SPEAKER_00 0:02

Welcome to the Future Ventures Podcast. I'm Scaling with Clarity. Today we are joined by Dr. Sylvain Charlbois, widely known as the food professor, who is one of Canada's leading voices in food economics, grocery inflation, supply chains, and consumer behavior. He is a professor and senior director of the Agri-Food Analytics Lab at Dauhaus University and one of the world's most cited researchers in food supply chain management and traceability. Dr. Shao Bois is also the lead author for Canada's food price report and co-host of the Food Professor Podcast, where he explores the biggest issues shaping the future of food, grocery retail, restaurants, and agriculture. Welcome to the stage, Sylvan.

SPEAKER_01 0:48

Oh, thank you, Maxim.

SPEAKER_00 0:50

I'm super excited to talk to you about it, uh, to talk about food innovation in Canada and kind of like what does this look like? Um, so why don't we just start with kind of like what led you down the path of being so passionate about food and and food innovation?

SPEAKER_01 1:06

Mentorship, really. I mean, uh, when you become uh a student, uh, first of all, I came from uh uh an environment where there was a lot of farming, and uh so you worked on farms all my youth, and uh so when I decided to go back to school, uh I was mentored by folks that really uh had a passion for food, food distribution policy. It was all about strategy and systems, and that's all I'm more of a systems thinker, and uh that's basically why. And uh over time uh I've been able to work with a lot of great people uh that have actually influenced my work as well, uh whether it's in Canada or other places around the world. So yeah, so it's been it's been a busy uh time for sure, and uh so yeah, we're not slowing down.

SPEAKER_00 1:55

That's amazing. And and what are the trends shaping the industry here in Canada, but also globally? What are you observing? What are you seeing? Kind of like where's the future of food going?

SPEAKER_01 2:07

It's it's complicated, uh, because obviously every day there's something that comes up that is actually beyond beyond the control of uh of policymakers, the industry. And I'm thinking about climate change. Obviously, I'm thinking about geopolitics as well, uh, the currency. I mean, I can go on and on and on, and really uh there's always something that actually uh reminds us that uh food systems are are are pretty complicated. And so uh, and obviously uh everyone is looking for answers. Uh and food inflation is a big one, uh, with food costs being so high in Canada. A lot of people are you know jumping to different conclusions in terms of why prices are so high. Some people are saying, well, it's really a matter of greed and profiteering, and others are saying, well, it's not that simple. And I'm of the mind that really food inflation is a complicated phenomena, it's very complex. And so our job is to basically dissect that phenomena as much as possible so people can actually understand exactly what's going on there.

SPEAKER_00 3:17

And what are the things that uh that they're perhaps the biggest bottlenecks or challenges that if we're to go about solving them, if you are to draw a roadmap, short, medium, and long term, what would be the things that you would suggest that we as a country or we as a as an industry tackle to to solve?

SPEAKER_01 3:35

Uh well, I I think policy is something that is incredibly dangerous. Uh it's the blind spot that nobody really seems to see because uh really the problem is that when you implement bad policy, you pay for it for several years, but people people can't point fingers at something they can't see. And uh so interprovincial trade barriers, uh industrial carbon pricing, uh recycling laws. I mean, those are all things that tend to make business, conducting business more expensive. And uh and it's often underappreciated by consumers. And so our job is to remind people well, these are that's that's the pressure we put industry under, and that's why things tend to cost more. So people want a want better environmental stewardship, for example. I think everyone actually wants industry, but that comes at a cost, and so we have to we have to appreciate that a little bit more. So people think that, well, we're just gonna fix things and and and the industry has the resources to fix everything. Well, that's not exactly how it works.

SPEAKER_00 4:46

I agree. Um, I mean, like we we we own a number of different businesses that they're part of the the food and alcohol, and uh some of our suppliers or producers are organic and biodynamic, but that has a price to it. Um exactly would would we want to have all products be organic or like um using polycultures, a regenerative video culture or regenerative uh agriculture? Absolutely, but if you're trying to build something at scale, um you you have to be mindful of the cost. So, what are the what are the possibilities in terms of driving scale while maintaining um uh sustainability or or focusing on things that are better?

