Food Proc Guide

Winter 2008
INTRODUCTION
This guide is intended to help you develop your food processing business. Whether youre new to
the food industry and starting a new business, or are considering expanding your existing operation,
youll find the tools you need here.
The guide takes a look at some of the important areas that are specific to the food processing
business. Weve included guidelines for food safety, quality assurance and government regulations,
as well as general information about how to market and promote commercial-scale products.
If youre a new entrepreneur and youve never started and run your own business in Ontario,
we highly recommend two other invaluable resources along with this guide:
Your Guide to Small Business: This six-part guide, from the Ontario Ministry of Small
Business and Entrepreneurship, highlights what you need to know to begin a new business.
It takes you through the process, covering everything from initial preparation
to developing a business plan, financing your business, incorporating, assessing your
progress and expanding your business. Your Guide to Small Business is available free online
at http://www.sbe.gov.on.ca/ontcan/sbe/en/st_yrguide_en.jsp, or you can download it as a
PDF file.
The Canada-Ontario Business Service Centre website, www.cbsc.org/ontario.

This website, jointly managed by Industry Canada and the Ministry of Government Services,
contains a wealth of information for anyone starting a business. Here youll find guidance on
getting started, financing, research, marketing, taxation, management and planning, hiring
employees and much more. An on-line small-business workshop takes you step by step
through a program that will help you develop your business idea, start a new venture or
improve an existing business.
Throughout this guide youll also find many other valuable contacts and resources, including
on-line links, that will help you through some of the hurdles of starting and expanding your
food processing business.
Ministry of Agriculture, Food and Rural Affairs Business Development Branch
CONTENTS
Introduction . 2
1. Doing Your Research .. 6
Researching the Industry 7
2. Your Responsibilities and Obligations... 10
Liability and Insurance 11
General Obligations and Responsibilities 12
Regulatory Responsibilities and Obligations 15
Federal Statutes and Regulations 18
Provincial Statutes and Regulations 20
Municipal Regulations 24
U.S. Regulations. 24
3. Developing and Manufacturing Your Product.. 26
Choosing a Manufacturing Strategy 27
Setting Up Your Own Manufacturing Facility 27
Using a Product Development Facility 29
Co-Packing Your Product.. 30
Product Development 33
Inventory 35
4. Food Ingredients.. 37
Sweeteners.. 38
Fats and Oils.. 43
Food Starches. 48
Flavours.. 50
Herbs, Spices and Seasonings. 53
Food Additives... 57
5. Food Processing and Preservation. 61
Processing Methods 62
6. Quality Assurance 69
Creating Quality.. 69
Quality Programs 72
Product Certifications. 73
Product Specifications. 74
Sanitation in Food Processing. 75
Developing a Sanitation Program 77
7. Packaging and Labelling. 79
The Ideal Food Package.. 80
Regulatory Considerations.. 81
Sourcing Food Packaging 82
Packaging Materials. 83
Environmental Concerns 86
Package Design... 87
Labelling. 88
Nutrition Labelling.. 91
Other Points About Labelling 92
8. Strategic Marketing.. 93
Marketing Strategies 94
Marketing Programs 95
Promotion.. 97
Advertising. 99
Publicity.. 103
Sales Promotion.. 103
9. Pricing Your Product... 112
Pricing Strategies. 113
Pricing Programs. 114
Monitoring Costs 115
Setting Prices.. 117
Exceptions to the Pricing Rules.. 119
Trade Terms... 120
Deals and Allowances. 121
10. Distributing Your Product 125

Types of Distribution Channels.. 126
Building a Customer Base... 127
Deciding on a Distribution Channel 128
How to Get Your Product Listed 129
How to Be a Successful Supplier. 134
Choosing a Broker.. 136
Resources138-161
ACKNOWLEDGMENTS
The Guelph Food Technology Centre for their technical support
Ministry of Agriculture, Food and Rural AffairsEconomic Development Division Staff
Disclaimer
Content
This information is provided as a public service. Although we endeavor to ensure that the
information is as current and accurate as possible, errors do occasionally occur. Therefore,
we cannot guarantee the accuracy of the information. Readers should where possible verify
the information before acting on it.
External Links
There may be Web sites linked to and from this site that are operated or created by or for
organizations outside of the Government of Ontario. Those organizations are solely responsible
for the operation and information (including the right to display such information) found on their
respective Web sites. These linked Web sites may or may not be available in French. The linking
to or from this site does not imply on the part of the Government of Ontario any endorsement
or guarantee of any of the organizations or information (including the right to display such
information) found on their respective Web sites.
The Government of Ontario does not assume and is not responsible for any liability whatsoever
for the linking of any of these linked Web sites, the operation or content (including the right
to display such information) of any of the linked Web sites, nor for any of the information,
interpretation, comments or opinions expressed in any of the linked Web sites. Any comments
or inquiries regarding the linked Web sites are to be directed to the particular organization for
whom the particular Web site is being operated.
Acknowledgments
1. DOING YOUR RESEARCH

Research makes good business sense. It can uncover hurdles you need to overcome, identify
unexpected costs and help you avoid spending time and money on a project with little or no
chance of success. Research can help you fail small and fail earlyor not fail at all.
Research is essential for developing a sound business plan. Whats more, the knowledge you
gather will be a useful marketing tool.
In your research, you need to look at the industry, the environment, your competition and your
customers. The Canada-Ontario Business Service Centre website at www.cbsc.org/ontario contains
information about initial research.
However, when it comes to researching the food processing industry, youll want specific
information thats unique to this business.
RESEARCHING THE INDUSTRY

Your goal here is to gain an understanding of how the overall industry works.
Youll discover trends, important players, competitors and customers that you
can then investigate in more depth.
Information on an industry comes from two main sources:
published data; and

interviews.
The easiest way to begin is by collecting all the published information thats available. This
will enable you to build a base of knowledge before you attempt to contact anyone directly.
Your starting point should be with the industry associations. They can often provide:
a list of participants;
leads on published information;
general impressions about how the industry functions;
key factors for company success; and
important industry trends.
A word of caution: industry associations are more likely to help members than non-members,
and they may share what you discuss with them among members who are potential competitors.
If you already have a business, you might want to consider joining the associations (there are
many benefits beyond gathering information). An introduction from a member may also be
useful in gaining the associations cooperation.
An excellent source for agri-food industry associations is:
Food in Canada
www.bizlink.com/food.htm
(food industry associations, events and trade shows)
Jan/Feb Guide Book Issue
Tel: 1-800-567-0444
Narrowing Your Search

Once you have collected background information from the industry associations, youre ready
to refine the topics for your search. All of the organizations that specialize in information can
help you complete a narrower search. This might include:
industry profiles and studies;

annual reports of publicly held participants;
articles and newspaper clippings about the industry or participants;
company directories;
company documents;
trade magazines; and
Statistics Canada information.
The government-publication section of your library is a good place
to start. Here, you can see if any reports have already been done on
the industry. You can also look at specific market information such
as food consumption habits, consumer price indexes or income groups.
This type of information will help you determine potential target markets
or product demand.
Libraries
Some libraries specialize in government publications. Youll find a list in the Resources
section of this guide.
Databases
A vast amount of information about new research, consumer surveys, business trends and
developing technologies from all over the world is available on a wide variety of databases.
You can access some of these yourself at a library or on the Internet. Others are available
through data services, most of which charge on a fee-for-service basis.
In order to get the most relevant information, make a list of key words that describe the
industry, the participants and the topic in question. Key words can include (but arent limited to):
company names;
industries;
products;
topics;
individuals;
locations.
As you go through the information you have gathered, take notes and be sure to reference
them. This will reduce your need to reread the material, and help you avoid the frustration
later of trying to find where a piece of information came from.
You should also look through each source for references to other published sources and names
of people to interview.
The Resources section of this guide includes on-line data sources.
Trade Journals
Trade journals and magazines can be a useful source of information. Some of these publications are
general, while others are specific to the food industry or a sub-sector such as dairy.
You can get journals by subscription. Many libraries also carry them. For a list of trade journals
see the Resources section of this guide.
Also check industry association newsletters; they provide information that you may find of value.
Field Research
Once you have a basic understanding of published information, its time to go out and start
talking to people. Field research can give you more specific information than youll get from
published sources.
As you do your field research, make a list of the trends that you see, both positive and negative.
You should also try to establish who competes in the food processing industry and for which
customers. This will help you identify your companys own standing in the industry, as well as
who to watch out for.
2. YOUR RESPONSIBILITIES AND

