Processing Vegetable Stakeholders’ Input Workshop

Ontario Farm Products Marketing Commission February 23, 2017 Chatham, Ontario

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Bryan Boyle & Associates

Table of Contents Page

Executive Summary 3 Purpose of Session 5

Prioritize Features of Projects 6

Listing of Features of Projects 7

Details of Projects

Sustainability and Profitability 10

Transparency 13

Competitive Pricing 14

Clear Terms and Conditions 16

Additional Tonnage 16

Strong Oversight 18

Communication and Collaboration 18

Workshop Summary 24

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Bryan Boyle & Associates

Executive Summary On February 23, 2017 approximately seventy-five tomato growers and processors involved in Ontario’s processing tomato sector met at the John D. Bradley Conference Centre in Chatham for a highly interactive workshop facilitated by Bryan Boyle. The purpose of the session was:

To solicit more detailed input from all tomato stakeholders relating to their perspectives of projects to support innovation and growth in the processing tomato sector in 2017 or 2018.

The approach of the meeting was to identify many of the key points relating to this issue to allow decision makers to make the best possible decisions .

Jim Clark, Interim Chair, Ontario Farm Products Marketing Commission provided the perspective of OFPMC relating to current events and activities in the processing vegetable sector.

Bryan Boyle reviewed the perspectives on relationships and potential project merits, challenges and actions that were identified by stakeholders at the meeting of processing vegetable growers and processors in the Bradley Centre exactly one week earlier on February 16. Copies of the full meeting report were provided to each participant.

Participants were asked, “What are the most important features of projects to support innovation and growth in the processing tomato sector in 2017 or 2018?”

The participants shared suggested potential features, which were clustered and titled on the wall. They were prioritized using a scoring system.

They based their allocation on which features are most critical to include in potential projects to support innovation and growth in the processing tomato sector in 2017 or 2018. The responses were tabulated by growers, processors and combined growers and processors. The following are the themes prioritized by the three groupings:

Growers: 1st: Transparency 2nd: Sustainability and Profitability 3rd: Competitive Pricing 4th: Clear Terms and Conditions 5th: Additional Tonnage 6th: Strong Oversight

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Bryan Boyle & Associates

7th: Communication and Collaboration Processors: 1st: Competitive Pricing 2nd: Sustainability and Profitability 3rd: Additional Tonnage 4th: Communication and Collaboration 5th: Clear Terms and Conditions 6th: Transparency 7th: Strong Oversight

Growers and Processors Combined: 1st: Sustainability and Profitability 2nd: Transparency 3rd: Competitive Pricing 4th: Clear Terms and Conditions 5th: Additional Tonnage 6th: Strong Oversight 7th: Communication and Collaboration

Certain observations or trends emerged when comparing the prioritized themes of growers and processors. Sustainability, profitability and competitive pricing are high priorities for both groups. Growers’ highest priority is transparency although the processors view transparency as a much lower priority. Processors value additional tonnage as a component of potential growth and they place strong priority on communication and collaboration. Growers attach less priority to additional tonnage. Communication and collaboration is the growers’ lowest priority of the identified themes.

At their table discussion groups, participants were encouraged to choose an action theme or specific action and generate a plan identifying: What? Why? Who? Where? When? How? Resources? and Success? The details of these plans are included in the body of this report.

The participants were very engaged in the workshop. They provided substantial input from tomato stakeholders relating to their perspectives of projects to support innovation and growth in the processing tomato sector in 2017 or 2018.

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Processing Vegetable Stakeholders’ Input Workshop

Ontario Farm Products Marketing Commission

John D. Bradley Conference Centre, Chatham, Ontario February 23, 2017 Facilitated by Bryan Boyle

Purpose of the Session To solicit more detailed input from all tomato stakeholders relating to their perspectives of projects to support innovation and growth in the processing tomato sector in 2017 or 2018

Approach To identify many of the key points relating to this issue to allow decision -makers to make the best possible decisions

Throughout this report whenever two or more participants (or in the cases of the table discussion groups - number of groups) offered the same or very similar comments they are noted with an “x” and the number, i.e. (x3) Ontario Farm Products Marketing Commission Perspective on Current Activities – Jim Clark, OFPMC Interim Chair

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Participants were asked “What are the most important features of projects to support innovation and growth in the processing tomato sector in 2017 or 2018?”

After the participants shared their suggested potential features, those features were clustered and titled on the wall. They were prioritized using the following method:

Each participant was given 100 points to allocate to the feature themes to show their relative importance. They based their allocation on which features are most critical to include in potential projects to support innovation and growth in the processing tomato sector in 2017 or 2018.