SPEAKER_01 5:30

Well, I mean, I I think it's important to take a step back and understand the implications of of decisions that we make. Uh, but of course, there's the consumer. The consumer also influences the structure of the of the um of the sector as well. Um, and we often uh talk about competition or the concept of competition. What's really fascinating with Canada and Canadians is that they uh they often I don't really understand, I'm not sure people understand the role of companies in the first place, why companies exist in the first place, and two, they may not actually appreciate how they, as consumers, impact the entire food systems every single day when they actually make decisions, uh, when it comes to food in general, whether it's in service or in retail. So it's it's been interesting, uh, for sure. And and at times I would say frustrating because it's like right now, for example, there are there's a growing number of Canadians that actually believe that the government can actually do a better job selling socializing food distribution than than the private sector. And uh, and I and I and I for first of all, as an academic, I say, why would people think that? I mean, and of course, the issue is is around grocers. Uh, a lot of people don't trust grocers, believing that they should be bringing down prices. So they think, well, by actually have having the government to put pressure on prices, that's a that's going to fix things, but that's not exactly how it works. And so um, so on the other hand, you also have theft. In the last few days, we heard from the retail council of Canada announcing that theft, grocery theft, is a ten billion dollar problem. Really? Okay, yeah, just to put that into perspective, that's basically two thousand dollars of food stolen per grocery store in Canada every single day.

SPEAKER_00 7:35

Per grocery store.

SPEAKER_01 7:36

Per grocery stores per day, about two thousand dollars. It's a lot of money. It's and of course, uh the margins are very, very low, two to three percent. So, so on the one hand, you have people uh people who have a misguided view of how food distribution actually works. On the other hand, there are some people who are taking matters into their own hands saying, you know what? Uh, if we can't fix the problem, I'm gonna do something for myself. Now, there's pity crime, there's uh crime-based just pushed by desperation, and that's not necessarily it's always been there. I think uh people will steal a sandwich and a juice, and that's not really what we're talking about here. What we're talking about here is organized crime. Uh organized crime will actually steal thousands and thousands of dollars worth of food uh every time they go out and steal, and that really is becoming a problem because at the end of the day, as you know, you and I we all pay for that.

SPEAKER_00 8:40

Well, it has to come out of out of somewhere, and so um like just like a bank, it like banks have reserves for for fraud, uh and so I'm sure that grocers have reserves to deal with uh with losses that come from uh from from theft.

SPEAKER_01 8:56

They have reserves for uh so it's called loss prevention, but loss prevention is often linked to cyber attacks and uh cyber security. Theft, uh it's always been there, but not as bad as now. I mean, it's really right now it's incredibly bad. And so what what what the the challenge, of course, is that it will actually push grocers to to avoid avoid certain areas like downtowns where you have a lot of homelessness and drugs, and and so that creates that can create urban deserts where food outlets aren't around and people have to pay a heat huge price for food, and and you don't want that. So it's important to actually fix those those problems. So so perception is actually impacting how people view the industry. Our job is to quantify everything and basically bring more rationality to any discussion related to industry and policy as well.

SPEAKER_00 10:04

Do you see um uh an incoming shift in terms of retail strategy? It is is in terms of the grocery business. Are we going to continue to see more big grocers or are we gonna see more of the emergence of mini marks, which is kind of like the more common common model in Europe?

SPEAKER_01 10:22

I think we're gonna see both. Uh okay. Yeah, I'm gonna see both. Of course, demographics are changing, things are shifting all the time. Uh, I do see some adaptation. The Canadians tend to like big stores, uh, but there are independents out there that are actually doing very well too, offering good deals. Yeah, and so I do think that there is some space for that, but I do think that at some point independence will actually start playing a larger role for those mini marts you're talking about, the mini march you would find in Europe. I actually lived in Europe for a few years myself with my family, and uh we basically, I mean, stores there are much more modest than stores we find here, where I mean Canada and North America, um North America is essentially a car economy, uh, whereas in Europe, in Europe, you can actually survive very well without a car.

SPEAKER_00 11:22

And so, with the advancement of autonomous vehicles and uh the rise of cars a service, do you expect that this is going to shape the industry in terms of the creation of more media markets or more distributed system rather than centralized it?