OBLIGATIONS
Once you have completed all the basic steps involved in starting your own business, youre ready
to look at specific considerations relating to the food processing industry.
As a food processor, you have specific obligations and responsibilities that are governed by federal
and provincial acts, statutes and regulations. You need to be aware of these, to ensure that you are
operating a safe and legally compliant business.
Equally as important, you must be certain that you are properly insured. When youre starting a
business, you cant afford to be under-insured. Even small disasters have the potential to destroy
a new business. And personal assets such as your house or car could be seized if you dont have
proper insurance in place.
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LIABILITY AND INSURANCE

Many types of insurance are available. Your best bet is to consult
with an experienced insurance agent or broker, who can advise you
about the coverage you need. When youre looking for an agent,
speak with other food processors, friends and associates for
suggestions about who to use.
There is a section on risk management for small businesses at the
Insurance Bureau of Canada website at: www.ibc.ca.
You can also find names in the Yellow Pages. Its always useful
to get more than one quote.
You may need to purchase individual policies for each type of protection. However, your insurance
agent might be able to find a package thats geared to your particular business.
Product Liability Insurance
As well as general insurance, as a food processor you should be covered for product liability and
completed operations liability. This will give you protection against claims by customers who have
incurred damages or become ill through eating your food product.
Much of the regulation aimed at protecting consumers is designed to reduce the risk that
they will eat a spoiled or tainted product. But food-borne illness is a continuing concern.
A single lawsuit in this area can bankrupt even the biggest company. Personal assets such
as a house or car can also be seized.
Store owners may require you to provide assurances that your product is properly insured, because
they can also bear some liability for selling the product.
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GENERAL OBLIGATIONS AND RESPONSIBILITIES

Food safety is the responsibility of everyone along the chain, from farm producers to those
supplying inputs to them to consumers.
Health Canada
The Food Program is administered by Health Canadas Health Protection Branch. Its main task
is to assess and control the nutritional value, quality and safety of food under the authority of the
Food and Drugs Act. The branchs activities include nutritional assessments of food, nutritional
labelling and the regulation of novel foods derived from biotechnology.
The branch also carries out surveillance and risk-assessment activities to prevent and control
diseases of national and international concern, including food-borne diseases.
Food Safety
You have specific obligations to:
your employees;
the suppliers of raw products, ingredients and other materials and services;
the distributors and retailers of your products;
the consumers of your products; and
the community in which you operate.
Consumers expect food to be safe. And they expect to be protected from unfair or fraudulent
business practices. Its your responsibility to ensure the safety of your products and the proper
representation of its quality and quantity. The governments role is to ensure that these obligations
are met.
At the manufacturing plant level, food safety begins at the receiving dock and continues beyond the
shipping dock. It includes such considerations as:
the location and design of the plant;

the safety, proper handling and storage of raw materials, ingredients, packaging materials
and manufactured goods;
proper handling, storage and disposal of waste products;
proper installation, maintenance and use of equipment;
proper training of your employees;
programs or systems for such concerns as pest control, product formulation and recalls;
proper packaging and labelling of products; and
adequate information for your customers regarding handling, storage and preparation
of foods.
You will find more details about the above in Part 3: Developing and Manufacturing Your
Products, and Part 6: Quality Assurance.
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Allergen Control
A variety of foods contain ingredients or substances that can cause adverse or allergic reactions
in sensitive people. You need to ensure that prepackaged food is labelled in compliance with the
federal Food and Drug Regulations. Most prepackaged food must have a complete and accurate
listing of ingredients. If allergens arent labelled correctly, or if there is inadvertent contamination
of a food with these products, the results can be serious.
For information on food allergies and your responsibilities as a processor, go to the Canadian Food
Inspection Agency (CFIA) website at www.inspection.gc.ca.
Youll find more information about labelling in Part 7: Packaging and Labelling. The CFIA
website also contains information about labelling.
HACCP
Increasingly, buyers are requiring suppliers of raw products, ingredients and manufactured food
products to use a documented process control system that maximizes safety. One such system is
the Hazard Analysis Critical Control Point (HACCP) system. This is a method of analyzing the food
processing to identify potential hazards to food safety. Once they have been identified, critical limits
are set at each point during the processing.
The Ontario Ministry of Agriculture, Food and Rural Affairs HACCP Advantage Program was
developed as part of the HACCP approach, and is designed to be feasible and practical for any food
processing facility, regardless of its size, the commodity produced or the volume processed.
The HACCP Advantage Program consists of 57 prerequisite program standards and eight HACCP
plan forms. The prerequisite programs are designed to control environmentaland personnel
related hazards, while the HACCP plan accounts for productand process-related hazards.
When you implement all the prerequisite program standards and complete and implement the
required HACCP plan forms, you can create a functioning HACCP system. Much of the program
may already be present in your business, with the only requirement being proper documentation.
The HACCP Advantage Program manual presents the prerequisite program standards and
the HACCP plan forms in a user-friendly format. For more information about the HACCP
Advantage Program or to get a copy of the manual, call 1-866-641-3663 or e-mail
advantage@ontario.ca.
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Product Returns and Recalls

You can minimize product returns by ensuring that the quality is maintained once the
product leaves the plant. Many companies:
use packaging designed to protect and prevent contamination of the product;

ensure that everyone handling the product is aware of all storage and
transportation procedures;
develop clear inventory control procedures;
use a printed or embossed code marking on the package to identify the date
produced and even the exact production machine or production run; and
use systems designed to indicate whether temperature abuse has occurred
during distribution.
Product Returns
Occasionally, customers will want to return a product because they feel something is wrong with it.
As a gesture of goodwill and a way of maintaining and strengthening customer relations, you might
want to accept the returned product and issue a credit note or a refund.
Investigating and keeping records of complaints is useful. Investigations may reveal problems in
production or distribution systems that you need to correct. Records may indicate that a continuing
complaint by a customer isnt related to a defective product or deficiencies in your distribution
system, but to home or institutional preparation problems or other customer-related problems.
For example, if the local football association is always returning hot dogs when games are rained
out, it may be due to their own poor planning, not bad hot dogs. If this is what the complaint
records show, then you may want to look at other ways of dealing with the football association.
Product Recall or Removal
If one of your products is found to be unsafe or is implicated in a food-borne illness outbreak,
regulatory agencies will request that you withdraw or recall the product from the marketplace.
If you refuse, or there is an imminent threat to public safety, the Canadian Food Inspection
Agency or municipal health units may exercise their powers to recall or remove the product
from sale.
You need to be continually vigilant to avoid product recalls. To minimize the impact of a food recall,
have a process control system that provides readily accessible and accurate documentation as well as
an efficient and effective emergency recall plan.
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Food and Consumer Products of Canada publishes a number of guidelines and publications,
including a Product Recall Manual. Contact:
Food and Consumer Products of Canada
www.fcpc.ca
885 Don Mills Road, Suite 301
Toronto, Ontario M3C 1V9
Tel: 416-510-8024
Fax: 416-510-8043
E-mail: info@fcpc.ca
REGULATORY RESPONSIBILITIES AND OBLIGATIONS

