Achieving Export Market Readiness with AgriAssurance
If your company signed a big contract next week, could you scale up to meet the new demand? What about if your new customer is in another country? Export market readiness is becoming more and more important for food and beverage manufacturers, especially if you want to take advantage of the government grant programs like AgriAssurance to fund your company’s growth into new markets.
Grant programs like AgriAssurance, along with other federal initiatives under the Canadian Agricultural Partnership (CAP) and regional programs like the BC Food Processing Fund, are looking to strengthen the competitiveness of local food industries with cost-sharing investments. What makes AgriAssurance an especially attractive opportunity for growing food and beverage manufacturers is its focus on funding the regulatory step that is absolutely necessary to get your products to market.
Funding to expand your market access and bolster your brand is on the table, but some windows are closing already. The Icicle team put together three steps to demonstrate export market readiness in your grant application – or, if you know where to look, your stack of grant applications – and drive your next phase of growth.
How Can You Capture Export Opportunities with AgriAssurance?
Agriculture Canada reports that in 2021, Canadian food and beverage manufacturers exported their products to over 200 markets, making Canada the fifth-largest exporter of agri-food and seafood products in the world. Regulatory requirements are so important for exporters that the CFIA maintains a Food Export Requirements Library for Canadian manufacturers.
New compliance requirements can come from regulatory jurisdictions (like the US FDA), specialty market certifications, or specifications from your customers themselves. Major retailers like Costco, Walmart, and Whole Foods require higher regulatory standards for food safety, quality, and traceability. Usually this requirement includes certification under a program recognized by the Global Food Safety Initiative (GFSI), like SQF certification.
That’s where AgriAssurance comes in. Many food companies bank on the tradeshow circuit to find new markets for their products, hopefully with support from programs like CanExport. When that investment pays off and you have new customers knocking at your door, programs like AgriAssurance can continue to support you in realizing that success.
Say you have the opportunity to expand in the US market, but you need to boost your traceability systems, increase your manufacturing capacity, and/or obtain a new certification entirely. AgriAssurance is designed to support companies that already have a specific export opportunity on the table and need resources to close the sale and deliver.
Successful applicants can finance the adoption of assurance systems and tools to meet market requirements, providing 50% cost-sharing for projects up to $50,000 each. Unlike other funding programs, there is no minimum revenue requirement for AgriAssurance, making the program a key resource for growth. But first, eligibility criteria demand (among other things) proof of the export opportunity’s viability and value as well as your capacity to deliver on the project – in short, export market readiness.
1. Establish Market Opportunities and Your Vision for Growth
Your AgriAssurance application needs to make the case for a specific, viable export opportunity with reference to detailed market research. Applicants are also required to submit an international export plan via the Agriculture and Agri-Food Canada’s AgriAssurance Program Small and Medium-Sized Enterprises (SME) Questionnaire. These sections of the application process are not only where you lay out your vision, but also how you identify the assets necessary for the project’s success.
Assess Your Target Markets for Canadian Food Products
Frequently, the big fish for Canadian food manufacturers is breaking into the U.S. market, often through familiar retailers that may already be their customers domestically. The opportunity – and challenge – is scale. While Canadians spent CAD $186.7 billion on food, beverage, tobacco, and cannabis products in 2021 (the second-largest household expenditure category after housing), Americans spent USD $2.12 trillion on food and beverages in grocery stores and other retailers and on away-from-home meals and snacks – making it a significantly larger market for growing brands.
AgriAssurance and programs like it want to help Canadian companies capture more market opportunities abroad. Your AgriAssurance application should clearly lay out what you will need to fill the specific demand with Canadian-made products. Which distributors, suppliers, retailers, would align with your flagship products? In a larger market like the USA, are there specific segments that could enhance your domestic successes? And if you can secure new customers and distribution channels, what next? Will you need new documentation (like SOPs)? Do you need new or improved infrastructure to meet compliance standards?
Pinpoint Compliance Technology for End-to-End Traceability
One major factor for Canadian manufacturers looking to export to the USA is the FDA’s Food Safety Modernization Act (FSMA), which is still rolling out and establishing higher standards for safety and quality. Most recently, the new FSMA Traceability Rule has raised the bar for trace and trace systems to cover the entire supply chain – including suppliers abroad – over the next two years.
Alongside higher food safety and quality standards required by many retailers, regulatory shifts like these are pushing manufacturers to fully automate their data management and traceability systems rather than relying on manual processes that might have made the cut before. AgriAssurance aims to support challenges like FSMA traceability compliance that are necessary to enter target markets.
In order to demonstrate the opportunity, your application will need to drill down further into the market opportunity and your project to tackle it. In addition to a detailed project budget, AgriAssurance requires that you measure the value of expected results for each activity you include in your project, as well as the number of prospects you anticipate by the end and the direct, forecasted sales for the following year.