SPEAKER_01 11:37

I would yeah, yeah, I would say so, absolutely. Of course, there's there's the online issue, and Europe again is very uh is very focused on online purchasing. Some countries are really plugged in, like UK, for example. Canada is is a lagger. Uh people still want to go out and buy their food, and they buy in bulk. So uh, so obviously they're um they're certainly keen in pursuing that compared to what we're seeing elsewhere around the world.

SPEAKER_00 12:07

What is the government's receptive receptivity around policy changes or maybe bringing regulations close to European regulations? What are you seeing from uh from a government regulatory perspective?

SPEAKER_01 12:20

Well, there's a rapprochement right now uh under the uh the Carney government. Uh you can feel that there is uh because obviously if you want to diversify your market, because right now 75% of all exports uh go to the US. There's a reason for that. Um, I mean standards are very uh predictable, same language, same standards. Uh but if you are to sell to other parts of the world, especially Europe, you have to align uh standards, and and that's way more work. So I would say that basically uh right now there's uh there's more uh alignment with Europe right now. Um but at the same time, uh when it comes to food, Europe is Europe. I mean, they're they're very focused on European goods, it's a very closed market and they heavily subsidize their agriculture compared to Canada, so it's just a different regime altogether, and uh and create these synergies between the two is is uh is a little bit more complicated than doing the work with uh that we've been doing with the Americans.

SPEAKER_00 13:34

Where where do Canada's trends lie when it comes to agriculture and food? Is it kind of like the big expansive territories that we have in terms of producing wheat at scale? Um, are you seeing more um the evolutionary innovation in terms of cell-based product or innovative products that maybe are not traditional in its in their nature?

SPEAKER_01 13:59

Um I'm not sure. Uh of course, policy-wise, there's a lot of work to be done. Uh, I think there's some uh some interesting work on uh precision fermentation on the ingredient side, really. Uh so dairy's been approved. Re Milk is a company that actually has been in Canada for a while, out of Israel. And um, but this whole issue of cellular agriculture uh I think is a work in progress. Uh my guess is that there's gonna be some pushback uh by the livestock industry and uh and dairy in particular, and dairy is very strong lobby. So I I do think that right now it's um um it's something that hasn't been fully addressed in Canada, but it's probably gonna have it's gonna have to be addressed at some point.

SPEAKER_00 14:50

I would agree. I mean, like we we we talked with a lot of investors from around the world, and recently we had interviews with two VCs, VC firms out of uh uh one of Spain and one in the Netherlands, and they're significantly they're spending significant amounts of money backing up high-value products like coffee, like cocoa beans, uh or cocoa production, probably, yeah.

SPEAKER_01 15:12

Um, because there's there's a bit of a slowdown right now. I'd say in the last year, it's uh it's slowed down a little bit. And in Canada, the capital capital is just not there. Uh in the US, yes, in Europe, yes, uh, but not in Canada. There's uh there's less of uh there's less momentum there, and frankly, it's just because the regulatory framework is just not clear.

SPEAKER_00 15:37

So, besides regulatory framework, what else is preventing uh the influx of capital into uh food innovation or act tech companies?

SPEAKER_01 15:47

Consumer perception. Okay, oh yeah, oh yeah. So obviously, um there's some campaigns with uh lab grown this, lab grown that. That doesn't sound very appetizing. That's certainly something that VCs are absolutely about. You know, what's what's possible with uh certain products, and so certainly they they they keep that in mind. Where is the market going to be? And and um of course when you see food prices the way they are, uh there could be some incentive there, but uh the bottom line is that uh you're really looking at uh at uh VCs looking for the long game, and there's already a lot of startups in that area. It's really about scalability. Uh so the the technologies are actually there, but how do you make sure you can produce a product at a lesser price? And is the industry interested in selling products at a lesser price? I mean, if you are to make money, if you want to create value for yourself as a company, uh is is is uh a race to the bottom the best thing to do for the food industry? That's the dilemma that really do we don't hear, but like a race to the bottom. I think people are hoping to stabilize food prices over time, but to actually uh bring in a product that is actually cheaper on the market, that's something that that doesn't necessarily sit well with the loblaws and the metro and the sobase of the world.

SPEAKER_00 17:22

Why would like why why would it be opposed to it?

SPEAKER_01 17:26

Margins. Margins. It's as simple as that. So for labeling, for new technologies, uh, let's say, for example, you have a genetically modified salmon, and that's and that salmon is uh is uh say I don't know, uh is about 50% less expensive. Okay. Well, do you think that loblaws will actually sell salmon at 50% off when other salmon are more expensive?