The information that follows is only a partial guide to the regulations that apply to the food
processing industry. Its your responsibility to contact the applicable regulatory agencies for
detailed information.
Some of the responsibilities and obligations you have to your suppliers,
employees, customers and communities are specified in agricultural, business,
contract, food, environmental, labour, trade or criminal law.
In Ontario, federal, provincial and municipal governments have enacted laws
governing the food industry and food processors. You need to be aware of
the applicable laws, as well as any changes that occur in these laws over time.
Get as much information as possible to determine the requirements
of the applicable legislation, regulations and bylaws, particularly before:
building a new plant;

buying an existing plant;
starting operations;
expanding or modifying your operation;
introducing new products; or
expanding into new markets.
One main function of regulatory agencies is to conduct inspections to ensure compliance. The
frequency with which these routine inspections are carried out is generally determined by the degree
of risk posed by a product.
For example, meat is a relatively high-risk product. The slaughter of animals for meat for human
consumption has to be done in the presence of an inspector. The inspector will examine all animals
before they are slaughtered and all carcasses afterwards.
15
If your facility produces lower-risk products, inspectors might visit less frequently. If your product is
intended for export markets, the inspection frequency will be determined by requirements imposed
by your trading partners.
If, during the course of a routine inspection, a product or the premises are found not to be in
compliance, you will have to take corrective action.
Product and other requirements may vary from country to country, province to province and state
to state. Requirements for food processing premises, as well as restrictions on them, may also vary
from municipality to municipality.
Harmonized Inspection Standards
In Canada, the federal, provincial, territorial and municipal governments recognize the need to
harmonize food safety standards nationally. The Canadian Food Inspection System Implementation
Group is developing a new system of food safety inspection standards, which will be applied
nationally. These may reduce the regulatory burden on processors and make international and
interprovincial trade easier.
You can check the progress of this initiative at the Canadian Food Inspection System website,
www.cfis.agr.ca.
Legislative Renewal
The federal government and many jurisdictions also recognize the need to modernize and
consolidate existing food safety legislation. Both Health Canada and the Canadian Food Inspection
Agency have launched legislative renewal initiatives. Ministries with food safety responsibilities in
Ontario have joined with municipal representatives to identify improvements needed in Ontarios
food safety system.
Supply Management at the National Level
National supply management plans were introduced under the Canadian Dairy Commission Act
and the Farm Products Marketing Agencies Act.
The Canadian Dairy Commission oversees the administration of the National Milk Marketing Plan
and reports to the Minister of Agriculture and Agri-Food in Canada. The plan covers all processed
dairy products, with the exclusion of fluid milks (which are administered by the provinces).
The commission oversees national supply management quotas for industrial milk. It also
provides quotas for the development of products that are new to the Canadian market.
16
If you are planning to use dairy ingredients in your finished product, you need to contact the
Commission. It administers a system of special classes that sets raw milk prices used to make
milk ingredients for finished products. Contact:
Canadian Dairy Commission
www.cdc.ca
Building 55, NCC Driveway
Central Experimental Farm
960 Carling Avenue
Ottawa, Ontario K1A 0Z2
Tel: 613-792-2000 (main)
Fax: 613-792-2009
E-mail: cdc-ccl@agr.gc.ca
The National Farm Products Council is a federal body that oversees certain national supply
management agencies. Supplies of chicken, turkey, eggs and broiler hatching eggs are controlled
so that Canadas needs are met effectively. Contact:
National Farm Products Council
www.nfpc-cnpa.gc.ca
Canada Building
344 Slater Street, 10th Floor
Ottawa, Ontario K1R 7Y3
Tel: 613-995-6752
Fax: 613-995-2097
E-mail: nfpcweb@agr.gc.ca
A list of national marketing agencies is available on the Ministry of Agriculture, Food and
Rural Affairs website, www.omafra.gov.on.ca/english/farmproducts/index.html
Imports
You can import products from other countries for processing or further processing as long as you
comply with certain conditions imposed by federal or provincial legislation. Some products can only
be imported under a federal import permit issued by International Trade Canada.
Certain products are subject to tariff rate quotas. These are described on the International Trade
Canada website at www.international.gc.ca/eicb/menu-en.asp.
If you would like to learn more about import requirements, contact:
a customs broker or freight forwarder;

the local Revenue Canada-Customs office; or
the local Canadian Food Inspection Agency office.
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FEDERAL STATUTES AND REGULATIONS

You need to familiarize yourself with a number of federal statues and regulations, administered
by several agencies.
Canadian Food Inspection Agency (CFIA)
All federally mandated food inspection and quarantine services are consolidated in a single federal
food inspection agencythe CFIA.
Acts and regulations that the CFIA administers or enforces include the following:
Agriculture and Agri-Food Administrative Monetary Penalties Act;

Canada Agricultural Products Act;
Canadian Food Inspection Agency Act;
Consumer Packaging and Labelling Act;
Orders made under the Financial Administration Act;
Fish Inspection Act;
Food and Drugs Act;
Health of Animals Act;
Meat Inspection Act; and
Plant Protection Act.
The CFIA maintains an excellent website at www.inspection.gc.ca that provides explanations

of the programs and services it offers to industry, access and regulations, and a directory of
staff and offices. This website contains a wealth of information available to industry and consumers.
It includes newsletters, fact sheets, guidelines, manuals and databases covering a wide range of topics
such as allergens, labelling, food safety and codes of practice. Be sure to check out the CFIAs
Guide to Food Labelling and Advertising, which is available on the website and can be downloaded
as a PDF file.
You can contact the CFIA at:
Head Office
Canadian Food Inspection Agency
59 Camelot Drive
Ottawa, Ontario K1A 0Y9
Tel: 613-225-2342
Fax: 613-228-6601
Ontario Area Office
174 Stone Road West
Guelph, Ontario N1G 4S9
Tel: 519-837-9400
Fax: 519-837-9783
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Measurement Canada
Measurement Canada is a special operating agency of Industry Canada that administers and enforces
two statutes dealing with measuring devicesthe Electricity and Gas Inspection Act and the
Weights and Measures Act.
Under the Weights and Measures Act, the agency evaluates and approves all measuring devices
(scales and meters) used in trade. You must ensure that all approved devices are inspected before
you use them, and that you have them inspected regularly. Measurement Canada has an inspection
program. However, you are legally responsible for the accuracy of your devices.
Measurement Canada also inspects goods and services that you trade on the basis of measure,
to ensure that they are accurately measured.
Check the Measurement Canada contact list in the Resources section of this guide.
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PROVINCIAL STATUTES AND REGULATIONS

As a food processor, you must familiarize yourself with a number
of provincial statutes and regulations. The Innovation and
Competitiveness Division has useful website links for gaining
information about food labelling regulations in Canada and the
United States, as well as proposed changes to current government
regulations. Note that the selected links below are to external
websites, and are intended for information only. A good reference
source is the food page of the Ministry of Agriculture, Food and
Rural Affairs website at www.omafra.gov.on.ca.
You can also get copies of the various acts through government information centres in Toronto
and Ottawa, as well as a number of third-party outlets throughout Ontario.
Ontario Government Bookstore
www.publications.gov.on.ca
880 Bay Street, 5th Floor
Toronto, Ontario M7A 1N8
Tel: 416-326-5300
Toll Free: 1-800-668-9938
Fax: 416-326-5317
By mail: Publications Ontario
50 Grosvenor Street
Access Ontario
Ottawa Court House
161 Elgin Street, Level 2
Ottawa, Ontario K2P 2K1
Tel: 613-238-3630
Toll Free: 1-800-268-8758
Fax: 613-566-2234
A list of private distributors is available at www.publications.gov.on.ca/english/shopsite.
The acts are administered or enforced by a number of agencies, including the following.
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Ontario Ministry of Agriculture, Food and Rural Affairs

The Ministry of Agriculture, Food and Rural Affairs administers or enforces the following statutes:
Dead Animal Disposal Act: regulates renderers and the disposal of dead animals;
Edible Oil Products Act: regulates manufacturers and wholesalers of edible oil products
that resemble dairy products;
Farm Products Grades and Sales Act: establishes requirements for fruit and vegetable,
honey and maple products and grade marking requirements for beef;
Livestock and Livestock Products Act: establishes requirements for eggs and
processed eggs;
Milk Act: establishes requirements for dairy processors and dairy products; and
Meat Inspection Act: establishes requirements for abattoirs and processing in abattoirs.
Regulations under the Food Safety and Quality Act, 2001 will harmonize Ontarios
standards for food safety with national standards where appropriate. The legislation will
serve as a strong complement to the Ministry of Health and Long Term Cares Health
Protection and Promotion Act.
For more information, contact:
Food Inspection Branch
1 Stone Road West, 5th Floor NW
Guelph, Ontario N1G 4Y2
Tel: 519-826-4230
Toll Free: 1-888-466-2372
Fax: 519-826-4375
Note that if you are a processor of dairy products, edible oil products or eggs, you must be licensed
under provincial legislation. Abattoir operators who arent federally registered also need a license.
Contact the Food Inspection Branch for details.
The Ontario Farm Products Marketing Commission administers the following acts:
Farm Products Marketing Act; and

Milk Act.
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If you are a processor of apples, asparagus, grapes, potatoes, tender fruit or vegetables, you need to
be licensed under the Farm Products Marketing Act.
Ontario Farm Products Marketing Commission
www.omafra.gov.on.ca/english/farmproducts/index.html
1 Stone Road West, 5th Floor SW
Tel: 519-826-4220
Toll Free: 1-888-466-2372
Fax: 519-826-3400
A useful resource about regulations governing dairy processing in Ontario is the Dairy Farmers of
OntarioOnline Services website, at
www.milk.org/Corporate/View.aspx?Content=Processors/DairyProcessing
Marketing plans have been established under the Milk Act and the Farm Products Marketing Act.
These plans are administered by various producer marketing boards.
The plans vary by commodity, and each board has been granted different authorities. See the
Ministry of Agriculture, Food and Rural Affairs website at www.omafra.gov.on.ca for a list of
marketing boards and agencies.
Ontario Ministry of Consumer and Business Services
The Alcohol and Gaming Commission of Ontario has jurisdiction over the following acts:
Liquor Licence Act; and

Wine Content Act.

