Foodservice Opportunities for Beef, Pork, Bison & Lamb in

Foodservice Opportunities(in Hotels, High-end Restaurants,

Chains, & Universities) for Beef, Pork, Bison & Lambin Saskatchewan & Alberta

FINAL REPORT

Submitted By: Hodgins & Company

105 – 111 Research Drive Saskatoon, Saskatchewan

CANADA S7N 3R2

December 2002

TABLE OF CONTENTS PAGE

EXECUTIVE SUMMARY PART ONE – Background Information 1 1. Introduction 2 2. Objectives 2 3. Methodology 3 PART TWO – Publications and Internet Review 4 4. Publications and Internet Review 5 4.1 Description of the Foodservice Industry 5 4.2 The Market 6 4.3 Market Drivers 10 4.4 Trends 12 4.5 Consumers 15 4.6 Products 16 4.7 Price 23 4.8 Promotion 23 4.9 Competition 24 4.10 Distribution 27

4.11 Issues 32 4.12 Critical Success Factors 34 4.13 The Future 35 4.14 Conclusion 36

PART THREE – Interview Findings 37 5. Interview Findings 38

5.1 Overview 38 5.2 Trends 39 5.3 Foodservice Customers 40 5.4 Products 41 5.5 Product Usage 47 5.6 Pricing 48 5.7 Promotion 49 5.8 Suppliers 50 5.9 Universities 57 5.10 Issues 62 5.11 Critical Success Factors 63

PART FOUR – Market Viability & Conclusions 65 6. Market Viability 66 6.1 Conclusions 66 6.2 The Opportunity 70 APPENDIX A – List of Interviews APPENDIX B – List of Restaurants APPENDIX C – Typical Weekly Meat Requirements at

University of Saskatchewan APPENDIX D – Western Canadian Imports of New Zealand and

Australian Beef

Foodservice Opportunities – Beef, Pork, Bison, Lamb

Executive Summary i

EXECUTIVE SUMMARY Saskatchewan Agriculture Food and Rural Revitalization contracted Hodgins & Company Management Consultants Inc. to undertake a study to assess and identify the market potential for beef, pork, bison and lamb products in the high end and chain foodservice industry in Saskatchewan and Alberta. The study was to provide processors and suppliers with an understanding of the market’s supply chain and its requirements for entry. Specifically, the attached report reviews:

• A market assessment; • A competitive analysis of the distributors and suppliers to the market; • Specific opportunities; and • Market viability.

The scope of the project was limited to foodservice outlets in hotels and high end restaurants and chains in the two provinces. In addition, four prairie universities were included in the project in order to understand their foodservice needs (universities of Saskatchewan, Regina, Calgary and Alberta). The research methodology for this study included a publications’ and internet review as well as 59 interviews with representatives from restaurants, distribution centers, foodservice management groups, and processor/distributors. The Industry The foodservice industry represents an important component of the economy. In Canada, sales in the industry were valued at $41.1B in 2001 and is expected to reach $42.6B in 2002 according to the Canadian Foodservice and Restaurant Association (CFRA). As well, the industry represents a major source of employment for youth between the ages of 15 and 24. 2001 represented the eight consecutive year that the sector has gained share from supermarkets and other food retailers. The CFRA states that of every dollar spent on food in Canada in 2001, 41.1 cents went to foodservice (compared to 46.1 cents in the U.S.). By 2007 the figure is expected to exceed 50% of the consumer food dollar. Trends affecting the industry include:

• The changing life situation in households with more households reporting “no children” (recent research identifies the presence or absence of children as a major determinant of food and beverage choices for a household);


Executive Summary ii

• The growth of dual income households reflecting the growing affluence (increased disposable income to spend on food outside the home) and the need for convenience in food offerings;

• Increasing concern about nutrition affecting the menu choices available (chicken sales are now on par with beef sales at foodservice outlets);

• Increasing diversity of the Canadian population reflecting the rise in foodservice menu offerings of ethnic foods;

• Product branding where menus sport brands recognizable to consumers (e.g. Alberta Beef, Maverick Natural Beef, Neilson’s Ice Cream);

• Supermarkets expanding into commercial foodservice outlets where food retailers are offering full-service dining opportunities; and

• The growth of the “fast and easy dining chains” in Western Canada (e.g. Moxie’s, Earl’s, etc.) that are gradually securing market share from the fine dining outlets as well as the independent outlets.

Based on the interviews, the foodservice consumer segments in Alberta and Saskatchewan are (in priority):

• The business and professional customer (particularly “the lunch crowd”);

• Tourists (particularly in Alberta); • Families; • “Locals”; and • “The young crowd” (23-35 years old).

In order to service these segments, foodservice outlets in Saskatchewan and Alberta offer a variety of protein sources. Without a doubt, the main protein sources being sold are beef and poultry. Pork is a distant third in the rankings overall (with about 50% of sales being bacon for breakfasts), and lamb and bison an even more distant fourth and fifth. Very little value adding of product by processors is being done to target this industry in the two provinces although the smaller distributors such as Prairie Meats and Chef-Redi offer products such as kabobs, marinated steaks, and dry ribs. Most outlets add the value themselves due to the perception that portion steaks do not meet the quality standards. In addition, there is concern about potential labour strife at the outlet(s) if products are used that may result in a reduced workforce. A major issue for the foodservice operators is the cost of protein on any given menu offering (“centre-of-the-plate” pricing). On average, the food share of total foodservice cost runs about 30-33% (although the highest noted was 45% for Boffins in Saskatoon and the lowest being 29% at the Elephant & Castle). The centre-of-the-plate cost (protein cost) was then identified as being anywhere between 50-88% (average being 63%) of the total cost of food depending on the level, quality and distinctiveness of their garnishes.


Executive Summary iii

The foodservice outlets in Saskatchewan are primarily using the following distributors:

• SYSCO/Serca; • Centennial Meats; • Prairie Meats; • Chef-Redi Meats; and • Sunspun.

The foodservice outlets in Alberta are primarily using the following distributors:

• Bridge Brand/Gordon Foods; • SYSCO/Serca; • Western Quality Meats; • Centennial Meats; • Intercity Meats; and • Edmonton Meat Packing Ltd..

Note that SYSCO is the distributor of choice to the Universities of Saskatchewan, Regina, Calgary and Alberta. Foodservice outlets, even the independents (except in small rural areas distant from distribution centres) usually use the services of several suppliers, even for the same commodity in order to get the best price (e.g. two or three suppliers for beef). Some foodservice outlets, and in particular the chains, often enter in a contract with the larger distributors. For example, most chains are either using SYSCO or Gordon Foods. The contract is based on expected volumes. Any foodservice outlet that exceeds those volumes can source product from other suppliers for reasons such as a better price, quality, etc. Or the contract may be for a minimum order thus allowing outlets to use other sources. In the case of universities/hotels/food chains, it is often the practice to choose the end supplier and then direct the distributor to use that supplier. Contracts are usually entered into anywhere from six months to 2 years. The smaller independents however do not work on contract. Conclusions The foodservice industry on the prairies as examined for this report will be very difficult to penetrate and make substantial gains. Any processing facility or producer wishing to penetrate the industry is faced with the following situation.

• The foodservice market on the prairies is extremely competitive. The market is mature with growing competition from the chains classed as casual or licensed (e.g. Moxie’s, Earl’s, Tony Roma’s, etc.). Smaller independent restaurants and local chains are having an increasingly


Executive Summary iv

difficult time competing as it is more difficult for them to receive the volume discounts that the chains can garner.

• This is a price driven industry: While the ability to provide the

type of product with the desired quality attributes at the volume required is the “admission price” to being a supplier to the foodservice industry, once those requirements are met, price is the primary consideration with service being a close second.

Margins are small and volume sales are required to make a profit.

The industry as examined for this project is comprised of high end restaurants, casual chains and independent restaurants. The following table outlines what each of these categories demand from their suppliers. The points are listed in priority.

Supplier Requirements - Foodservice Outlets High End Chains (Casual) Independent (Casual)

Top quality meat (and if in Alberta – must be Alberta beef)

Ability to supply entire chain consistently

Best price

Consistent quality Best price Appropriate sizing of the meat

Trusted supplier (often deals with large distributor)

Appropriate sizing of the meat

Consistent supply

Best price Meet specifications Ability to deliver a couple of times a week if required

Ability to deliver daily if required

Consistent quality & size Will deal with smaller distributors

Deals with large distributor Ability to deliver daily if

required

While “price” may not have been listed as the most important factor in supplying all categories, it is still a critical issue. This entire industry appears to be price driven. This is a result of the high degree of competition in the marketplace as well as consumer resistance to menu price increases.

• Consumers in the two provinces are classed generally as being

the “meat and potatoes” crowd. And until Saskatchewan is deemed a destination place for tourists, it likely will not have the level of high end restaurants that Alberta enjoys. Generally Saskatchewan foodservice consumers are more price sensitive than their Alberta neighbours.

• The main protein items in demand for this market are beef and

chicken. With particular focus on beef, the market issues on the prairies are:

Consumer concern over health: beef vs. chicken;


Executive Summary v

Quality perceptions: beef vs. “Alberta Beef”; Size requirements: Canadian beef vs. Australian/New Zealand

beef; and Price considerations: Canadian beef vs. Australian/New

Zealand beef.

Alberta Beef: The Alberta producers enjoy a marketing advantage by having successfully built a brand that is recognized internationally and equates to top quality beef. Regardless of whether the meat is in fact top quality or just perceived to be, it would be difficult at this point to build a Saskatchewan brand that would rival the reputation of the Alberta product. In addition, the cost to build a brand is significant (anywhere from $2M to $30M). New Zealand/Australian beef: The market in Western Canada for New Zealand and Australian beef has increased significantly over the past four years. The following chart illustrates the value of the imports to this region. [Note however that it is not possible given this information to determine where the product is used (e.g. retail, foodservice, etc.).]

Value of Beef Imports to Western Canada Australia and New Zealand – Value in $ ‘000s

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000

1998 1999 2000 2001

AustraliaNew Zealand

Source: Statistics Canada

In other words, the market for Australian and New Zealand beef in Western Canada has doubled in just four years.

• The current suppliers are meeting the demand for pork. One

area that requires monitoring however is the demand for back ribs. Only one distributor claimed to have had difficulty in sourcing that particular product last year.

• Alberta and New Zealand producers are currently meeting the

demand for lamb. As with beef, the smaller size of the New Zealand racks as well as their lower price, make it suitable for the foodservice market. Since the demand for lamb in foodservice is


Executive Summary vi

very small, it is likely not a market that warrants examining for import displacement until lamb producers can influence consumers to purchase it for more meal occasions (in other words, producers must work to create demand for their product).

In addition, if lamb producers wish to supply this market, they must be prepared to find markets for the lesser quality cuts.

• Bison represents a specialty product at this time. While bison

burgers and some high value cuts are used in tourist areas as well as “specials” on fine dining menus, the market is limited. The restaurants and distributors that are using the product have found suppliers that offer consistent quality and most buyers are not prepared to try new suppliers for this product. In addition, bison producers must decide who their market is. They have damaged their reputation by selling to (or attempting to sell to) distributors and then directly to the restaurants to whom the distributors supply.

The Saskatchewan Opportunity There are three ways in which to participate as a supplier to the foodservice industry:

• As a distributor; • As a processor; or • As a producer.

It would be very difficult for a new processor to penetrate this market as a distributor to the foodservice industry. Competition is fierce. The large established players are consolidating. Due to their size, they bring massive buying power and can secure lower prices based on volume purchases which are then passed off to the restaurants. They are now going after the markets of the smaller distributors who are experiencing increasing pressure from the large distributors. Indications are that these large distributors are determined to fight among themselves over the smaller market share. Saskatchewan processors then have two potential markets:

1. To supply the larger distributors (e.g. SYSCO, Gordon Foods) who have the contracts with the chains or the high end restaurants (they must be able to meet the requirements of the distribution company); or

2. To supply the high end restaurants or the independents directly. Saskatchewan processors will be challenged to penetrate the market (as examined in this report) beyond its borders and even within its borders given the competitive nature of the business.


Executive Summary vii

In consultation with a member of the Steering Committee who has in-depth knowledge of the Saskatchewan meat processing industry, it became clear that the processors either are currently providing some supply to the foodservice industry or are devoting their production and marketing efforts elsewhere. They are likely not in a position (have the resources) or have the interest to penetrate this market due to their current strategies. The option for consideration at the processor level may be for three or four smaller processors to form some sort of cooperative action to supply a distributor already servicing this industry. The cooperative action of course provides them the opportunity of supplying the quantities required to enter the market. The challenge in that scenario is that the alliance would require common standards and strict adherence to quality demands, pricing strategies and meeting delivery schedules. The producers may represent the best opportunity to supplying this market. That opportunity is import replacement of the Australian and New Zealand products. Before examining this market, producers must understand that the smaller size of the cut is not the only reason that the off-shore product is in demand. It is a combination of size AND price. In order to determine if the import replacement option is a viable opportunity, there needs to be a good understanding of the production processes and transportation of the Australian and New Zealand products. In other words, how can that smaller cattle be produced, processed, shipped to Western Canada and still be priced at or lower than Canadian beef. In addition, the examination should consider the appropriate size of herd(s) that would be required to fill the demand. This does not likely represent an opportunity for all beef producers but rather a small group. Therefore, if a Canadian product can be produced (e.g. a ten pound and under striploin) that meets the price and at least meets the quality, then it will be the product of choice. The other area where opportunity may exist but was not examined, is for value added products targeted at foodservice outlets where food is not the primary source of revenues and who have limited food preparation space (e.g. bars). Small processors are encouraged to examine this market segment to determine if the option is viable.


Saskatchewan Agriculture Food and Rural Revitalization 1

PART ONE BACKGROUND INFORMATION



1. INTRODUCTION Agricultural producers and food processors in Saskatchewan are seeking new markets or growth areas in current markets for their products. The foodservice industry may be such a market as it represents 4% of Canada’s gross domestic product.1 In addition, certain segments within foodservice are realizing significant growth. Saskatchewan Agriculture Food and Rural Revitalization (SAFRR) therefore wishes to explore the foodservice industry on the prairies to evaluate its true potential with particular focus on the red meat products. This report examines and assesses the opportunities available for both small processors and livestock producers in the province. SAFRR contracted with Hodgins & Company Management Consultants Inc. to undertake the market study. 2. OBJECTIVES The overall objective of this study was to assess and identify the market potential for beef, pork, bison and lamb products in the Saskatchewan and Alberta restaurant, hotel and university segments of the foodservice market in order to provide processors and suppliers with an understanding of that market’s supply chain and its requirements for entry. More specifically, the objectives were to:

1. Undertake a market assessment: • Quantify the market for beef, pork, bison and lamb products

in Saskatchewan and Alberta; • Detail foodservice trends; • Outline products served (including relative pricing and

consumption patterns); • Storage and shipping requirements; and • Outline the critical success factors for entry and

sustainability.

2. Undertake a competitive analysis of the distributors and suppliers to the market that will: • Provide an overview of the distributors and meat suppliers

currently servicing the market.

3. Identify specific opportunities including identification of: • Pricing requirements; • Buyers; • Product forms required; and • Procurement policies.

1 www.crfa.com



4. Assess market viability (e.g. identify if the market can be

penetrated). The scope of the project was limited to foodservice outlets in hotels and high end restaurants and chains. In addition, four prairie universities were included in the project in order to understand their foodservice needs (universities of Saskatchewan, Regina, Calgary and Alberta). A list of interviewees was provided to the steering committee for approval. 3. METHODOLOGY The research methodology for this study included:

• A publications and internet review;

• Interviews: In total 59 representatives from restaurants, distribution centers, foodservice management groups, and processor/distributors were interviewed during the course of the project. See Appendix A for a list of interviewees. Note that some distributors asked that specific quantity information not be included in this report but was provided to give perspective to the consultants.

The results of the study are outlined in the following report. The findings are summarized in:

Part Two: Publications and Internet Review; Part Three: Interviews With Industry Stakeholders; Part Four: Market Viability and Conclusions



PART TWO PUBLICATIONS & INTERNET REVIEW



4. PUBLICATIONS & INTERNET REVIEW 4.1. Description of the Foodservice Industry The foodservice industry is typically categorized into two major areas, commercial and non-commercial. The division is usually dependant on whether the food purchase is the primary purpose of the business.2 The commercial segment of the foodservice industry is the sub-sector most often seen by consumers. Statistics Canada defines the commercial sectors as being comprised of the following five business segments:

1. Licensed restaurants: The largest segment holds a liquor license and predominantly serves food.

2. Unlicensed restaurants (known in the U.S. as “fast casual”): The second largest segment does not serve alcohol but has seats for their guests and is usually quick service restaurants (e.g. MacDonald’s, Harvey’s).

3. Take-out and delivery: This segment does not serve alcohol and provides very limited seating for guests (e.g. Pizza Pizza, KFC).

4. Social and contract caterers: Companies that cater cafeterias in schools, hospitals, homes for the aged, etc. (e.g. Versa Services, Beaver Foods).

5. Pubs and taverns: While these enterprises serve food, most sales are derived from alcoholic beverages.

For perspective, the non-commercial foodservice sector serves food as a necessity to “quasi-captive” clientele. This sector includes all food sold through hotels, motels and resorts including fine dining, catering and quick-service at these establishments. As well as hospitals, schools and prisons (definitely a captive customer), food sold through outlets at leisure venues such as movie theatre snack bars, ball parks, arenas, vending machines, department stores and institutions are also included in the non-commercial sector.3 The commercial foodservice sector represents an important component of the economy. Figures from the United States indicate that for every dollar spent dining out, another $2 in business is generated for other industries. While not confirmed, it is likely that the multiplier effect is similar for Canada. It is little wonder that the foodservice industry has been dubbed “the cornerstone of the economy”.4

2 www.agr.gov.ca/food/industryinfo/distribution/distribution.pdf 3 Ibid. 4 www.restaurant.org/cornerstone/economy.cfm



4.2 The Market The global foodservice industry is currently valued at US$1.2 trillion5 and is considered to be “the most dynamic sector of the food market” given that it is growing at a rate five times that of retail. Even with the high value of the industry, 2001 represented what one industry CEO considered to be “the worst demand situation in 10 years”.6 The combined effects of the recession and the terrorist events of September 11, 2001 in New York, kept customers away from the commercial restaurants. This was mainly due to the slowdown of business and leisure travel. Over 2001, most establishments saw sales down anywhere from 5%-20% on average. 7 While many articles noted that business has come back in 2002, others indicated that sales from tourism are still down. The Canadian Restaurant and Foodservice Association (CRFA) credits this sector (tourism) as comprising 22% of commercial foodservice sales. Therefore, if tourism decreases, then commercial foodservice take a direct hit. Another effect of the difficult 2001 year is that while customers are back to eating out, many have turned from the upscale restaurants to more moderately priced restaurants.8 The CRFA states that the current value of foodservice (including both commercial and non-commercial) in Canada was valued at $41.1B in 2001 and is expected to reach $42.6B in 2002. It is the single biggest customer for many food producers and processors. The following chart provides an overview of the foodservice industry in Canada. It is evident that the commercial sector makes up the lion’s share of the industry.

5 http://just-food.com/features_detail.asp?art=452 6 “Steakhouse Trendsetters: Sizzle and Substance”, Meat Marketing & Technology, March 2002. 7 Ibid. 8 Ibid.



Table One: The Foodservice Market in Canada - 2001

Full Service Rest.37%

Retail2%Other

4%

Institutional6%

Accomoda-tions11%

Bars5%

Caterers7%

Limited Service Rest.

28%

Source: Foreign Agricultural Service/USDA

The special foodservice sectors that include foodservice contractors, social caterers and mobile foodservice registered the largest growth rate in 2001 with an 18.5% increase in revenues with limited service restaurants enjoying an 8% growth rate. And pubs, bars and full service restaurants grew by 7% in 2001.9 The CRFA expects that consumer preference will make the full service restaurant the fastest growing channel over the next decade.10 However, limited service restaurants like Burger King are showing less robust growth with some exceptions such as Subway.11 Canadian consumers spent $29.9 B in various commercial foodservice outlets in 2001.12 For this industry in Canada, operators purchase annually:13

• $14.7 B worth of food and beverage products including: o $2.6B worth of beef; and o $2.5B worth of chicken.

The following table provides an overview of the Canadian industry and for comparison purposes, also provides a picture of the industry in the United States. 9 www.statcan.ca/daily/English/020628/d0206281.htm 10ww.crfa.ca/research/foodservicetrends/research_foodservicetrends_foodservice2010.htm 11 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002. 12 www.agr.gco.ca/food/consumer/mrkreports/consumers_e.html 13 Source: Canadian Restaurant and Foodservice Association.



Table Two: The Canadian Foodservice Sector - 2001 Description Canada

(CDN$) U.S.

(CDN$) Foodservice sales 2001 $41.1 B

(commercial & non-commercial))

$611.5B (commercial

only) Food purchases (@32% of sales) $13.2 B Alcoholic beverage purchases (@3.7% of $41.1B in sales)

$ 1.5 B

Employment in foodservice sector * 978,700 11.66M Commercial sector sales 2001 $29.9B $408B Forecasted annual commercial sector sales growth to 2005 (in 2001 dollars)

2.5%

Number of restaurants, caterers, pubs, bars and nightclubs

64,000 850,000

Average sales per commercial unit 2001 $576,000 Food purchases per commercial unit $184,000 Profit margin before taxes 6.6% Source (Canadian figures): Canadian Restaurant and Foodservice Association

Source (US Figures): www.restaurant.org * The commercial foodservice industry employs 42% of employed youth between the ages of 15 and 24 (CRFA). Regionally, Western Canada represented 34.6% of national food services in 1999 according to the United States Department of Agriculture (USDA). There are over 40,000 commercial outlets in western Canada with the chains and their associated franchisees dominating the independents. In 1999 terms British Columbia enjoyed 15.9% of national sales, Alberta 13%, Saskatchewan 3% and Manitoba 2.8%.14 In general, the CRFA has updated its forecast for commercial foodservice sales for 2002 as a result of an apparent stronger economy in Canada than the U.S. and gains in the labour market. While the revised forecast for 2002 is for a 4% growth, higher menu prices are expected to hinder real sales growth reducing real foodservice sales to just 1.2%. The growth is expected to be a result of the recovery in the second half of the year as many of the provinces showed a dramatic decrease in the first quarter. Alberta led the way in a 10.5% decline in real foodservice sales and Saskatchewan was down 6.6% during that time period. In 2003 however sales are expected to result in a 4.3% real growth.15 The foodservice share of the total food dollar spent by consumers is also an important perspective when examining the growth of the industry. 2001 represented the eighth consecutive year that the sector has gained share from supermarkets and other food retailers. BUT, the figures reflect the devastation felt by Canadian foodservice operators as a result of the introduction of the GST. Of every dollar spent on food in Canada, 41.1 14 Woodcock, B., USA Food Export, Inc., “Canada HRI Food Service Sector – Hotel, Restaurant, Institutional Sector Report – Western Canada, 2000”, Foreign Agricultural Service/USDA, August 2000. 15 www.crfa.ca/research/research_foodservicealestoheatup.htm



cents16 (compared to 46.1 cents in the U.S. 17) went to foodservice in 2001 up slightly from 40.7 cents in 2000 but below the 42.1 cents back in 1989 prior to the GST. The GST and a recession resulted in the foodservice market share to fall to a low of 37.1% of the total food dollar in 1993. The following table provides an overview of the past decade of the share of the total food dollar spent in the foodservice sector for both Canada and the U.S. (the rest being spent for food in the home).