Rank Features (From Growers’ Perspective) Total Score 1st

Transparency 167 2nd

Sustainability and Profitability 162 3rd

Competitive Pricing 135 4th

Clear Terms and Conditions 131 5th

Additional Tonnage 99 6th

Strong Oversight 86 7th

Communication and Collaboration 59

Rank Features (From Processors’ Perspective) Total Score 1st

Competitive Pricing 17 1st

Sustainability and Profitability 17 3rd

Additional Tonnage 12 4th

Communication and Collaboration 12 5th

Clear Terms and Conditions 10 6th

Transparency 9 7th

Strong Oversight 1

Rank Features

(From Combined Growers’ and Processors’ Perspective) Total Score

1st Sustainability and Profitability 17

2nd Transparency 17

3rd Competitive Pricing 15

4th Clear Terms and Conditions 14

5th Additional Tonnage 11

6th Strong Oversight 8

7th

Communication and Collaboration 7

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The suggested potential features are listed below by theme in the same priority order as the table above indicating the combined growers’ and processors’ perspectives.

Sustainability and Profitability • Sustainability (x2) • Profitable (x2) • Money • Financially viable • Economically viable for the whole industry • Supports growth • Growth • Target the consumer to improve the market • Building a brand for locally processed tomatoes • Promote Canadian product, “Grown in Canada” • Must realize the long-term effects • Progressive innovation • Affordable • Pioneering Transparency • Transparency (x6) • Full transparency • Total transparency • Public pricing • Level playing field • Ensure it does not undermine regulated marketing Competitive Pricing • Competitive price • Premium price for product • Good pricing structure • Justifiable price • Financially worthwhile • Benefits both sides • Where yield doesn't dictate price Clear Terms and Conditions • Agreement amongst all stakeholders as to direction taken • Solids adjustment formula • Conditions beneficial to the whole industry • Protection of 2016 acreage

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Additional Tonnage • Demand • New acres • Direct marketing • More options • Choice • Anti-monopoly • Offset imports without buying market share • Improve crop research for solids, yield and quality • Identify how you expand into a glutted market Strong Oversight • Balance of powers • Involvement of producers, processors and government • Degrees of commitment • Proper leadership • A strong supportive grower group for the OPVG • Save the Board • 100% Board support • OPVG negotiated price • Broad representation by OPVG • All growers negotiate as one through OPVG

Communication and Collaboration • Mutually beneficial (x3) • Flexibility on both sides (x2) • Symbiotic relationship • Beneficial to all parties • Shared benefits to all • Productive teamwork • Positive relations • Willingness to cooperate • Partnership • Key partners • Positive relations • Teamwork • Negotiating in good faith • Project should be agreed by all parties • Compromise • Adapting to change with combined linkages with growers and processors working

together

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• Fairness • Equality between growers • Applicable to all processors • Innovative • Progressive • Proactive • Successful • Achievable • Trust • Respect • Industry Advisory Committee • Establish the goals

Format to Develop a Plan or Logistical Details

At their table discussion groups, participants were encouraged to choose an action theme or specific action and generate the following information.

What? Clearly defined feature to help ensure strong and viable projects Why? The positive impact this feature would have on projects

Please note how your recommended feature: • builds on a strength • reduces or eliminates a weakness • improves relationships between growers and processors

Who? The lead person or group Where? Area or location where activity would be focused When? Reasonable and attainable timelines How? Recommended steps in implementing the specific feature Resources? Resources required (e.g. funds, materials, payment-in-kind, etc.) and who will

supply these resources Success? Metrics or criteria that will be used to evaluate success of this action

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The plans created by participants are displayed below. They are organized by theme in the same order of priority as the original features are presented above.

1) Sustainability and Profitability

Action 1.1 Table Number 8 What? Growth and sustainability Why? • Improve relations between growers and process ors to be profitable for

both • Return on investment • Grow our own businesses

Who? • Customers • Suppliers

Where? • Processing plants • Consumers • Farms

When? 2017 season and beyond How? • Promotion and marketing

• Focus on the local market share • Increase efficiency on farm and in processing plant • Fair price for tomatoes provides the opportunity for growth that is

sustainably profitable • Generic marketing

Resources? • Government • Private research • Advertisements • OPVG

Success? • Capture more shelf space and market • On-farm growth • Both grower and processor receiving a fair profit

Action 1.2 Table Number 1 What? Sustainability and profitability Why? Long-term viability Who? OPVG

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Where? Competitive pricing When? Annually How? Mediation Resources? • Growing Forward 2