Alcohol and Gaming Commission of Ontario
www.agco.on.ca
Atrium on Bay
20 Dundas Street West
Toronto, Ontario M5G 2N5
Tel: 416-326-8700
Toll Free: 1-800-522-2876
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Ontario Ministry of the Environment

The Ministry of the Environment is responsible for the Environment Protection Act. For more
information, contact:
Ministry of the Environment
www.ene.gov.on.ca
135 St. Clair Avenue West, Main Floor
Toronto, Ontario M4V 1P5
Tel: 416-325-4000
Toll Free: 1-800-565-4923
Fax: 416-325-3159
Ontario Ministry of Health and Long Term Care
The Public Health Branch is responsible for the Health Protection and Promotion Act.
Ministry of Health and Long Term Care
www.health.gov.on.ca
Suite M1-57, Macdonald Block
900 Bay Street
Tel: 416-314-5518
Toll Free: 1-800-268-1154
Fax: 416-314-8721
Local Public Health Units are official municipal health agencies established to deliver community
health programs. Among their duties, the Medical Officer of Health and the inspection staff of each
unit are responsible for inspecting all food premises, including restaurants and retail outlets, within
their units. They also investigate and control food-borne illness outbreaks.
You can find Food Premises Regulation 562 under the Health Protection and Promotion Act on the
Internet at http://www.e-laws.gov.on.ca/html/regs/english/elaws_regs_900562_e.htm
For your location go to: Municipal Public Health Unit Locations (Ontario)
Bills before the Legislature
The Ministry of the Attorney General website provides the status of bills before the legislature,
as well as electronic versions of statutes and regulations. Go to:
www.attorneygeneral.jus.gov.on.ca ; or
www.ontla.on.ca.
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MUNICIPAL REGULATIONS
Local municipalities are responsible for enforcing the Ontario Building Code. Your municipality
may have bylaws that control the location of food processing operations, water and energy usage
and waste disposal. Check with your local municipal office for more information.
U.S. REGULATIONS
You must comply with specific regulations when your products are destined for the United States.
United States Food and Drug Administration
The United States Food and Drug Administration (FDA) is generally responsible for all food
products entering the United States except meat and poultry.
If you intend to manufacture products destined for U.S. markets, you must comply with all
applicable U.S. laws, particularly the:
Federal Food, Drug and Cosmetic Act;

Fair Packaging and Labeling Act; and
Nutrition Labeling and Education Act of 1990.
Note that you must register with the FDA if your business includes low-acid canned food and
acidified food processing and you ship products to the United States.
The FDA maintains a web page at www.fda.gov/oia/impinsp.htm for international importers
to the United States, which includes frequently asked questions. The web page also includes a
source of international regulatory resources, as well as a listing of FDA District Office Import
Program Managers.
The Food and Drug Administration (FDA)
www.fda.gov
Center for Food Safety and Applied Nutrition
Industry Activities Staff (HFS-565)
5100 Paint Branch Parkway
College Park, Maryland 20740-3835
Tel: 301-436-2600
24
United States Department of Agriculture

The Food Safety and Inspection Service (FSIS) is the public health agency in the U.S. Department
of Agriculture thats responsible for ensuring that imported meat, poultry and egg products are safe,
wholesome and correctly labelled and packaged. These requirements come under the following acts:
Federal Meat Inspection Act;

Poultry Products Inspection Act; and
Egg Products Inspection Act.
FSIS has a web page with information for exporters to the United States, at: www.fsis.usda.gov
25
3. DEVELOPING AND MANUFACTURING

YOUR PRODUCT
Your next step in getting your business started is called product development or
product commercialization.
This includes taking your initial market research and, perhaps, a simple homemade recipe and
developing a physical version (or prototype) of your product, including a commercial recipe
and the manufacturing technology needed.
You may have already developed a sample of your product at home. However, commercial
recipes must still be developed for batch processing.
26
CHOOSING A MANUFACTURING STRATEGY

There are several ways you can proceed from this point, including:
developing your own commercial recipe and manufacturing facility;

obtaining the assistance of a product development specialist who will help you develop
a commercial product; or
developing your own commercial recipe and finding an existing food processor known
as a co-packer, who will make the product according to your recipe.
Youll find that, as with market research, there is a great deal of support from groups that
want to help you develop the best commercial product possible. These groups are experienced in
new-product development, or they specialize in one part of the process, such as developing recipes.
Most groups will charge a fee for gathering specific information or preparing material customized
to your needs. To avoid excessive fees, be clear about your objectives. Also determine whether
you have the expertise to develop your own commercial recipe, analyze ingredients and fat levels
and set up a manufacturing plant. Product development fees have been known to exceed $20,000.
SETTING UP YOUR OWN MANUFACTURING FACILITY

If you decide to operate your own plant, you can either lease
or purchase an already existing facility or you can construct a
new building.
Choosing the Best Location
You need to look at many factors when youre deciding on a location.
These include rental or purchase cost, customer and market location,
labour force, raw material accessibility, trucking and freight access,
leasing arrangements and industrial space availability. You should
consider the following initial steps:1
understanding all the needs of the production process;

determining if an existing building will satisfy those needs;
trying to locate a facility that was originally designed for food processing
operations (preferably one thats already federally or provincially registered);
determining if the lessor will pay for renovations required for the business; and
calculating whether it is cheaper to adapt an existing building or to build a new one.
__________________________________________________________________________________________
1Nelson-Stafford,
Barbara, From Kitchen to Consumer: The Entrepreneurs Guide to Commercial

Food Production,: Academic Press, New York, 1991, pp. 107-108.
27
Zoning
Be sure to check the zoning laws for the location you have selected. To find out if your business
can obtain a permit, call the city planning department (the number will be in the Blue Pages of
your phone book). You can also get a good indication of whether the area is zoned in your favour
by looking at the surrounding businesses.
If the area you have chosen isnt zoned for business, you can apply for a re-zoning vote before
city council. (Re-zoning isnt likely to happen if there is other land available in an appropriate zone.)
Also be aware that just because one inspection department checks your proposed business and, for
example, certifies that it meets health and safety requirements, you cant assume you are a correctly
zoned business. Each department is operated separately.
Talk to local economic development officers; they can be a great ally in helping you with all
municipal concerns.
Food Plant Design
Naturally, youll want your plant to operate as efficiently and cost-effectively as possible. As well,
youll have to meet certain federal, provincial and municipal requirements. Here are some questions
and considerations to keep in mind:
Your bank will ask for a Phase One environmental assessment if you are buying a site,
and it could also be required if you are leasing or changing the use of an existing facility.
If you are taking over an existing building, is there documentation to show that it was
used for food processing?
Is there room for future expansion?
Does the facility need repairs?
Do the hydro services fit your needs?
Will you need space for a cooler?
The production line should be as linear as possible; when cross-overs occur they result
in inefficiencies, staff waiting time and loss of productivity.
If possible, use rolling conveyors, for less walking, lifting and turning.
Heres a general rule of thumb for size1,000 square feet for $100,000 in sales, 2,000
square feet for $200,000 in sales, etc.
Two doorsone for shipping, one for receivingare best.
Also look at such requirements as floor drains, washable walls, suitable hand-washing facilities,
washrooms that dont open onto the production floor, a change room and a separate area for
storing packaging goods, ingredients and finished goods.
28
USING A PRODUCT DEVELOPMENT FACILITY