Table Three: Foodservice Share of the Total Food Dollar

0%

10%

20%

30%

40%

50%

1989 1993 1997 2001

CanadaUnited States

Source: Foodservice Facts 2002

Expectations are that by 2007 the foodservice share will exceed 50%. This is important to note as the USDA’s Economic Research Service predicts U.S. food expenditures will increase 26% over the next 20 years. 18 As illustrated above, Canadian figures usually lag but do follow the trends in the U.S. When examining the potential growth of the industry, consideration should be given to factors such as population growth, greater service costs and food price inflation which can skew the figures.19 In other words, real growth figures will likely be less than projected. In addition to the commercial foodservice sector, the non-commercial sector is an important growth area. In fact institutional foodservice is forecast to be the fastest growing foodservice sector in 2002 with 4.1% increase over 2001. The highest growth area in the institutional sector is “education” with a forecasted growth of 7.3%. The growth is a result of an increase in enrollment at colleges and universities which “will make self-operated education foodservice the fastest growing sub-sector”.20

16 According to the CRFA, the foodservice share of the stomach is based on total foodservice spending in Canada at the consumer level, as well as by foreign visitors, business, industry and government. 17 www.cfra.ca/research/research_foodserviceharerises.htm 18 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002. 19 www.agr.gco.ca/food/consumer/mrkreports/consumers_e.html 20 www.crfa.ca/research/research_institutionalgrowth.htm



In Canada, the education market is currently valued at CDN$361M (2001 figure) and projected to be CDN$387M in 2002. This figure includes private schools, high schools, colleges and universities with the majority accredited to the latter segments.21 In other words, the education market represents less than 1% of the total foodservice industry. And in 2000, foodservice sales at U.S. colleges and universities accounted for US$10.8B (or CDN$16.9B). Educational consumers are seen to be a “captive market”. Due to increasing competition for students, the institutions recognize that having efficient, high-quality foodservice options are a necessity. Many educational institutions have recently privatized foodservice or contracted them out. In order to capture a larger share of the students’ food dollars, including those who live off campus, the operators are offering more of a varied menu such as adding more nutritious meals (e.g. more fruits, vegetables and vegetarian meals).22 4.3 Market Drivers Most articles agreed that economic growth is the primary determinant of consumer expenditures on away-from-home foods23. And the two major economic variables that drive the commercial foodservice industry are the Gross Domestic Product (GDP) and Disposable Income (DI). To put this in perspective, the CRFA calculates that a one percent increase in DI results in a 1.1% increase in commercial foodservice sales.24 In addition, the stronger showing of the Canadian economy in recent months has led to a decision by CRFA to increase its forecast for the industry for 2002 as outlined in the previous section. Other factors that were identified as currently driving the commercial foodservice industry are:

• The maturity of the retail market: The retail market for food (e.g. supermarkets, convenience stores, etc.) is considered to be mature and growing at a rate that is only a fifth of the rate of growth of the foodservice sector. Since it is becoming more and more difficult to secure significant margins out of the retail market, large food companies are turning to the foodservice industry in order to maximize value for the companies.25

21 LBC Consulting Services, “Canada HRI Food Service Sector, An Overview of the Institutional Foodservice Market in Canada 2002, Foreign Agricultural Service/USDA. 22 “The United Sates Foodservice Market (FaxLink no. 34119)”, The Team Canada Market Research Centre, August 2000. 23 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002. 24 Gain Report #CA0047, Foreign Agricultural Service, USDA. 25 Woodcock, B., USA Food Export, Inc., “Canada HRI Food Service Sector – Hotel, Restaurant, Institutional Sector Report – Western Canada, 2000”, Foreign Agricultural Service/USDA, August 2000.



• Knowledgeable and demanding consumers: Consumers are more knowledgeable than in the past and are demanding; 26

Variety; Quality and freshness (and willing to pay for it); Convenience due to time pressures; Health and nutrition (particularly the aging baby boomers); Environmental sensitivity (with the primary drivers, the

youth); Safe food as a result of heightened media attention; and Access to information.

In addition, increasing consolidation within the foodservice sector and an increasingly competitive climate means consumers will continue to drive the market.27

• Smaller households: Smaller households are driving North

Americans to eat away from home on more occasions. The studies indicate that the smaller households eat out more often because of economies. For example, the time spent preparing food per family member and the cost of the meal, increases as the size of the family decreases.28 Therefore as households decrease in size, consumers eat out more often.

• Proximity to restaurants and quick service: Lunchtime represents

an important segment of the foodservice industry. For the luncheon segment, the main drivers are proximity to the restaurant and how long it takes to get in and out of the restaurant. “After than comes value. Quality is the expectation and it is imperative”.29

In summary, there appears to be support for the premise that the commercial foodservice industry will soon secure more of the consumers’ food dollar due to the following drivers/factors:

1. Continued economic growth, particularly increases in per capita income;

2. The shift to smaller households; and 3. Increasing numbers of empty nesters and single person

households.

Note however that income growth may result in increases in the per capita quantities of some food items consumed. For example, the USDA predicts that higher incomes will likely lower consumption of pork (down 3%), beef (down 2.8% - if the same decrease occurs in Canada, results in a decrease in beef sales to commercial foodservices of $72.8M) and other meat and eggs, and it will result in an increase in consumption of fruits, vegetables, cheese, yogurt and fish.

26 www.agr.gco.ca/food/consumer/mrkreports/consumers_e.html 27 http://just-food/features_detail.asp?art=452 28 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002. 29 www.rimag.com/1402/Food.htm



4.4 Trends In addition to the current drivers, trends were also identified as having an influence of the growth of the foodservice industry. They include:

• The changing life situation in households: In the short term, the largest growth market will be the 50-64 year old age-group which by 2011 will be 40% larger than it is today. (U.S. figures note that 32% of Americans 55 and older currently dine out three times a week or more.30) There is a growing body of research that finds that food and beverage choices are more determined by the presence or absence of children in the home and whether or not a couple is retired. Once children have left home, the tight food budget is no longer as important. As well, this group is tired of years of meal preparation and prefers to eat out more often. In other words, eating patterns appear to be more dictated by life situation rather than age. So, while older consumers may have more time to prepare meals, they actually eat out more before and after retirement. This group is known as the WOOFs (Well off Older Folks). 31

Life situation not only affects households where children have grown and left home, but also the growing number of single adults or couples who opt out or delay parenthood. This group is also a high frequenter of commercial foodservice operations.

• Growth of dual income households: Two income-earner

households mean more income (increased affluence) resulting in: Consumer demand for convenience; 32 Consumers increasingly opting out of household tasks such as

meal preparation and eating away from home; A greater emphasis being placed on leisure activities in which

dining away from home plays an important part; and Increased foreign travel, broadening consumer tastes for a

greater variety of global cuisine. 33

The increased affluence has not only affected the wage earners, it has also affected their children. In the 15-24 year old age group, approximately 40% eat their main meal out of the home three or more times a week. “Our customers of tomorrow are growing into adulthood by cultivating the habit of eating away from home”. 34

• Increasing concerns about nutrition: Nutrition becomes increasingly

important as people age. Mature adults are as receptive to new foods as their children. As consumers age however, they are more

30 Gain Report #CA0047, Foreign Agricultural Service, USDA. 31 www.foodincanada.com/index.cgi?pcode-0122FCEF7C6681786128B916CD7CE968 32 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002. 33 http://just-food/features_detail.asp?art=452 34 www.meatingplace.com/meatingplace/Archives/oop/qnohit_g.asp.ID=5364



interested in nutritious foods that will assist them to maintain their health longer. 35 Many restaurants and even fast food chains have addressed this trend by offering lighter or heart healthy menu offerings.

In addition, as adults mature/grow older, they tend to eat less. Projections are that this will result in downward demand pressure on per capita quantities of beef and poultry.36 The older population is not the only group who are eating healthier. The American Dietetic Association states that 38% of Americans are actually eating more healthy, a significant increase from 28% in 1999.37

• The changing face of the Canadian (North American) population:

The growth of the Canadian population is slow (expected to be 1.2% annually over the next decade). It is expected that in order to make up for the slow growth, immigration will increase. This will likely occur in the U.S. as well. And in order to address the tastes of the new population, restaurants that meet the demands of the new population make-up will be in demand. 38

It should also be noted however that minority groups are not as inclined to dine out as the majority of the population in North America. 39

• Growth in demand for personal chefs: Personal chefs are a growing

trend in North America. The chefs interview family members concerning meal preferences and then shop for, make meals and stock them in the client’s fridge/freezer. The U.S. Personal Chef Association states that if people eat out at least three times a week they can afford the services of a personal chef and are likely to realize savings using their services rather than eating in restaurants. Currently, there are personal chefs in nearly every city in the U.S. with a population of more than 50,000 people. In fact, “there are about 6,000 in the U.S. with some 80-100 new people getting into the business every month”. The client groups are predominantly:

Working professionals; People with special diets (weight-loss diets, weight-gain diet

or doctor imposed diet); Seniors seeking a healthy meal that tastes good; Widow or widower who does not feel like cooking for him or

herself.40

35 http://just-food/features_detail.asp?art=452 36 Blisard, Noel; Lin, Biing-Hwan; Cromartie, John; Ballenger, Nicole; “America’s Changing Appetite: Food Consumption and Spending to 2020”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1. 37 Functional Foodwire, August 19, 2002. 38 www.agr.gov.ca/food/consumer/mrkreports/consumers_e.html 39 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002. 40 Anderson, Mark, “Dinner is Served”, Sacramento Business Journal, August 8, 2002.



• Branding and multi-branding at commercial foodservice outlets: This growing trend in foodservice is two-fold. Not only are products that are recognizable to consumers offered on the menu (e.g. Maverick Natural Beef, or Neilson’s ice cream products) but also food companies producing private label products for the foodservice industry. 41

• Supermarkets expanding into commercial foodservice outlets:

The U.S. is realizing a growing trend towards grocery stores adding a full-service fine dining restaurant (e.g. Tastings Restaurant a 114 seat fine dining restaurant attached to Wegman’s Food Market in Rochester, N.Y.) The concept is that products including alcoholic beverages offered on the menu are available in the grocery store and can be purchased prior to the customer leaving the building. 42

• “Going up – as in upscale”: Restaurant chains are moving

towards offering a higher quality dining experience. While new menu items are sourced in researching the most popular food trends, these chains are also offering old menu favourites which are considered “the comfort zone of loyal customers”. The concept is considered to be risk taking but the goal is to increase traffic into their locations.43 Even MacDonald’s has attempted to attract new customers with their more up-scale menu offerings of healthier meals.

• Food as entertainment: Since the market is highly competitive,

distinguishing features are added in order to attract market share. For example, at Chi-Chi’s, a Louisville, Kentucky chain, fajitas now get a splash of tequila and are flamed tableside. The chain has added this feature specifically to tap into this trend.44

• Focus on quality, rather than quantity: Quality describes the

demand for a wide array of food characteristics such as taste, nutritional content, safety and convenience. Consumers are turning away from the huge super-sized meals of the past at restaurants and turning to quality.45

• More natural and organic products on the menu: The

foodservice industry appears to be increasingly interested in offering natural and organic products, particularly in meat and poultry. (Note: The challenge is that natural and organic brokers are not foodservice oriented. It [the foodservice industry] is a “whole different sales game than the specialty retail market”. In

41 http://just-food/features_detail.asp?art=452 42 www.democratandchronicle.com/biznews/forprint/0810story5_business.shtml 43 Yee, Laura, “Stepping Up”, R&I, July 15, 2002. 44 http://www.rimag.com/1402/Food.htm 45 Blisard, Noel; Lin, Biing-Hwan; Cromartie, John; Ballenger, Nicole; “America’s Changing Appetite: Food Consumption and Spending to 2020”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1.



other words, the foodservice industry demands a much higher level of service than retail as well as being more price sensitive.)46

Interestingly, the combined result of many of the trends is that there is a growing percentage of the population who have either not developed or have lost their cooking skills.47 In addition, it should also be noted that the current downturn in the economy has affected some trends. For example, according to the USDA for example, many retirees are currently considered time rich but cash poor due to the reduction in income from the low interest received (if any) from their savings and investments. This group is now looking for value and bargains. It is unclear as to whether this current situation will turn into a trend in the future and will therefore have an on-going effect on the foodservice industry.

4.5 Consumers The consumers of Canada and the U.S. are generally wealthier, older, more educated, and more ethnically diverse than in the past. While the population cannot be viewed as a homogenous group, the following description typifies the household that spends the most money on commercial foodservice outlets: 48

• Household income is $70,000 or more; • Age of the head of the household is between 45-54; and • The oldest child is 18 or older.

While the above description fits the households with the highest overall spending on foodservice, other consumer groups represent a strong segment of the market. For example, households headed by a person under age 25 spends a higher percentage of their food dollar on food away from home but their total spending is lower. As well, households consisting of only a husband and wife have the highest average per capita expenditure on food away from home.49 Consumers are looking for an experience that addresses one or a combination of convenience, quality (tasty, good value, safe food) and service. Depending on the consumer’s situation, they may want quick service that will send them on their way to the soccer game. Others prefer a dining experience. For example, seniors’ eating patterns run contrary to eating on the run trend. They are more likely to perceive mealtime as traditional and wish an enjoyable, social event rather than quick replenishment prior to

46 Lipson, Elaine, “The Foodservice Frontier”, The Natural Foods Merchandiser, March 1999. 47 http://just-food/features_detail.asp?art=452 48 National Restaurant Association, “Restaurant Spending”, 2000. 49 www.restaurant.org/research/spending.cfm



running off to the next event. This segment wants good service and to be served with respect.50 There is a growing number of references in the publications questioning past perceptions of the “wealthy gray market”. The older baby boomers have been referred to as the affluent, with significant disposable income, thus having the ability to buy what they want when they want. With the downturn in the economy, government spending tightening, and a growing number of people living longer, many futurists are re-examining the impact of the trend. “Facing an extended old age with disappointing holes in savings and pensions, many consumers must cope on a low income”. 51 In other words, the segment comprised of older consumers with high disposable income may be much smaller than predicted. The impact to the foodservice industry is that this group, while still wanting a social event, will likely decrease the number of eating away-from-home occasions and spend more time cooking and entertaining at home. According to Statistics Canada, the average Canadian household spent CDN$1,536 on food and alcohol in commercial foodservice outlets in 2001. Figures from the U.S. indicate a much higher level of household spending of U.S. $2,137 (or CDN$3,333.72) in these outlets.52 Closer to home, Western Canadians tend to spend more on “away from home” eating than their counterparts in the other areas of the country. British Columbia in fact has Canada’s highest per capita foodservice spending at 1.31 (restaurant/population development index).53 While consumers have a wealth of venues from which to eat, when dining out they are more likely to do so at table service or fast-food outlets rather than in cafeterias.54 And while the evening meal still represents the meal most often served at foodservice outlets, the fastest growing meal occasion is breakfast. In two years, the share of restaurant traffic for breakfast and/or morning snacks has increased from 16.1% to 17.1% while lunch and supper have in fact fallen.55 4.6 Products Food is only one of the categories of goods sold in the foodservice industry representing 32% of sales as opposed to over 90% of the cost of sales in the retail grocery sector.56

50 www.crfa.ca/research/foodservicetrends/research_foodservicetrends_servingseniors.htm 51 http://just-food.com/features_detail.asp?art=661&app=1&fotw.sct 52 www.restaurant.org/research/spending.cfm 53 Source: Statistics Canada 54 www.agr.gco.ca/food/consumer/mrkreports/consumers_e.html 55 www.crfa.ca/research/foodservicetrends/research_foodservicetrends_consumerbreakfast.html 56 Source: Canadian Restaurant and Foodservice Association.



Restaurants aim to offer variety in their menus and are increasingly offering new foods in order to attract new customers. The trick for the outlets is to continue offering a core set of products that will keep their old customers coming to the restaurant while offering new products and menu items that attract new diners. However, the new products need to be significantly different so that they will not cannibalize existing options.57 As well as new product offerings that provide a “solution” for the foodservice industry, many food companies use restaurants to launch and experiment with new product ideas. The food companies see this market as a ready test market for consumers’ constantly changing tastes and one that provides quick feedback prior to introduction at the retail level. 58 Even though restaurants aim to offer new products, the “old standbys” seem to be entrenched in the hearts of the consumers. The following table outlines the top food items purchased at foodservice outlets in Canada.

Table Four: Top Ten Foods & Beverages at Canadian Foodservice Outlets - 2001

Food Category Share of Occasions

French Fries 22% Hamburgers 11% Unsweetened Baked Goods 11% Salads 11% Chicken 11% Pizza 10% Sandwiches 10% Sweetened Baked Goods 7% Desserts 6% Ice Cream/Frozen Yogurt 5%

Source: Canadian Restaurant and Foodservice Association While a growing number of seniors enjoy trying new foods, the major target market for familiar foods is usually the senior. This group often avoids experimenting if faced with digestive or health problems. The Canadian Restaurant and Foodservice Association has noted that this group is more likely to want dishes they grew up with and have meat as the major feature of the meal. 59 Restaurants have accommodated the older market segment in order to “provide a point-of-difference” for their outlet by updating recipes or “adding a twist” to it such as new spices. This is done for three reasons as the restaurants aim to: 60

1. Attract the seniors with familiar food but in a manner that they would not make at home;

57 Yee, Laura, “Stepping Up”, R&I, July 15, 2002. 58 www.foodincanada.com/index.cgi? 59 www.crfa.ca/research/foodservicetrends/research_foodservicetrends_servingseniors.htm 60 Ibid.



2. Offer traditional menu items that have been made “healthier” (a critical criteria for many seniors); and

3. Increase taste intensity (sense of taste decreases with age). As well, chefs are looking for ideas that are driven by seasonality, ethnic flavours and the popularity of comfort food.61 Most of the fine dining segment employ chefs. This group is particular and often works on “creative urges”. Chefs direct their sous-chefs to create (or will create themselves) a dish with only certain ingredients in mind.62 In other words, they wish to use ingredients where they will add the value. The rest of the industry usually employ “cooks”, people who follow specific recipes and produce the same item exactly the same each time. This group may be more inclined or required to use value added products that provide the consistency from meal to meal. Except for the very high fine dining restaurants, the publications indicated that the foodservice industry (with less of an emphasis on the fine dining operations) is looking for:

1. Pre cut meat that is exactly the same size and weight so that cooks know exactly how long to cook the portion.63 Processors will need to be cognisant therefore of the need to cut and portion each piece of meat exactly the same.

2. Food product solutions such as partially baked foods (cold plated/ready-to-heat and serve) that are easy to store, require limited heating before serving. These products save time by reducing the labour (and therefore labour costs) required to make the products from scratch.64

While food processors receive better returns at the retail level than in foodservice, most also produce for the HRI trade. A representative of Unilver Bestfoods noted it is critical to be in the foodservice channel or forego dollars spent on food purchased away from home. “We’d be shooting ourselves in the foot if we weren’t in foodservice”.65 An example of the importance of foodservice to the food industry is the emphasis that the transnational food company Nestle places on foodservice. Nestle Foodservice introduced a comprehensive program called NIMS (Nestle Integrated Menu System). It is a selection of more than 125 fully prepared frozen meal components.

61 www.rimag.com/1402/Food/htm 62 Harvard Business Review, “Management By Fire”, July 2002, p.60. 63 Yee, Laura, “Stepping Up”, R&I Magazine, July 15, 2002. 64 Woodcock, B., USA Food Export, Inc., “Canada HRI Food Service Sector – Hotel, Restaurant, Institutional Sector Report – Western Canada, 2000”, Foreign Agricultural Service/USDA, August 2000. 65 Burn, Doug, “Carving Up the Pie”, Food in Canada, May 2002.



To illustrate the growing importance of the foodservice industry to the major food companies, three of Nestle Canada’s eight manufacturing plants are now dedicated exclusively to making products for the foodservice industry. 66 A key strategy for both the food processing and foodservice industries to pursue is constant experimentation with new food concepts to address changing consumer tastes.67 Other food companies are also preparing products targeted at the foodservice industry. California based Fernando’s Foods Corp. has developed Southwestern and Latin American entrees, signature dishes and appetizers for foodservice menus. The products are specially seasoned and prepared and are individually quick-frozen and heat-sealed in portion-controlled bags. Red meat offerings include grilled steak strips, “shredded mexicana, and carnitas” (pulled pork). FoodMasters Inc., a Missouri based company has introduced “Country Creations Natural Slab of Pre-Cooked Boneless Loin Back Ribs with Savory BBQ Sauce” for the food service industry. 68 In addition, many value added meat products are designed solely for the foodservice industry. One article noted that most pre-marinated, pre-seasoned steaks are processed for the family style restaurant chains who “need signature, value-added steaks on their menus to create points of difference that are more affordable and unique (different flavour profiles)”. Many of the food companies are working with spice companies to develop unique flavour profiles for meat products.69 Marinated brands specifically developed for the foodservice industry are also becoming available at the retail level. Tyson Prepared Foods/IBP for example sells its brands, Black Diamond and Black Gold, a line of pre-seasoned frozen steaks, to both the foodservice industry and club stores. 70 Branding of products by the large distributors is also gaining strength. Consumers however have been turning to other sources of protein over the years. The following table indicates that per capita consumption of chicken has taken away market share from the beef industry. Pork on the other hand has remained fairly stable.

66 www.foodincanada.com/index.cgi? 67 Ibid. 68 www.meatingplace.com/meatingplace/Archives/oop/qfullhit_m.htw? 69 Salvage, Bryan, “Pre-Seasoned Steaks: A Product for the Times”, Meat Marketing & Technology, March 2002. 70 Ibid.



