Organic Product - Marketing Situation in Canada

According to the trend of environment conservation of Global Warming of David Suzuki a famous scientist and environmentalist in Canada, and health care’s trend by consuming more healthy food, products’ quality & without chemicals, these made the trend of consuming organic products more popular. Canada is one of countries influenced by the trend that resulted extension‘s tendency of Canadian organic products increasingly. According to Organic Agriculture Centre of Canada (OACC) evaluated that market value of Canadian organic products costs US 2.6 billion (฿ 83.2 million) by proportion 2% of gross value of all food products in Canada. Therefore organic products have the extension’s rate 15 to 20% per year. Organic products are not only limited in the food products but also organic cosmetics, spa, clothing such as cotton shirts made of organic cotton etc.

Organic products are popular in Canadian market such as food products, vegetables, fresh fruits and cosmetic and spa products.

Domestic Production Sector in Canada

.  Canada is an important producer of organic products such as wheat, soybean, canola (Canola Seeds). All of them are the important crops of Canada. In 1960 there are 3.782 cultivated areas certified by Organic Farming Standard.

.  Meaning and definition of organic products in Canada covered rather than organic products by avoiding use of chemicals in all process and production system. Moreover the production does not affect to environment directly and indirectly such as no releasing hazardous waste and pollutant within the production area and near places by 8 meter far (25 foots), and including reasonable employment and fair trade such as to sell organic coffee seed from African continent, local people should be hired fairly and reasonable.

.  The price of organic products categorized to a premium products as well as a high price.

.  Saskatchewan province in Canada, settled at the middle of the country bordered by Vancouver, is a producer and an organic products export value one-third of all markets. The next other cities Quebec, Ontario and British Columbia.

.  Organic wheat products is the main product production exported from Canada by cultivated area about 187,000 acres (467,500 rai), and the product is about 93,500 tons.

Canada produces also the organic meat products especially organic beef cattle, swine and chicken respectively. The rate of organic meat production is increasing 15 % per year. Most of organic meats can distribute in specialty meat store.

The below table shows organic meat production in Canada in 2005.

Unit: type / BC / AB / SK / MB / ON / QC / NB / NS / PE / YK / Canada
Beef / 2,374 / 10,288 / 7,172 / 2,198 / 3,189 / 1,628 / 48 / 205 / 59 / - / 27,161
Swine / 578 / 865 / 525 / 174 / 623 / 2,598 / 20 / 125 / - / - / 5,508
Chicken / - / - / - / - / - / - / - / 2,500 / 16 / 640 / 3,156

.  Recently Canadian agriculturalists and Entrepreneurs of food industry adapted the line of planting and production into organic farming increasingly to add value (value added) of agricultural products. In 2006 there were 3,782 organic producers in Canada as follows:

Provinces / Amount of Organic Producers / Amount of Organic Producers during Number in Transition / cultivated area unit: acre (approximation)
British Columbia / 455 / 201 / 33,208
Alberta / 231 / 64 / 397,244
Saskatchewan / 1104 / 105 / 654,150
Manitoba / 181 / 49 / 91,333
Ontario / 669 / 90 / 100,723
Quebec / 988 / 485 / 88,865
New Brunswick / 46 / 8 / 5,000
Nova Scotia / 57 / 6 / 2,300
Prince Edward Island / 43 / 3 / 1,713
Newfoundland / 45 / - / Na
Yukon / 5 / 1 / Na
Total (Canada) / 3,782 / 1,012 / 1,374,536

Marketing Condition of Organic Products in Canada

According to importers’ information, most of organic products in Canada imported from America mainly because of the short route of transportation and most of import products namely Perishable such as vegetables and fruits.

Canadian Customs Department started to collect organic products information by using HS Code (Harmonized System) in 2008 but it was only the test by categorization the products improperly so the expectation of good change will be possible in the future.