Product development facilities include laboratories, research stations and pilot plants.
Laboratories provide product development and testing facilities on a small benchmark scale. This
is usually the first step if your product is totally new rather than a variation of similar or previously
processed products.
The process may involve standardizing your home recipe and developing it to a commercial formula.
This would include analytical tests, chemical analysis and shelf-life analysis.
Product Development Laboratories
Youll find a list of product development laboratories in the Resources section of this guide. For
the names of other product development testing labs that operate in Ontario, contact the Ontario
Ministry of Agriculture, Food and Rural AffairsBusiness Development Branch, at 1-888-4662372.
Guelph Food Technology Centre (GFTC)Pilot Plant
The GFTC provides and maintains a state-of-the-art pilot plant
with specialized facilities for fruits and vegetables, dairy, meat,
cereals, baking, fermented products, confections and pet food.
You can access this pilot plant through a project at the GFTC or
by arranging to lease or rent space to install and test equipment and
new processes.
Leading equipment manufacturers have installed equipment in the pilot
plant. They can demonstrate the operation of new equipment or carry
out confidential development work with you.
Ingredient manufacturers use the facility to test the performance of new products in a range
of processing environments. You can also use their other advisory services, covering product
development, scale-up and nutrition labelling.
Guelph Food Technology Centre
www.gftc.ca
88 McGilvray Street
Guelph, Ontario N1G 2W1
Tel: 519-821-1246
Fax: 519-836-1281
E-mail: gftc@gftc.ca
Research Laboratories
29
In addition to the GFTC, several laboratories provide food research services. Youll find a
list in the Resources section of this guide. Note that the list isnt complete; for the names of
other food research labs that operate in Ontario, contact the Ontario Ministry of Agriculture,
Food and Rural AffairsBusiness Development Branch, at 1-888-466-2372.
CO-PACKING YOUR PRODUCT

A co-packer, or contract manufacturer, is a food processor that agrees to produce another
companys product within their own facility. Manufacturers that pack products for others
generally do it to use their own equipment to full capacity, which will cover some fixed costs.
Choose a co-packer carefully to ensure that it meets your criteria, because it is producing a product
that will possess your name. After all, its your reputation that will suffer if the end product doesnt
meet client/consumer standards.
Advantages and Disadvantages
There are some definite advantages in having your product produced by an existing manufacturer.
For example:
no investment in facilities or equipment;

conservation of cash;
fewer personnel needs;
reduced capital requirements;
reduced start-up time required;
able to bypass plant maintenance and equipment obsolescence;
ongoing technical support by co-packers personnel; and
assistance with product development (some co-packers).
There are also some drawbacks to using a co-packer. However, they can be mitigated with your
contractual agreement. Make sure your contract covers:
control of your product (quality, safety and delivery);

formula confidentiality; and
cost and product agreement.
Because you cant be present for every production run, you must have mutual trust and confidence
in your co-packer and your agreement.
30
Establishing Your Criteria for a Co-Packer

Before you contact potential co-packers, it is essential for you to define your specific needs.
Some things you should consider include:
the price you are willing to pay for their services;

the quality that must be maintained;
the volume you need produced;
distribution and delivery methods required;
your level of involvement in manufacturing;
the timing of your needs; and
the availability of warehousing.
You also need to determine whether you require a co-packer that specializes in a particular area
(for example, canning equipment). This will depend on your specific equipment needs. Often it
is difficult to find a co-packer with the exact equipment you require. In such a case, you must
determine up front whether you are willing to purchase or lease the equipment to be installed on
the co-packers premises.
Its essential to prioritize which needs are the most important to you. Its unlikely that you will find a
perfect match between your objectives and those of your co-packer. Trade-offs must often be made.
By prioritizing your most important objectives, you can more easily determine which ones must be
met and which can be compromised.
Where to Look for Co-Packers
Even many experienced entrepreneurs and workers within the food industry often dont know
where to begin looking for a contract manufacturer. There are, in fact, very few publications that list
potential co-packers. Its usually through work-related encounters that manufacturers are revealed.
For assistance in finding a co-packer, contact the Ministry of Agriculture, Food and Rural Affairs
at 1-888-466-2372.
Other alternatives available to assist you include:
food industry associations;

Industrial Research Assistance Program advisors; and
Private Label Directory, published annually by Private Label Magazine
(for U.S. co-packers).
Selecting a Co-Packer
Once you have a list of co-packers, start contacting manufacturers to determine:
if they are willing to co-pack; and

if they are capable of satisfying your needs and objectives.
31
Ideally, the size of your business should be matched to that of the co-packer. That is, a small or
medium-sized co-packer will probably service a small product line best.
After you have screened a number of co-packers and begun looking more closely at using a few
facilities, you will want to schedule a tour of each potential plant. From this tour you will be able
to get a good idea of their processing line set-up, general up-keep, sanitation, product loss factors,
quality monitoring systems, etc. It might also be a good idea to ask to see:
references from other clients;

copies of federal and provincial processing licences (if applicable); and
copies of previous quality control inspections.
Limit the amount of information that you give a potential co-packer about your product, formulas,
processes, etc., until a confidentiality agreement has been signed between both parties. Its wise to
not disclose confidential information to a co-packer, regardless of any agreement that has been
signed by both parties, until you are absolutely certain that this is the co-packer that you are going
to contract. You certainly dont want someone running away with your ideas.
A test run is usually completed before signing any agreement. Test runs not only determine if
the product can be produced within the facility, but they also help to establish the costs assumed
by the co-packer.
Other key points besides processing capabilities must be taken into consideration when you are
selecting a co-packer. These factors are associated with the way the manufacturer does business and
how it will affect the co-packerthe client relationship. When dealing with a co-packer, consider
their openness, enthusiasm and corporate goals in addition to their facility.
Co-Packing Costs
In order to negotiate a mutually beneficial agreement with a co-packer, you need to know the costs
of producing your product within their facility. The co-packer will provide you with a breakdown of
the fixed and variable costs.
Generally, if you can offer a co-packer high volumes or long-term business, you will likely be able to
negotiate a better agreement.
In calculating what you can afford to have your product co-packed, you may need to consider the
cost of mark-ups as the product moves from the co-packer to retail. In the food industry, mark-ups
are calculated from the retail price working back, rather than from the cost price working up. As a
rule of thumb, retailers margins average around 30 percent. Distributors margins can be as high as
30 percent as well, depending on the services provided.
32
PRODUCT DEVELOPMENT
Whether you plan to develop the product yourself or use the assistance of a product development
specialist, you need to take certain steps in preparation.
Food product development involves building on an idea and developing a product to the stage
where it is suitable and acceptable for commercial sale.
Recipes used for commercial-scale production can be significantly different from the original
recipe, because the commercial product must meet the requirements of the regulatory agencies.
Many product development facilities can assist you in modifying your product so that it is suitable
for commercial production and is accepted by consumers.
Before you approach a product development facility, you should establish certain criteria for
choosing one that will be appropriate for your product.
By this stage, you will have identified the location and size of your target market, so you have
an idea of the potential sales. You will have assessed your competitors products, gathering such
vital information as the ingredients and packaging (including package specifications and cost of
packaging) and the positioning of the products in the marketplace. Sensory evaluation tests and
physical and chemical analyses can also be performed on your competitors products, which will
provide further information on their composition.
Once you have assessed your competitors products, you should have a clearer idea of what the final
product should be like. For example:
general description (fruit pies, cookies, etc.);