• Check-offs Success? • Sustainable growth with a stable grower base

• More than nine growers in 2018 Action 1.3

What? • Sustainability and profitability Why? • For future generations

• Invested interest long-term

Who? • Shared risk between processor and grower Where? • Across the entire vegetable industry and market When? • Start as soon as possible with a 3 to 5 year project plan How? • Secure processors

• Secure markets Resources? • Incentive programs that fund the increase Success? • Growth of farm businesses’ revenue

• More profit in growing tomatoes than growing grain and oilseeds • Growth of vegetable exports

Action 1.4 Table Number 6 What? Sustainability and profitability Why? • It is the most important feature; if it is not sustainable, it is only short-term

• If it is not profitable, no one will want it

Who? • Both growers and processors When? • Always strive to be profitable and sustainable How? • Monitor aspects of change

• Be transparent

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Action 1.4 Table Number 6 Resources? • Process capacity (in excess)

• Start-up funds • Contingency plans

Success? • Was the environment affected? • Did all stakeholders survive financially? • Is anyone left out? • Can it continue? • Did we all make money?!

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Action 1.5 Table Number 17 What? • Sustainability and profitability Why? • Beneficial to producers and processors

• Secure our future • Positive industry momentum

Who? • Industry Advisory Committee • Actual growers and actual stakeholders

Where? • Throughout the sector When? • As soon as possible How? • Balanced power

• Government mandated • Remove current process and administration • Open, honest communication • Benchmark global leaders

Resources? • The right people Success? • More tonnes of tomatoes produced

• More producers • More processors

Action 1.6 Table Number 7 What? • Sustainability and profitability Why? • Trust is essential Who? • OPVG Where? • Across the sector When? • As soon as possible How? • Growers and processors engage in brainstorming session several times

each year to drive innovation and efficiency • Processor specific variations on terms, not price

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• Research for solids

• Efficiency for grower and processor • Pin to pin shunt service at factory

Resources? • OPVG Success? • Were meetings held?

• Were results shared? Action 1.7 Table Number 5 What? • Sustainability and profitability Why? • Three pillars of sustainability: economic, environ mental and social Who? • Win-win for grower and processors Where? • Widespread in the growing and processing area When? • As soon as possible How? • Demonstrate transparency

• Open dialogue between growers and processors Resources? • Grower check-off Success? • Other examples that can be documented? Action 1.8 Table Number 16 What? • Get rid of Regulation 440 Why? • OPVG cannot handle the administration and the power Who? • Farm Products Marketing Commission Where? • Here in the Southwest When? • Now; just do it How? • Farm Products Marketing Commission has the legislative authority Resources? • Government-funded as part of regular administration Success? • Profit for growers and processors

2) Transparency Action 2.1 Table Number 14 What? • Transparency Why? • Leads to trust

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• Improves relationships

• If you're not honest, what are you?

Who? • OPVG Where? • London When? • Until 2019 then reassess How? • Avoid reinventing the wheel

• Maintain status quo • Use mediator if necessary

Resources? • Memorandum of Understanding Success? • Mutual contentment Action 2.2 Table Number 9 What? • Transparency Why? • Builds trust and understanding Who? • All growers

• All processors • Farm Products Marketing Commission

Where? • Across the tomato sector When? • Ongoing How? • Communication where contracts are shared with everyone Resources? • OPVG Success? • Improved relationships

3) Competitive Pricing Action 3.1 Table Number 7 What? • Competitive pricing Why? • So that producers and processors can invest in their businesses while

• still making a profit • To ensure a strong future and even playing field

Who? • California Price • OPVG set a base that can be tweaked

Where? • Southwest Ontario When? • Now

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Action 3.1 Table Number 7 How? • Analyze cost from producers and processors • Track currency exchange rate

• Identify California Price • No backroom deals

Resources? • OFVPA • OMAFRA

Success? • 100% • Current measures OPVG uses

Action 3.2 Table Number 9 What? • Competitive pricing Why? • Keeps the processor business here in Southwest Ontario

• Gives growers a processor to grow for at a reasonable prof it

Who? • Led by both OPVG and OFVPA Where? • Southwestern Ontario When? • 2017, 2018, 2019 How? • Process would be led by OPVG

• Monitored by Farm Products Marketing Commission

Resources? • Organizations would support Success? • Are processors still here in Southwest Ontario? Action 3.3 Table Number 18 What? • Competitive pricing Why? • Develop a clearly established price

• Should be kept simple

Who? • Negotiations should include: • Board member • Farm Products Marketing Commission • All growers • Processor representatives