Dairy Products - Customs Tariff Chapter 4

0403.10.10.10 Yogourt, within access commitment

0403.10.20.10 Yogourt, over access commitment

Fresh vegetables - Customs Tariff Chapter 7

0701.90.00.10 Potatoes, except seed

0702.00.29.10 Tomatoes, cherry

0702.00.99.21 Tomatoes, roma

0702.00.99.29 Tomatoes, other

0703.10.99.10 Onions, other

0703.10.39.10 Onions or shallots, green

0704.10.90.10 Cauliflower

0704.90.29.10 Broccoli

0704.20.90.10 Brussels Sprouts

0704.90.39.10 Cabbage

0704.90.49.10 Cabbage, chinese

0705.11.90.20 Lettuce, head

0705.19.90.20 Lettuce, other

0706.10.40.10 Carrots, other

0706.90.30.10 Beets

0706.90.59.10 Radishes

0707.00.99.20 Cucumbers and Gherkins

0709.20.99.10 Asparagus 4

0709.30.00.10 Eggplant (Aubergines)

0709.40.90.10 Celery

0709.60.90.20 Peppers of the genus Capsicum or Pimenta

0709.90.40.10 Sweet corn-on-the-cob

Packaged fresh salad cut mixes

0705.19.90.21 Not exceeding 1 kg each

0705.19.90.22 Exceeding 1 kg each

Baby carrots

0706.10.20.11 In packages not exceeding 1 kg each

0706.10.20.12 In packages exceeding 1 kg each

0708.10.99.10 Peas (Pisumsativum)

Spinach, packaged fresh cut

0709.70.00.11 In packages not exceeding 1 kg each

0709.70.00.12 In packages exceeding 1 kg each

Fresh Fruit - Customs Tariff Chapter 8

0803.00.00.11 Bananas

0804.30.00.11 Pineapples

0805.10.00.12 Oranges except Temple

0805.40.00.10 Grapefruit

0805.50.00.11 Lemons

0805.50.00.12 Limes

0807.11.00.10 Watermelons

0807.20.00.10 Papayas

0808.10.10.81 Apples, Golden Delicious

0808.10.10.82 Apples, Red Delicious

0808.10.10.83 Apples, Granny Smith

0808.10.10.84 Apples, Gala

0808.10.10.89 Apples, other

0808.20.29.10 Pears

0809.30.29.10 Peaches 5

0810.40.10.22 Blueberries, cultivated

0809.20.39.10 Cherries

0810.10.99.10 Strawberries

0810.20.19.10 Raspberries and Loganberries

0810.40.10.11 Cranberries

Coffee, Tea, Maté and Spices - Customs Tariff Chapter 9

Green tea (no fermented)

0902.10.10.10 In bags for individual servings

0902.10.90.10 In packages not exceeding 3 kg

0902.20.00.10 In packages exceeding 3 kg

Black tea (fermented & partly fermented)

0902.30.10.11 Not decaffeinated, in bags for individual serving

0902.30.90.11 Not decaffeinated, in packages exceeding 3 kg

Medicinal plants - Customs Tariff Chapter 12

Herbal tea

1211.90.10.10 In bags for individual servings

Oils - Customs Tariff Chapter 15

1509.10.00.11 Olive oil, virgin in container sizes less than 18 kg

Prepared foods - Customs Tariff Chapter 19

1901.10.20.10 Containing more than 10% on a dry weight basis of milk sold for

infant use, retail sale

Prepared foods - Customs Tariff Chapter 21

2103.20.90.91 Tomato Sauces

Beverage containing milk - Customs Tariff Chapter 22

2202.90.49.10 Milk beverages 6

The Regulations of Organic Products in Canada

Canadian Food Inspection Agency (CFIA), an organization of Canadian government sector, has a duty to control and set the rules of importing organic products in Canada (Canada Organic Products Regulations). The regulations have been used since June 14, 2008 (the former expectation to use the regulations in December 14, 2007) that has principles and specifications about organic products; it initially can be concluded as follows:

-  Organic products got guarantee the standard by CFIA and permitted to use the Organic Logo or Canada Organic Logo on the organic products must have organic mixture at least 95%.

This is the Organic Products Logo will be used on the Canadian Organic Products ( during the consideration)

-  Products mixed with 70 to 90%of the organic mixture, government sector of Canada permitted producers able to claim following the real proportion of mixture as it was (% organic products) but use of the Organic Logo is not permitted.

-  To import organic products to Canada, the products must pass the standard of the Canada Organic Standard or the organic products must pass the Organic Standard from theexport-country and producers-country having basically the standard as well as Canada standard and also the agreements with Canadian government sector.

-  Initially the Canada Organic Products-Regulations from CFIA do not cover to Aquaculture, Cosmetics, Pet food, and Natural Product.

-  Organic Products Regulationsof Canada

http://gazette.ca/rp-pr/pl/2009/2009-2-14/html/regel-eng.html

Organic Products-Production Standard

Organic Production Systems General Principles and Management Standard

http://www.cog.ca/documents/310.pdf

-  To import organic product to Canada is not necessary having Specialty License but importers must register to Import License.

.  Canadian General Standard Board is an organization of Canadian Government Sector regulating the organic products standard; production sector (agricultural products) and an abstract of Organic Production Regulations following as:

1.  Part I (Organic Production Systems General Principles and Management Standard)

CAN/CGSB-32.310-2006) – Information of Standard Form and the Process of Organic Production may be concluded as follows:

InformationDetail from http://www.pwgsc.gc.ca/cgsb/on_the_net/organic/032_0310_2006-e.pdf

1.1  Food Agricultural products are classified to be the Organic Products must be from the relation’s planting system between beings and environment cause the perfection of production and preparation of weeds and pests, disease control by method of biological control and multi vegetation, recycle of vegetation and animal’s residues, selection of crops and plant rotation, water system management, to plough the field, and lastly cultivation.