basic process (fresh, frozen, etc.);
flavour and aroma;
key ingredients (blueberries, chocolate, etc.);
texture;
shelf life; and
packaging.
You arent trying to duplicate a competing product, but you may generate ideas for possible
ingredients or packaging and combine them with your own unique ideas.
Product formulation involves a series of trials in which test batches are evaluated against a
pre-determined set of quality criteria. Before you begin the product development process,
set a budget for the amount of money you are willing to spend. This will help the product
development facility to determine which services you require. It will also help you to identify
the areas that are crucial to developing the product so that it is acceptable for commercial sale.
33
Equipment Sourcing
Sourcing equipment for the production of your product can also be a difficult process. One way
to get the information you need is through the expertise of other food producers; they can provide
trade publications, supplier lists and trade show information.
As well, people in research and development and product development will provide important
information. Go to the Resources section of this guide for equipment sourcing contacts.
Trade shows also provide an opportunity to look at available food processing equipment.
Trade shows are discussed further in Part 8: Strategic Marketing of this guide.
Ingredient and Raw Material Sourcing
A good place to start is with the Canadian Company Capabilities website at
www.strategis.ic.gc.ca/sc_coinf/ccc/engdoc/homepage.html. This on-line databasepart
of Industry Canadas Strategis websiteprofiles tens of thousands of Canadian companies.
The database is used globally to find Canadian supply sources, investment partners, agents
and joint venture projects.
You can also find other information sources for suppliers of raw materials through trade
publications, trade directories, trade shows and other producers. One useful source is:
Canadian Food Brokers Association
c/o Food & Consumer Products of Canada
www.fcpc.ca
Tel: 416-510-8024
34
INVENTORY
Inventory is the most visible and tangible aspect of
a food processing operation. It includes all the raw
materials you have on hand for manufacturing, the
goods in progress and your finished products.
These items are a large portion of your business
investment, and you must manage them well
in order to maximize your profits. As a small
business, you probably cant afford the losses
that poorly managed inventory can cause.
Inventory Management
Successfully managing your inventory involves simultaneously balancing the costs and benefits
of the inventory.
The costs of inventory are called holding costs. They include the costs of storage facilities,
insurance on stocks, loss, breakage, deterioration, obsolescence and the interest on capital you
could gain if the money werent tied up in inventory.
In any business, you should aim to minimize holding costs. However, the benefit of inventory is
sales revenue. Sufficient inventory will ensure that your customers can purchase products when they
need them. If you hold too little inventory, you may lose a sale. But if you hold too much, you may
have excessive holding costs.
Proper inventory management includes the following:
keeping holding costs low while ensuring adequate supply for customers;
increasing inventory turnover while maintaining adequate profits;
keeping process material stocks as low as possible; and
making volume purchases to get discounts while avoiding excess buying.
You can choose from many inventory management systems. One of the simplest is ABC Analysis.
35
ABC Analysis
ABC Analysis states that 80 percent of the firms total inventory cost is caused by only 20 percent
of all items. ABC analysis divides stock items into three classesA, B and Cthat is, those items
accounting for 80, 13 and 7 percent of your total inventory costs. Once you can divide your stock
into these classes, you can control the stock accordingly.
A computer can help you in this method of coding sales items into the three classes. Take the
following steps to do your ABC analysis:
1.
2.
3.
4.
Determine the value of each item by multiplying the cost times the number of units sold.
Rank items on the basis of their dollar value and list these in ascending order.
Calculate the percentage of dollar value of each item.
Determine the cumulative percentage for:
the number of items; and
the dollar volume based on the totals for A and B.
5. Classify the items according to A, B and C groupings.
Just-in-Time (JIT)
Another method of controlling stock is Just-In-Time. This means carrying a minimum
inventory and buying only as its needed or against orders in hand. This allows you to keep
inventory costs at a minimum.
This form of inventory management requires working closely with suppliers and customers to
ensure that shortages of product or ingredients dont occur.
36
4. FOOD INGREDIENTS
As you work on developing your product, one of the keys to success is in knowing the various basic
ingredients that are added to foods, as well as how theyre used.
Six groups of ingredients are commonly found in food products:
sweeteners;
starches;
fats and oils;
flavours;
spices; and
food additives.
Once you have read through this section, you should be able to answer the following questions
about the food ingredients covered:
What forms does it come in?

When would I use it?
Note that for information about sources for any food ingredients, you can contact the Ontario
Ministry of Agriculture, Food and Rural Affairs at 1-888-466-2372.
37
SWEETENERS
The taste sensation of sweetness is one of the most highly
regarded attributes of food substances. To most people,
sweetness comes from sucrose, the white granular sweetener
sold in the supermarket.
To the food processor, however, sweetness can come from a
number of different carbohydrate sources.
Commercially Available Sugar Products
You can choose from a wide variety of sugar products.
Sugar Beet/Cane Products
Products in this category include the following:
Dry granulated sugar: This type of sugar is commonly referred to as table sugar
or sucrose. Sucrose is a disaccharide. It is composed of one molecule of glucose and
one molecule of fructose.
Sucrose is processed in a variety of granulations to fulfil different processing requirements.
For example, fine granulated sugar is used for direct consumption, whereas powdered sugar
may be used for confections and baking.
Dry granulated sugar is packaged in large, multilayer paper bags. A moisture barrier
layer must be present to slow the penetration of moisture and the release of water that
causes clumping.
The clumping of dry sugar is a common problem. To prevent it, bags of sugar should
be stored in dry areas. Generally, if the relative humidity of the air is less than 70 percent,
little or no clumping will occur. You can also minimize clumping by rolling the bags every
few days to prevent a hard mass from forming.
As a rule of thumb, as the size of granulation decreases, there is an increase in tendency for
clumping because of the larger crystal surface area. In products such as icing and powdered
sugars, about three percent cornstarch is added. The starch absorbs the moisture, which
prevents the sugar from clumping.
38
Liquid sugar/sucrose: Liquid sugar is simply the melted form of refined granular
sugar. The typical percentage of sucrose in liquid sugar is 66 to 68 percent, and the
remaining 34 to 32 percent is water.
Invert liquid sugar: Invert sugar is made from sucrose by splitting the sucrose into its
component parts, glucose and fructose. (Glucose is also referred to as dextrose. Fructose
is also referred to as levulose.). Invert sugar is a liquid mixture of these component sugars.
An equal ratio of glucose to fructose is always obtained during this process.
Varying levels of invert sugar are available to food processors, ranging from 10 percent
to 90 percent. As invert sugar has a higher sweetness level than sucrose, it is often more
economical to use.
Molasses: Molasses is the concentrated juice extracted from sugar-bearing plants, such as
the viscous liquid produced in the refining of sugar. (Pancoast and Junk, 1980) Fancy is the
term given to the highest grade of molasses, and blackstrap molasses is the final syrup
obtained in the refining process.
Brown/yellow or golden sugar: The trade usually refers to brown sugars as soft sugars
because they are typically used for their characteristic flavour. Brown sugar is a fine-grain
sugar covered with a very thin layer of syrup, usually cane molasses. The grades are based
on the degree of brown colour.
The clumping of brown sugar is very problematic if it isnt stored properly. In low relative
humidity conditions, loss of moisture causes the layer of syrup to become sticky. However,
if its stored in high relative humidity, the syrup is permitted to regain moisture. Ideally,
brown sugars should be stored at a relative humidity of between 60 percent and 70 percent.
Corn Products
Corn sugars are classified as any carbohydrate obtained by the partial or complete breakdown
of cornstarch. All corn sugars are processed to have a dextrose equivalent of greater than 20.
Maltodextrins are also obtained from the breakdown of cornstarch. However, they possess dextrose
equivalents of less than 20.
It is important to define the widely used term dextrose equivalent (DE). This is the percent of
reducing sugars in the syrup, calculated as dextrose (that is, glucose) on a dry weight basis. The
simple way to remember this is that DE indicates what percentage of syrup is glucose.
Corn syrup: Corn syrup is produced from the starch of corn by a series of chemical
reactions called hydrolysis. Corn syrup is a very viscous liquid that gains much of its
sweetness from its high glucose content.
Corn syrup is the only type of corn sugar sold at the retail level.
39
Glucose (dextrose): Glucose is the product of the complete breakdown of starch.