Table Five: The U.S. Average Annual Per Capita Consumption In Pounds of Beef, Chicken and Pork

0102030405060708090

1980

1984

1988

1992

1996

2000

BeefChickenPork

Source: USDA

It appears that any growth in beef would need to come from population growth. The following sections provide an overview of information specific to each product category. Beef Within the red meat food group, consumers with a higher disposable income often choose beef steak as their menu item. While steak is usually the highest price point on the menu there appears to be an increasing demand for quality over quantity of steak in restaurants. Restaurants often see a really unique, signature steak as their competitive advantage. The “au jus flavor” is the most requested steak flavor. 71 While overall population growth in North America results in a projection of a 15% increased consumption in beef by 2020, the per capita beef consumption in fact is expected to drop as identified above. The USDA attributes the projected decrease to an aging population, an increasingly educated population (which heightens awareness of the health risks of excess saturated fat) and income growth (indicates a shift towards poultry and fish). The expectation is future consumers of red meat (not just beef) will demand a higher quality, more expensive product. 72 71 Salvage, Bryan, “Pre-Seasoned Steaks: A Product for the Times”, Meat Marketing & Technology, March 2002. 72 Blisard, Noel; Lin, Biing-Hwan; Cromartie, John; Ballenger, Nicole; “America’s Changing Appetite: Food Consumption and Spending to 2020”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1.



Bison Bison has had some difficulties getting onto the menu. Its higher price and its “exotic” image have been barriers to increased consumption.73 As well, it has been difficult to translate the message of the health benefits (high protein, lean meat) into sales.74 It appears however that bison meat is “making a comeback as an alternative to beef”.75 Previously it was known as being “dry, overdone, chewy hockey puck…served in a tourist trap”. The industry is working hard to overcome that reputation.76 The Canadian Bison Marketing Council appears to be promoting bison as a “healthy and safe meat” with the following attributes: 77

• “Bison is leaner than beef, chicken or pork and has about 30% more protein than beef”;

• It is “grassfed and the use of antibiotics and hormones is avoided”; and

• Programs have been developed that “include implementing industry standards that provide consistent product and food safety with its ‘On Farm Food Safety Plan’”.

Bison is also being promoted to those who wish to eat kosher foods. Bison is now being featured on the menus of many kosher restaurants across the country. Kosherbison.com offers burgers, roasts, steaks, ribs and deli meats from bison meat.78 Note that “kosherbison.com is available in the U.S. only. The main issue however noted in the publications is that bison lacks market penetration and that there may be too much production given the size of the market. Any market growth has been achieved through sales to the white tablecloth restaurants (account for about one third of the all sales). Of the 660,000 pounds of dressed meat produced last year for the market (valued at CDN$40M and representing one quarter of the North America production), about 90% was exported to the U.S. where consumption is higher. In parts of the U.S., such as Colorado (population 4.4 million), the per capita consumption is 6 pounds of bison per year while the average per capita consumption in Canada is .45 pounds.79 The biggest challenge to increasing the market for bison however may be the differing names used causing confusion. The U.S. restaurants usually use the term buffalo while Canadians use bison or buffalo. In reference to the term

73 www.web5.infotrac.galegroup.com 74 http://just-food.com/features_detail.asp?art=660&app+1&fotw=sct 75 www.web5.infotrac.galegroup.com 76http://just-food.com/features_detail.asp?art=660&app+1&fotw=sct 77 Ibid. 78 www.meatingplace.com/meatingplace/Archives/oop/qnohit_g.asp?ID=6533 79 http://just-food.com/features_detail.asp?art=660&app+1&fotw=sct



buffalo, water buffalo is enjoying a small but growing market in North America. In the U.S. specialty meat market the concern is that there will be consumer confusion.80 Pork While beef has realized a decrease in per capita consumption since 1970, per capita pork consumption has remained relatively flat at about 50 pounds per year (U.S. figures).81 Rather than discuss pork in general, articles mainly focused on value-added pork products. New flavours and ready-to-serve items are being developed for foodservice such as:

• SiouxPreme Packing Company that offers 50 different pork products targeting restaurants;

• Swift’s ready-to-cook pork product “offering 10 different flavours”; and • Godshall’s Smoked Pork products.

Since breakfast is the meal occasion that appears to be growing the fastest, pork may be a product to watch to see if an increased demand for bacon and sausages is evident. Lamb Due to the strong U.S. dollar and the lack of quotas on lamb imports into the U.S., the Australian and New Zealand producers have taken the upper hand in the U.S. Meatingplace.com points out that “if you can find lamb, it likely isn’t North American”. 82 Lamb does not seem to enjoy the consumer acceptance of either beef or pork at the foodservice or retail sectors. The lack of product promotion has left most consumers thinking of lamb primarily as an entrée at holiday meals or at white tablecloth restaurants. There may be an increase in the demand for lamb in the future. The USDA is currently in the process of approving a check-off that would result in an annual US$3.5M marketing campaign to increase sales. In addition, new pre-cooked products are being tested on the market in response to consumer confusion as to cooking methods. 83 80 Ibid. 81 www.meatingplace.com 82 www.meatingplace.com/meatingplace/Archives/oop/qnohit_g.asp?ID=8981 83 Ibid.



As it relates to products in general, a recent USDA report describing the HRI trade in Canada stated that there is a “foodservice predisposition to buy Canadian first”.84 Therefore home-grown products may in this instance have a competitive advantage over their American competition. However countries that can supply products that meet Canadian foodservice quality standards and are lower priced will still likely have the advantage in this market segment. 4.7 Price Price was not discussed extensively in the publications. Most references were to bison where its 20-50% price premium is perceived as being too high for the average Canadian consumer.85 4.8 Promotion If the commercial foodservice industry is viewed on a continuum with the white table cloth restaurant being at one end and the take-out and delivery outlets at the other end, the closer to the takeout and delivery, the higher the use of promotional activities directly to consumers to grow sales, particularly with the chains.86 The following table illustrates the intensity of the promotion activities by segment.

Table Six: Promotional Activities

Increases Promotional Decreases Activity

Take-out & / Unlicensed Licensed Delivers / (Family Dining) (White Table-Cloth) The internet is also used as a promotional tool for restaurants. However, many small independent restaurants do not appear to use this form of advertising. The internet is also used to promote specific forms of non traditional meat products at restaurants. For example, restaurants offering organic meat (e.g. www.allorganiclinks.com/restaurants, www.berettafarms.com, www.organicbreadbasket.com/profiles.htm, http://santacruz.about.com/library/blcuisine4.htm) and bison meat (e.g.

84 Woodcock, B, USA Food Export, Inc., “Canada HRI Food Service Sector – Hotel, Restaurant, Institutional Sector Report, Western Canada, 2000”, Foreign Agricultural Service, USDA, August 2000. 85 http://just-food.com/features_detail.asp?art=660&app+1&fotw=sct 86 http://just-food/features_detail.asp?art=452



www.albertabuffalo.com) are featured on either producer or industry websites. This channel is targeted directly at consumers. Promotional activities are also conducted by commodity groups and targeted at restaurants themselves. This is particularly true of the white table-cloth outlets where chefs often do the ordering. For example, new beef menu ideas were offered at a chef education seminar conducted at a leading culinary school to key menu decision-makers in the restaurant and related industries. The second annual “Beef, It’s What’s on the Menu” seminar was held at the Culinary Institute of America Greystone Campus in St. Helena, California and funded by the National Cattlemen’s Beef Association (NCBA). The Association sponsored the program in order to “allow us opportunities to reach those individuals who decide what goes on the menus in America’s restaurants, and to increase beef’s presence on those menus”.87 This example may represent an opportunity for Saskatchewan producers and processors to promote and test their products with the foodservice industry. 4.9 Competition The publications identified specific examples of restaurants or chains that have achieved some success in the marketplace and the reason for the success. The ones to which reference was made are in the U.S. and are:

• The Outback Steakhouse: This casual dining chain was identified as “one of the most successful chains in the country …with its commitment to service and passion for creating serious food ”.88 As well, the article noted the strategic alliance that the company has built with its meat suppliers, IBP Inc., and Excel. Another feature of the Outback Steakhouse is that it introduced the “Curbside Take-Away Program” where servers take dinners to their customers who wait in their cars.

• Ruth’s Chris Steak House: This fine dining chain is located in

Louisiana and is “one of the most successful in the world”. Its commitment to quality control where steaks are monitored from all suppliers has been the major contributing factor to its success. While the company did meat cutting in-house at each site, it is now turning to pre-cut and pre-seasoned steaks for all cuts, done at a central cutting house.89

• Morton’s of Chicago: This internationally known restaurant built its

reputation on top quality service and the “best prime steaks in town”.90 .

• T.G.I. Friday’s: This growing full-service chain bases its offerings on the consumer demand for convenience as well as demand for dining amenities and a diverse menu offering.91

87 www.beef.org/dsp/dsp_content.cfm?locationID=45&contentID=319&contentTypeID=2 88 www.meatingplace.com 89 Ibid. 90 Ibid.



• Ted’s Montana Grills: Media mogul Ted Turner is growing a chain of

burger restaurants that use bison meat from his own ranches (a good example of vertical integration). The chain features freshly cooked bison burgers and chili.92

The growing competition is actually coming from retail grocery outlets. Retailers are trying to stem the flow of customers and their food dollars to the foodservice industry by offering home meal replacements and deli sections. And in some instances, these retailers are developing restaurants as a complementary service at the grocery store.93 Closer to home, competition abounds. Appendix B provides lists of restaurants in Saskatchewan and Alberta sourced on the internet. In addition, chains, both foodservice and hotels, provide competition. The major chains that have operations in Western Canada and their affiliations in the foodservice industry were identified and are outlined in the following table:

91 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002. 92 www.web5.infotrac.galegroup.com 93 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002.



Table Seven: Chains in Western Canada With Foodservice Outlets CHAIN AFFILIATE HEAD OFFICE

Four Seasons Hotels & Resorts

Don Mills, Ontario

McDonald’s Restaurants of Canada

Toronto, Ontario

#TDL Group Ltd. Subsidiary of Wendy’s International; Licenses Tim Hortons.

Oakville, Ontario

Cara Operations Ltd. Harvey’s; Swiss Chalet; Summit Food Distributors; Beaver Foods and Airport Services.

Mississauga, Ontario

Canadian Pacific Hotels Delta Hotels Fairmont Hotels.

Toronto, Ontario

Tricon Global Restaurants (Canada Inc.)

KFC; Pizza Hut; Taco Bell.

Rexdale, Ontario

Starwood Hotels & Resorts Worldwide Inc.

Sheraton Hotels; Westin Hotels & Resorts; Four Points Hotels

Toronto, Ontario

Best Western International, Inc.

Phoenix, Arizona

Subway Franchise Systems of Canada, Ltd.

Milford, Connecticut

Choice Hotels Canada Inc. Clarion Hotels; Quality Hotels; Comfort Hotels; Economy Lodge; Rodeway Inns.


Burger King Restaurants of Canada Inc.

Etobickoke, Ontario

A&W Food Services of Canada Inc.

Vancouver, British Columbia

Bass Hotels & Resorts Holiday Inn Express. Atlanta, Georgia Royal Host Travelodge Canada;

Thriftlodge. Calgary, Alberta

The Second Cup Ltd. Toronto, Ontario UniHost Corporation Journey’s End;

Holiday Inn; Comfort Inn.


Keg Restaurants Group Inc., Richmond, British Columbia Boston Pizza International Inc.

Richmond, British Columbia

Kelsey’s International Inc. Kelsey’s; Montana’s Cookhouse Saloon; Outback Steakhouse.

Oakville, Ontario

Mr. Sub Toronto, Ontario Northland Properties Ltd. Sandman Hotels and Inns;

Denny’s Restaurants; Moxie’s Restaurants.


#SIR Corp. Armadillo steakhouse; Papa Leoni’s; Canyon Creek; Alic Fazooli’s Italian Crabshack;

Burlington, Ontario



Al Frisco’s; Far Niente; Jack Astor’s.

Darden Restaurants Red Lobster; Olive Garden


Coma Food Group Inc. Company’s Coming Bakery Café; Grabbajabba Gourmet Coffee Stores; Pastel’s Restaurants.

Calgary, Alberta

Coast Hotels Limited Vancouver, British Columbia White Spot Restaurants Triple O’s Vancouver, British Columbia Smitty’s Canada Ltd. Calgary, Alberta Arby’s Canada Inc. TJ Cinnamon’s. Mississauga, Ontario The Spectra Group of Great Restaurants Inc.

Milestone’s; The Bread Garden; The Boathouse; Roman’s Macaroni Grill.


Hospitality Corp. of Manitoba Inc.

Windsor Park Inn; Garden City Inn; Express Fort Garry Inn; Transcona Inn; Fort Garry Inn.

Winnipeg, Manitoba

ABC Country Restaurants Inc.

Surrey, British Columbia

Humpty’s Restaurant International

Rockin’ Robin’s Diner. Calgary, Alberta

Red Robin Restaurants of Canada Ltd.

North Vancouver, British Columbia

Taco Time Canada Ltd. Calgary, Alberta Elephant & Castle Group Inc. Rosie’s and Alamo Bar &

Grill; Rainforest Café.


Donato Food Corporation Mrs. Vanelli’s; Made in Japan.


#Joey’s Only Seafood Calgary, Alberta Edo Japan Calgary, Alberta Husky Oil Marketing Company Ltd.

Husky House Restaurants Calgary, Alberta

Source: USDA/Foreign Agricultural Service As noted above, many of the foodservice operations own/franchise several concepts (e.g. Red Lobster and Olive Garden). The rationale is the need for diversification in order to capture different markets.94 4.10 Distribution Within the distribution, chain three groups play a key role in linking the processors and the foodservice outlets:

1. Distributors; 2. Brokers; and 3. Buying groups.

94 www.meatingplace.com/meatingplace/Archives/oop/qfullhit_m.htw?



Most larger restaurants and chains are supplied by established agents/brokers/distributors. Smaller operations often purchase their requirements through large retail and wholesale outlets such as Costco or Walmart to maximize their individual buying efficiencies. 95 Distributors Distributors are the logistic link that warehouse and deliver food and beverage products to foodservice operators. The publications identified three types of distributors: 96

• Broadline distributors (also known as full service distributors): The broadline distributor purchases products from numerous processors, stocks the goods in a warehouse, and delivers the ordered products to the restaurants. It is the most comprehensive type of distributor and tends to serve single unit restaurants and small-scale chains. Examples of this type of distributor are SYSCO, Gordon Foods and Sunspun (a division of Westfair Foods).

• Specialty distributors (also known as niche distributors or

shortliners): As the name suggests, the specialty distributor deals with a narrow range of products only, such as meats or produce (e.g. Prairie Meats, Chef-Redi Meats).

• Systems distributors serve mostly chain restaurants that centralize

purchasing. Some distributors also offer cash and carry outlets (limited line warehouses) where products are purchased and picked up. The major challenges facing distributors are to work with clients to grow their businesses, procure the desired goods on time and in the right quantities that provide good returns. 97 However the biggest challenge of all may be in servicing customers. Distributors are now being asked to supply additional services, stock a wider variety of goods, and deliver these goods to a wider variety of retailers and restaurants regardless of distance.98 And while many commodities such as dairy products usually require minimum orders, distributors often drop the minimum requirements as well as delivery surcharges for out-of-the-way customers in order to secure marketshare. The speculation however is that “over servicing” will not continue. 99 In order to reduce some of the “over servicing” in the industry, SYSCO is aiming to service clients only within an hour of distribution centers (DC). This 95 GAIN report #CA0050, Foreign Agricultural Services/USDA. 96 Stewart, Hayden; Martinez, Steve, “Innovation by Food Companies Key to Growth and Profitability”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1. 97 Ibid. 98 Ibid. 99 Burn, Doug, “Carving Up the Pie”, Food in Canada, May 2002.



poses a challenge for distributors servicing Canadian centers as many cities are further than one hour’s distance from a DC. What it means is that foodservice outlets will likely choose their distributor based on their proximity to a DC. Otherwise, the restaurateur will be left picking up the cost of the additional delivery charges. 100 Consolidation appears to be the theme when discussing distributors and brokers in the foodservice industry. Dan Murphy summarized what is happening in the industry by stating:

“Consolidation and technological investment are the dynamics of the meat industry. The economies of scale needed to service ever-larger retail & foodservice accounts, coupled with the growing burden of regulatory compliance and food-safety-related risks is driving little guys under and mid-sized ones into the arms of their big boy suitors.” 101

The market share of the 10 largest foodservice distributors in North America increased from 17% in 1990 to 28% in 2000. The four top distributors accounted for almost 50% of all foodservice distributor sales in 2000. They are:102

1. SYSCO; 2. US Foodservice; 3. Alliant (who have subsequently been purchased by US Foodservice);

and 4. Performance Food Group.

In order to keep the players straight, the following table outlines the major distributors, identified in the publications, who are operating in Western Canada along with recent mergers or takeovers of other distributors.

100 Burn, Doug, “Carving up the Pie”, Food in Canada, May 1, 2002. 101 Murphy, Dan, Meat Marketing & Technology, June 2002. 102 www.corporate-ir.net/ireye/ir_site.zhtml

Saskatchewan & Alberta Foodservice Opportunities – Beef, Pork, Bison & Lamb

Saskatchewan Agriculture Food & Rural Revitalization 30

Table Eight: Foodservice Distributors Serving Western Canada Distributor Takeovers/Alliances

SYSCO (Houston, Texas) Acquired Serca’s (subsidiary of Sobey’s) operations east of the Rockies; Entered into an alliance with Sobey’s to explore procurement opportunities; Acquired HRI Supply of Kelowna; Acquired Abbott Foods Inc. Columbus, Ohio.

Gordon Food Service (Grand Rapids, Michigan)

Acquired Bridge Brand Food Services Ltd of Calgary; Acquired Serca Pacific Division of Delta, B.C.

US Food service Acquired Alliant Exchange Performance Food Group Unilever Bestfoods Foodservice Canada (Toronto)

Cara Operations Tannis Food Distributors (Ottawa, Ontario); Summit Food Service Inc. (London, Ontario);

Campbell”s Foodservice A division of Campbell Soup Company.

Kraft Canada Tees and Persse Brokerage Ltd. (Delta, B.C.)

Cyba Stevens Mgt. Group (Calgary, AB)

Contact Management Group (Surrey, B.C.)

Tier 1 Services Inc. (Coquitlam, B.C.)

Concord National Inc. (North Vancouver, B.C.)

Pennine Marketing ltd. (Surrey, B.C.)

Binner Marketing & Sales (Winnipeg, MB)

Network Sales Ltd. (Fort Saskatchewan, AB)

Cambrian Enterprises Ltd. (Winnipeg, MB)

Ashley-Koffman Foods (Mississauga, ON)

Preisco Jentash (Coquitlam, B.C.) Hardy Sales (Langley, B.C.) Additional information provided in the publications concerning key players includes:

SYSCO: • Largest foodservice organization in North America; • 2001 sales of $22.66B; 103 • Current Canadian sales of fresh and frozen meat valued at $2.7B

(20% market share); 104 • Fresh and frozen meat – 21% of overall foodservice sales; • 400,000 customers and 46,000 employees; 105

103 www.coporate-ir.net/ireye/ir_site.zhtml 104 Burn, Doug, “Carving up the Pie”, Food in Canada, May 1, 2002. 105 www.coporate-ir.net/ireye/ir_site.zhtml



• Offers 38,000 SYSCO branded products (e.g. Buckhorn Beef, Newport Pride106 – beef products, SYSCO Classic Calamari);

• Some private label products targeted to hit retail store shelves; • Aims to get returns in Canada of $4.40 in before tax income for every

$100 in sales (Serca returns were $1.40 for every $100 in Canada); 107

• Ordering done over the internet if desired; • Assists restaurateurs by offering customers electronic gift certificates

and customized birthday cards;108 and • Projecting 6% growth in 2003.109

Gordon Foods/Bridge Brand:

• Current Canadian sales of fresh and frozen meat of $1.4B (11% market share). 110

Unilever Bestfoods:

• Has its own private label for foodservice clients. Note that Gordon Food Service and SYSCO combined secured 31% of the estimated $13.2B general foodservice market in 2001 in Canada. 111 (The $13.2B figure represents the food purchases made by the Canadian foodservice sector in 2001). It is evident that many of the large food processors are getting into foodservice even though margins are higher in the retail channel. The rationale is that they are targeting more of the consumers’ food dollar by gaining a market share of food purchased away from home. Murray Webb of Unilever Bestfoods noted that “We’d be shooting ourselves in the foot if we weren’t in foodservice”.112 Brokers In addition to distributors, brokers (and processors) play a marketing role in the foodservice industry. Brokers are the marketing agents of the processors. They often market products directly to foodservice outlets and then go to distributors with orders. In other words, they pull the product through the system. Most new product marketing is undertaken by the processors’ own sales force as well as their brokers.113 Advantages of using a broker are:

106 Stewart, Hayden; Martinez, Steve, “Innovation by Food Companies Key to Growth and Profitability”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1. 107 Burn, Doug, “Carving up the Pie”, Food in Canada, May 1, 2002. 108 Stewart, Hayden; Martinez, Steve, “Innovation by Food Companies Key to Growth and Profitability”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1. 109 Just-food.com – “USA: Sysco says real sales growth up 6%”. 110 Burn, Doug, “Carving up the Pie”, Food in Canada, May 1, 2002. 111 Burn, Doug, “Carving up the Pie”, Food in Canada, May 1, 2002. 112 Ibid. 113 www.agr.gov.ca/food/industryinfo/distribution/distribution.pdf



• Brokers screen new products and ideas; • They advise processors on the marketplace; • They normally have local market knowledge; and • They usually have in-depth knowledge of specific product categories.

One article noted that the average brokerage commission is 4-5% of sales.114 However, another article stated that brokers’ commission in Western Canada varies widely. While the average is about 4.5%, it can range anywhere from 3% to 6% of sales.115 The most important factor is that the processors get the right broker to represent them (need the right fit).116 This means that processors must choose brokers who will represent them well and get results. Buying Groups In order to secure better prices from processors and other suppliers to the foodservice industry, buying groups have been established. The buying groups in Canada are:117

• Federated Foods; • Associated Food Distributors (Newmarket, Ontario); • Groupex (a service of the Canadian Restaurant and Foodservice

Association for its members, providing rebates on several lines); • ITWAL (Brampton, Ontario); and • Emco (Calgary, Alberta).

In addition to the buying groups, some commodity groups assist their producer members. For example, the Beef Information Centre (BIC) operates a foodservice program. BIC works with the various segments of the distribution channel (processor, distributor and foodservice outlet) to “enhance the quality and consistency, the perception, the convenience and the safety of the beef products”.118 The Centre views itself as a partner with the stakeholders by providing information, resources, forums and other services. 4.11 Issues The top challenges faced by the commercial industry are in priority:119

• Recruiting and maintaining staff; • Maintaining volume of business (i.e. the immense volume demanded by

some customers could exhaust a smaller processor);

114 Ibid. 115 GAIN Report #CA0050, Foreign Agricultural Service/USDA. 116 Ibid. 117 www.agr.gov.ca/food/industryinfo/distribution/distribution.pdf 118 www.beefinfo.org 119 www.restaurant.org/research/forecast_overview.cfm



• The economy/recession; • Intense competition; and • Higher cost of doing business than in retail.

