links: Trade Shows in Canada

If you are able to physically come to Canada, you should plan to visit or, even better, exhibit at a Canadian trade show. This would be one of the best ways to meet potential buyers and to guage the market by conducting some market research in terms of what products or services are offered on the market and how to position your products in relation to the competition.

Canada is generally not a major country for trade shows of international caliber, especially if you have been to trade shows in Germany for instance or in the United States. However, Canada is internationally known for its (Prospectors & Developers Association of Canada) PDAC show for the minerals exploration industry which takes place, usually in March of each year, in Toronto. There are some smaller but nevertheless important shows taking place each year that specialize in a number of sectors. In the food and beverage industry for instance, the major shows are:

  • Salon international de l’alimentation (SIAL) – manufactured/processed foods and equipment;
  • Canadian Produce Marketing Association (CPMA) – fresh produce;
  • Grocery Innovations Canada – fresh and manufactured/processed foods;
  • Canadian Health Food Association (CHFA) – specialty, health foods;
  • Canadian Coffee and Tea Show.

You can visit the following sites to get more complete information on trade trade shows:

Download the I CAN Export step-by-step guide on exporting to Canada

Below is a list of the largest trade shows in Canada.

Trade shows are known to be generally expensive in terms of equipment, furnishings and technical requirements. Avoid making on-site decisions because your costs will go up dramatically. It is therefore important for your company to have a dedicated team who monitors this entire process. To give you an example, look at the difference in booth rental prices for SIAL 2017 in Toronto. Therefore, a 10’ X 10’ (100-sq. ft) booth would cost you 2975 CAD$ before November 2016 compared to 3400 CAD$ after November 2016. A 100-sq. ft. booth would be the smallest booth size available for single companies to select.

Example:

Take a good note that if you want to bring to a trade show food and plant products, your product should comply with regulatory requirements, given that food and horticultural products are subject to rigid import controls in Canada. Please consult the CFIA website for more information. Also, use the Automatic Import Reference System (AIRS) to check the requirements for your product. Therefore, plan the sending of samples in advance!

Life-hacks to successfully negotiate with a Canadian partner

In Canada sellers are fully responsible for the quality of the goods on their shelves. Therefore, Ukrainian companies that work with Canadians have to follow the regulatory and certification requirements closely.

Musthaves for exporters

To get your goods to the supermarket shelves, you have to ensure 101% compliance within the letter of the law. The requirements are quite strict in Canada. Automated Import Reference System (AIRS) may help to learn all regulatory requirements for the food products. You need to enter the product code or name and the website will automatically generate the list of requirements.

If entrepreneurs intend to supply non-food products to Canada they will have to study sector-specific legislation. No single magic portal contains all the information.

Also, there is a number of “voluntary-compulsory” certificates in Canada. In this market, sellers bear full responsibility to end consumers for the goods on their shelves.

Sellers are interested to have not simply good but the best products, which are fully certified and safe.

I, therefore, recommend exporters to start reviewing GFSI certification right away, as it includes the following certificates: BRC global standard for foods safety Issue 6; FSSC22000; SQF code 7th Edition Level 2; IFS Foods Standard Version 6; Global Aquaculture Alliance Seafood BAP Seafood Processing Standard. These are the certificates that will make your goods much more attractive for retail chain representatives. It is hard but necessary.

In addition, large Canadian supermarket chains often require their suppliers to go through a corporate social responsibility (CSO) audit before the supply of goods. Canadians are known to be “moral buyers”. Canadian business prefers the suppliers who do not violate labour, gender or human rights. Nevertheless, few Ukrainian companies can boast of something else within the CSO framework than charity campaigns or formal policies.

Veni, vidi, vici 

As a rule, Canadian companies plan their meetings well in advance and will not meet you at inconvenient time even if you need it urgently and “it will take only five minutes”. No cancellation or force majeure, unless you want to lose your partner’s trust.

Based on my practical experience, it took 5 months to organize a meeting of Ukrainian food manufacturers with a supermarket chain in Canada. The Canadian party’s timetable is booked for months to come.

In 99% of cases, the first meeting is held personally: no Skype or teleconference. If you want a result, you will have to travel to Canada. The meeting itself goes quickly and intensively. You must take product samples with you. Most likely, the importer will ask you of the possibilities to change the products: packing design, labelling, taste line, frequency of supplies.

The first meeting may last 7 to 30 minutes. The first contact is the indicator of interest. If a company manages to catch the interests of Canadians their quality and safety specialists will need to analyse the samples in detail.

After the meeting, there may be two possible case scenarios. Under the negative scenario for the Ukrainian company, it will hear of the Canadians’ decision within a month or a month and a half; a positive outcome will, most likely, be known within about a year.

First scenario: the products have been tested and they are not different from those of the existing supplier. This means there is no sense to continue negotiations. A letter on such a decision will come, as a rule, 1-1.5 months after the meeting. The answer is usually straightforward: “Thank you, but our company decided to extend its contract with the existing supplier”.

Second scenario: the partner liked your products but this is only the beginning of further work. Depending on individual Canadian food importers, the working process with supplying companies takes 2 months to one year between the discussion and negotiation and the first supply of your products to the supermarket or warehouse.

As soon as the importer confirms its intentions, you will be entered into the internal system and an individual project will be launched with a dedicated manager. Further, step by step, you will be discussing prices, mix, packing, design and batch volumes over the phone or Skype.

In addition, a schedule is mandatorily developed for provision of necessary start-up documents. For instance, a future supplier should submit a third party insurance agreement, a goods insurance agreement, a confirmation of the goods’ compliance with Canadian organic standards. It will take time and financial resources to compile and coordinate those documents. This is a part of the process, however, and one may only get the goods to the supermarket shelves upon successful passage of this phase.