SPEAKER_00 18:01

If even if it's not labeled, but I I I I view it as as something different, like um I the way that I would have expected the gross to think about okay, let's say the the the overall cost is 50% less, but I can move my margin from three to maybe six or seven percent to higher margin, yes, it's a cheaper product, and maybe becomes a substitute for uh a different product.

SPEAKER_01 18:25

Exactly. But right now there's some uh there's some um there's some ambiguity around labeling. So right now nobody wants to label gently modified anything in Canada, whereas in Europe it's actually mandatory, and uh so obviously consumers don't really have a choice. So why would you actually label a product GMO uh when you can actually sell it at a much higher price and increase your margin? So that's why that's why I so people are saying, well, we maybe we should label it, but if we are labeling it, my guess is that there'll be a race to the bottom, margins will be squeezed uh for so many companies all at once. So it has to be done uh slowly but surely. So we're we're right, that's what we are right now.

SPEAKER_00 19:14

Are you expecting to see similar reform to the one in Europe with a common agricultural policy reform with looking for greater transparency uh in terms of uh labeling standards and kind of like what's included, including alcohol, um, or is kind of part for the course in in Canada in terms of what's happening? Because even though CFIA is the one that's responsible for labeling, the labeling requirements are really, really lax.

SPEAKER_01 19:40

Yep, they they are. Um, I would say um right now the momentum is towards transparency, but there's still a lot of work to be done, and uh, I'm not sure there's a will there. Um just because uh right now uh people seem content, but this redirection by actually looking at other markets, my guess is that at some point we won't have much of a choice. We're gonna have to really change our our our way of thinking when it comes to well, to transparency towards consumers, but also the bureaucracy. I mean, we do have a lot of bureaucracy at all levels of government, municipal, provincial, and federal, which is really suffocating businesses right now in Canada. So if you want to launch a new product, you need approvals for many bodies that can actually take months. In the United States, I actually know of Canadian companies, Canadian food companies only selling in the US because it's so easy to get approvals, you can actually get approval within weeks. And so, so why why bother selling in Canada, really?

SPEAKER_00 20:49

Smaller market, higher bureaucracy. I get it. Okay, yeah. Um, it it is there a body or or what it's what is somebody like you or somebody else that's looking to reduce that the red tape in bureaucracy?

SPEAKER_01 21:03

Well, yes, of course. Uh I we've we've looked into it, and uh many many uh associations have actually looked into it, and uh, but the governments have never actually uh never wanted to do anything because regulations are often uh a product of uh of a pet project by an MP or an elected official saying that I wanted to save the save the people from themselves, I want to actually make industry more accountable, and um, and that's fine. But uh again, these regulations will come at a cost, has come at a cost, and uh so you we need to appreciate that. So there is right now some will to change that, to modernize our regulatory framework. But I I think unions are gonna resist. Uh I on food safety, I can see it. But so while Ottawa is saying, well, we need to um not divest, but Manage risks differently, yeah. Which would mean fewer fewer inspectors, but inspectors who who are unionized will say, Well, if you actually lay off inspectors, you're gonna poison people, you're gonna kill people, and therefore you need more inspectors. So that's so that that's what the government is up against.

SPEAKER_00 22:22

If if the if if the will is not there, uh are we thinking about in terms of like like I mean, Canada is a very well-educated country with a lot of innovation, a lot of money spent on RD in terms of building out the knowledge and the know-how and then exporting this know-how to other countries. There's there's other countries like what is the Caribbean Islands, where food insecurity is is is is a big issue for them. So, how can we drive innovation? How we how can we drive agriculture export that they're not necessarily tied to commodity, but tied to uh development of high-value products or technology?

SPEAKER_01 22:57

Yeah, no, absolutely. And uh I'd say right now there's a bit of a shift uh from a commodity-based uh agriculture, uh agricultural system to an ingredient-based agricultural system, but it that that shift is actually extremely low, uh, extremely slow. Okay, uh, it's not happening all, it's not happening really fast. And so um, and Canada is not very good at branding. I mean, like we don't have a Red Bull, we don't have like uh if you go around the world uh in food, you do have a lot of companies or countries that have been able to really launch some great brands, and and Canada's not that at all. And uh, so we're maple syrup pork, uh, we're we're good at selling genetics, like swine genetics or or genetics for livestock, but uh well we're not very good at branding, and that needs to that needs to change. Like uh lobster is a good example of of uh of how bad we are at at branding. So if you go to China, um they'll talk to you about um Boston lobster from Canada.