Other challenges identified in the publications concerning the commercial foodservice industry were:

• Regional differences/preferences: Restaurateurs must take into account local attitudes toward, and awareness of, different products when determining how innovative their menus should be.120 For example, bison has an “exotic image” and therefore it is difficult to introduce as a mainstay in some foodservice outlets. 121 In addition, new products such as bison usually are higher priced compared to standbys like beef stopping some consumers from testing the product. 122

• The high cost of overhead: Foodservice kitchens face high overhead

costs of labour and space. Labour for example can run as high as 16% of costs. As well, due to the high cost of space, many new foodservice kitchens are reduced in size. In order to maximize efficiencies and ensure a positive bottom line, many restaurateurs are putting pressure on the food processors to develop products that will save labour and reduce costs. 123

• Implementation of an efficient inventory replenishment system: To try

and increase efficiencies and reduce the need to stockpile inventory, the industry is moving to implement an electronic marketplace. For example, in July 2000, industry leaders, including McDonald’s, Sysco, Cargill and Tyson Foods, launched eFS Network. The goal of eFS Network is to create an “internet based, industry wide marketplace for foodservice companies” which will help lower costs and thereby lower menu prices. The effect would be to increase the number of away from home meals for the cost conscious consumer.124

• Meat cutters in short supply: Experienced meat/steak cutters are

increasingly harder to find. Foodservice operations, particularly the white table cloth segment, are challenged to not only train meat cutters but also to retain them.125

• Recent world events: The September 11th, 2001 terrorist attack in New

York combined with the downturn in the economy and corporate upheavals have affected the foodservice industry.

120 www.crfa.ca/research/foodservicetrends/research_foodservicetrends_servingseniors.htm 121 www.web5.infotrac.galegroup.com 122 http://just-food.com/features_detail.asp?art=660&app+1&fotw=sct 123 www.foodincanada.com/index.cgi? 124 Stewart, Hayden; Martinez, Steve, “Innovation by Food Companies Key to Growth and Profitability”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1. 125 Crawford, Gregory, “Kill & Cut: Preserving the Art of Cutting Steak”, Meat Marketing & Technology, March 2002.



The National Restaurant Association (U.S.) launched the “Cornerstone Initiative Public Relations Campaign” in autumn 2001. It was targeted at American consumers aiming to draw them back to the 858,000 restaurants during “one of the most challenging periods in our country”.126

Another method used to attract more customers has been to offer a more cost-conscious menu. 127 The reviews are mixed as to whether the industry has bounced back totally.

• Cost conscious Canadians: Canadians watch their spending in

foodservice outlets making it difficult for restaurateurs to raise menu prices even if only to cover inflation.128

• Do well and lose: One article cautioned manufacturers about entering the

foodservice industry. If they do well, the article noted that foodservice could “wipe you out from a capacity standpoint”. While that sounds attractive, the immense volume demanded by some customers (chains) could exhaust a smaller processor.129

4.12 Critical Success Factors In order to achieve success in the foodservice market, the following factors were identified:

• Developing appropriate product support materials: Materials explaining the products to chefs is critical as they have varying backgrounds but wish to explore new menu offerings that complement their creative abilities. Cooks on the other hand are afforded little opportunity for creativity as they follow very specific recipes.

• Finding the right representative (broker, distributor etc.): The

foodservice industry and its needs are distinctly different from the retail part of the food industry. It is critical for processors to find the right representative who knows how to service the foodservice industry appropriately.130

• The ability to adapt to change: The ability to differentiate through quality,

new product development, value and innovation will be key to appealing to a wide range of consumers and increasing sales. These can be achieved by building individual relationships with consumers. Value must be communicated to the consumer if higher margins are to be achieved.131

Branding in foodservice will be considered an even more powerful tool in winning consumer loyalty. It will be used as a symbol to represent a specific

126 www.restaurant.ogr/pressroom/pressrelease_print.cfm?ID=460. 127 www.prweb.com/releases/2002/8/prweb44035.php 128 Gain Report #CA0047, Foreign Agricultural Service, USDA. 129 Lipson, Elaine, “The Foodservice Frontier”, The Natural Foods Merchandiser, March 1999. 130 Ibid. 131 http://just-food/features_detail.asp?art=452



set of values and an image that demonstrates the company’s ability to satisfy consumer needs.132

Foodservice outlets must create menus and experiences than distinguish themselves. In addition, branding of foodservice products can carry over to the retail stores where margins are higher.133

• Building trust and effective communication: These two areas are more

important to foodservice purchasing agents than good service, price or brand according to a new study from the U.S. Centre for Hospitality Research at the School of Hotel Administration at Cornell University. Strong partnerships between purchasers and suppliers have come to be viewed as a competitive advantage for food and beverage purchasers who are looking for long-term economic success. (Turnover in supplier representative – brokers, distributors, processors - is emerging as one of the most troublesome challenges facing purchasers today.134)

4.13 The Future The future will be even more challenging for foodservice operators. They will be required to provide a more extensive service offering with a high level of value attached.135 However the most successful outlets are likely to be those that tap most effectively into the North American’s appreciation for diversity in their lives, “especially the insatiable desire for new and different food choices”.136 In addition, there are still opportunities to grow the breakfast market. Market growth will come from children and the 18 - 34 year-olds who skip breakfast more often than any other age group.137 Canadians over 65 are another growth area. This group is living the active senior’s lifestyle. They are young-at-heart and a good number have wealth, education, sophistication, travel, and diverse interests. Many have both the time and money to contribute substantially to foodservice revenues.138 Limited-service restaurants (e.g. McDonald’s, Bad Ass Jack’s, Harvey’s) were particularly targeted in the publications as experiencing challenges in the future. Other foodservice sectors will likely grow faster than this segment.139 132 Ibid. 133 www.crfa.ca/research/foodservicetrends/research_foodservicetrends_foodservice2010.htm 134 Ibid. 135 http://just-food/features_detail.asp?art=452 136 Blisard, Noel; Lin, Biing-Hwan; Cromartie, John; Ballenger, Nicole; “America’s Changing Appetite: Food Consumption and Spending to 2020”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1. 137 www.crfa.ca/research/foodservicetrends/research_foodservicetrends_consumerbreakfast.html 138 www.crfa.ca/research/foodservicetrends/research_foodservicetrends_servingseniors.htm 139 Davis, David; Stewart, Hayden, “Changing Consumer Demands Create Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002.



4.14 Conclusion The publications indicate that while this industry is considered to be mature, there will still be growth. That growth will likely come from consumers who will be spending an increasing amount of their food dollar in foodservice outlets (at the expense of the retail sector). As well, an increasing growth in population bodes well for the industry. If these predications come to fruition then the foodservice industry can expect the retail chains to attempt to stem the flow of food dollars away from their supermarkets by entering the industry themselves. In other words, competition is likely to increase particularly at the chain level where economies can be realized.



PART THREE INTERVIEW FINDINGS



5. INTERVIEW FINDINGS The interviews crossed both the commercial and non-commercial foodservice sector as directed by the terms of reference and included:

• Commercial restaurants; • Non-commercial hotel/motel restaurants; • Universities foodservice; • And distributors/food management organizations servicing all segments.

The following information is based on the 59 interviews conducted. 5.1 Overview It became evident in the interviewing process, the growing influence that chains have in the foodservice industry whether through stand-a-lone restaurants or through hotel chains. These chains appear to be flourishing at the expense of independents and white table cloth restaurants. The major difference between the food outlets in hotels and the stand-a-lone restaurants appeared to be in the amount of catering that is done. Most of the restaurants do not have separate facilities for large events and thus catering accounts for a small portion of their sales. Some restaurants stated that they conduct no catering at all (e.g. Cheesecake Café - Calgary) or a minimal amount (5% Sherwood House - Canmore). Those facilities affiliated with a hotel however, receive a high percentage of their sales from catering – in excess of 50% (e.g. 55% for R.J. Willougby’s at the Quality Inn – Saskatoon and 80% for the Radisson - Canmore). Some of the restaurants indicated that they prefer not to cater due to the higher costs of labour affiliated with catering. Catering of events is usually at its peak during spring and late fall due to conventions and Christmas season outings. The interviews also revealed that the busy season for foodservice depends on the region. For example, if in areas where there is high tourist traffic (destination places), then summer, hunting season and ski season can be very busy. This is particularly true in Alberta. In many parts of Saskatchewan however, which is often not regarded as a destination place, the busy times appear to be in fall through Christmas and then in the spring. Other points noted were that:

• Regina is a government city and thus foodservice outlets are slow in the summer;

• If the restaurant is in a mall, then the busy times are at Christmas and during the “back to school” season;

• If the restaurant is in Calgary, then the busiest time is during the Calgary Stampede;



• Valentine’s Day is the most profitable day of the year for foodservice outlets; and

• Mother’s Day is the busiest day of the year. Many of the restaurants in both provinces that were not reliant on the tourist trade noted that summer is not busy due to the “barbeque season”. Note that the foodservice industry refers to the period between busy times as the “shoulder season”. The interviewees described the market as having fierce competitive. In addition to the competition that were identified in Table Seven in Section 4.9, other chains or family of outlets were noted and included:

• Earl’s with 53 restaurants, 7 of which are franchises, (also owns Saltliks in Calgary and Vancouver and Joey Tomatoes outlets);

• Penny Lane Entertainments which owns Chicago Chop House, Cowboys, Coyotes, Kaley’s and the Drink Restaurant and Bar in Calgary;

• Canadian Pacific: in addition to owning the Fairmont and Delta chains, CP also owns Legacy Hotels;

• Hy’s Steak House with 7 locations across Canada with head office in Vancouver; and

• Moxie’s with 36 locations throughout Canada. 5.2 Trends The following trends in foodservice were noted during the course of interviews.

• Consumers are becoming increasingly aware of the need for healthier nutrition choices: The implications of this trend are:

Per capita red meat consumption has shown a downward trend at foodservice outlets (in favour of an increased demand for chicken). Distributors noted that since the number of foodservice outlets is increasing, the amount of red meat marketed to foodservice has remained steady or been “marginally more”;

Smaller portions of meat are demanded at restaurants140; Menus are now offering an increasing number of meatless dishes;

and Consumers are turning to home meal replacements as a healthy

alternative to “fast food”.

• Home meal replacements are increasingly affecting the smaller independent restaurants: Two of the smaller suppliers to the industry noted that some consumers looking for convenience are turning to home meal replacements rather than stopping at some of the fast food outlets.

140 This trend has resulted in a niche market for smaller portions being filled by the Australian and New Zealand ranchers who are producing smaller cattle that are more appropriate for the foodservice market. See Section 5.4 for more information.



• The “fast and easy dining chains” are doing well in Western Canada:

Chains that offer relatively fast service and “value meals” (e.g. Moxie’s, Earl’s) are gradually securing market share from the fine dining outlets as well as the independent outlets.

• Trends in new foodservice products begin in the United States: The

larger distributors noted that trends in products start in the U.S. and are usually slower in coming to Canada and in particular Western Canada.

• Supermarkets are beginning to offer foodservice outlets (more than a

counter or cafeteria style): Two interviewees referred to the influence of the U.S. supermarkets in setting up restaurants in order to secure/maintain market share. They identified the two new Superstores in Regina (offering restaurant services) as examples of what Western Canada is likely to see more often in the future. These restaurants offer opportunities for cross-promotion of products offered in the retail section.

• Consumers want a more diverse menu: The influence of television food

shows appears to be having a growing influence on restaurants. Demands for foods that are spicy, healthy and organic appear to be increasing as a result of the shows (perception of the distributors). In response to addressing the trend for a diverse menu, one Edmonton restaurant noted it was changing from Quincey’s, a “chop house” to River City Sakura Steakhouse and Sushi Bar.

Diverse menus also include an increasing demand for “different meats”. Those centers that see themselves as being “cosmopolitan” (e.g. Canmore) have seen a trend over the past five years towards a demand for meats such as bison and other specialty meats.

5.3 Foodservice Customers All restaurants appeared to have a good understanding of their customer. The following prioritized list provides an overview of the description provided of the customers in the two provinces:

• Business/professional (particularly for the lunch crowd); • Tourist (where “300 skiers at a time” must be accommodated) which

includes school tours; • Families; • “Locals” (some restaurants catering to the tourism market are working to

increase the local clientele and one even knew that his clientele was within a 3-7 kilometer radius);

• “Young crowd” – 23-35 years old; • “Blue collar” (provides a steady crowd year round); • Government employees; • Seniors; • “Cosmopolitan”; and



• Hunters. In addition to the description above, some of the restaurants stated that their clientele was the “meat and potatoes crowd”. That description was evident in both provinces. 5.4 Products Most restaurants offer a variety of protein sources with only a couple focusing solely on beef. Without a doubt, the main protein sources being sold by the foodservice outlets are beef and poultry. The interviews revealed that the amount sold of each is about on par. Pork is a distant third in the rankings overall, with lamb and bison an even more distant fourth and fifth. Foodservice offers a variety of ways in which the meat or protein is prepared for both their restaurants and catering menus. Bison and lamb (and to a lesser extent pork) are more likely to be found on a catering menu than a restaurant menu. Note that the meat products used for catering purposes are purchased through the distributors used by each outlet for the restaurant. As well it varies as to how often the menu changes. The two extremes were Calories in Saskatoon who stated that its menu changes regularly (every month) and the Temple Gardens in Moose Jaw who has not changed its menu in five years. Some others change twice a year with others making the change every two to three years. On average, most outlets review and make changes to their menus annually. Menu changes do not mean a completely different product offering but rather a few items added/deleted from the previous menu. Menus for chain outlets (restaurants and hotels) are set by head office. There is latitude in setting the menu however higher up the chain. For example, the finer the dining, the wider the differences in the menu from one chain outlet to another in the same chain (e.g. Fairmont Hotels). Casual dining chains such as Earl’s or Moxie’s believe it is critical to offer the same choices as their clientele expects the same offerings at each outlet regardless of city. The menus do not change often because as one interviewee stated “it’s like MacDonald’s. People expect you to have the regular stuff” even for the white tablecloth restaurants. Therefore it is actually rare that menus are changed dramatically. Almost all restaurants however noted that they offer specials either as an insert into the menu or voiced by the server. The specials are a function of (in order of priority):

• Seasonality and availability of products (e.g. fresh fruits, vegetables, etc.); • “Specials” offered by the suppliers;



• Menu offerings to attract more local customers; or • [For hotels] occupancy levels (the higher the room count, the more

elaborate/extensive the menu). In addition, specials provide restaurants the opportunity to test new items. The most popular ones may find their way onto the set menu during the next change. In addition, catering menus can vary widely from what is offered in the restaurant outlet. Value added products were explored with the interviewees. While some of the smaller distributors such as Prairie Meats and Chef-Redi offer products such as kabobs, marinated steaks, and dry ribs, most outlets are adding the value themselves. One of the larger distributors noted, “marinated meat is an American thing but will come here eventually”.

Beef Except for the odd restaurant, beef is delivered in primal or sub primal cuts. One restaurant chain noted that it purchases pre portion steaks, and a few of the large hotels stated that they purchase sides of beef. The reasons provided for not moving to the trend of pre-portioned items vary and include:

• The preference to cut meat in-house because the perception is that portion cut meats do not meet the quality standards;

• Restaurants have their own meat cutters (The Keg for example has 2-3 “master butchers” at each outlet); and

• It provides an opportunity to age the beef properly. Several of the interviewees noted that while they purchase beef that is aged for 21 days, they wish to age it an additional 14 days prior to serving. Most restaurants offer a variety of sizes of steaks of meat. As well, 6-ounce steaks “for the females” were identified as being in demand. Note that men are more likely to order beef than females. Distributors indicated the size most in demand is an 8-ounce steak. The majority of the restaurants purchased multiple grades of beef depending on availability. Most prefer at least AAA beef while others noted they purchase Certified Angus, Sterling Silver, and AA beef. There was some disagreement about the perception of Certified Angus (or Certified Black Angus). While there is the belief by some that it is very high quality beef, two interviewees believe that the quality is no better than AAA grade and is simply a marketing ploy by the species’ group. This example illustrates the need for distributors and processors to consistently demonstrate a difference between a branded product and its competition.



In addition, one person noted that any beef purchased must follow “the Alberta grading system”. Beef grading in Canada is the responsibility of the Canadian Beef Grading Agency and is based in Calgary. The comment therefore indicates that there is some “education” required of the restaurateurs concerning the system. Branded beef products were also identified. SYSCO is developing a line of branded beef and will be pushing it to the market. One customer noted that they would buy it “based on price” (i.e. not willing to pay a premium for it). The product needs are based on the types of cuts offered on the menus. Some restaurants offer perhaps three different cuts of steak (filet, New York and T-Bone) while others, particularly the “chop houses”, will offer as many as 15-20 different cuts. It appears that the item most in demand for foodservice outlet is the striploin. In other words, the foodservice industry requires mainly the higher value cuts. Other products purchased are tenderloins, sirloin butts and outside flats. The major issue identified by the interviewees as they relate to beef is the source: First, is it is “Alberta Beef”? For the majority of restaurants interviewed in Alberta, they want to be able to state that their beef is “Alberta Beef”. Comments included:

• “The Alberta product is the best. I have worked all over Canada and Alberta beef is the best product out there”.

• Alberta beef is “finished on grain and it’s better”; • “Everyone knows that it is number one”; and • “Saskatchewan beef doesn’t compare to Alberta beef”.

Interestingly, one Alberta steak house offered that while they advertise the product as “Alberta Beef”, some of it likely is not. The representative stated “we know it’s not 100%…some of it is American but it’s stamped Canadian”. In other words, there is a perception that Alberta beef is better than beef produced elsewhere. As well, as a marketing tool, they wish to be able to identify it as Alberta beef on the menu. [Note that if the beef is purchased in Alberta it will be identified as Alberta beef but if purchased from someplace outside of the province, the menu will not identify the source.] Restaurateurs were aware that much of Alberta beef is actually from cattle raised in Saskatchewan. The fact that it is killed in Alberta however allows them to state that it is Alberta beef. Interesting, one distributor noted that cattle can and are being raised in Saskatchewan, slaughtered in Alberta, cut up in Montana and returned to Alberta for sale and still called “Alberta Beef”.



Secondly, is the beef Canadian? Most surprising however is not the issue of whether the beef is Albertan, but rather if it is sourced off-shore. During the interviewing process it became evident that an increasing amount of beef targeted at the foodservice industry is coming from either Australia or New Zealand. The main reason provided was the size of the cuts particularly the striploins. Distributors stated that Canadian cattle are being bred larger. And of course larger cattle produce larger striploins (“you can’t buy a 12 pound and down Canadian striploin” noted one specialty distributor). Chefs/cooks therefore are not able to cut the portion size of steak they require without wasting a good portion of the valuable cuts. A secondary reason provided for sourcing off-shore is the price. Grass fed New Zealand and Australian beef can be as cheap “as half the price” landed in Canada. Most of the grass fed beef was reported as coming from Australia. One distributor stated that he has a machine that “does a good job in tenderizing the meat and makes it acceptable to my customers”. Grain fed beef landed in Canada was reported to be a little less than or about the same price as Canadian (but with a more appropriate size cut for the foodservice industry). Therefore many of the restaurants that do not need to promote Alberta beef are turning to the Australian and New Zealand product. Several distributors stated that there has been a marked increase in the quality of the grass fed beef recently coming from Australia and New Zealand. In most cases, several of the distributors noted that Cargill is importing the beef from overseas and then further distributing it. And one of the smaller distributors stated that in addition to getting the product from Cargill, he is dealing directly with suppliers from those countries. New Zealand and Australian beef is coming to Canada both in sides (fresh) as well as primal cuts (both fresh and frozen). Beef (regardless of source) is delivered both fresh and frozen to the restaurants. It appears that the rural centers, however, particularly those that are a good distance from the distribution centers are receiving their product frozen. Restaurants are looking for a combination of the following characteristics when purchasing beef:

• Quality (depending on the needs); • Size; and • Price:

While, the restaurant industry is very competitive, Calgary appears to be the most competitive where the steak houses were noted as being highly



demanding because they “must serve a great steak” in order to be competitive. As well, the majority of the restaurants stated that they were purchasing their beef from a federally inspected plant. In further checking, many restaurateurs making this claim were in Saskatchewan using Chef-Redi Meats or Prairie Meats, neither of which is federally inspected. However, both of these processors/distributors are buying primal cuts and/or sides from federally inspected plants. Pork Most of the restaurants are using some form of pork but other than those featuring ribs, use it mainly on a catering menu or for specials.

The pork is being sourced in Alberta, Saskatchewan or Quebec (brought in through Mitchell’s Gourmet Foods). Restaurants are sourcing primals, cutlets and ribs. It is being delivered fresh or frozen and with cry-o-vac packaging. Ribs can sometimes be in short supply. One distributor noted that he had to import a container of Danish back ribs last year, as he was unable to source any in Canada. Of any of the protein sources, pork appeared to have more value-added products purchases than other meats including:

• Ham (purchased for catering and buffets); • Bacon and sausages (may be up to 50% of all pork purchases - for

breakfast menus); • Pre cut fillets; and • Marinated pork kabobs.

One broadline distributor noted that pork going to the foodservice industry must be moisture enhanced. Bison Bison represented an interesting discussion point. It appeared that a few of the interviewees believe that bison is a wonderful growth opportunity (particularly as the price is decreasing on the market) but most others spoke to the problems associated with the product. Successful entry of bison into foodservice is particularly noted for the Chicago Chop House in Calgary and the Sherwood House Restaurant in Canmore. Examples of bison usage are:

• The Chicago Chop House offers bison rib eyes and burgers. Up to

10% of their sales is a result of bison products. • The Sherwood House has had an increasing demand for “buffalo”

burgers. Currently they sell between 8-10 five-kilogram cases a week



of burgers. The representative noted that “anything that would improve supply would be appreciated”.

• Head-Smashed-In-Buffalo-Jump sells 10 cases of 4-ounce patties per week (40 patties to a case). As well, they sell a small number of buffalo dogs and 6 oz. seasoned steaks.

• Country Cuisine sells one case a week of bison burgers (30 patties). Other products identified as being sold in various outlets were buffalo dogs and bison chili. As well, some restaurants noted that they have offered bison as specials or for banquets if requested.

