Interview with Dr. Sylvain Charlebois

FOOD FOR THOUGHT

EPISODE 2: Dr. Sylvain Charlebois

Mike Wilkes: Hello everyone and thanks for tuning into Food for Thought. A series of interviews EnWave is conducting with business leaders in the food industry covering everything from consumer-packaged goods to food supply chains to the world of product development. The focus of Food for Thought is how we can rethink food in a post COVID-19 world.

Our guest today is Dr. Sylvain Charlebois. Senior Director of the Agri-Food Analytics Lab at Dalhousie University.

Dr. Charlebois is the former Dean of the Rowe School of Business at Dalhousie University. He co-founded the University of Guelph’s Food Institute and has also taught at the University of Regina and the University of Saskatchewan. Dr. Charlebois is the author of five books on global food systems and is a regular contributor to The Globe and Mail, BNN Bloomberg and the Canadian Grocer.

Dr. Charlebois, welcome to Food for Thought, and thank you for being here.

Dr. Sylvain Charlebois: Well thank you.

Mike Wilkes: Perfect. Let’s jump right in. So firstly, I want to talk about something that’s a very hot topic these days. Alternative proteins. I’m wondering if you can reframe for the average Canadian what the debate should actually revolve around. Plant versus animal-based diets using facts or objectivity as opposed to subjectivity and simply viewpoints.

Is there a case based on facts that it’s simply not sustainable based on future population growth? Or is [meat consumption] unsustainable at current levels? What insight might you give to reframe the argument? To typical consumers that are used to animal-based but are seemingly being pulled to plant-based by the market.

Dr. Sylvain Charlebois: Yeah. Good question. I mean it was an ongoing debate at least before COVID. For the last couple of years a lot of people were wondering what is the future of protein? A mixture of different sources is what was going to be or what was being offered to Canadians probably for the first time.

I mean Beyond Meat democratized the notion of vegetable proteins by allowing them to be available on the market. For the longest time people felt that lentils and chickpeas are great but they go in a salad and people didn’t know how – they didn’t see them as a source of protein, but they are.

Beyond me made them edible, in a certain way. Because a lot of people just didn’t see chickpeas or lentils as delicious as a steak on a BBQ. So that bridge was made.

But it created a lot of tension between the two camps. I guess between animal proteins and vegetables.

So, is it more sustainable? Well, of course, I’m a scientist so the best answer I can provide you with is “it depends”. It depends on what metrics you’re looking at. Of course, if someone actually eats 90 kilos of beef every year, that’s a problem.

It’s a problem related to the environment. It’s a problem related to health. So, there is probably a sustainable way of eating different types of meat and nutritionally actually there’s probably some value there as well.

It’s just the debate has been so divisive we’ve kind of forgot that the two can actually work together. I hope that that – actually at the beginning of 2020, things were changing already. Before COVID. So I suspect. hopefully coming out of this, that the language will be a little bit different. Or at least the same as the beginning of the year.

Mike Wilkes: Okay. One wild card source of protein that many in the western world at least aren’t familiar with is insect proteins. Do you see a future for that at all in the western diet five to ten years down the road?

Dr. Sylvain Charlebois: I think so. I do think so. Based on our numbers of course, not a whole lot of people are interested in eating insects of course but I would say that there is potential there. Some interest for it is it’s the cheapest way to produce protein to be honest. It’s hard to argue when you look at the metrics and you look at some of the studies out there it is really interesting what you can do.

I’ve actually eaten insects myself. Beyond the yuck factor, you can actually start eating different granola bars different products and considering insects as an ingredient. So I do believe that there is potential. There’s also a lot of potential for lab-grown meat. Before COVID we were expecting the United States to approve the commercialization of lab-grown meat but I’m not sure if it’s still ongoing. That is also of interest.

Mike Wilkes: Okay. Very interesting. Shifting to more of Canada’s food security and the North American food supply chain. Post COVID-19, I think there’s a big shift or some shifts coming to the industry. What can the Canadian government do to help the Canadian economy capture more value within the food supply chain?

Where I’m going with this as you know Canada is one of the largest wheat producers and exporters in the world. For example, that wheat you know might be exported to Italy, produced into pasta put back on a truck to the western European coast and then shipped back to Canadians to eat in the form of pasta.

This is one example but are there ways that we can capture more of that value within Canada? I know it’s difficult because we’re not the most population-dense but are there some eat you know examples that you that you could give of how we could capture more that value than simply being an export focused nation?