1.2  Regulation- CAN/CGSB 32.310-2006 can apply to the following products:

1.2.1  Corps and planting products that are not preserved and domestic animal &products of domesticanimal following the regulation and limitation in the production process mentioned in clause 1.2.1.

1.2.2  Preserved corps from agriculture and products of domestic animal as human food or used things mentioned in clause 1.2.1.

1.2.3  Feeding domestic animal.

1.2.4  Preserved corps from agriculture and products of domestic animal as animal food or used things mentioned in clause 1.2.1.

1.3  According to the Standard of Quantities and Dimension following Regulation- CAN/CGSB 32.310-2006 will use metric unit equal to yard and pound with dimension of metric unit as the formal unit and it can be used in the case of when contradictions and problems caused by the standard of dimension.

2. Part II (Organic Production Systems Permitted Substances Lists; CAN/CGSB-32.311-2006)

Information about lists of Organic Production Systems permitted substances that in the production procedures and preservation or sticking process of organic products label, producers are prohibited to use chemicals or the following techniques briefly:

InformationDetails: http://pwgsc.gc.ca/cgsb/on_the_net/organic/032_0311_2006-e.pdf

2.1 Substances or products produced from genetic modification or genetic engineering.

2.2 Insecticides produced from chemosynthesis such as defoliants and desiccants, fungicides, insecticides and rodenticides and preservative for wood e.g. arsenate.

2.3 Fertilizer or substances mixed with crops and animals contained prohibited chemicals.

2.4 Any mud sewage is modified for quality development.

2.5 Growth Substances of crops.

2.6 Drug from synthesis from animals such as antibiotics, parasiticides except substances mentioned in CAN/CGSB-32.311-2006.

2.7 Chemical helper and catalysts and mixtures used for synthesis process and food garnish such as sulphates, nitrates and nitrites.

2.8 Irradiation activated to ion or other irradiations in food and food ingredients.

2.9 Equipments or materials used for the packaging and product container or tank that have fungicide, preservative or fumigant.

2.10 ther substances not mentioned in CAN/CGSB-32.311-2006 are prohibited.

DistributionChannels

-  Distribution Channels of Organic Products in Canada

-  Supermarket Chain such as Loblaws and Wal-Mart Supermarket, organic products are placed on the Mainstream Market by arranging on the shelf separately in the premium price. Loblaws is the biggest Supermarket Chain in Canada (few products in Wal-Mart Supermarket).

-  A type of Specialty Store known as Health Food, a type of store as Grocery, a small area,only has organic products such as vegetables, fruits, rice, tea, coffee, vitamin, and kinds of food. Most of stores namely Whole Food Canada, Planet Organic, Big Carrot established in the city or the town where middle and high class lives.

-  Types of Restaurant namely Organic Restaurant and Organic Vegetarian become popular in Canada. They are known as Niche Market and evaluated the market value about US 10 million per year. The restaurants will order directly the products or from products distributor, food logistics.

An Opportunity of Thai Organic Products in Canada

.  Organic jasmine rice emphasized the market penetration in Caucasian-Canadian Market rather than Asian-Canadians because they can buy the products in premium price. An adaptation changes by reducing a package size about 1 to 2 kilograms instead of 8 to 15 kilograms per a package that is suitable for the demand and food habits of Caucasian-Canadian consumers.

.  Canned food/processing such as canned organic coconut milk, canned organic fruits etc., with taking an opportunity of Canadian consumers’ trust to Thai organic products rather than China and Vietnam.

.  Ready to Eat food (RTC Food) such as vegetarian food and sea food that both of them are accordance with the way of Canadian life because most of them are working outside of their home and they do not have time to cook and the products can response to organic favorite consumers’ group. Besides it is a way of eliminating a problem of regulation to meats import’s difficulty in Canada.

.  Tea or herb drinks such mulberry tea, mangosteen juice.

.  Cosmetic products such as soap, body lotion, shampoo that produced from substances certified by organic farming.

.  Organic clothes with brand names such as GAP, and H&M started to design organic cotton-clothe collections that the price is quite more expensive than general cotton clothes.

Penetrate Market’s Strategy of Thai Organic Products in Canadian Market

.  Development of Thai Organic Products Standard based on Canada Standard or USA Standard by issue for Standard Certificate from Organizations in Canada (DFIA) or in USA (USDA) to be accepted and to import Thai Organic Products to sell in the market.

.  Recently there are 21 countries; 15 EU countries, USA, Japan, Australia, Costa Rica, New Zealand, and Switzerland negotiated and made an agreement with Canada to accept the equality of organic products standard (Equivalency Determination) such as the organic products certified in USA (USDA)can distribute in Canada that it is not necessary to apply for the certification from Canada Government by this method can reduce the import procedure, cost and time as well.

.  Package development such as design, colorful, size, fort that is attractive to customers and also it can make the trust to Thai products.

.  To stick on the product label following the regulations.

.  To specify products prize that can compete in the market.