Note that both the term bison and buffalo were used to identify the products. For the most part, restaurateurs and distributors are unhappy with bison for various reasons including:

• The toughness of the meat (several restaurants have discontinued it because of customer complaints);

• The lack of consistent supply and quality (includes lack of grading of the product); and

• The lack of professionalism of the suppliers. In other words, the lack of consistent quality and supply of the product has hurt the bison industry as a whole. In order to have a competitive product in the foodservice industry, producers/processors of bison will need to address these issues. The lack of professionalism was noted in two areas. First, many buyers noted that there are too many bison producers trying to sell to the individual restaurants. The restaurateurs stated that it is not possible to talk to all of the suppliers. Secondly, producers are reported to be selling to distributors and also approaching the distributor’s clients. Distributors therefore do not wish to deal with the producers under those circumstances.

Some sympathy however was noted for the producers as most people are aware of the difficulty in selling bison currently due to over supply and inconsistent quality which has resulted in low prices. Lamb Lamb is not a big seller in foodservice. The main issues related to lamb were identified as:

• Perception of taste; • Size of the racks (in general, the smaller sized racks from New

Zealand/Australia are preferred over the larger Canadian racks); • Ability to source only specific parts of the lamb; and • Lack of promotional activity.



Some interviewees spoke to the attitude of prairie customers towards lamb. As one person stated “it is a hold over effect from World War II when everyone had to eat mutton”. The implication is that lamb is equated with mutton and people do not want to eat it. A small amount of lamb is being purchased from Alberta (through the plant at Innisfail) or New Zealand/Australia (although one restaurateur stated that he is sourcing lamb from Treen’s in Swift Current). Only one interviewee stated that the New Zealand lamb was too large. All other interviewees stated that the New Zealand/Australian lamb was more appropriately sized for the foodservice industry (small racks). As well, two interviewees noted that the New Zealand/Australian lamb is cheaper.

The lamb coming from New Zealand/Australia is vacuum packed and frozen. Saskatchewan lamb producers have approached few buyers. Comments made were that the Canadian producers want the buyers to buy the entire lamb. The foodservice industry however will only take specific cuts (higher value cuts). The buyers have directed the producers to approach the plant at Innisfail. The final concern expressed about lamb was that producer groups do little to promote the product therefore consumers are not asking for it. Producers must be mindful that purchasing decisions in the foodservice industry are based on demand rather than supply. If consumers perceive that lamb is not palatable, then the restaurateurs will not buy it. This indicates a need for the lamb producers to undertake marketing activities that will entice consumers to demand the product. Restaurants that do offer it mainly want boneless legs and racks.

As noted above, most of the meat products that are being delivered are utilizing cry-o-vac packaging. Two interviewees (both in Regina) expressed concern about that specific type of packaging. From their perspective the main issue is that the product has not been aged, but packaged immediately. The experience has been in both instances that the meat has “bled” in the packaging. As one stated, “The biggest scam of the processors is the cry-o-vacing. They don’t age it and hang it… they cut it and package the meat and it bleeds in the package and the consumer pays for this”. While cry-o-vac packaging is intended to allow for aging of the beef, one authority in the meat industry stated that meat in fact does not age as well using this form. 5.5 Product Usage Many restaurants were vague about the amounts of red meat they use in their operations. Examples of restaurants that would provide some information are outlined in the following table. As is evident, the Saskatchewan based restaurants were more forthcoming than their Albertan counterparts.



Table Nine: Red Meat Usage in Foodservice

Outlet Usage Caesar’s (Calgary) Uses $15,000 per week of meat (affiliated locations use $5,000 per

week). Calories (Saskatoon) Beef rib eyes – 10-12 per month; Country Cuisine (Battleford)

Spends $1,500 - $2,000 per week for all meat products; Uses 1 case of bison burgers (30 patties) per week; Has $1M in sales per year.

Chicago Chop House (Calgary)

Beef burgers – 60-80 per week; Beef rib eye steaks – 40-50 units per week; Beef sirloins and fillets – “a couple hundred sirloins and 8 & 12 ounce fillets”.

Hawood (Waskesiu) Beef striploins – 500 pieces for the season; Beef roasts – 1,800 kg per season; Bison – 200 kg per season; Lamb – 70 kg per season; Pork - 320 kg per season.

Lakeshore (Regina) Beef striploins – 50 kg per week; Beef T-bones, short – 30 kg per week; Beef fillets – in excess of 50 kg per week; Pork cutlets – 4 kg per week; Pork ribs – 15 kg per day; Lamb racks – 1- kg per week.

Melissa’s (Banff) Beef tenderloin – 23,000 kg per year; Beef sirloin –14,000 kg per year; Sales of $3M per year.

Tannin’s (Prince Albert)

Beef tenderloins – 3-4 per week; Beef striploins – 1-3 per week Pork tenderloins – 6-12 per week; Pork loin – 1 per week; Lamb racks – 4-12 per week.

One of the large distributors added that the independent restaurants want 75% primals and 25% steaks while the chains want the reverse, 75% steaks and 25% primals. It was noted that the big issue for the chains is consistency of product which the large distributors believe can be delivered through branding. 5.6 Pricing Except for the odd person, most interviewees were not prepared to discuss pricing of the product. One of the reasons is that depending on volume, prices can be “haggled out”. The other reason provided was that pricing fluctuates in the market. It was identified however that buyers could be offered at least one of three types of deals:

1. Discounts: A representative of a major hotel stated while they can receive deliveries of meat daily, he orders only once a week in order to secure his volume discount of 10% on meat orders that are between $3,000-$4,000. The distributors confirmed that various “deals” are made with suppliers based on volume or whether the supplier wishes to penetrate the market (if undertaking a market penetration strategy, then prices will be cut and product sold either close to cost, at cost or at a loss).



2. Cash back: Another representative stated that they “receive cash back on

certain products and a free case of this and that”.

3. Sale prices: Restaurateurs are offered “sale prices” if distributors or suppliers have an oversupply of a product. These items usually end up on the menu as “specials” for the day or the week.

It was pointed out that pricing is very competitive as restaurants are hard pressed these days to raise menu prices without losing a significant number of customers. The prices given by just a few people were:

• Beef prime rib - $120 for 8 kg; • Beef fillets - $89-$90 for 4 kg; • Beef “prime New Yorks” - $100 each for a 5-6 kg. piece; • Beef tenderloin - $44 per kg; • Bison sirloin cubes - $10 per kg; and • Marinated lamb kabobs - $13.20 per kilo.

Other comments included:

• Australian tenderloins are $10 per kilo cheaper than Canadian tenderloins; • New Zealand tenderloins are $8 per kilo cheaper than Canadian tenderloins; • New Zealand lamb is half the price of Canadian lamb; and • AAA beef is double the price of AA and Certified Angus in quadruple the

price. “Centre-of-the-plate” pricing was also discussed with the restaurateurs. Centre-of-the-plate is the cost per portion of the protein item (or main feature) on a plate of food. First, each representative was asked what percentage of their costs was attributable to food. The average response was between 30-33%. Of all outlets interviewed, Boffins in Saskatoon has the highest cost of food as a percentage of overall costs at 45% while the Elephant & Castle (Calgary) was the lowest at 29%. The center-of-the-plate or protein then was identified as anywhere between 50%-88% (average being about 63%) of the total cost of food depending on the level, quality and distinctiveness of their garnishes. Boffins and Calories represented the lower end, while the steak houses in Alberta represented the higher end. 5.7 Promotion Promotional assistance from producers and processors to the restaurants is limited. For the few people who responded that they had some support, it was most often in the form of tent cards for tables. The Alberta Cattle Commission (for cattle) and Mitchells’ Gourmet Foods (for Boss Hawg Burgers) provide tent cards and posters.



The Alberta Cattle Commission also provides assistance in running promotions and advertising. In addition, the commission has in the past offered an incentive program for servers where trips are offered to the staff members who sell the highest volume of Alberta beef. This represents a good opportunity to increase uptake during specials and promotions. The Alberta Bison Commission was also singled out as assisting in advertising. One distributor also noted that Thomas Cook restaurants place the nutritional content of bison on each table in order to promote the product. Several interviewees spoke about the lack of promotion done by lamb producers. One distributor however expressed hope for the future of lamb since he believes that the U.S. Department of Agriculture has just approved a check-off for lamb producers that will raise US$3.5M to be targeted at a marketing campaign. 5.8 Suppliers Distribution – Foodservice Outlet Perspective The restaurateurs for the most part were open about their sources of meat. The main distributors identified in Saskatchewan were:

• SYSCO/Serca: • Centennial Meats; • Prairie Meats; • Chef-Redi Meats; and • Sunspun.

In Alberta, the most often identified distributors were noted as:

• Bridge Brand/Gordon Foods; • SYSCO/Serca; • Western Quality Meats; • Centennial Meats; • Intercity Meats; and • Edmonton Meat Packing Ltd.

As is evident in Table Ten below, foodservice outlets even the independents use the services of several suppliers, even for the same commodity (e.g. two or three suppliers for beef). Once the outlets are satisfied that a distributor can supply them with the quality, quantity and delivery service requirements (need to meet these demands just to get on the supplier list), then the issue is primarily price. Some foodservice outlets, and in particular the chains (both hotels and restaurants), often enter into a contract with the larger distributors. For example most chains are either using SYSCO or Gordon Foods (referred to by all interviewees as Bridge Brand). The contract is based on expected volumes. Any



foodservice outlet that exceeds those volumes can source product from other suppliers for reasons such as a better price, quality, etc. Or the contract will be for a minimum order thus allowing outlets to use other sources. The minimum order is based on a percentage of sales from the previous year and therefore obviously varies by outlet. In the case of organizations/hotels/food chains, etc. (large volumes purchased), it is often the practice for the buyer to choose the end supplier and then direct the distributor to use that supplier. For example, A&W will direct Gordon Foods (the distributor) to use Centennial Meat. Once the deal has been made, Gordon Foods then will take responsibility for purchasing and ensuring that the correct volumes are delivered at the right time. This process happens only if a foodservice outlet is prepared to go into contract with a distributor. One chain has an interesting method of determining whom to source. The Delta chain (foodservice purchasing managed by Avendra) holds annual meetings for all the chefs. Suppliers are invited to come and make presentations. At that point, the chefs decide on the suppliers to be used and direct Avendra to use those suppliers. Contracts are usually entered into anywhere from a six month to 2 year term. The smaller independents often do not work on contract and some interviewees stated outright that they would refuse to do so. Their refusal to go into contract however does not preclude them from using a variety of sources including the larger distributors. The following table provides an overview of the suppliers of meat as identified by the foodservice outlets. The list is as extensive as the restaurateurs would co-operate in identifying their sources if known.



Table Ten: Foodservice Sources – Buyer Perspective Foodservice Outlet Distributor Source

Central Saskatchewan Alex’s Steak House (Humboldt)

Centennial (beef, bacon & quarters), Sunspun (pork)

Alexander’s (Saskatoon) Prairie Meats Boffins (Saskatoon) Prairie Meats, SYSCO Calories (Saskatoon) Centennial (for Sterling Beef) Goes directly to

producers for some meats

Country Cuisine (Battlefords) Prairie Meats, D&L Gourmet Meats, SYSCO

Hawood (Waskesiu) Centennial, Prairie Meats (bison), SYSCO, Drake Meats (bison)

Jackfish Lodge SYSCO, Prairie Meats (bison), Maple Leaf, Honeyman’s, Premier Meats, Sunspun

Cargill

John’s Prime Rib (Saskatoon)

Centennial, SYSCO, Pine View Farms (lamb)

Marlborough Inn (Prince Albert)

Centennial Meat, P.A. Meat Markets, Chef-Redi Meats and Prairie Meats (for dried ribs, bison & steaks)

Mykanos (Saskatoon) Centennial (beef), Chef-Redi (beef & pork), Sunspun (lamb), South River bison Company (bison)

R.J. Willoughby’s (Saskatoon)

SYSCO/Serca, Centennial, Prairie Meats, Chef-Redi

Spiro’s Steak & Pizza (Lloydminster)

Prairie Meats, SYSCO

Station Place (Saskatoon) SYSCO (beef), Maple Leaf (pork), Prairie Meats (pork), Lamb (SYSCO), Kobie’s Meats

XL Meat (beef), and New Zealand (lamb through SYSCO)

Tanin’s Centennial (beef), Prairie Meats (pork & lamb), South River Bison Company (bison)

Temple Gardens (Moose Jaw)

Centennial (beef), Western Quality Meats, SYSCO, Norm Nugland – Assiniboia (for bison)

Southern Saskatchewan Akropol Dining Room (Swift Current)

Sunspun (beef), Centennial (pork & lamb), Treen’s (beef & pork)

Diplomat (Regina) Centennial (beef), Drake Meats (bison)

Lakeshore Restaurant (Regina)

SYSCO, Sunspun, Centennial

Memories (Regina) Centennial Meats Mediterranean Bistro (Regina)

SYSCO/Serca New Zealand product all sold through Frank Meats (Nebraska)

Southern Alberta Caesar’s (Calgary) Centennial Packers Chicago Chop House, Cowboys, Coyotes, Kaley’s, The Drink

SYSCO Edmonton Meat Packing Ltd., Rocky Mountain Meats

Earl’s Intercity Meats



Elephant & Castle, Alamo Bar & Grill, Rainforest Cafe

Bridge Brand/Gordon Foods Bruss Meats, South Dakota (part of Tyson Foods)

Head-Smashed-in-Buffalo-Jump

Windy Ridge Buffalo Ranch – Lethbridge (bison), Canadian Wholesale Club (beef)

Hy’s Steakhouse Centennial (beef) and SYSCO (pork)

Keg Restaurants Centennial Meats in western Canada and McGregor’s (Ontario)

Kelsey’s Restaurants Bridge Brand/Gordon Foods Melissa’s Restaurant (Banff) Centennial, Western Quality

Meats, Capital, Intercity, Prepack Meats

Moxie’s Centennial (beef), Fletchers (pork)

Quincey’s on 7th (Calgary) Master Chef Meats of Calgary (beef), Billingsgate (pork), Bridge Brand (lamb)

Reef N Beef Western Quality Meats XL Meats Saltlik’s (Calgary) SYSCO Intercity Packers Sherwood House (Canmore) SYSCO/Serca, Prairie Buffalo –

Taber (for bison) Edmonton Meat Packing Ltd.

Smuggler’s (Calgary) Bridge Brand/Gordon Foods (SYSCO for bison only)

Northern Alberta Chances (Edmonton) Intercity (beef & bison), Barhead

Custom Meats (pork)

River City Steak & Chop House (Edmonton)

Rocky Mountain Game Meats (beef), Calahoo Meats (pork), Bridge Brand (lamb)

Sawmill Restaurant Group Edmonton Meat Packing Ltd. (beef, lamb, bison), pork from “various suppliers”

Hotel Chains Delta Hotels (account managed by Avendra Group)

Rocky Mountain – Airdrie (for bison), North Country Bison (for bison), SYSCO, Gordon Foods, Centennial Meats,

XL Meats

Fairmont Hotels (account managed by Avendra Group)

SYSCO XL Meats

Hyatt Hotels (account managed by Avendra Group)

SYSCO

Radisson Hotels Centennial, Western Quality Meats, SYSCO

In addition to the distributors, two foodservice management groups are used on the prairies.

1. The Avendra group manages all foodservice needs for the CP, Fairmont, Legacy, Hyatt and Delta Hotel Chains; and

2. Aramark, the largest global foodservice management group who manages three of the four universities interviewed for this project (see Section 5.9).



In these instances, a person from the management group is assigned the task of working closely with the client (and often onsite). The person then becomes the buyer for the chain or organization. The foodservice outlets get delivery of the product anywhere from once to three times a week. Since almost all indicated that they have some on-site storage (particularly for further aging of the meat), storage did not seem to be an issue. The frequency of delivery appears to be a function of:

• Volume requirements on a daily basis (may fluctuate by season); • Volume discounts (sometimes reducing the number of deliveries in order to

get the discount); and • Distance from the distribution center (e.g. outlets a significant distance from

the center will receive product usually once week). Except for bison, most buyers are purchasing product from trusted and established processing businesses. In some cases, interviewees noted the length of time they have used a distributor (e.g. up to 24 years in one instance). In addition, most foodservice outlets prefer not to deal with small suppliers/producers. Since menus are printed only occasionally, they need to have a trusted supply of product. As well, a few of the interviewees spoke about the lack of quality from many of the small suppliers. Calories was the only restaurant identified that wishes to work with small producers. This outlet aims to move towards natural or organic products. It was interesting to note however, that one of the head chefs from the Radisson makes it a point to visit ranches to see how cattle are handled. While he cannot deal directly with the producers, he believes it important to understand how the animals are handled and what processes affect the quality of the meat. The most often identified source of meat was Cargill. Either the outlets believes that their distributor is sourcing product from Cargill or they suspect it. In fact some of the restaurants contacted about the use of beef and lamb from Australia or New Zealand believe that Cargill is the Canadian importer. Distribution – Distributor Perspective Competition in the distribution of foodservice supplies is fierce. As one person who has been in the business for 23 years stated, “It is an ever changing industry and getting tougher … it’s no fun anymore”. The smaller processors feel squeezed by the larger processors who wish to penetrate the market. The smaller ones must rely on niche products and markets and “the market for the smaller accounts is getting smaller”. It was noted that SYSCO and Sunspun are trying to secure the small rural accounts as well as the larger accounts.



The following table provides an overview of information on the major distributors in Saskatchewan and Alberta.

Table Eleven: Foodservice Distributors – Saskatchewan & Alberta Distributor Comments

SYSCO/Serca Distribution Centres in Regina, Calgary & Edmonton; Developing a SYSCO brand for AA, AAA, Angus & Reserve beef; Must be aged 21 days at distribution center; Items are cry-o-vaced in items of 2 primal cuts and boxed; Minimum orders of $1,000 required; Beef supplied by Cargill and Lakeside (SYSCO person in each plant); Source fresh hamburger in 4 and 10 pound tubes from Lakeside; Edmonton Meat Packing Ltd. process the SYSCO label hamburgers; Uses Harvest Meat for some products; In peak times, sells 50 frozen and 50 fresh outside flats in Saskatchewan (sirloin roasts); Pork supplied by Maple Leaf (because of high standards); Source pork side ribs, buckeyes (150 cases/week of 15 kg boxes and used for stir-fries in Chinese restaurants); Use 500 – 5 kg boxes of bacon per week in Saskatchewan; Use North Country Bison Meats and Rocky Mountain Games, both in Alberta for Bison; Lamb is frozen from New Zealand – good price and consistent quality (order racks, loins, chops, boneless lamb legs every 2-3 weeks); Some fresh lamb purchased from Canex in Richmond B.C.; Have own trucks for distribution.

Gordon Foods/Bridge Brand

Distribution Centres in Calgary, Edmonton, Red Deer, Regina and Saskatoon; Chains are 50% of the business – “Street trade” the other half; Source product from the packing houses; Offer 30 different cuts from a 5 oz steak to 42 oz porterhouse as well as different grades (e.g. 6 oz. New York in 4 grades); “Use many suppliers”; Sells in excess of 45,000 kg of beef per week mostly in primals and steaks; 50% of pork sales are bacon and sausage (“3 players for the primals and bacon is contracted out); Uses approximately 2,500 pounds per week of lamb – supplied from Innisfail and “one off-shore”; Uses own trucks for distribution.

Sunspun (division of Loblaw’s)

Foodservice distribution centers in Yorkton and Edmonton; Make purchases on volume and use the buying power of Loblaw’s; Beef suppliers are Westbrook, Cargill, Edmonton Meat Packing Ltd. and Centennial Meats; Pork supplier is Mitchell’s; Supplies Subway chain, some local chains and “the street trade”; Uses 100 cases of inside rounds (3 pieces of 70 lbs to a case) per week for Saskatchewan and Manitoba; Trying to move their clients to portion cuts.

Centennial Meats Has eight plants in Saskatchewan, Alberta and British Columbia; Orders beef sub primals – 35% from New Zealand (grass fed) and grain fed from Australia; 60% of product are middle cuts; “Can go through a container of striploins in a week”; Source pork from Maple Leaf, Mitchell’s, Britco (Vancouver) and Oleymel in Red Deer – spare ribs, back ribs, boneless pork legs,



loins and bacon; Sources lamb legs from Innisfail and racks from New Zealand Lamb Company (offices in Toronto and Calgary); Uses Kindersley Transport to ship product.

Chef-Redi Meats Distribution Centre in Saskatoon to service entire province; Sources meat from Cargill, Excel (brought into the province by Mitchell’s) and Lakeside and then processes it as required on site; Lamb sourced from Canada West in Innisfail; Brings in off-shore beef through Cargill; Sources Quebec pork (price issue) from Mitchell’s (processes it into breaded cutlets and dry ribs); Does once a week delivery and sometimes every second week; Has own trucks for Saskatoon and north but uses “common carrier” for the south (charges a fuel surcharge).

Prairie Meats Half to two-thirds of business targets foodservice industry; Has 4 full time sales people to cover Saskatoon and North “with a few distributors in Regina and a distributor in Prince Albert to do the camps (seasonal); Sources beef from Excel, Edmonton Meat Packing Ltd., Cargill and Lakeside; Cargill imports Australian meat for Prairie Meats; Sources some lamb from Innisfail (legs and loins) but most lamb sourced from Australia and New Zealand through a Vancouver broker (uses about 200 kg per week); Sources boneless bison from Northwest Packers in Edmonton; Sold in excess of 68,000 kg of middle cuts of bison to foodservice in 2001; Source prime ribs from Better Beef in Ontario; Sources pork (hips, middle cuts & burgers) from Oleymel, Maple Leaf and Mitchell’s; Makes own hams; Uses 10,000 kg/week of pork tenderloin (25,000 kg of pork in total).

To become a supplier to SYSCO the home office requires:

• Samples of product and pricing; and • Proof that the processing plant is HACCP approved.

Gordon Foods added that meat supplies must come from a federally inspected plant. Distributors use a bidding process to source meat on a weekly basis. They seem to work with a group of suppliers whom they trust and can be assured quality. After that, it is all price. However, one distributor noted that “price will get you in the door but get you out just as fast”. In other words, suppliers must be able to meet all the standards set, some of which may not be communicated. One distributor also added “we’re cautious about switching suppliers”. SYSCO noted that the company holds its own foodservice show each year and in each province. The company invites its National Alliance Partners (large suppliers who produce the SYSCO labels) to show their wares. Customers are invited to attend. The Partners then attempt to secure the customers business by offering rebates directly to them such as $1 per case rebate after a certain volume is achieved. In other words, any special deals or discounts are made directly from



the supplier and not the distributor. The next show is expected to be in Regina in April 2003. 5.9 Universities While universities are normally classed as being non-commercial, four universities on the prairies were examined to determine their foodservice needs and how they are met. Representatives managing the foodservice division of the following universities were interviewed:

• University of Saskatchewan; • University of Regina; • University of Alberta; and • University of Calgary.