SPEAKER_00 24:07

Boston lobster from Canada, okay.

SPEAKER_01 24:10

Yeah, okay. Because because because the Americans were the first to actually go to China, that became the benchmark. And so when you go to China, uh they'll say, Oh, that's Boston lobster. They don't even call it lobster, it's Boston lobster from Canada. Wow, but out because of of colder waters, uh many argue that the that cane lobster is actually superior to the American lobster. So that's really one example of the things that we have seen in Canada that really has impacted uh the sector's ability to uh uh differentiate and to do things a little bit differently.

SPEAKER_00 24:51

Interesting. I mean, and and we've seen um do you I mean the US is amazing at branding, uh, no question about it. It's amazing at building and scaling CPG brands. Uh I'm I'm absolutely in amazement with grooms how quickly they were able to build like a billion-dollar business and sell it to uh crafter, I can remember who they sold it to uh in this in the span of 32 months. Are there any Canadian companies that you are watching and following kind of in the CPG space that may become major players on on the world stage?

SPEAKER_01 25:24

Well, McCain is a major player on a world stage. Uh McCain is a good player, so it's done very well for itself. Uh, but it's it's few and far between, really. I mean, uh Saputo is also doing very well, Agro Pur is doing very well, also. Um, but again, it's not it's not necessarily um by through innovation and good marketing, it's really it's really what the secret behind most of these uh companies is the is the relationship that they have with farmers and how they actually have access to to certain commodities.

SPEAKER_00 26:04

Interesting. Are there food accelerators in Canada like uh like uh organizations that they're specifically dedicated to food food innovation? I know there's a lot of actag, like drive by SVG Ventures, but some something that's specific to food.

SPEAKER_01 26:19

Oh, yeah, absolutely. And uh I'm involved with uh with some of them, absolutely, and uh and so that uh is uh something that uh is growing, and uh there's one in Calgary, there's one in Quebec, there's one in uh in the Atlantic right here. There's actually quite a few, to be honest, and so it's not necessarily uh something that um that is not uncommon. My my my concern is is again access to capital. There's there's just not enough capital, and uh so I suspect that with your podcasts you dive into many different sectors, and uh the difference between agriculture is more difficult to attract capital to because of margins, and you have to be patient. And uh VCs tend not to be as patient, that's the problem, yeah. Right now, right now, if you're not an AI or if you're not uh I mean that's deep tech d tech, yeah, fintech. I mean, those are things that really will attract uh the attention of investors, but ag not so much.

SPEAKER_00 27:28

That's interesting. Um we uh I mean you're right, we we deal with a lot of uh um a lot of companies, investors globally. I'm just doing a search here on um food in our platform. We have food, food, and beverage, food tech, uh, agri foods, and so uh just if I click on this, like we're coming up with like crazy like hundreds and hundreds of investors that invest in this space. Um like just for context, we have 18,000 investment firms. So the investors exist, but the question is how do we connect this? And and part of the reasons why we won't launch the podcast is to be able to connect opportunities to investors. So if they're if their companies looking for capital in the food tech, agro food space, give us a shout. Or if if you if you have uh startups more so scalps that that they're doing something amazing, please recommend them. We'd love to have them on the pod. It doesn't cost anything. We're just trying to build out the ecosystem.

SPEAKER_01 28:26

I think the one accelerator that really is doing well for the sector right now in Canada is CDL Rockies, uh hosted by the University of Calgary. Yeah, so I'm involved with that uh accelerator as a mentor, and uh I'd say it's well organized. And if you have any investors looking at investing in companies, it's a it's a uh it's a nine-month program, and we go through six uh five different meetings, it's very disciplined, uh very honest, uh, very transparent in terms of uh you know making founders uh accountable to themselves, essentially. And so typically a cohort is 25 different startups uh or companies that are pre-commercial or they're starting to sell, and we finish uh the program at the end of the year with maybe six or seven, because if they don't really meet objectives from one session to another, they're out of the program. Yeah, and so uh so mentors are actually spending time with companies that are actually working hard to stay in the program. And so so as a mentor, you you you're not wasting your time. So if if if you're an investor out there looking for opportunities, I'd basically start with uh with CDL Rockies.