Dr. Sylvain Charlebois: Oh, I would say so. I mean I’ve been claiming this for 20 years. We don’t process enough. We think about commodities but we don’t necessarily think about value-added products and this is a big myth. In fact, during COVID you’re seeing it. I mean processing is a big flaw in Canada. We’re still not doing all that great.

You cannot have a strong agri-food sector without a strong processing sector. That needs to be recognized more and more. I suspect that during COVID we’re going to do that. After COVID we’re going to recognize that a little bit more. Hopefully, anyways.

Actually, that applies to wheat that applies to lentils and chickpeas. AGT in Saskatchewan I mean kind of did that. It was born on the basis of adding value to commodities grown in the prairies. We can do the same with other commodities.

Mike Wilkes: We’ve also seen a drastic rise in food wastage during COVID-19. Largely this is a result of food service demand going to zero. Or seeing things like entire crops vegetables being dumped into landfills back into fields. Were seeing livestock being euthanized because of a bottleneck in processing capacity because of the large plants in Alberta being shut down.

Are these issues that we’re seeing, did they exist before? Or has this black swan event simply brought them to light? Was that the food system bursting at the seams or will a lot of these problems that are getting a lot of media attention going to go away once there’s equilibrium in the market.

Dr. Sylvain Charlebois: I surely hope not but I think that’s exactly what’s going to happen. Unfortunately, I seen this before. We’ve gone through crises in the past. Like I said, I’ve been that this for twenty years and we’re kind of repeating ourselves.

Unless we really want to change things and I suspect it would have to be commodity specific. I’d say that really, when it comes to pulses there’s an ongoing initiative that seems to be working so far. That’s Protein Industries Canada (PIC). That really has mobilized several stakeholders around a value chain for pulses in the west. You’ve seen provinces embrace that approach.

You’ve seen a lot of different stakeholders revolve around PIC. That’s because it is a supercluster. It’s one way to do it and it seems to be working and hopefully there will be more successes down the road. But we can actually create a supercluster for different commodities or for different markets. PIC is all about a market-driven agenda.

Typically, in Canada that we’ve always looked at commodities and just felt well if we can grow it a market will come. But it doesn’t necessarily work that way anymore. You have to figure out what the market is looking for – what are the gaps. Work your way back and design an architecture – an industrial architecture around those based on those gaps based on those needs that you see.

Mike Wilkes: Just touching on the processing piece. I believe the stat is 90 per cent of Canada’s beef supply comes from the three plants in southern Alberta.

Do you see that as too much concentration risk? From a Canadian food security perspective? Or is it simply a high-volume low margin business and it requires large companies to be able to keep the cost of meat down? Or is there a more sustainable model where you don’t have so much of the capacity tied up within three facilities feeding an entire nation essentially?

Dr. Sylvain Charlebois: Well, the industry’s architecture is the product of what consumers want and that’s cheap food. So, that’s the key here.

If that changes leaving COVID into another era maybe we’ll see something else. But for the time being I actually don’t see any significant changes. We talk about local food we talk about different initiatives but it will end up costing more. So are our consumers willing to pay more for value? I don’t know.

We’re going to a Great Recession right now so there are fewer consumers who can afford a value-added product. So it’s going to be very difficult to establish some sort of a new social contract between consumers and the food industry.

But my guess is that consumers won’t have a choice but to accept higher food prices because they’re going up. I mean you can see right now across the supply chain it does cost more to produce food. So eventually prices will have to go up.

Mike Wilkes: That’s a really interesting point. Switching gears a little bit. You’ve given some keynote speeches in the past on food fraud that you’ve said is apparent in the global food supply chain. Can you articulate to the average consumer what do you mean by food fraud?

Dr. Sylvain Charlebois: Well what I mean by food fraud. Essentially, I would say that food fraud is categorized in three ways. One, you may actually have, say a product as misrepresented. Of course, all food fraud, you’re looking at miss-labeling. But there is misrepresentation. For example, you are selling a product as an organic product but it’s not. So that’s misrepresentation.

Also, you have counterfeiting. Of course, because you have theft all across the supply chain. That gets repurposed.

Finally, adulteration. Replacing one ingredient with another a cheaper one. Which is of course also known as economically motivated adulteration. That’s the hardest one to catch. Often you would see liquids, spices, you would see different products being affected by food fraud.