It is available to food processors in a liquid solution form or a crystalline sugar form.
In Canada and the United States, glucose syrup made from corn is referred to as corn
syrup. This could create some confusion. Therefore, its important that you request the
proper ingredient from suppliers.
Corn syrup solids (CSS): These are the dried version of corn syrup, and may also
be referred to as dried glucose solids. CSS are classified according to particle size,
carbohydrate distribution and dextrose equivalent.
High fructose corn syrup (HFCS): This type of syrup is similar to invert sugar, but
it doesnt have an equal ratio of glucose to fructose. HFCSs are classified according to
their glucose-fructose ratio.
The trend in industry is to increase the amount of fructose with a corresponding decrease
of glucose. This causes a syrup with a higher sweetness level, so that less syrup is required.
However, this is often counterbalanced by the higher cost of processing.
In Canada, HFCS is called glucose-fructose in the ingredient statement. The proportion of
glucose to fructose affects the terminology.
Fructose: Fructose has the highest sweetness level of any commercial sugar. Therefore, only
a small amount is usually required in food. It is available as a solution or a crystalline powder.
Maltodextrin: Maltodextrins in a strict sense shouldnt be considered sweeteners,

because they possess little sweetness. However, they are often used to control sweetness.
As mentioned earlier, maltodextrins are obtained from starch that has been processed to
have a DE of less than 20. They are sold as a dry white powder that can be reconstituted
in water. They are classified by their DE value and their bulk densities. Because they possess
a large volume in comparison to their weight, they are often used as fillers.
Honey
Food processors generally use two types of honey: white and golden.
Golden honey imparts more flavour and, as the name implies, is a golden yellow colour.
White honey is less sweet and possesses little colour.
Golden honey is less expensive than white honey.
40
Artificial Sweeteners
Two choices of artificial sweeteners are available:
Aspartame: This artificial sweetener, with the brand name Nutrasweet, was approved
by Health Canada in 1981. It is a dipeptide, composed of two amino acids, that possesses
a sweetness value 160 to 200 times that of sugar.
Because aspartame isnt heat stable, its applications are limited. A recent development,
howeverencapsulated aspartamedoes have applications now in baking.
One remaining difficulty with aspartame is that it cant be consumed by people with
phenylketonuria, a genetic condition where the amino acid phenylalanine cant be broken
down by the body.
Sucralose: This non-nutritive artificial sweetener, more commonly known as Splenda,

was approved by Health Canada in 1991. Sucralose is a synthetic form of sucrose that
contributes no calories and is 600 times as sweet as sugar.
Since sucralose is more stable at high temperatures, it can be used in bakery and cooked
product applications.
41
Functions of Sugars
Sugars have the following functions:
Sweetness: Not all sugars impart the same level of sweetness. When establishing the
sweetness level of your food product, you need to consider the relative sweetness of
the sugar. A value of 100 has been arbitrarily assigned to sucrose, which is used as the
benchmark. All other sugars are given a value depending on their relative sweetness to
sucrose. For example, fructose has been assigned a value of 170, which means fructose
is 1.7 times as sweet as sucrose.
The Relative Sweetness chart below lists the sweetness values of some of the
commercial sugars available. Use such a system only as a guideline. Note that sugars
shouldnt be substituted directly based on values given, without experimentation.
Relative Sweetness
Sweetener
HFCS 42% fructose
HFCS 55% fructose
42DE corn syrup
54 DE corn syrup
Molasses
Fructose
Lactose
Glucose (dextrose)
Honey
Sucrose
Relative Sweetness To Sucrose

100
100-110
40-45
50-55
75
150-170
40
70-80
97
100
Adapted from: Pancoast and Junk (1980)
42
Humectancy: This is the ability of an ingredient to resist a change in moisture content.

With respect to sugars, humectancy is related to the water activity of sugar solutions.
Thus, adding some sugars to a food product will reduce water activity.
Preservation: The growth of some microorganisms is inhibited by high sugar concentration.
Fermentable carbohydrate: Some sugars are used by yeast to produce either

carbon dioxide or alcohol. This is beneficial in products such as dough and wine.
Browning: Reducing sugars (glucose and fructose) take part in a browning reaction with
amino acids in the absence of water. This reaction is known as maillard browning. The
reaction forms pigments that exhibit a brown colour.
Maillard browning is evident in toast, baked goods and certain cooked meat products.
Bulking agent: Some sugars that possess a low sweetness level can be used to add
volume to a food product without overpowering the flavour of the product. For example,
low-calorie table sweeteners made from artificial sweeteners use maltodextrins as a filler.
Hygroscopicity: Some dry sugars readily absorb moisture. This is a negative property,
because it causes clumping. Some sugars, however, have a very low capacity to absorb
moisture. These sugars are used in products where moisture absorption is undesirable.
FATS AND OILS

The difference between a fat and an oil is its state at room temperature. That is, a fat is solid at room
temperature, whereas an oil is liquid.
Today, consumer diet and health concerns have forced food processors to choose very carefully
the fats and oils they include in their food products. Fat provides twice as many calories per gram
as either carbohydrate or protein, and contributes to health problems if consumed in excess.
Unfortunately, certain foods cant retain characteristic properties without fat. Knowledge of the
properties of fats and oils will help you reduce the level of fat, hopefully without sacrificing quality.
Functions of Fats and Oils
Fats and oils have four functions:
Palatability: contributes characteristic flavours and aromas, and aids in colour development.
Satiety: makes you feel full.
Texture: contributes to tenderness and flakiness, mouth-feel.
Cooking medium: can be heated above the temperature of boiling water, resulting in an
alternative method of food preparation.
43
Types of Oil
Most oils purchased by food processors and consumers alike have been refined. That is, they have
been previously processed to remove odour, colour and other impurities.
Adding hydrogen to the double bonds of fatty acids makes them saturated. This changes the
properties of oils, because increasing the level of saturation increases an oils melting point. As
a result, the oil becomes more stable and more solid at room temperature. That is, it is converted
to a solid fat. This process is used in manufacturing margarine and shortening.
Common Food Oils
Some of the common oils available to food processors include:
Soybean oil: This is a low-cost, highly unsaturated vegetable oil. It is very unstable even
after typical refining processes. Thats why it must be hydrogenated slightly for use in salad
dressings and mayonnaise.
Partially hydrogenated soybean oil is the most abundant oil used in shortenings and
margarines. It isnt used for frying because of its instability.
Cottonseed oil: With the advent of the more cheaply produced canola and soybean oils,
cottonseed oil has lost its popularity. Because cottonseed oil has many of the same
properties as soybean oil, its extra cost isnt warranted in certain applications.
However, unlike soybean oil, cottonseed oil can be used in frying applications. During
frying, it is often combined with other oils, because its characteristic nutty notes are used
to mask the off-notes of other oils.
Canola oil: Today, canola oil is the most commonly used oil by food processors
and households alike. It is a result of a Canadian 20-year breeding program of rapeseed.
Canola oil is very similar to soybean oil with respect to its uses in salad dressings,
shortenings and margarines, and cooking applications.
Canola oil contains moderate levels of polyunsaturated fatty acid, linoleic acid and
alpha-linolenic acid, and is one of the lowest in saturated fats available commercially.
Corn oil: The production of corn oil is limited by the demand for cornstarch products.
It is primarily used in the unhydrogenated liquid form and sold to consumers. With the
promotion of polyunsaturated oils, it has been included in margarines, although it has
no functional advantages over soybean oil.
Palm oil: Palm oil is sold at room temperature. This means it can be used as a shortening
without hydrogenation. Its use is mainly a factor of cost and availability. Palm oil may be
further processed, where one fraction obtained is used as a cooking oil and the other is
used for margarines.
44
Sunflower oil: The characteristic flavour of sunflower oil, together with its good stability,
makes it a very popular oil throughout the world. It is used in a wide variety of applications
and is sold for a moderate cost.
Safflower oil: This oil gained its popularity with the increase in demand for polyunsaturated
fats. Safflower oil is typically used in specialty mayonnaise and salad dressings, where a
polyunsaturated claim is very important.
The high level of unsaturation causes safflower oil to be very unstable in frying conditions,
so it is rarely used in households.
Peanut oil: Although peanut oil is more costly than other frying oils, it is often used among
snack and fast-food processors because of the roasted-peanut notes it gives to food
products. Thats why frying is one of peanut oils primary food applications.
Olive oil: Olive oil originated from Mediterranean countries, although it is also grown
now in California. In North America, olive oil is considered a gourmet item because it
is highly flavoured and more expensive than other oils. Olive oil is typically used for
dressings and frying.
Virgin olive oil is simply the oil pressed from the olive. It is sold in three grades: extra,
fine and ordinary, depending on the free fatty acid content of each. Pure olive oil is
either a blend of virgin and refined oils or simply refined olive oil. Blended olive oil is a
blend of virgin olive oil and a second-grade oil, and industrial olive oil has been stripped
and deodorized to be a bland oil.
Coconut oil: This oil is liquid at room temperature. However, just below room
temperature it becomes solid. This happens because coconut oil is very high in
saturated fats. This property makes it ideal for snack foods and confections.
Coconut oil is an excellent frying oil for nuts and snack foods that require a long shelf life
because of its stability. Because it doesnt feel greasy in the mouth, it is also used for coatings
and lubricants in confectionery products.
Coconut oils limitation is that it easily forms a soapy flavour because of rancidity.
Due to consumer demands for unsaturated fats, coconut oil is being omitted in many foods
by processors.
Palm kernel oil: This oil is highly saturated and, as a result, is even more solid than coconut
oil at room temperature. Like coconut oil, it is often used in confections. Palm kernel oil is
also being phased out of food products due to consumer demand for healthier fats in food.
Fish oils: These are mainly used by manufacturers of shortening and margarine in Canada
and Europe. Because of their nutritional profile, there has been a renewed interest in fish
oils. They are highly polyunsaturated, and they possess omega-3 fatty acids. Omega-3 fatty
acids are believed to help reduce heart disease.
45
Unfortunately, fish oils must be slightly or partially hydrogenated (increasing the amount of
saturates), otherwise they emit strong fishy odours.
Storing Oils
Store oils in a dark place to avoid oxidative rancidity. If they are kept at room temperature, they
may have a shelf life of several weeks before they become rancid. If you store them at refrigerator
temperatures, they will have a longer shelf life, but will become solid. Generally, the same is true for
hydrogenated oils.
Its also important that lids are fastened securely to prevent air from entering, which also promotes
oxidative rancidity.
Types of Fat
You also have several fats from which to choose.
Your Fat Choices
Fats available to food processors include:
Cocoa butter: This is a major commercial vegetable butter. It is unique because it