The Universities of Saskatchewan, Regina and Alberta have recently chosen to hire the services of Aramark, the largest global foodservice management company. Its specialty is to provide management services for institutions. An Aramark representative is located and works full-time at each of the institutions. In fact, they term their relationship with the universities as “a true partnership”. The benefits that large foodservice management companies bring are:

• The buying power (large scale purchasing from national and international suppliers allows for volume discounts passed onto the institution and thus keeps the costs down for students);

• The ability to introduce new processes, products and concepts (Aramark has ongoing seminars, conferences and networking opportunities for its team of managers); and

• Institutions keep focus on “their business” (e.g. in this instance, the focus on education).

At this point, the University of Calgary has chosen to keep foodservice management in-house. The representative believes that this is the best method for them to address their needs. And it is a large one. The University of Calgary has one of the largest university catering outfits across Canada as a result of the legacy of buildings from the Olympics. Its catering sales are approximately $2.4M from conferences, weddings, fundraisers and corporate parties. While the other universities noted that they do some catering, it is currently limited and represents “an opportunity” and “a growth area”. Aramark is working with the institutions to increase the catering services particularly during the slower times (April through to the end of August). It was evident from the interviews that the managers clearly focus foodservice efforts on the students rather than faculty and staff at the universities. And faculty clubs are independent of university foodservice management. Even though the University of Calgary was the only school to classify itself as an urban campus (e.g. students can walk in multiple directions off campus and within



a short period of time find another place to eat), all campuses noted the students are spending more of their time off campus than they did in the past. The reasons vary and include:

• An increased number of students are attending school part time and therefore are not on campus for longer periods of time (or meal time);

• There is an abundance of employment in the foodservice industry itself for students in various cities and therefore the students eat at their places of work;

• For some students, there is increased affluence (particularly noted in Alberta where representatives stated that many “parents are footing the bill and don’t want their children to eat like they did when they went to school”, i.e. macaroni and cheese).

In order to keep the students on campus, foodservice are offering more “specialty bread and deli items” as well as national chains (e.g. Starbucks Coffee, Pizza Pizza, etc.). In addition, the universities have noticed an increased demand for vegetarian meals. It appears that on campuses, vegetarian meals as an alternative is growing and affecting sales of meat. But as one representative noted, the consumers demanding these meals are not true vegetarians but rather “AC/DC vegetarians … they flip flop if the dish looks good”. The following table provides an overview of the universities, its size and foodservice facilities:



Table Twelve: University Foodservice School Enrolment Residence

Places Foodservice

University of Saskatchewan

19,265 60 10 retail food outlets plus a central dining facility (Marquis Hall, Itza Pizza, Sub Shoppe, 6 Buffeterias) [other outlets owned by Student’s Union]

University of Regina 12,000 1,500 8 food establishments (Common Ground Coffee House, Grille Works & World’s Fare, Pizza Pizza, Mr. Sub, Coffee Stop, Robin’s Donuts, Café Des Lys, Lab Café)

University of Alberta 31,000 19 different locations including residences (CAB Café, Tim Hortons, Tuck Shop, Checkers, Lister Market Menu Line, The Marina, Pizza Pizza, Corbett Hall Café, Courtyard, Potpourri, Gavel, Java, Mr. Sub, Kettles, Le Café St. Jean, Nosh Locker, Orange County, Vital Signs, Burger King)

University of Calgary 26,000 1,560 + 250 family units

16 retail food operations (Baron’s Court, Beny’s Cappuccino Bar, The Soup Link, Club Medibles, First Cup, Love Me Tenders Chicken, Primo Italian Bistro, Scrufield Hall Cafeteria, Smash Hit Subs/Hot Stuff Pizza, Season/Starbucks Coffee, Taco Time, Doucette Library, Alberta Room Cafeteria, Legacy’s Coffee House)

In all cases, SYSCO is the distributor of choice. Calgary has made its own deal with SYSCO but is also the source for Aramark. The process for meat purchases is that Aramark or the University of Calgary will make “deals” with the processors and then instruct SYSCO to source those processors (but they can only use suppliers approved by SYSCO). In all cases, there are multiple suppliers. There appears to be a core group of processors who have proven their ability to supply quality products with volumes required. The universities have a common bid process. The “meat call day” is usually Tuesdays where processors are faxed a list to fill. They submit the quality they are able to supply and the prices. The foodservice manager then chooses the supplier(s) for that week. The main goal is to keep costs as low as possible. Once the deal is struck, all purchasing goes through SYSCO. The representatives indicated that they wish to support provincial and local enterprises. The following table indicates the suppliers used by the various universities.



Table Thirteen: Suppliers to Universities University Suppliers

University of Saskatchewan Main supplier – SYSCO Other suppliers:

• Prairie Meats • Mitchell’s Gourmet Food • Centennial Meats • Pacific Fresh Fish

University of Regina Main supplier – SYSCO Other suppliers:

• Centennial Meats • Schneider’s • Maple Leaf • Mitchell’s Gourmet Food • Fleetwood

University of Alberta Main supplier – SYSCO Other suppliers:

• Centennial Meats • Cargill

(“no supplier given exclusivity”) University of Calgary SYSCO only (due to their buying

power) but use SYSCO’s contacts with:

• Schneider’s • Kraft • Unilever • Lilydale

In addition, foodservice managers are required to use the distributors of the national/international chains on campus. For example:

• SYSCO supplies all Taco Bell and Subway; • Bridge Brand/Gordon Food supplies A&W, Mr. Sub; • Dawn Food supplies Robin’s Donuts; • Sapputo supplies Pizza Pizza; and • Starbucks supplies its own outlets.

Managers consider the following capabilities for suppliers over and above the criteria for fulfilling SYSCO contracts:

• Business reputation; • Either a federally or provincially approved facility; • Ability to deliver requirements; and • Evaluation of samples (test for shrinkage, quality, hold times and price).

The representatives noted that branding is being very important in the marketing of meat “as it sets quality and consistency”. All representatives stated that SYSCO was now branding meat products and that “they have a center pork chop which is very good”. Other brands noted were Mitchell’s (where “80% of their product is branded”) and Centennial (where “80% is private label burgers so you can trust them”).



The Aramark manager at the University of Saskatchewan was the only representative to agree to provide specific amounts of meat purchased over a one-week time frame. (See Appendix C for an example of meat requirements for a typical week during a school term). The following table however outlines the information on products and amounts they were all willing to share.

Table Fourteen: Product Usage at Universities Beef Pork Lamb Bison

U of S 263 kg beef per week almost half of which is ground beef. AAA and AA grades (price dependent).

500 kg of pork per week – about 40% being bacon.

Use for catering at the President’s house 15-20 times a year (20 lbs for each occasion)

Patties about 3 times a year for special events (60 lbs in total)

U of R AAA beef. Frozen flats and sliced deli meat. 2/3 menu beef and chicken.

Ham, roast pork but must respect ethnic cultures that will not eat it

Only for specific functions and usage is minimal

Never use (too expensive and no demand)

U of A 15,000 kg of patties in a school week. Boxed fresh sirloin roasts. End cut frozen steaks. AAA and AA grades.

End to end frozen chops, loin. Fresh ham for banquets 4,000-5,000 kg per school year

Frozen, diced lamb for stew only Served once every three weeks but only 50-60 portions at a time

For catering only. Price prohibitive. Served only once. Discourage people from ordering.

U of C – All meat sourced through Sysco

35% burgers. 65% solid meat (inside rounds, prime ribs – pre-cut). All Alberta beef, but cut in Montana, grade AAA.

Chops, centre cuts, ribs Source from anywhere

Use once a week in menu rotations Legs and chops Source from Alberta or New Zealand

Small amounts Used in catering when asked for. Burgers, hips, inside rounds. Sourced on the prairies.

Note that the University of Alberta only insists on “Alberta Beef” for its conference market. The school often uses American beef because of the lower prices. All schools get frequent delivery (3 to 4 times per week and “sometimes up to 5 times depending on usage”). Any new products and suppliers are tested from May to July and if deemed appropriate, then those products or suppliers will be added to the menus for the next term. Menus are set well in advance and foodservice outlets are always looking for turnover in recipes. One representative stated that he would prefer if suppliers offered ideas on new menu offerings (“but nobody ever does that”). In addition, they are always on the look out for specials offered by their suppliers and will make changes to menus if cost cutting can be achieved.



The representatives also noted that any value adding of products (e.g. marinades, portion cuts, etc.) is usually done on site. While pricing is critical, universities must also deal with unions. If an introduction of a product meant the reduction of labour then it likely would not be accepted. When asked about the prices paid for meat, all representatives stated they were unable to do that “as everything is negotiable”. Information they would provide is:

• A current supplier provides a $.50 rebate per kg based on a certain volume purchased (“all a function of volume” but would not say what that volume was);

• Food costs for universities are about 40% food (protein as high as 85-90% of that cost) and 40% labour; and

• Protein cannot cost more than $1 to $1.10 per serving as opposed to the $3 - $3.50 foodservice industry average.

One representative added that suppliers often will not look at universities or institutions because the portion costs are too low. In order for a supplier to get into the market, the representatives summarized:

• Suppliers must have the ability to deliver daily; • Quality product is a given; • “You must be so unique in order to get into this market because of the

competition”; and • “As long as your are on SYSCO’s approved list, it all comes down to dollars

and cents”. And finally each representative was asked about their attendance at trade shows. The Aramark reps stated that they have their own in-house training but sometimes go to Hostex and the National Restaurant Association (NRA) events. In any event, Aramark sends people to all shows and then forwards the information to their managers at training sessions. The representative from the University of Calgary stated that he attends both Hostex and the NRA in Chicago (usually in May) for ideas. He prefers the NRA as the ideas are “newer and wider” than at Hostex “and you can see the trends. He also added that there is an increasing representation of Canadian schools at the NRA and that “all the big schools in the States are in attendance”. Note that it would be useful for processors to attend the Hostex and NRA shows in order to understand the latest trends and product offerings as well as ideas on how to better service the industry. 5.10 Issues The three major issues relating to the foodservice industry on the prairies are:

• Consumers are increasingly price conscious: Consumers who are pressed for time and wish convenience are eating out more often but are



concerned about the amount of money spent at the meal occasion. Therefore, the influence of fast casual types of restaurants, particularly the chains (e.g. Earl’s, Moxie’s), is increasing. This level of outlet is reluctant to increase menu prices and is making supply decisions based on price (e.g. will settle for AA rather than AAA if the price is right).

• There is increasing competition from off-shore producers of beef and

lamb: The foodservice outlets require meat that can be cut into 6 and 8-ounce steaks. Except for the high end restaurants, they are turning to beef from Australia and New Zealand (and racks of lamb) because the smaller size is more appropriate for this industry.

• There is increasing competitiveness and power of the larger players:

Distributors are consolidating and fighting for market share. It appears that the large distributors are entering into pricing penetration strategies and thus making it increasingly difficult for the smaller distributors to compete.

5.11 Critical Success Factors The following factors are critical to success for any meat suppliers attempting to service the foodservice industry:

• Supplies must provide a consistent quality of meat: The processing business is very competitive. In order for a small processor to break into the market, she/he must know the specifications set by each customer and meet the specs on a consistent basis. Note that the level of “quality” may be different for each client (need for various grades, trim, etc.).

It appears that for the higher end business in Alberta, quality is translated into the need for AAA and higher grades of “Alberta beef”.

• Consistent quality is a given, pricing is key: To make inroads into this

industry, the supplier will be required to outbid (underbid) the competition. Margins are decreasing and the small players are losing market share.

• Suppliers must be able to supply volumes required: Many restaurateurs

and distributors shy away from using small suppliers as they cannot be assured of a consistent supply of product.

• Suppliers must be service oriented: Interestingly, the reason provided by

many of the buyers for dealing with a specific group of suppliers/distributors was that the sales people called them regularly to discuss their needs. In other words, the sales people had invested in building a relationship with the customers. That valued relationship is built on trust and integrity (having the ability to supply what was promised when promised).

As well, service oriented requires supplying the product that the customer wants. Currently, distributors indicated that the Canadian producers are not producing the size of cattle appropriate for the foodservice industry. In most cases, the beef is too large for steaking.



• Suppliers must be able to deliver more than once a week: While some

of the outlying rural areas receive delivery only once a week, they want the ability to be able to get products more frequently if required. Outlets close to distribution centers certainly want and need the ability to have frequent delivery. In the foodservice industry, demand fluctuates. Often it is difficult to have a long lead time (supplies may need to be delivered with only short notice).

• Product must be sourced from either a federally or provincially

inspected plant: Surprisingly, many of the interviewees believe that their product is sourced from federally inspected plants, but in many cases it is not. Due to the increasing concern over food safety, the buyers want assurances that the product is safe.

• Suppliers must not go into competition with their buyers: Producers

(for the specialty products – bison, lamb) must choose whether to sell to restaurants or distributors/processors. By attempting to sell to both, distributors/processors see the producers as the competition and therefore refuse to purchase from them.



PART FOUR MARKET VIABILITY & CONCLUSIONS



6. MARKET VIABILITY The ultimate goal of this project was to identify opportunities, if any, for provincial red meat processors and/or producers in penetrating the higher end foodservice market in Saskatchewan and Alberta. The following section provides a conclusion of the findings of the project as well as identification of potential opportunities. 6.1 Conclusions The foodservice industry on the prairies as examined for this report will be very difficult to penetrate and make substantial gains. Any processing facility or producer wishing to penetrate the industry is faced with the following situation.

• Consumers in the two provinces are classed generally as being the “meat and potatoes” crowd. However there are differences between the provinces. Alberta has three major market segments: tourists, the business crowd and the “young crowd” (23-35) and to a lesser extent “the locals”. Saskatchewan on the other hand mainly serves government, the business crowd and “the locals”. While many consumers are turning to the chains, the high end restaurants that target specific groups (e.g. business crowd or tourists) are still doing well and are using the services of the larger distributors.

Until Saskatchewan is deemed a destination place for tourists, it likely will not have the level of high end restaurants that Alberta enjoys. In other words, generally Saskatchewan foodservice consumers are more price sensitive than their Alberta neighbours.

• The foodservice market on the prairies is extremely competitive. The

market is mature with growing competition from the chains classed as casual or licensed (e.g. Moxie’s, Earl’s, Tony Roma’s, etc.). Smaller independent restaurants and local chains are having an increasingly difficult time competing as it is more difficult for them to receive the volume discounts that the chains can garner.

Current restaurateurs will need to monitor the food retailers to see what degree of competition they are prepared to play in the future in this industry. The retailer reaction will be in response to consumers who are and will be spending more of their food dollars at foodservice outlets rather than at the retail level.

• This is a price driven industry. While the ability to provide the type of

product with the desired quality attributes at the volume required is the “admission price” to being a supplier to the foodservice industry, once those requirements are met, price is the primary consideration with service being a close second.



Margins are small and volume sales are required to make a profit.

The industry as examined for this project is comprised of high end restaurants, casual chains and independent restaurants. The following table outlines what each of these categories demand from their suppliers. The points are listed in priority. Table Fifteen: Supplier Requirements - Foodservice Outlets

High End Chains (Casual) Independent (Casual) Top quality meat (and if in Alberta – must be Alberta beef)

Ability to supply entire chain consistently

Best price

Consistent quality Best price Appropriate sizing of the meat

Trusted supplier (often deals with large distributor)

Appropriate sizing of the meat

Consistent supply

Best price Meet specifications Ability to deliver a couple of times a week if required

Ability to deliver daily if required

Consistent quality & size Will deal with smaller distributors

Deals with large distributor Ability to deliver daily if

required

While “price” may not have been listed as the most important factor in supplying all categories, it is still a critical issue. Once the meat supplier has met the approval of the buyer, then the supplier becomes only one of a group of suppliers. At that point, it is the best price that gets the opportunity to supply for that week. This entire industry appears to be price driven. This is a result of the high degree of competition in the marketplace as well as consumer resistance to menu price increases. The implication is that it is highly unlikely that any processor will be able to secure exclusivity of supplying either the outlets or major distributors. There may be one exception and that is in servicing the small rural accounts that are a great distance from a distribution center. And at this point, the large distributors are making attempts to secure that market away from the smaller distributors/processors already in the market.

• The main protein items in demand for this market are beef and

chicken. With particular focus on beef, the market issues on the prairies are:

Consumer concern over health: beef vs. chicken; Quality perceptions: beef vs. “Alberta Beef”; Size requirements: Canadian beef vs. Australian/New Zealand beef;

and Price considerations: Canadian beef vs. Australian/New Zealand

beef.



Alberta Beef: The Alberta producers enjoy a marketing advantage by having successful built a brand that is recognized internationally and equates to top quality beef. Regardless of whether the meat is in fact top quality or just perceived to be, it would be difficult at this point to build a Saskatchewan brand that would rival the reputation of the Alberta product. In addition, the cost to build a brand is significant (anywhere from $2M to $30M). New Zealand/Australian beef: The market in Western Canada for New Zealand and Australian beef has increased significantly over the past four years. The suppliers from those countries have used a smaller sized product, lower or competitively priced product and a consistent supply to secure a spot in the Western Canadian foodservice market. The following chart illustrates the value of the imports to this region. [Note however that it is not possible given this information to determine where the product is used (e.g. retail, foodservice, etc.).]

Table Sixteen: Value of Beef Imports to Western Canada Australia and New Zealand – Value in $ ‘000s

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000

1998 1999 2000 2001

AustraliaNew Zealand


In addition to the value of the imports to Western Canada, the following table provides an overview of the value of specific cuts for 1998 and 2001. See Appendix D for a more extensive coverage.



Table Seventeen: Australian and New Zealand Top Beef Cuts Percentage of Total Shipment to Western Canada Cut Australia

1998 Australia

2001 New

Zealand 1998

New Zealand

2001 Bovine loin cuts, fresh/chilled 7.2% 25.8% 26.5% 19.8% Bovine eye/outside/inside round 20.0% 5.6% 19.1% 13.4% Bovine cuts, boneless, fresh/chilled .5% 7.8% 4.3% 6.5% Bovine cuts, boneless, frozen 25.2% 30.7% 16.0% 22.3% Bovine forequarter, frozen 27.4% 8.1% 9.6% 12.2% Bovine hindquarter, frozen 6.4% 1.9% 5.7% 11.4% Bovine rib cuts, boneless, fresh/chilled

3.5% 6.4% 3.9% 1.4%

Other products 9.8% 13.8% 14.9% 13.0% Total value all products $34.6M $79.7M $35.8M $69.4M

Source: Statistics Canada .

In other words, the market for Australian and New Zealand beef in Western Canada has doubled in just four years.

• The current suppliers are meeting the demand for pork. One area

that requires monitoring however is the demand for back ribs. Only one distributor claimed to have had difficulty in sourcing that particular product last year.

• Alberta and New Zealand producers are currently meeting the

demand for lamb. As with beef, the size of the New Zealand racks as well as their lower price, make it suitable for the foodservice market. Since the demand for lamb in foodservice is very small, it is likely not a market that warrants examining for import displacement until lamb producers can influence consumers to purchase it for more meal occasions (in other words, producers must work to create demand for their product).

In addition, if lamb producers wish to supply this market, they must be prepared to find markets for the lesser quality cuts. The foodservice industry only wants the higher value cuts and they prefer to deal with a trusted processor in Innisfail.

• Bison represents a specialty product at this time. While bison

burgers and some higher value cuts are used in tourist areas as well as “specials” on fine dining menus, the market is limited. The current low prices offered by the bison producers make it attractive for restaurants to offer it as a special, but at the low prices, it is not likely a market for the producers in which they can garner sufficient profit. The restaurants and distributors that are using the product have found suppliers that offer consistent quality and most buyers are not prepared to try new suppliers for this product. In addition, bison producers must decide who their market is. They have damaged their reputation by selling to (or attempting to sell to) distributors and then directly to the restaurants to whom the distributors



supply. The producers cannot have it both ways and expect to keep both buyers.

• Some value adding activity is taking place and mainly at the smaller

processor/distributor level (Chef-Redi and Prairie Meats). Those products however are targeting the foodservice outlets that have limited kitchen facilities. Other than dry ribs and products targeted at the appetizer section of the smaller independents, not much value added product is finding its way onto the menus of the outlets reviewed for this project.

As well, distributors would like to move their clientele more towards pre cut portions. Not many restaurants however are currently demanding that product form.

6.2 The Opportunity There are three ways in which to participate as a supplier to the foodservice industry:

• As a distributor; • As a processor; or • As a producer.

It would be very difficult for a new processor to penetrate this market as a distributor to the foodservice industry. Competition is fierce. The large established players are consolidating. Due to their size, they bring massive buying power and can secure lower prices based on volume purchases which are then passed off to the restaurants. They are now going after the markets of the smaller distributors who are experiencing increasing pressure from the large distributors. Indications are that these large distributors are determined to fight among themselves over the smaller market share. Saskatchewan processors then have two potential markets:

1. To supply the larger distributors (e.g. SYSCO, Gordon Foods) who have the contracts with the chains or the high end restaurants (they must be able to meet the requirements of the distribution company); or

2. To supply the high end restaurants or the independents directly. In order to put the situation in perspective, the following table provides an overview of the federally and provincially inspected processing plants in Saskatchewan. The competition in Alberta is also included.



Table Eighteen: Federally Inspected Processing Plants Saskatchewan Alberta

Federally Inspected141 Centennial Foods Saskatoon Bouvry Exports Calgary

Ltd. Calgary

Fuhrman Meats (1978) Ltd.

Regina Canada West Foods J.V. Inc.

Innisfail

Harvest Meat Co. Ltd. Yorkton Capital Packers Inc. Edmonton Kitsaki Meats Inc. La Ronge Caravelle Foods Spruce Grove Mitchell’s Gourmet Foods Inc.

Saskatoon Cargill Foods High River

Thompson Meats Ltd. (TML)

Melfort Centennial Food Corp. Calgary

XL Foods Moose Jaw Heritage Meats Edmonton Intercity Packers Inc. Edmonton J&M Meats International

Ltd. Warburg

Lakeside Packers Brooks Maple Leaf Meats Lethbridge Nossack Fine Meats Ltd. Red Dear Olymel Red Deer Select Food Services Ltd. Edmonton South Edmonton Produce

Co. Edmonton

Trochu Meat Processors Trochu Western Quality Meats Calgary Wexford Agri-Foods Ltd. Edmonton XL Foods Inc. Calgary Domestically Inspected142

Corcan Agri-Business Prince Albert Balzac Meat Processing Balzac Drake Meat Processors Drake Brooks Meat Packers Brooks Treen Packers Swift Current City Packers Ltd. Lethbridge Edmonton Meat Packing

Ltd. Edmonton

H&M Meats Inc. Grande Prairie Lakeland Meat

Processors Elk Point

Red Deer Lake Meat Processing Ltd.