Where? • Throughout our tomato production and processing area When? • Immediately How? • Through negotiations

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Action 3.3 Table Number 18 Resources? • OPVG and OFVPA Success? • Successful negotiations with a clearly established price Action 3.4 Table Number 12 What? • Competitive pricing Why? • The whole industry makes a profit Who? • OPVG and processors Where? • Throughout the sector When? • Continually How? • Through negotiations Resources? • OFVGA and OPVG Success? • If the negotiations establish a competitive price for both growers and

• processors

4) Clear Terms and Conditions Action 4.1

What? • Clear terms and conditions Why? • To avoid conflict between farmers and processors Who? • OPVG Where? • At all meeting points of processors and growers When? • Sooner the better How? • Processes already in place with Regulation 440 Resources? • Both growers and processors supply resources Success? • If status quo is maintained

5) Additional Tonnage Action 5.1 Table Number 11 What? • Growing additional tonnage for processing Why? • Capture new markets

• Build stronger ties between grower and processor • See growth for grower and processor

Who? • Joint development between growers and processors

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Action 5.1 Table Number 11 Where? • Southwestern Ontario When? • Over the next 3 to 5 years How? • More growers’ input into the decision of the contracts

• Longer-term contracts • Processor specific negotiations

Resources? • Deferred payment on additional tonnage • Tax and utility credits to processors • Government support re: labour wages for additional jobs

Success? • Increased growth in existing markets • New growers in the industry • Penetration into new markets

Action 5.2 Table Number 8 What? • More profit and efficiency for the processor

• Manage processors’ risk • Growth to create work for new generation through succession plan

Why? • Growth • Improved efficiency of both growers and processors • Improved farm profits • Risk management

Who? • Customer, both processor and consumer • Supplier, farmer • Government, both local and provincial

Where? • Chatham-Kent and Essex for producers • Ontario for processors • Global for consumers

When? • 2017 How? • Producing input costs

• More marketing as one voice • Competitive pricing

Resources? • Growers and processors Success? • Growth of both farmers’ and processors’ businesses

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Action 5.3 Table Number 16 What? • Direct contracting Why? • Allows processors to talk and deal directly with growers Who? • All growers and processors would lead Where? • Across the sector When? • Now How? • Initiate grower/ processor meetings Resources? • Self-supporting Success? • Grower and processor feedback

6) Strong Oversight Action 6.1

What? • OPVG to donate to processing industry through check -off Why? • Farm Products Marketing Commission should get to know OPVG Who? • Commissioners and OPVG Board Where? • Central location When? • As soon as possible How? • Farm Products Marketing Commission should meet with OPVG Resources? • You have OPVG - use it Success? • OPVG survives; it will be good for both OPVG and the processors

7) Communication and Collaboration Action 7.1 Table Number 17 What? • Communication and collaboration Why? • Improve understanding of different points of view

• Improve trust • Promotion and acceptance of change • Education

Who? • OPVG and OFVPA interact with Industry Advisory Committee as well as growers and processors

Where? • Within the tomato industry When? • Timely and ongoing

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Action 7.1 Table Number 17 How? • Meetings

• E-mails and newsletters • Open door policy

Resources? • Utilize existing resources effectively Success? • Not having to go through this again!

Action 7.2 Table Number 1 What? • Building a brand Why? • To grow the market Who? • OFVPA, OPVG and OMAFRA Where? • Ontario When? • Near future How? • Industry partnering project Resources? • Growing Forward 2 Success? • Stakeholders, growers and processors teaming up together Action 7.3 Table Number 7 What? • Communication and collaboration Why? • Overcome egos

• Everything is on the table • Come to the best solution without injuring either party

Who? • Only the vested people • No regulatory bodies involved

Where? • Neutral area When? • Monthly How? • Elected representatives from both sides Resources? • Economic division of the local university Success? • Measured by OMAFRA economic division

• Non-political Action 7.4 Table Number 12 What? • Communication and collaboration

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Action 7.4 Table Number 12 Why? • So that all stakeholders get the full picture Who? • OPVG and processors Where? • In Southwest Ontario When? • Before September 2017 How? • An Advisory Committee of growers and processors

• Meeting 2 to 3 times per year • Three party involvement with OMAFRA and Farm Products Marketing • Commission

Resources? • OPVG/OFVPA/FPMC Success? • If the Advisory Committee has been created

Summary of the Workshop The participants were very engaged in the workshop. They provided substantial input from tomato stakeholders relating to their perspectives of projects to support innovation and growth in the processing tomato sector in 2017 or 2018.