With the COVID-19 pandemic changing consumer buying patterns from their favourite treats to pantry staples and familiar foods, experts urge producers to examine their role in their value chains and determine if new opportunities are present.
Dr. Martin Gooch, CEO of Value Chain Management International, says some of the food staples consumers crave right now are lesser processed – and as a result, lend themselves well to marketing outside of traditional channels.
“The first principle for effective value chain management is to focus on what customers and consumers value,” Gooch says. “This has changed since the COVID-19 pandemic. Right now, producers need to map out all their value chains and see where there might be opportunities.”
Diversifying revenue streams reduces risks
Dr. Simon Somogyi, Arrell Chair in the Business of Food at the University of Guelph, says when primary producers own successive parts of the supply chain, they diversify revenue streams and reduce risk.
“Vertical co-ordination - working with members of the chain that are downstream to producers, such as processors and retailers – is lacking,” Somogyi says. “There’s also a general lack of Canadian farmer-led vertical integration such as on-farm value adding, other than simple customer processing like grain drying.”
Somogyi acknowledges some agricultural sectors would be challenged by greater vertical co-ordination, but he still sees many opportunities. For example, he says, Japanese buyers praise the high quality of Ontario soybeans which they import and process into tofu. But few soybean farmers in the province have invested in soybean and tofu processing equipment to manufacture, brand and export tofu to Japan.
“Diversification, collaboration and integration help reduce risk,” Somogyi says.
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