Calgary

Redwater Meat Packers Redwater

141 At federally-registered establishments, inspection and safety of meat and meat products is the responsibility of Health Canada and the Canadian Food Inspection Agency. Inspection at these plants is mandatory before any inter-provincial trade or export of meat is possible. At these federally registered facilities, random tests for residues in meat are taken. Over the past few years, results from the Canadian Food Inspection Agency showed beef consistently in 99.7% compliance or higher for the substances monitored. Any carcass or organs that do not meet the government’s high standards are condemned and destroyed. These rigorous inspection procedures are a means of ensuring only wholesome foods end up in the hands of the consumer. Source: www.beefinfo.org/inspection.html

142 Under the Domestic Meat Inspection Program abattoirs and meat processing plants can request inspection. Domestic inspected plants can sell meat only in Saskatchewan. In Saskatchewan, the Canadian Food Inspection Agency is contracted to provide the meat inspection service. Source: http://www.beefinfo.org/frameset.cfm?u=http://www.agr.gov.sk.ca/DOCS/about_us/programs_services/meatinspect.asp



Rocky Mountain Meats 1999 Ltd.

Rocky Mountain House

Health Inspected143 Chef-Redi Meats Saskatoon Prairie Meats Saskatoon Source: Saskatchewan Agriculture Food and Rural Revitalization Alberta Agriculture Food and Rural Development The table indicates that there is a high level of competition from Alberta with established players such as Cargill (although mainly for slaughter purposes), Edmonton Meat Packing Ltd., XL Foods and Centennial Meats. It is unlikely that the Saskatchewan processors would be able to penetrate the market (as examined in this report) beyond its borders and even within its borders given the competitive nature of the business. In consultation with a member of the Steering Committee who has in-depth knowledge of the Saskatchewan meat processing industry, it became clear that the processors either are currently providing some supply to the foodservice industry or are devoting their production and marketing efforts elsewhere. They are likely not in a position (have the resources) or have the interest to penetrate this market due to their current strategies. The option for consideration at the processor level may be for three or four smaller processors to form some sort of cooperative action to supply a distributor already servicing this industry. The cooperative action of course provides them the opportunity of supplying the quantities required to enter the market. The challenge in that scenario is that the alliance would require common standards and strict adherence to quality demands, pricing strategies and meeting delivery schedules. The likelihood of this action happening, given the current players and their target markets, is slim. The producers may represent the best opportunity to supplying this market. That opportunity is import replacement of the Australian and New Zealand products. Before examining this market, producers must understand that the size of the cuts is not the only reason that the off-shore product is in demand. It is a combination of size AND price. In order to determine if the import replacement option is a viable opportunity, there needs to be a good understanding of the production processes and transportation of the Australian and New Zealand products. In other words, how can smaller cattle be produced, processed, shipped to Western Canada and still be priced at or lower than Canadian beef.

143 The program allows for slaughtering and processing of meat for local consumption in plants that are subject to health inspection visits.



In addition, the examination should consider the appropriate size of herd(s) that would be required to fill the demand. This does not likely represent an opportunity for all beef producers but rather a small group. Therefore, if a Canadian product can be produced (e.g. a ten pound and under striploin) that meets the price and at least meets the quality, then it will be the product of choice. The other area where opportunity may exist but was not examined, is for value added products targeted at foodservice outlets where food is not the primary source of revenues and who have limited food preparation space (e.g. bars). Small processors are encouraged to examine this market segment to determine if the option is viable.



BIBLIOGRAPHY Anderson, Mark, “Dinner is Served”, Sacramento Business Journal, August 8, 2002. Blisard, Noel; Lin, Biing-Hwan; Cromartie, John; Ballenger, Nicole; “America’s Changing Appetite: Food Consumption and Spending to 2020”, Economic Research Service, USDA, FoodReview, Vol. 25, Issue 1. Burn, Doug, “Carving Up the Pie”, Food in Canada, May 2002. Crawford, Gregory, “Kill & Cut: Preserving the Art of Cutting Steak”, Meat Marketing & Technology, March 2002. Davis, David; Stewart, Hayden, “Changing Consumer Demands Creat Opportunities for U.S. Food System”, Economic Research Service, USDA, FoodReview, Spring 2002. Functional Foodwire, August 19, 2002. Gain Report #CA0047, Foreign Agricultural Service, USDA. Gain Report #CA0050, Foreign Agricultural Service/USDA. Harvard Business Review, “Management By Fire”, July 2002, p.60. Just-Food.com- “USA: Sysco says real sales growth up 6%”. Lipson, Elaine, “The Foodservice Frontier”, The Natural Foods Merchandiser, March 1999. LBC Consulting Service, “Canada HRI Food Service Sector, An Overview of the Institutional Foodservice Market in Canada 2002, Foreign Agricultural Service/USDA. National Restaurant Association, “Restaurant Spending”, 2000. Salvage, Bryan, “Pre-Seasoned Steaks: A Product for the Times”, Meat Marketing & Technology, March 2002. “Steakhouse Trendsetters: Sizzle and Substance”, Meat Marketing & Technology, March 2002. Stewart, Hayden; Martinez, Steve, “Innovation by Food Companies Key to Growth and Profitability”, Economic Research, USDA, FoodReview, Vol. 25, Issue 1 “The United States Foodservice Market (FaxLink no. 34119)”, The Team Canada Market Research Centre, August 2000.



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Appendix A

Interviews – Restaurants and Hotels

ALBERTA and SASKATCHEWAN R. J. Willoughby’s - Saskatoon (306) 665-7576

Chef Tran Thoung (pronounced Tong) Direct Line 244-2311 ext. 210

Jackfish Lodge Golf and Conference Centre (Battlefords)

Executive Chef Dale O’Grady – (306) 386-2800

Memories Fine Dining, Regina

Chef Joel Duckworth (306) 790-1321

Mediterranean Bistro – Regina

Chef – Jan Pritchard (306) 757-1666

Marlborough Inn (306) 763-2643 Prince Albert

Chef – Jeannette Boyko

The Diplomat – Regina (306) 359-3366

Chef - John Kangles

Calories – Saskatoon (306) 665-7966 Direct Line or 220-1647 cell

Chef - Remi Cousyns

Temple Gardens – Moose Jaw (306) 694-5055

Chef Jeremy Priest

Spiro’s Steak and Pizza – Lloydminster (306) 825-8241

Chef – Brenda Church

Tannin’s Restaurant – P.A. (306) 763-4252

Chef – James Smith



Hawood Inn – Waskesiu (306) 663-5911

Chef Don Cyr

Boffins – Saskatoon (306) 249-5344

Chef – Steve Driver

Alexanders – Saskatoon (306) 956-7977

Chef – Corinne Marchuk

Station Place Restaurant - Saskatoon (306) 244-7777

Chef – John Larson

Akropol Dining Room - Swift Current (306) 773-5454

Chef Stacey Henderson

John’s Prime Rib – Saskatoon (306) 244-6384

Chef Ken Brown

Lakeshore Restaurant – Regina (306) 584-3780 Since 1974

Owner – Arthur Flengerius Note Chef Albert does some of the ordering

Alex’s Steakhouse – Humboldt – Bella Vista Inn (306) 682-2686 –

ask for kitchen Chef – Barb Tameline Owner – Alex Jiannakos – both do ordering Mykanos (306) 665-0606 Buyer – Joanne Osbon She also has a head cook who puts the order together but Joanne approves the orders

Country Cuisine Battlefords (306) 446-4555 Chef Dave Bordall Sheraton Hotel – 32nd Avenue and Barlow Trail, N.E. (Franchise) Chef – Jake Kirchner (403) 250-6327 Colours Café, Carvers and Catering services

The Keg Downtown (403) 266-1039 4 locations in Calgary Darcy McGowan – Lead Cook – Days



Caesars – Calgary (403) 264-1222 (downtown location) 2 restaurants Chef – Richard Panteluk

Olive Garden 333-36th Str. N.E. (403) 248-1020 Radisson Hotel Calgary Executive Chef – Andy Waters and Sous Chef – John Nidua 2120-16th Avenue N.E. (403) 291-4666 Radisson Canmore Executive Chef – Jason Symonton (Direct Line) (403) 609-5434 Hotel Line (403) 678-3625 The Cheesecake Café – 7600 McLeod Trail S.E. (3 locations in Calgary) Dominique Audia, Manager, Kitchen Manager – Jeff Bodnar (403) 255-7443 Delta Calgary Airport Hotel – 291-2600 Executive Chef – Paul Miniaci

Chicago Chop House – Downtown Calgary (403) 265-3000 Chef – Dan Derasp – Owned by Penny Lane Entertainment which operates Cowboys, Coyotes, Kaley’s(?), and The Drink Restaurant and Bar Earl’s 1110- 16th Avenue N.W. (403) 289-2566 Chef Cory Tate Regional Office 875-0281 Head Office (604) – 989-4606

Fairmont – Jasper Park Lodge (780) 852-3301 Executive Chef – Patrick McLary Reef N Beef (403) 285-3322 Chef Ken Eng

Kelseys Restaurants – 4 locations in Calgary 900-3545 – 32nd Avenue N.E. (403) 291-3145 Paul Bleay- Manager, GM – Maurice Fillion (Moe)

Elephant and Castle – Ken Hyde Downtown Location (403) 265-3555 Total of 36 restaurants in N.A. Smugglers – Calgary (403) 253-5355 Chef – Jim Sarantis, Purchasing Agent – Wayne Marthaller

Melissa’s Restaurant and Bar- Banff (403) 762-5511 Manager - Rick Lee



Hy’s Steakhouse – Calgary (403) 263-2222 Executive Chef – Edgar Huliganga, Assistant Manager – Gary Campbell

Moxies – Calgary Elaine Wallace (403) 543-2600 Regional Office ewallace@moxies 36 locations

Cocoa’s Restaurant & Lounge –(Delta Hotel) (780) 423-9650 Chef Roy Serra

Sherwood House – Canmore Chef – Chris Montgomery – (403) 678-5211

Quincy’s on 7th - Calgary – (403) 264-1000 Chef – Freddy Charkhandeh

River City Steak & Chop House - Edmonton (780) 482-1140 Chef Frank Prizwyswitt or Executive Chef – Rick

Chances Edmonton (780) 424-0460 Chef Duncan Scott Saltliks – Calgary (403) 537-1160 Chef – Steve Vella

Tom Goodchild Moose Factory – Edmonton Sawmall Restaurant Group - (780) 437-5616 (5 locations) Chef – Neil McCandless

UNIVERSITIES John Olson – University of Saskatchewan (306) 966-6785 Pat Doyle – Aramark @ the University of Saskatchewan (306) 966-6894 Allan Oleskiw – Aramark @ the University of Alberta (780) 492-4411 George Thomson – University of Calgary (403) 220-6001 Shannon – Aramark @ the University of Regina (306) 585-5245 DISTRIBUTORS – PROCESSORS Avendra Group – Chris Ransom (403) 260-1216 Bridge Brand/ Gordon Foods, Calgary 1-800-661-7090 Mike Mitchell Centennial Foodservice, Saskatoon (306) 665-2999 Glen Campbell



Chef Redi Meats Inc., Saskatoon 1-800-667-3975 or (306) 665-3266 Don Carruthers Prairie Meats, Saskatoon (306) 244-4024 Jean Dupuis Sunspun Food Service, Saskatoon (306) 664-4817 Dean Cote SYSCO/SERCA Food Services, Regina (306) 347-5212 Tim (in Regina) Mel Harder (in Toronto) (416) 234-2666

ADDITIONAL CONTACTS: Note: Interviews were not done but contact names and people are listed: Banff Fairmont Hotel – Martin Luthi – Executive Chef – (403) 265-4500 Cathedral Village Freehouse (Regina) (306) 359-3366 Chef Matt Johnson Fairmont Palliser Hotel – Takashi Ito – Executive Chef (403) 262-1234

Tony Romas – Head Office - Gord Lem – buyer – (403) 301-7427

Earl’s Restaurant – Head Office – Vancouver - Don Rankin (604) 984-4606

Travelodge Sunridge Hotel – Calgary - Chef David Baker (403) 291-1260

Fairmont Lake Louise – Chef Dominique Guyot – (403) 264-6780

Travelodge – McLeod – Diane Ross (403) 253-7070

Olive Garden – Darden Restaurants Inc. Head Office – Florida (407) 245-4000 Rex Clothier, Director – Red Meat buyer, Chris Williamson – Pork buyer

The Keg – Head Office buyer Craig Davis Vancouver (800) 684-3534

Cheesecake Café – Head Office – Edmonton – Ken Gooz (888) 204-0155 ext. 25

La Ronde – Crown Plaza Chateau Lacombe Restaurant – Edmonton Chef Jasmin Kobajica (780) 428-6611

Holiday Inn – Calgary – (403) 230-1999 Chef Vinny Thoung

Hyatt Regency – Calgary (403) 717-1234 Executive Chef Max Labhardt



Westin Calgary – (403) 266-1611 Executive Chef Martin Heiser

Willows – Saskatoon (306) 956-1100 Chef Mia Wilton

Granary – Saskatoon – (306) 373-6655 Chef Alex Gignai, Home Number 955-6646

Elkridge Resorts – (306) 663-4653 – Chef Ben Stanford

Wanuskewin Heritage Park – Saskatoon (306) 931-9932 Restaurant Contact – Jamie Pfiefer

Danbury’s (Regina) (306) 525-8777 Chef Chris Treahern



Appendix B Restaurants

Saskatoon Amigos 652-4912 Albertos Restaurant 652-1121 Alexander's Restaurant & Bar 956-7777 Alyce's Kitchen Ltd 373-7750 Athena Family Restaurant 249-0900 Botanica Restaurant & Lounge 668-9621 Blondies Cafeteria 664-8747 Boomtown Cafe 931-1910 Boffins Food Services 249-5344 Broadway Café 652-8244 Brooklyn's Bar & Grill 955-7110 Brothers Two Restaurant 242-1100 Cafe Casa Broadway 652-6800 Calories Bakery & Restaurant 665-7991 Carver's Steakhouse 652-6770 Crawdaddy's Louisiana Bar & Grill 978-2729 Crazy Cactus At Melrose 975-1266 David's Lounge & Restaurant 664-1133 DJ's Bar & Grill 933-0288 Delphi Restaurant & Bar 955-2440 Diners Restaurant 244-6200 Emerald Casino Lounge & Restaurant 683-8840 Earl's Restaurant & Lounge 664-4060 Elephant & Castle Restaurant 652-5535 Four Seasons Restaurant 244-5564 Fat Tony's 955-4555 Fine Art Café 933-9449 Fude Bistro 652-2028 Gallery Restaurant 477-1300 German Canadian Club Concordia 244-6869 Gourmet Taste 664-3375 Granary The 373-6655 JD Peppercorns Steak & Pasta House 665-5555 Johns Prime Rib & Steak House 244-6384 Karz Kafe 652-1482 Keg Restaurants 653-3633 Kelsey's Restaurant 955-4616 Lydia's Restaurant 652-8595 Mr Rizos Restaurant 664-1923 Mykonos Restaurant 665-0606 Moxie's Classic Grill 374-9800 Mcgettigan's Café 664-1953 Mediterranean Inn 384-1900 Micisotan Restaurant 374-7889 Montana's Cookhouse Saloon 384-9340



Mr Ribs 477-3334 Nellie's Kitchen 382-6464 New Red Lantern Inn 665-7335 Nicholas Montreal Smoked Meats 664-7000 North View Restaurant 931-3355 Nutana Café 653-4562 O'Smile 652-8988 Odeon Niteclub & Restaurant 651-1000 Olympia Family Restaurant 244-1513 Peter D's On 8th 956-3131 Pioneer Steak-Out 933-2014 Red Pepper 477-1977 R J Willoughby's 665-7576 Red Rock Grill 978-6628 Rembrandts 244-8555 Restaurant 224 664-4566 Ricky's All Day Grill 652-3222 Riviera Restaurant 664-1919 Season's Cafe & Eatery 665-8121 Saskatoon Station Place 244-7777 Seasons At The Willows 956-1100 Salonika Inn Restaurant 955-3333 Sardinia Family Restaurant 955-8888 St Tropez Bistro 652-1250 The Cave 374-5090 The Maz 249-5777 The Publican 652-2244 The Victorian 664-2313 The Wooden Barrel 955-1200 The Yard & Flagon Pub 653-8883 Traeger's Bakery & Restaurant 374-7881 Venice House 373-6666 Wall Flowers Café 249-5600 2nd Ave Grill 10-123 2nd Ave S 244-9899 Source: www.mysask.sympatico.ca Caterers Blondies Cafeteria 2241 Hanselman Ave 664-8747 Make Me Well Kitchen 257 2nd Ave S 955-3609 Continental Hole in the Wall Restaurant Dundurn 492-4804 English Emerald Casino Lounge and Restaurant 683-8840 Family Mandolin’s Restaurant 243 21st E 665-1314 Mulberry’s Restaurant 124 3rd Ave N 664-4911 La Salsa Mexican Food 241-1966



Source: Dining Guide Sasktel Saskatoon City 2001/02 Phone Book Pages 808-809 Centennial Auditorium & Convention Centre A state of the art facility that provides both a 2, 000, 3 tier soft seat theatre and is surrounded by a full service convention centre located in the heart of downtown Saskatoon. We provide meeting, banquet, convention services, along with special for groups as small as 10 people to as large as 1, 500 people. A premium facility not to be missed. Country Style BBQ Catering to larger groups our specialty is our “AAA aged Beef” slowroasted on our rotisserie BBQ’s, our homemade buns and Saskberry pies. We also do pitchfork steak fondues and are equipped to do “large pancake breakfasts”. Offsite catering “From hot dogs to whole hogs”. Berry Barn A relaxed country setting on the banks of the South Saskatchewan River, minutes from Saskatoon. Featuring Saskatoon berry pie and homestyle meals. Visit our gift shop. Butler's Restaurant Monday through Friday our bountiful luncheon buffet is a favorite. Friday, Saturday and Sunday we feature different ethnic evening buffets for a change of pace. AX, DC, MC, VI $5.00-$18.00 L Garden Court Cafe Offers Saskatoon's finest setting overlooking the Delta Bessborough gardens and the river valley. Open daily for breakfast, lunch and dinner; located on the mezzanine level. Creative regional cuisine served in a relaxed atmosphere. We also offer a delicious Sunday Brunch, 10:00am to 2:30pm. Garden Terrace Restaurant Dine in a relaxed tropical setting around the pool. Offering Ethnic Buffets, made to order Pasta Night, Hip of Beef Night and the best Sunday Brunch in town. AX, DC, MC, VI $6-16 L Majestic Grille A refreshingly modern restaurant over-looking the riverbank, offering a tantalizing menu for all times and tastes. Features Starbucks Brand coffee. Mitchell's Food Service Mitchell's Gourmet Foods is home to the Olympic Fine Meats and Mitchell's Gourmet Food brands. Our aim is to produce high-quality meat products that make your lives easier, healthier and better... because our family knows how important it is to your family. Batoche National Historic Site Visitor Reception Centre with modern theatre, exhibit hall, food and concessions. On site you will find reminder of the 1885 conflict between the Canadian



Government and the Metis Provisional Government. These include military rifle pits, Metis rifle pits, bullet holes in the rectory, Zareba and the graves of the Metis casualties including Gabriel Dumont, the military leader of the Metis. Located 90 km North of Saskatoon. Hours: May 8 - September 30: 9:00am - 5:00pm. Entry fee. Off Broadway Dinner Theatre Thursday through Sunday year round, Saskatoon’s original Dinner Theatre offers you a delicious buffet dinner, friendly service and full-length feature comedy all under one roof. On Saturday afternoons we present the Children’s Lunchtime Theatre Show especially for kids! Wanuskewin Heritage Park A National Historic Site. Ongoing archeological excavations indicate more than 6000 years of habitation. Visitor centre overlooking the beautiful valley interprets the history and culture of the Northern Plains Indians. Self guiding trails take the visitor past a medicine wheel, buffalo pound, tipi rings. Restaurant, gift shop and art gallery. Overnight tipi camp programs available. Champetre County Set your watches back 100 years and get ready for the action and excitement of Champetre County! We are an award-winnng venue for conference socials, corporate functions, meetings, retreats, weddings, family reunions, and just about anything else! With twelve years of experience specializing in hosting groups, we have developed a reputation for consistently exceeding client expectations. Visit our website, then drop us a line to book your event today! Off Broadway Dinner Theatre Thursday through Sunday year round, Saskatoon’s original Dinner Theatre offers you a delicious buffet dinner, friendly service and full-length feature comedy all under one roof. On Saturday afternoons we present the Children’s Lunchtime Theatre Show especially for kids! Source: Tourism Saskatoon Website. www.tourismsaskatoon.com Caterers Saskatoon Inn 668-9608 D'reens Catering 934-6000 Manhattan Ballroom 934-6000 Best Western Inn & Suites 244-5552 Source: www.mysask.sympatico.ca Regina Oaks Family Restaurant 757-0121 Botanica (Regina Inn) 525-6767 Vic’s Steakhouse 525-6767 Memories Fine Dining 522-1999 Johnny Fox’s Restaurant 584-6333



Crown Room 781-9270 Bartleby’s/Bart’s on Broad 565-0040 The Copper Kettle Restaurant 525-3545 Lakeshore Restaurant 584-3780 The Last Spike 781-7000 Ramada Hotel & Convention Centre 569-1666 Abstractions Café 352-5374 B-52 Dining Room & Lounge 545-4944 Banbury House Inn (1995) Ltd 292-6760 Caesar’s Restaurant 575-2638 Cathedral Village Free House 359-1661 Chimney House 584-7777 Coliseum Family Restaurant 789-5620 The Cottage 584-1313 Creative Dining 775-1752 Creek In Cathedral Bistro 352-4448 Danbry’s 525-8777 Diplomat Steak House 359-3366 Double Happiness Restaurant 757-8033 Earl’s Restaurant 584-7733 Four Seas Restaurant 522-1818 Four Seasons 525-8338 Golf’s Steak House 525-5808 Greenfields Restaurant 586-7975 Greko’s Restaurant & Steak House 584-3646 The Harvest Restaurant 545-3777 545-3377 Henry the 2nd Banquet 791-7881 The Hideaway 359-1694 Keg Restaurants 585-1717 Kelsey’s Restaurant 761-9000 585-8883 La Bodega 546-3660 Lamvina Restaurant 569-8855 Newtown Restaurant 757-7722 Novia Café Ltd 522-6465 Windsor Castle Restaurant 757-9388 Oaks Family Restaurant 757-0121 Red Ox 525-9105 Regency Palace Family Restaurant 721-2828 Royal Canadian Legion Regina 522-2676 Swiss Chalet Rotisserie & Grill 352-3169 Melrose Place Family Restaurant 575-9999 Melrose Place Family Restaurant II 347-9999 Montana’s Cookhouse 569-1557 Moxie’s Restaurant 781-5655 Murphy’s At The Pub 586-9595