SPEAKER_00 29:53

Yeah, I mean it's it's it's the longest running uh accelerator in Calgary, the creative distraction lab, and uh arguably, at least in my opinion, the most successful one that we've had, even from the come from away accelerators that we brought in here.

SPEAKER_01 30:08

Okay, okay. Yeah, and you're located in Calgary, correct?

SPEAKER_00 30:12

I'm based out of Calgary, yes.

SPEAKER_01 30:14

Okay, Calgary is a happening place. Calgary, I mean, Alberta is um a province that, and you know this uh forever has fallen into the oil and gas trap. As soon as oil and gas actually goes up, and when oil actually started to go up again uh as a result of uh of attacks in Iran, I thought, well, that they'll forget about ag and food, but they they haven't. They're still focused, committed to uh in fact, actually, I'm meeting uh later today with uh with uh cabinet minister in Alberta to talk about uh some opportunities in the ag sector in the province. So so there's it's kind of reassuring to see that.

SPEAKER_00 30:55

Yeah, uh, I mean the Alberta government has declared four priority industry of which energy is one, the other ones being um agriculture and agriculture technology. Uh the third one was AI, data, quant uh quantum data centers obviously are very attractive to Alberta because it's of the big infrastructure spend, but also like maybe different pricing models. So a lot of the government is chasing data centers.

SPEAKER_01 31:20

I suspect so. Um but Quebec is also doing that as well. There are a few, uh yeah, it's yeah, of course, uh there's uh there's a few jurisdictions doing that. Uh but there's lots but lots of potential for AI for sure. Um, I I mean I think that uh that the Ottawa, the federal government has actually uh has pivoted away from its uh EV battery fascination, uh finally. And so uh because I I've never I I never saw that industry to be a viable sector to grow the economy, really. And uh just the way they were doing it, it was just so wrong, very protective, and uh it wouldn't it wouldn't incentivize innovation or low prices, and uh so but I do think that AI is actually gonna be the one thing that that that that the government or governments will actually look into a little bit more seriously.

SPEAKER_00 32:22

And from your perspective, how will AI shape uh the the industry?

SPEAKER_01 32:29

I think AI has shaped uh has shaped the industry already. If you talk to farmers, you know, large-scale farmers, they've actually been using AI for a very for a while now. We've actually been using AI for 17, 17, 18 years as forecasters. So I think I I think uh AI has actually impacted the industry already. Uh what is new though is how do you develop an interface between the industry and consumers? And that's what we're hearing right now in the news. And uh, I think it's making a lot of people a little nervous. Uh, surveillance pricing, dynamic pricing, and all that stuff. I think AI can actually do extremely well in the food space as long as it's utilized. Uh that as long as its utilization won't be against consumers. That's really the one concern that uh that I have, certainly. But I do think the industry will actually embrace uh AI even more so in uh in days to come.

SPEAKER_00 33:33

Wouldn't uh the the adoption of AI or the wider adoption of AI in terms of precision agriculture, energy management make food prices uh lower? Uh wouldn't this lead to food deflation? Because you should in in theory you should be able to produce more with less. Um now on the consumer side in dynamic pricing, the the incentive is different and it's to increase margin, or how do you increase the the price that you're selling to consumer?

SPEAKER_01 34:01

Well, I mean, dynamic pricing is about optimizing the exchange between supply and demand. I mean, that's basically what it is, yeah. And so it can go in it can go either way. So uh the the issue of surveillance pricing is very interesting in the sense that you can actually evaluate uh the digital profile of people and customize pricing based on that digital profile.

SPEAKER_00 34:30

I see.

SPEAKER_01 34:30

Uh so and we see that already with hotels, with flights. Um, but are people willing to see that in food? That's the thing. So in the B2B space, I think that's fine. If you're if you're a company and you're you know organizing a party for um you know for uh for the holidays or whatever, of course, uh that's certainly one thing. But uh uh if you're if you're if you're a household uh trying to make hands meet and you are charged, I'd say, double the price for eggs and double the price for cheese. I'm not entirely sure people actually would be accepting of that.