Yeah, it is an absolutely a major issue for sure. So, it’ll be interesting to see exactly how we tackle this.

The other way to do it is to actually accommodate whistleblowers. Because they’ll have data and they’ll have information. Also accommodating industry as well because they know that there are some people and companies that are problems. They’re affecting the reputation of the entire sector and that needs to be addressed.

Mike Wilkes: This leads well into my next question. Which is, you know, food traceability is becoming a big theme in terms of building sustainable food chains. We’re seeing blockchain technologies being rolled out by the likes of IBM and applied to large scale farming.

We’re seeing tech start-ups focus specifically on traceability and food safety. We’re seeing your CPG products coming out that have a lock code on the back of them where you can look it up online and see exactly where your product was harvested.

Are these nice-to-haves or in this spirit of food fraud and began building a more transparent food chain do you foresee you know things of this nature becoming a requirement to have your food on the shelves at national grocery retailers?

Or like you said it’ll ultimately decide if consumers want the lowest cost product or a transparent higher quality (potentially) product?

Dr. Sylvain Charlebois: Well that’s I think, it’s always hard to consider the market as a homogeneous entity. This is what’s happening right now. Believing that really, consumers are all different. They have different needs. Some people will want different kinds of food and some people will want the same food.

But I think because we’re cooking more during COVID because we actually are becoming more sophisticated I suspect that it’s going to change.

So yeah, absolutely I mean it’s going to be interesting to see how things go with people having more knowledge about food.

They’ve been able to read the instruction manual of their stove. I mean you actually have apartments nowadays rented without a stove. A stove-less apartment. There are some in Toronto being rented for $3,200 without a stove. There’s not even a place for a stove.

So you can see that really were going in a specific direction. It’ll be interesting to see if there’s going to be a shift there a little bit as a result of this recession.

Mike Wilkes: Right and speaking of consumer education where do you think the onus lies in terms of consumers better understanding what goes into their food? Because now I think consumers when they go to the grocery store they have a little bit more time than they did two months ago where we were always “go-go-go”?

They’re looking what’s on the back of their granola bar or whichever product they’re looking at and you know they’re hearing lots of things about bad you know refined sugars and high carbohydrate products and different things that have traditionally been in large-scale CPG products.

Is this a matter of consumers empowering themselves and wanting to you know live a healthier lifestyle?

Is it more regulation in terms of how companies market their products and how transparent they are with you know what actually goes into them?

Dr. Sylvain Charlebois: Transparency is certainly something that consumers are expecting.

But what I think is going at what I think is happening is that and of course, in return the industry has tried to provide transparency to consumers. Only to find out that perhaps some of the things that consumers are seeing may not be appreciated or may not be what they were expecting. COVID is really shining a light on some of the practices that we see on farms.

For example, dairy cows producing ten times the amount of milk they would normally produce. Just because of genetics and how they’re built how they’re designed. The cull of hogs right now, because they are being euthanized because there’s no spot for them in slaughtering. The milk dumping as well. All of these things are probably getting people to think differently about food.

You can make the system transparent but be careful what you wish for. People may not like what you’re doing even though you think it’s a lifestyle and it’s part of what you do. Which could actually get people to eat differently.

So transparency is a very interesting concept in agriculture. If the system is more transparent it doesn’t mean it’s actually better for you. It could make things worse.

Mike Wilkes: Yeah, that’s really interesting. Sometimes when you open the curtain you don’t always like, what you thought was going on. That’s a great data point.

Speaking of food pricing, I think we’re going to see a potentially scary number of restaurants not open back up because of COVID-19. You mentioned food costs.

Because of increased competition in the restaurant space in recent years, there’s almost been a race to the bottom in terms of prices. Do you think that restaurants should be increasing their prices across the board to make for a sustainable industry and a higher quality restaurant experience?

Or do you think that consumers, in North America at least, are always going to offer sort of the lower cost basis?

I mean we’ve heard some staggering numbers well up above 50% of restaurants not opening up. That’s you know a favorite pastime of a lot of Canadians and Americans.

Dr. Sylvain Charlebois: Oh yeah, no absolutely. I actually do think that it is going to be a challenge in the future.

There’s this big urban-rural divide that we have. It’s really hurting us as a society I guess. Only 2% of the population will live on farms. It doesn’t necessarily mean that 98% should not be served what they’re looking for.