Author: Olga Vergeles, Project Manager, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: Delo.ua

Ukrainian Products: Paving the Way to Canadian Supermarkets

The Ukrainian food producers who consider placing their products on the shelves of Canadian supermarkets have a long and thorny way ahead. It is like running a marathon. You gear up, have trainings, and make a step-by-step try: a 10-kilometre distance, then a semi-marathon, and only after that you are prepared to run the whole distance. Provided that you have enough energy, willingness and understand the purpose.

Let us analyze the key stages of the cross-Atlantic marathon and barriers on the way to the Canadian retail chains. To begin with, we will concentrate on the questions “what should you sell?” and “whom to?”

Analyzing the demand for your products and consumer preferences in Canada

Your potential Canadian buyers are numerous (over 35 million) and diverse. Canada is a multicultural country; over 20% of its residents were born outside Canada. Consequently, the customs and preferences of Canadian consumers and partners are dissimilar. I would recommend that you start doing your homework by searching for information using the following resources:

  • Canadian Importer Database, which provides lists of companies importing goods into Canada, with breakdown by product, by city, and by country of origin.
  • Canadian Company Capabilities Directory offers more complete company information. In addition, this tool enables searching by industry. The database includes predominantly Canadian producers, and sometimes distributors.
  • Trade Data Online is another convenient tool to get information on importing goods to Canada, in general and by country.

You may get some information from these resources for free.


Source: Flickr

Studying the demand and the products offered by your competitors is more efficient when you do so on site, that is in Canada, by engaging other people, for example from the Ukrainian diaspora. It is critical that a company may invest into such study. Let us consider some potential market analysis scenarios.

Do-it-yourself market analysis. You, as a producer, go to Canada and – having drafted a plan of visits to certain supermarkets, grocery stores, and points of sale – study the products of a particular group, the prices and the available range. It is an efficient method enabling to understand the proper place and manner of presenting your goods. In addition (a real-world example), if you demonstrate a strong interest and a maximum insistence, you may get contacts of a person active in purchasing for a grocery store or a supermarket suitable for your goods.

Analysis by an agency or an agent. On the one hand, it is a plain vanilla: you contract an agency to conduct the study and, within a specified period, get the report. On the other hand, the agency is not a producer; it will demonstrate its enthusiasm solely within the limits specified in the contract. You cannot exclude that the agent you choose has his own views on the potential of your goods. Among the agents, you may find the representatives of the Ukrainian diaspora living in Canada for years. Often they see the specific nature of the Ukrainian producers, market requirements and demand from the eyes of Canadians. However, I would not recommend you accept a common conception that it is easier to make a deal with a fellow countryman; sometimes it proves unjustified. Your countrymen residing in Canada mind their business interests rather than nationality.

Market analysis by an organization. The main difference between organizations and agencies is that, in addition to studying the demand and providing you with information, organizations may offer you additional services related to the “ongoing promotion” of your company in Canada: participation in exhibitions, educatory touring, etc. Usually, the membership fee they charge is rather moderate; however, you do not get immediate results or “the first aid”. Promoting takes time and requires ‘adoption’ by the Canadian market.

Players of the Canadian food market: who they are and how they work

Supermarkets are the main players; 64% of food products are displayed on their shelves. A supermarket is a full-function and self-service retail market that sells food, with the annual sales of 2 million Canadian Dollars or more.

The 2015 retail sales by Canadian supermarkets and grocery stores are estimated at about 79 million Canadian Dollars.

The top five Canadian supermarkets by annual sales are: Loblaw Cos. Ltd., Sobeys Inc., Metro Inc., Costco Canada Inc. и Walmart Canada Corp.

When choosing and buying food at supermarkets, a Canadian buyer is guided by the following criteria, in descending order of priority: price, taste/freshness, quality, nutritional value/health benefit, safety.

By offering several brands of grocery stores – depending on the pricing policy – some supermarket chains encourage buyers to make more buys. Thirty-three per cent of Canadian buyers opt for specialized stores according to the principle of lower prices.

Winning in the ethnic buyers sector remains a top priority for chain supermarkets in Canada. For Ukrainian producers it means that representatives of ethnic groups (like Ukrainian or Arab diaspora) may trigger interest to certain food product groups. A proactive analysis will help the producer to identify the most wanted products.

In Canada, a typical distributor interacts with the chains of supermarkets and small grocery stores. Customarily, the distributor operates its warehouses in multiple provinces of Canada, which enable prompt product deliveries to multiple stores all over Canada. Commonly, a distributor is active in the markets of both Canada and the US; this may be useful to expand oversea sales geographically.


Source: Flickr

A distributor may operate a separate chain of small ethnic stores of the same brand. In addition, it may offer products under a private label.

For Ukrainian exporters it is important to know that distributors often show interest to food products matching the tastes of ethnic client groups. They opt for goods with the packaging and formula that remind the consumers about their preferences.

However, you should not narrow your offering excessively.

The partner is not interested in niche goods (e.g., gluten-free snacks) and orients at the goods that are popular among Canadian consumers: from confectionary to species.

An advantage of engaging a distributor is a potentially prompt transaction, which is critical for your entry into the Canadian market. If the goods meet the partner’s price, packaging and labelling requirements, the distributor may deliver them to the supermarket chains within 2 months.

What do the Canadian distributors normally expect from a potential supplier? Firstly, a proposal specifying, among others, the best sellers. Secondly, a list of products, including the product description, packaging options according to the consumers’ requirements and/or preferences, letters of references from serious partners. In addition, the supplier should provide a price list, a potential delivery schedule, and specify whether the products are certified.

Author: Olga Vergeles, Project Manager, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: Delo.ua