SPEAKER_00 35:16

It makes sense, yeah.

SPEAKER_01 35:18

So there's a there's a moral dilemma here, I think, uh in terms of uh in terms of how we include consumers in any AI model moving forward.

SPEAKER_00 35:29

Do you have a sense for what's the perception about AI in terms of Canada versus the the states? I mean the in in in the states the approval rating of AI is really really low. I think it's up 35 percent. Uh do we have a more receptive mindset here uh in Canada around AI?

SPEAKER_01 35:49

Um like from a consumer's perspective, you mean?

SPEAKER_00 35:52

Yeah, force for good, force for bad.

SPEAKER_01 35:56

I think it's a force. Like I I honestly um I I think AI, so when when AI was democratized or chat bots were democratized three years ago with Chat GPT, uh our our relationship with AI was incredibly immature. Uh but now I think people have a better appreciation for AI, they'll actually think that they know what AI is. Uh, I'm not sure they do, but over time, I do think that AI is uh something that we'll we'll have to uh use more wisely, if you will. Uh the older generation are very fearful of this. The younger generations uh won't have a problem with with that. And so you want to make sure that you know whatever we do um as a society to support the food industry makes uh economic and moral sense.

SPEAKER_00 36:58

Do you see any kind of um examples of circular-based uh companies that like that that they're tied to maybe energy and food production, like what is vertical farming and harvesting, uh ambient energy or whatever it might be, kind of like anything that that you would point to saying, yeah, this is an opportunity for us to like not only utilize a wasted resource or an unused resource but to drive food prices, but also to maybe to your point around urban designs, have food production closer to where food is consumed.

SPEAKER_01 37:31

Yeah, the um so at FarmGate uh soil science has been supported by AI quite a bit. So uh farmers will take samples uh to make sure that they uh mix like right now with uh what's happening with fertilizers, fertilizer prices are going through the roof. So obviously, you want to be as precise as possible when you apply fertilizer. You just don't want to spread everywhere, you want to be strategic in terms of how you use your inputs, uh irrigation also. So by sampling, uh they'll have drones out uh taking samples here and there, they'll bring samples back to to analyze and and they'll have a good sense of where to spread and how. And and so so they've they've been using AI for that in uh in in livestock, animal feed as well, is uh depending on the animal, of course. Everything is going to be customized. So there's there's more of that happening just to basically make things a little bit more efficient. Um the the lager is is manufacturing. Manufacturing is really uh not doing as well as we think it is, and uh, so I do think that that that people will need to understand that uh that uh you know you can't really flip two million two billion donuts by hand and expect to actually make a good profit, which is well, which is actually is going on right now in Canada. So so you need to invest in in automation uh and and AI.

SPEAKER_00 39:10

So if we're following that train of thought, do you do you believe that like we would see the innovation come from uh kind of like green field opportunities or green field spaces where we don't have to recalibrate existing machinery or existing processes, but rather we build in anew?

SPEAKER_01 39:27

I yeah I I would say so because uh you don't have to deal with biases, you don't have to deal with baggage, and uh and frankly, I would probably do that with some universities personally, but but uh generally speaking, I would say yes, absolutely. It's it's important to uh to do a control all delete, if you will.

SPEAKER_00 39:48

Reset. Um I know that you have to run in in a minute. Um any parting thoughts?

SPEAKER_01 39:54

I think it's a it's an exciting moment right now for food. Uh however, however, I think we're at the crossroads uh on so many levels. Uh, for example, what is the what is the what is the industry's relationship with consumers? Uh what what are what are they actually looking for? And how do we deal with resiliency? How do we actually make chains more resilient? And uh and lastly, it's the concept of competition. I mean, do we want competition or do we don't? Do we understand what it means to actually have more competition? And uh and why is it that every every time there's a there's a that there's a problem being um singled out, we the need your reaction in Canada is to think that the government is actually has a solution. So understanding why we do that and what else can we do other than relying on government.

SPEAKER_00 40:52

Makes sense, makes sense. Well, thank you so much for joining the podcast. Um, your insights are always valuable. Obviously, they're grounded in a lot of research and and uh broad based consultation. So I appreciate your time. My pleasure. Thanks, Sylvan.