Misunderstanding farming is hurting our perception of food it’s also hurting policy as well to be honest. I mean you know I think we do have some governments out there that don’t necessarily, they’re not avoiding agriculture they just misunderstanding it. That leads to a confusing sort of relationship between society governments and an industry.

Mike Wilkes: So post COVID are you are you optimistic about things that will change?

I mean some things we’ve spoke about in the last half-hour you think that will likely go back to sort of the way they were. But is there part of you that’s optimistic? This is an event that’s touched every part of the supply chain every part of society. Are you optimistic in humanity you know changing or do you think we’ll go back to our old ways?

Dr. Sylvain Charlebois: Maybe it’s wishful thinking but I do hope things are going to change. But I don’t think they will, unfortunately. COVID is interesting because it is long term. I mean it is it’s not just a snow storm it’s not just a hurricane it’s not just an earthquake.

It really has affected the entire planet within months. It has made a lot of people feel vulnerable.  Even though it was virtual or it wasn’t real it did make people feel vulnerable so that’s going to be interesting to see. If there is any interesting legacy, I think that should be one of them.

Mike Wilkes: Okay, I want to be respectful of your time so I think we only have time for a couple more questions. I wanted to ask about the retail experience. In the past five or ten years, grocery stores have become an immersive experience. These companies have made huge investments in making the retail shopping experience very seamless.

All of a sudden with COVID we’re now forced to maintain distance from other customers. The cashier which was once, I want to say a friendly place but you know I’ve found cashiers to actually be really friendly right now which has been a positive. But there are glass barriers. Do you see these things reverting back or do you think that people are going to be overly concerned from a germ perspective? Then as a result opting for more you know grocery pick up, business to consumer (B2C) type meal kits like a Good Food or Hello Fresh.

Do you see those continuing to go on? Or, once this has blown over, which we don’t know when it will be, will people want to go back to seeing their neighbors at the grocery stores and striking up conversations?

Dr. Sylvain Charlebois: I think were social beasts. I think we will always want to interact with people. Right now of course we’re conscious of the fact that we may endanger other people’s lives including our own.

So I think this is just a bubble. I think beyond that of course we will go back to the grocery store but the e-commerce part is undeniably there.

From now on, I mean before COVID, 3% of the population we’re buying food online on a regular basis and now that percentage will perhaps exceed 20%. So that would be a huge shift. And the industry’s not ready.

But this could actually create this phenomenon what I call the democratization of supply chains. A soon as e-commerce exists in people’s minds it actually does give an opportunity to any company in the food business to actually have a shot at the consumer.

That’s going to be very interesting. Farmers, processors, anybody can actually sell food to the consumer.

Cisco Canada is now selling food to consumers. Two months ago, if you would have asked me if Cisco Canada would have been selling food to consumers, I would have told you that you’re on good cannabis. But it did happen and it’s happening now so it’s a lot of interesting things.

Mike Wilkes: I think GFS is doing the same and I agree with you. Two months ago you never would have seen that.

I guess my last question is that a lot of the news that consumers see about food is that there’s a lot of people probably scared about what they’re seeing. McDonald’s is going to non-Canadian beef out of necessity.

They’re hearing about these plant shutdowns and COVID is affecting a lot of these plants in southern Alberta. What would you say to just the average consumer about food in the next six months?

Should they be worried that Canada is going to run out of food?

I know the grocery stores have been doing a great job of stepping up and same with all the frontline workers.

What would you leave people with as a message as we’re on the horizon maybe of the economy opening up sometime in the next six to eight weeks?

Dr. Sylvain Charlebois: Well you have to take a step back and rationalize some of the decisions happening right now.

So, if you go back to McDonald’s. But your meat ran out in the United States and elsewhere I would say this. Canada isn’t running out of beef McDonald’s did. That’s why it went south.

There’s a big difference. High River has McDonald’s as its biggest customer and frankly because McDonald’s went south it actually will put less pressure on High River. So that plant can provide beef to other outlets. So, it was actually a good move.

So, you have to think about things from a systems perspective and understand the big picture. If you do take the time to understand the big picture, you’ll feel safe. You’ll feel that the food industry can deliver, can do a good job and will continue to do.

Mike Wilkes: That’s really interesting perspective and I want to thank you Dr. Charlebois for taking the time to speak with us. We really appreciate you taking the time.

Dr. Sylvain Charlebois: My pleasure.