Capitalize on Assurance Programs and Certifications
While that level of detail may seem daunting, here is where you can develop your market strategy by leveraging assurance programs to generate future growth. If you need to implement new traceability systems for compliance with FSMA, what else can be achieved once you have that system in place? How will it help you scale up while maintaining a competitive advantage?
If you have your eye on major retailers like Costco – the company’s food processing suppliers saw their sales increase by over 9% in the first quarter of 2023 – you will want to look ahead and consider which certifications or systems will cover the most territory for you at your current stage of business growth. Costco requires their suppliers to have GFSI-recognized certification like the Safe Quality Food program (SQF), which has three compliance programs: SQF Fundamentals for small businesses, SQF Food Safety (formerly Level 1), and SQF Quality (formerly Level 2). Which one is right for you? Are there recent changes you should be aware of, like Costco’s recent mandate for unannounced annual audits? And crucially, what will be the most valuable for you in the future?
Questions like these may help you articulate your market strategy and show the long-term potential of short-term opportunities. A manufacturer of allergen-free snacks, for example, might see the benefit in targeting higher allergen control standards to maximize market access over time. Another company in the booming natural products sector might capitalize on a certification that provides them with the necessary evidence to enhance their packaging with attractive health claims.
Look at the Whole Supply Chain
Consider also your distribution strategies. Many specialty products start selling to customers directly through online vendors like Shopify. Indeed, this year online sales are expected to make up 5.2% of the global food market’s revenue, or USD $54.4 billion. If online distribution is part of your export market strategy, how will you manage the logistics of getting your products to the customer?
These factors might be even more important depending on your product lines. Targeting the growing frozen foods market, for example, adds temperature control into the mix. In addition to higher overhead, coldchain logistics come with higher risks, and therefore demands trustworthy logistics partners, appropriate procedures for safety and quality, and high supply chain visibility. Not only are these aspects relevant for an AgriAssurance application, they are essential to implementing traceability and assurance systems.
With a clear picture of the export market opportunity and a solid strategy to win, the final point is to show how you are going to implement new and improved assurance systems and measure your progress. To build a roadmap for adoption, make sure you cover all the aspects involved in the changes to your organization in the context of your organizational capacity. What management controls, human resources, and/or technical capacity will you need to succeed? What kind of training will you need to provide? When will it take place? How should you stage it out?
Validate Your Adoption Plan with Icicle ERP’s Onboarding Program
Combining food safety, quality, traceability, production, logistics, maintenance, sales, and more in one automated system, Icicle ERP is the backbone of food and beverage manufacturers worldwide. Each member of the Icicle community is guided through a customized, modular training program that is tailored to their unique operations. The quick implementation timeline – as little as four weeks – as well as stellar customer support have helped dozens of companies get across the audit finish line to make their big sale.
Icicle users leverage their accounts to put industry best practices into practice, without draining resources and overloading your staff. Icicle ERP is specifically designed for food and beverage manufacturers to simplify and streamline compliance, centralizing and integrating compliance and assurance programs. Features like the task management infrastructure reinforce your project’s implementation and make your company more resilient overall. As Dean Blignaut, Co-Founder and President of TMRW Foods, explained about his Icicle ERP implementation,
“We have a really high standard here, and we wanted to ensure that that standard was set and that it was nurtured and fostered while the team was still small. Now, whenever we add people to the team, they’re basically perpetuating a really good system, because they’re learning from the others who have gone through this process.”
Automate AgriAssurance Reporting with Icicle’s Analytics Tools
With advanced automation systems in place, Icicle helps you sustain that excellence and generate the documentation to prove it. That’s one of the requirements not just for your AgriAssurance application, but for the project itself: applicants must explain how activities and expenses will be achieved and monitored, and submit regular and accurate reports of your progress. Icicle’s integrated food production management system brings data like this to your fingertips with analytics dashboards and reporting.
When Icicle ERP users generate documentation automatically (including HACCP plans!), they can also leverage that level of data and analytics to generate more value for their business too. Whether it’s sales and financial reports for the AgriAssurance program or Smart Purchasing Suggestion reports or real-time Production Costing, Icicle’s capabilities support food businesses to grow sustainably. Icicle even integrates with the accounting software commonly used by SMEs like QuickBooks Online and Xero.
Grant-Stacking Can Power Your Growth with Icicle ERP and AgriAssurance
Growing Canadian food and beverage processors are poised to take advantage of government funding and open new markets. Several grant programs under Sustainable CAP (like AgriAssurance, AgriMarketing Program, and the AgriCompetitiveness Program) as well as others like the BC Manufacturing Jobs Fund are specifically prioritizing market-ready innovations and projects for support.
Small and mid-sized food manufacturers should also know that stacking grants (or combining multiple grants in a project’s budget) is encouraged. AgriAssurance-funded projects can include up to 85% support from government bodies, bringing you closer to implementing the systems you need to grow.
Get in touch with our team to find out how to stack grant opportunities and fund your next innovation with Icicle ERP.
Learn more about grant programs available for the food industry here.
Request our introductory guide to Mastering Profit Margin Formulas for Food Manufacturers.