Caterers Eagles Club 757-8998 Hungarian Culture & Social Club (Regina) 522-8182 Merv's Pitch Fork Fondue 543-3388 Red Rooster Barbeque 539-2671 Rybchuk's Management & Catering Service 352-5825 A' La Carte 525-0501 Butcher Boy Meats Ltd 781-6913 German Canadian Society Harmonie 352-5897 Harly's Catering 522-0031 Hidden Treasure Eatery & Emporium Ltd 522-8655 J & J Specialty Foods 347-8221 Montego Catering Co 533-9479 Nicky's Cafe & Bake Shop 757-3222 Novia Cafe Ltd 522-6465 Park Place 522-9999 Pavlo's Eatery 525-4489 Randy Kuntz Catering Company 543-1110 Rushton's Catering & Patio View Cafeteria 569-8538 Sacred Heart Catering 525-0502 Tina's Cafeteria & Catering 757-0999 Source: www.mysask.sympatico.ca Prince Albert Amy’s On Second Restaurant 763-1515 Mill Dining Room 763-2643 Malboro Inn Sapranos Restaurant and Eatery 922-1333 South Hill Inn 922-1333 Bannock Stop Plus 763-6133 Chef Dano’s Place 763-2121 Diggers Road House 922-7979 Dusty’s Café 953-9865 Greeniss Family Restaurant (1993) 764-2323 JR’s Diner 922-4611 Lotus Café 763-6646 Princess Café 763-3176 Spicy Peppercorn 763-7755 Star House Family Restaurant 764-6700 Tannins Restaurant & Wine Bar 763-4252 Terrace Café 922-9595 W K Kitchen 764-1500 Caterers Ed's Inn Catering 763-6266 Diverse Catering Co 764-2061 Hunt's Fine Foods 922-3343



Source: www.mysask.sympatico.ca Swift Current

FAMILY DINING

Akropol Family Restaurant & Dining Room (133 Central Avenue North) 773-5454

Carol’s Diner (914 Central Avenue North) 773-2450

Chinook Clubhouse Restaurant (663 6th Avenues Southeast) 778-3243

Elmwood Golf & Country Club (2015 Hillcrest Drive) 773-9500

B>Monte Carlos (North Service Road East) 773-6007

Spring’s Garden Restaurant (Swift Current Mall) 773-2021

TNT Restaurant (North Service Road West) 773-6002

Source: http://www.city.swift-current.sk.ca/

Moose Jaw Harwood’s Dining Room, Temple Gardens Mineral Spa 693-7778 Hopkins Dining Parlour & Curiosity Shoppe 692-5995 Nick’s Place 692-5555 Source: http://www.citymoosejaw.com/tourism/index.shtml

Lloydminster

Formal Dining

Kelsey’s (780) 875-1774

Mr. Bill’s Family Restaurtant (780) 875-3388

Olympia Restaurant & Lounge (306) 825-4181

Spiro’s Steak & Pizza (306) 825-4241

Venice House (306) 825-2226



Source: http://www.lloydminsterinfo.com/ Humboldt BELLA VISTA INN Highway 5 West Box 2317 Humboldt, SK S0K 2A0 Toll-free 1-800-667-0790 Phone: 306-682-2686 Fax: 306-682-5305 Web site: http://www3.sk.sympatico.ca/bvinn licensed family restaurant featuring ethnic buffets; licensed beverage room with occasional entertainment; banquet and meeting facilities to accommodate up to 225.

Licenced dining Black Forest Chalet 306-682-1644 Located at 627 9th Street Specializing in German and western cuisine Alexi's Steak House 306-682-2686 Located at the Bella Vista Inn on Highway 5 West Chick Allan's 306-682-4868 Located at the Geschaft Centre on Highway 5 West Sandor's Family Restaurant Located at 535 Main Street 306-682-6660 Catering is available from: Hannigan's (306-682-2501) BV Restaurant (306-682-2686) Source: http://www.humboldttourism.com/ Alberta Bison Market ABC Country Restaurant 910 Redcliff Drive SW, Medicine Hat, AB T9A 5E4 Phone: (403) 504-4111

Bertini's Catering 195 Weiss Drive, Fort McMurray, AB T9H 5B4 Phone: (780) 791-1026 Email: [email protected]

Blue Ox Restaurant #1, 4213 Highway 2A, Ponoka, AB T4J 1J8 Phone: (403) 783-8800

Oliver Square Location 11620 - 104 Avenue, Edmonton, AB T5K 2T7 Phone: (780) 482-4677 Fax: (780) 482-7319 Website: www.brewsters.com



Meadowlark Location 15820 - 87th Avenue, Edmonton, AB T5R 5W9 Phone: (780) 421-4677 Fax: (780) 444-3440 Website: www.brewsters.com

Buffalo Mountain Lodge Box 1326, Tunnel Mountain Road, Banff, AB T1L 1B3 Phone: (800) 661-1367 Email: [email protected]

Buzzard's Cowboy Cuisine 140 - 10th Avenue SW, Calgary, AB T2R 0A3 Phone: (403) 264-6959 Website: www.cowboycuisine.com

Canadian Rocky Mountain Resorts #203, 102 Boulder Crescent, Canmore, AB T1W 1L2 Phone: (403) 609-6150 Fax: (403) 609-6158 Email: [email protected]

Cedar Villa Restaurant Box 481, Foremost, AB T0K 0X0 Phone: (403) 867-2060

Chance Restaurant 10150 - 101 Street, Edmonton, AB T5J 4G8 Phone: (780) 424-0400 Fax: (780) 424-0490 Website: www.chancerestaruant.ca

Chianti Café & Restaurant 10501 - 82nd Avenue, Edmonton, AB T6E 2A3 Phone: (780) 439-9829

Cilantro Mountain Café - Banff PO Box 1326, Tunnel Mountain Road, Banff, AB T1L 1B3 Phone: (403) 760-4488

Cilantro On the Lake - Field PO Box 10, Emerald Lake Lodge, Yoho National Park, Field, BC V0A 1G0 Phone: (250) 343-6321

Cilantro Restaurant - Calgary 338 - 17th Avenue SW, Calgary, AB T0S 0A8 Phone: (403) 229-1177 or (403) 245-8880 Fax: (403) 245-5239

Coaldale Motor Inn 913 - 19A Avenue, Coaldale, AB T1M 1A7 Phone: (403) 345-2555

Cocoa's Restaurant 10222 - 102nd Street, Edmonton, AB T5J 4C5 Phone: (780) 423-9650

Danny's Restaurant Box 359, Acme, AB T0M 0A0 Phone: (403) 546-4400 Email: [email protected]

David's Restaurant 9945-50 street, Edmonton, Al T6A 0L4 Phone: (780) 468-1167 or (780) 468-1377 Fax: (780) 440-4671 Email: [email protected]

Deer Lodge Box 100, Lake Louise, AB T0L 1E0



Phone: (800) 661-1595 Email: [email protected]

Divino Restaurant 817 - 1 Street SW, Calgary, AB T2P 7N2 Phone: (403) 263-5869

EcoCafe, Regional Cuisine RR #1, #10 Village Drive, Westerose, AB T0C 2V0 Phone: (780) 586-2627 Fax: (780) 586-3841 Email: [email protected]

Emerald Lake Lodge Box 10 Yoho National Park, Field, BC V0A 1G0 Phone: (800) 663-6336 Email: [email protected]

Georgio's Contemporary Dining 1520 - 3rd Avenue South, Lethbridge, AB T1J 0K8 Phone: (403) 328-0676

Grace Fire Bistro 5114 - 50th Avenue, Rimbey, AB T0C 2J0 Phone: (403) 843-2120

Happy Valley Restaurant 5018 - 50th Avenue, Rimbey, AB T0C 2J0 Phone: (403) 843-2133

Hardware Grill 9698 Jasper Avenue, Edmonton, AB T5H 3V5 Phone: (780) 423-0969 Email: [email protected]

Head Smashed In Buffalo Jump Box 1977, Fort McLeod, AB Phone: (403) 553-2029

Huckleberry's Café #103, 3840 - 56th Street, Wetaskiwin, AB T9A 2B2 Phone: (780) 352-3111

J. B.'s Restaurant 1303 Mayor McGrath Drive, Lethbridge, AB T1K 2R1 Phone: (403) 329-0555 Fax: (403) 328-8846 Email: [email protected] Website: www.heidelburginn.com

Jack's Grill 5842 - 111th Street, Edmonton, AB T6H 3G1 Phone: (780) 434-1113

Java Shack 2302 - 2nd Avenue, Fort McLeod, AB T0L 0Z0 Phone: (403) 553-3063 Fax: (403) 553-3185

JJ's Restaurant 10615 - 105th Avenue, Hudson's Hope, BC V0C 1V0 Phone: (250) 783-9425

Mescalero Restaurant 1315 - 1 Street SW, Calgary, AB T2R 0V5 Phone: (403) 266-3339

Normand's Restaurant 11639A Jasper Avenue, Edmonton, AB T5K 0M9



Phone: (780) 482-2600 Website: www.normands.com

Outlaw's Bar & Grill 250 Main Avenue, Sundre, AB T0M 1X0 Phone: (403) 638-2882

Outrigger Pub 10419 Alaska Road, Fort St. John, BC V1J 1B1 Phone: (250) 785-0098

Patricia Hotel Box 24, Patricia, AB T0J 2K0 Phone: (403) 378-4647 Fax: (403) 378-3166 Email: [email protected]

Pradera Café & Lounge 10135 - 100 Street, Edmonton, AB T5J 0N7 Phone: (780) 493-8994 Email: [email protected]

Pure Country Box 363, Bellevue, AB T0K 0C0 Phone: (403) 562-2992

Ranche Restaurant Box 2780, 15979 Bow Bottom Trail SE, Fish Creek Provincial Park, Calg, AB T2P 0Y8 Phone: (403) 225-3939

Red Sage Restaurant General Delivery, Bragg Creek, AB T0L 0K0 Phone: (403) 949-7243 or (403) 949-4017 Fax: (403) 949-4017

Shawney's Restaruant #1, 4909 - 48th Street, Red Deer, AB T4N 1S8 Phone: (403) 342-2404

Shepherd's Inn Mile 72 Alaska Highway, Montney, BC V0C 1Y0 Phone: (250) 827-3676

Silver Creek Cookhouse 10104 Alaska Highway, Fort St. John, BC V1J 1A8 Phone: (250) 785-4888

Sorrentino's Downtown 10162 - 100 Street, Edmonton, AB T5J 0P5 Phone: (780) 424-7500 Fax: (780) 424-7507

Sven Ericksen's Family Restauran 1715 Mayor Magrath Drive, Lethbridge, AB T1K 2R7 Phone: (403) 328-7756 Fax: (403) 328-7596

Swiss Inn 4812 North Access Road, Chetwynd, BC V0C 1J0 Phone: (250) 788-2566

Symon's Valley BBQ Ranch 260011 Symon's Valley Road, Calgary, AB T3R 1E7 Phone: (403) 274-4574 or (403) 295-3378 Email: [email protected]

Tom Goodchild's Moose Factory 4810 Calgary Trail Southbound, Edmonton, AB T6H 5H5 Phone: (780) 437-5616 Fax: (780) 437-1966



Unheard of Restaurant 9602 - 82nd Avenue, Edmonton, AB T6C 1A1 Phone: (780) 432-0480 Website: www.unheardof.com

Vic & Annette's Restaurant PO Box 375, 604 Central Ave. W, Linden, AB T0M 1J0 Phone: (403) 546-4144 or (403) 546-4104 Email: [email protected]



APPENDIX C Typical Weekly Meat Requirements

University of Saskatchewan



HS PRODUCT DESCRIPTION In $Cdn 1998 1999 2000 2001 4-YR Total

0201201010 Veal cuts, bone in, fresh or chilled, within access commitment 80,000 257,128 262,909 113,853 713,8900201201091 Bovine rib cuts,bone in,exc processed/veal, fresh/chilled, w/a commitment 62,291 29,555 291,553 491,425 874,8240201201093 Bovine loin cuts, bone in, exc processed/veal, fresh/chilled, w/a commitment 869,791 1,528,281 1,485,087 2,446,312 6,329,4710201201099 Bovine cuts, bone in, exc processed or veal, fresh or chilled, nes, w/a 0 409,583 299,332 252,061 960,9760201202010 Veal cuts, bone in, fresh or chilled, over access commitment 0 0 38 0 380201202091 Bovine rib cuts, bone in, exc procssed/veal, fresh/chilled, o/a commitment 128 0 0 0 1280201202093 Bovine loin cuts, bone in, exc processed/veal, fresh/chilled, o/a commitment 0 0 5,957 0 5,9570201301010 Veal cuts, boneless, fresh or chilled, within access commitment 669,798 637,371 727,836 577,671 2,612,6760201301020 Bovine cuts, boneless processed, exc veal, fresh or chilled, w/a commitment 23,662 0 0 0 23,6620201301030 Bovine forequarter, boneless, exc processed/veal, fresh/chilled w/a commitment 0 0 0 53,425 53,4250201301040 Bovine hindquarter, boneless, exc processed/veal, fresh/chilled, w/a commitment 24,151 0 0 13,393 37,5440201301091 Bovine brisket cuts, boneless, exc processed/veal, fresh/chilled w/a commitment 3,461 0 4,289 287,885 295,6350201301092 Bovine chuck cuts, boneless, exc processed/veal, fresh/chilled w/a commitment 16,839 0 71,516 863,752 952,1070201301093 Bovine rib cuts, boneless, exc processed/veal, fresh/chilled, w/a commitment 1,211,251 3,899,843 4,222,329 5,084,248 14,417,6710201301094 Bovine hip cuts, boneless exc processed/veal, fresh/chilled, w/a commitment 67,311 149,341 537,735 2,810,942 3,565,3290201301095 Bovine loin cuts, boneless exc processed or veal, fresh/chilled, w/a commitment 2,476,577 9,279,550 10,712,281 20,566,264 43,034,6720201301099 Bovine cuts,boneless,exc processed/veal, fresh/chilled,nes, w/a commitment 167,470 501,729 4,200,723 6,249,975 11,119,8970201302010 Veal cuts, bonelesss, fresh or chilled,over access commitment 544 0 46 0 5900201302030 Bovine forequarter,boneless,exc processed/veal, fresh/chilled, o/a commitment 0 25 0 0 250201302094 Bovine hip cuts,boneless,exc processed or veal, fresh/chilled, o/a commitment 59 0 0 0 590201302095 Bovine loin cuts,boneless,exc processed or veal,fresh or chilled, o/a commitment 0 0 0 7,830 7,8300201302099 Bovine cuts,boneless,exc processed or veal, fresh/chilled,over access commitmen 84 145 75 0 3040202201010 Veal cuts, bone in, frozen, within access commitment 69,145 40,290 177,339 226,550 513,3240202201020 Bovine cuts, bone in, processed, exc veal, frozen, within access commitment 0 0 0 99,121 99,1210202201091 Bovine rib cuts,bone in,exc processed or veal, frozen, within access commitmen 0 0 72,935 124,981 197,9160202201093 Bovine loin cuts,bone in,exc processed or veal,frozen, within access commitmen 356,921 870,259 729,925 704,541 2,661,6460202201099 Bovine cuts,bone in, exc processed or veal, frozen, nes,within access commitmen 9,885 192,340 94,765 0 296,9900202301010 Veal cuts, boneless, frozen, within access commitment 414,688 331,751 1,242,901 333,222 2,322,5620202301030 Bovine forequarter,boneless,exc processed or veal,frozen,w/a 9,486,412 8,029,839 17,834,410 6,425,102 41,775,7630202301040 Bovine hindquarter,boneless,exc processed/veal,frozen,within access commitmen 2,277,106 4,077,425 5,011,272 1,495,490 12,861,2930202301091 Bovine brisket cuts,boneless,exc processed/veal,frozen, within access commitmen 0 0 0 20,787 20,7870202301092 Bovine chuck cuts,boneless,exc processed or veal,frozen,within access commitme 221,202 0 52,542 125,457 399,2010202301093 Bovine rib cuts,boneless,exc processed or veal,frozen, within access commitment 45,110 152,275 0 32,882 230,2670202301094 Bovine flank cuts,boneless,exc processed or veal,frozen,within access commitme 0 0 47,799 8,874 56,6730202301095 Bovine eye/outside/inside round,outside flat & sirlion tip,boneless,frozen,w/a 6,937,605 3,691,145 3,269,044 4,428,514 18,326,3080202301096 Bovine hip cuts,boneless,exc processed or veal,frozen,nes,w/a commitment 118,683 91,719 0 106,070 316,4720202301097 Bovine loin cuts,boneless,exc processed or veal,frozen,within access commitmen 123,508 232,957 962,566 1,221,460 2,540,4910202301099 Bovine cuts,boneless,exc processed or veal,frozen,nes, within access commitmen 8,727,123 14,700,662 11,937,113 24,462,219 59,827,1170202302030 Bovine forequarter,boneless,exc processed or veal,frozen, over access commitme 19,343 0 0 0 19,3430202302040 Bovine hindquarter, boneless,exc processed or veal,frozen,over access commitme 19,283 0 0 0 19,2830202302095 Bovine eye/inside/outside round,outside flat & sirloin tip,boneless,frozen, o/a 50,353 47,430 44,018 13,906 155,7070202302097 Bovine loin cuts,boneless,exc processed or veal,frozen, over access commitment 55,305 49,563 52,234 27,848 184,9500202302099 Bovine cuts,boneless,exc processed or veal,frozen,nes,over access commitment 30,119 10,846 41,581 23,174 105,720


Beef Imports from AustraliaWestern Provinces

APPENDIX DWestern Canadian Imports of New Zealand and Australian Beef



HS PRODUCT DESCRIPTION In $Cdn 1998 1999 2000 2001 4-YR Total

0201201010 Veal cuts , bo ne in, fres h o r chilled, within acces s co mmitment 0 0 0 243 2430201201091 Bo vine rib cuts ,bo ne in,exc pro ces s ed/vea l, fres h/chilled, w/a co mmitment 111,369 7,978 24,958 143,560 287,8650201201093 Bo vine lo in cuts , bo ne in, exc pro ces s ed/vea l, fres h/chilled, w/a co mmitment 188,641 6,404 181,111 529,999 906,1550201201099 Bo vine cuts , bo ne in, exc pro ces s ed o r vea l, fres h o r chilled, nes , w/a 88,185 20,076 0 8,370 116,6310201202099 Bo vine cuts , bo ne in, exc pro ces s ed o r vea l, fres h o r chilled, nes , o /a 0 0 0 138 1380201301010 Veal cuts , bo ne les s , fres h o r chilled, within acces s co mmitment 0 0 0 248 2480201301030 Bo vine fo requarte r, bo ne les s , exc pro ces s ed/vea l, fres h/chilled w/a co mmitment 25,193 0 298 3,049 28,5400201301040 Bo vine hindquarte r, bo ne les s , exc pro ces s ed/vea l, fres h/chilled, w/a co mmitment 667,171 76,765 311 3,049 747,2960201301092 Bo vine chuck cuts , bo ne les s , exc pro ces s ed/vea l, fres h/chilled w/a co mmitment 36,744 16,237 95,249 718,719 866,9490201301093 Bo vine rib cuts , bo neles s , exc pro ces s ed/vea l, fres h/chilled, w/a co mmitment 1,413,178 464,698 840,457 966,037 3,684,3700201301094 Bo vine hip cuts , bo neles s exc pro ces s ed/vea l, fres h/chilled, w/a co mmitment 890,688 471,970 568,458 813,010 2,744,1260201301095 Bo vine lo in cuts , bo ne les s exc pro ces s ed o r vea l, fres h/chilled, w/a co mmitment 9,495,783 9,153,719 9,896,443 13,765,363 42,311,308

0201301099 Bo vine cuts ,bo ne les s ,exc pro ces s ed/vea l, fres h/chilled,nes , w/a co mmitment 1,571,810 2,042,774 3,279,084 4,519,849 11,413,517

0201302095 Bo vine lo in cuts ,bo ne les s ,exc pro ces s ed o r vea l,fres h o r chilled, o /a co mmitment 117 117 0 0 2340201302099 Bo vine cuts ,bo ne les s ,exc pro ces s ed o r vea l, fres h/chilled,o ver acces s co mmitme 132 0 71 0 2030202201010 Veal cuts , bo ne in, fro zen, within acces s co mmitment 0 0 0 85,303 85,3030202201091 Bo vine rib cuts ,bo ne in,exc pro ces s ed o r vea l, fro zen, within acces s co mmitment 0 0 13,299 0 13,2990202201093 Bo vine lo in cuts ,bo ne in,exc pro ces s ed o r vea l,fro zen, within acces s co mmitment 101,687 78,098 0 0 179,7850202201099 Bo vine cuts ,bo ne in, exc pro ces s ed o r vea l, fro zen, nes ,within acces s co mmitmen 221,958 235,522 0 600 458,0800202202093 Bo vine lo in cuts ,bo ne in,exc pro ces s ed o r vea l,fro zen, o ver acces s co mmitment 122,811 0 0 0 122,8110202202099 Bo vine cuts ,bo ne in,exc pro ces s ed o r vea l,fro zen,nes , o ver acces s co mmitment 100 0 0 0 1000202301010 Veal cuts , bo ne les s , fro zen, within acces s co mmitment 0 500 0 20,743 21,2430202301020 Bo vine cuts , bo ne les s , pro ces s ed, exc vea l, fro zen, within acces s co mmitment 31,655 13,089 0 6,468 51,2120202301030 Bo vine fo requarte r,bo ne les s ,exc pro ces s ed o r vea l,fro zen,w/a 3,441,437 2,535,876 1,581,559 8,467,344 16,026,216

0202301040 Bo vine hindquarte r,bo ne les s ,exc pro ces s ed/vea l,fro zen,within acces s co mmitmen2,026,894 3,234,321 1,560,396 7,925,262 14,746,873

0202301091 Bo vine bris ke t cuts ,bo ne les s ,exc pro ces s ed/vea l,fro zen, within acces s co mmitme 90,633 158,062 175,495 286,373 710,563


Beef Imports from New ZealandWestern Provinces

Foodservice Opportunities for Beef, Pork, Bison & Lamb in

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