melts sharply at 37C, which is body temperature. It is cocoa butter that gives the silky
mouth-feel to chocolate. Imitation chocolates that use other vegetable oils cant mimic
the way chocolate with cocoa butter melts in the mouth. Because of this unique property,
cocoa butter is very expensive.
Lard and tallow: Lard and tallow are both meat fats prepared by rendering pork and beef,
respectively. Rendering involves heating solid animal fat to a liquid for fat removal. Both are
100 percent fat, consisting mainly of saturated fatty acids. They are solid at room
temperature.
Shortening: Shortening, other than butter or lard, is defined by the Food and Drug Act and
Regulations as a semi-solid food prepared from fats, oils or a combination of fats and oils.
Shortening may be processed by hydrogenation and may contain any of a wide range of
ingredients, including stearyl monoglyceridyl, certain preservatives and others. Emulsifiers,
for instance, may be added to shortenings used for bakery applications to promote small,
evenly distributed air pockets and retard staling.
You can buy shortening in the solid, fluid or powdered form depending on the application.
46
Butter: Butter is made from milk fat (that is, cream). It contains about 83 percent fat and
16 percent water. Salt may also be added for flavour and preservation. Although butter is an
expensive form of solid fat, it is often used because of its pleasing colour and flavour. Other
butter fat products include powdered butter, whipped butter and butter oil.
Margarine: Margarine is made from either a single source of vegetable oil or a blend of
vegetable oils. It may be hydrogenated to become a spreadable solid fat at room temperature.
Margarine differs from shortening in that it contains only 80 percent oil. The remaining
20 percent is water and possibly colour, flavour, vitamins A and D, and emulsifying agents.
Storing Fats
Fats that are used quite regularly can be kept at room temperature for ease of use. Generally,
however, fat should be stored at refrigerator temperature to retard hydrolytic rancidity. Fats
should also be tightly covered to prevent them from picking up neighbouring flavours and odours.
Selecting the Proper Fat or Oil For Your Food Application
Fats and oils can often be substituted for one another. Therefore, the first decision you must
make is whether a solid fat or a liquid oil is best suited for your particular application. Then you
must weigh the pros and cons of each type of fat or oil with respect to nutrition, functionality,
flavour, shelf-life and cost.
Answering the following questions will help sort out which fats or oils are best for
your application:
1. Do you specifically need a liquid fat for a salad dressing or for frying applications?
_______________________________________________________________
2. Do you need a solid fat to create flakes in your product?
_______________________________________________________________
3. Is there enough fat or oil in your product to affect the overall flavour of the product?
Is it a positive or negative flavour?
_______________________________________________________________
4. Is your ingredient line aimed at being health conscious?
_______________________________________________________________
5. What is the expected shelf life of your product?
_______________________________________________________________
6. At what temperature will your product be stored?
_______________________________________________________________
7. Do you foresee a need for an antioxidant?
_______________________________________________________________
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FOOD STARCHES
Starch is found in plant cells as microscopic granules. It is
extracted from plants and used in food products as a thickening
and gelling agent. Starch is a large constituent of some plants,
especially cereal grains. This is evident when we cook pasta, rice or
oatmeal, as they swell and double or even triple in volume.
Functions of Starch
Starch has two functionsthickening and gelling.
Thickening
Two things must be present in order for starch to swell and thicken a food product: water
and heat. By adding heat, water is able to penetrate the starch granule and swelling occurs.
The temperature range over which gelling occurs is called the gelatinization range. This range
is characteristic for each starch.
It is important to heat a starch for a short period at or beyond its gelatinization temperature to
remove the flavour of the starch.
A few types of modified starches are available that dont require heat for swelling. These are referred
to as cold water soluble starches.
When water is absorbed by the starch granule in a starch mixture, less water is available to make
the mixture fluid. Generally, starch will swell until no more water is available. It is by this means
that starches are capable of thickening food products.
Note that acids break down the starch molecule, causing them to have less thickening power.
A modified starch is required for acidic food products to enhance thickening.
Gelling
Some starches have the ability to form gels. A gel is a three-dimensional network that is able to trap
water. It is easily recognizable, because gels are mouldable and they take the shape of the container.
A gel increases the rigidity of the starch mixture and, therefore, a food product. A starch must first
be heated, swollen and allowed to cool before any type of gel can be developed. Only after cooling
will a gel form.
Note that when a gel stands it becomes weaker as a result of trapped water being released. This can
create many problems in food products. For example, consumers will reject a pudding that is sitting
in fluid.
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Types of Starches
There are two kinds of starchesnatural starches and those that are modified.
Natural Starches
The type of starch you use in a food application determines:
whether a gel will or will not be formed; and

the strength of the gel, if formed.
Starch from root plants, such as potato and tapioca, are termed waxy starches. They dont form
gels, so theyre used mainly for thickening. On the other hand, starches from cereal grains, such
as corn, wheat and rice, do form gels in food products.
Modified Starches
Modified starches are chemically altered to change and improve the properties of natural starches.
The following modified starches are available for food processing:
Parboiled/pregelatinized starch: This is coldwater soluble, so it rehydrates very quickly

in water. Generally, this type of starch is used as a thickening and binding agent in food
applications, such as instant pudding and pie fillings.
Acid-modified starch (thin-boiling starch): When this starch is cooled, a rubbery gel is
formed. This type of starch is used mainly in candy manufacture, and is the principal starch
used for gummy bear-type candies.
Cross-linked starches: These starches have an increased stability to heat, agitation and
shear. However, they are used mainly because of their functionality at low pHs and their
excellent freeze-thaw stability. Their applications include baby foods, cream corn and fruit
pie fillings.
Starch derivatives: These starches are treated in such a way as to cause a decrease in
gelatinization temperature and tendency to separate.
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What Type of Starch Do You Need?

Before you begin contacting suppliers to determine which starch will best suit your needs, you must
answer the following questions. Suppliers will likely ask these in order to provide you with the most
suitable starch for your application.
1. Are water and heat available in your food application?________________________
2. Up to what temperature will your product be heated?________________________
3. Do you require the starch to be cold-water soluble?__________________________
4. Do you want thickening only? __________________________________________
5. Does your product require a gel to be formed?_____________________________
6. Do you require a freeze/thaw stable starch?________________________________
7. What is the pH of your product?________________________________________
FLAVOURS
The flavour industry was derived from the fragrance and pharmaceutical industry only 150 years
ago. Although it is relatively new, analytical techniques have made it possible to identify flavour
components in food products down to the parts-per-trillion level. As a result, a huge array of
flavours is available to food processors for various applications including confectionery, savoury,
baked goods, snack foods and beverages.
Working with Flavours
When youre working with flavours, accuracy and mixing method are vitally important if you want
to produce a consistent, reproducible, homogeneous product.
Because flavours are highly concentrated, many are dispersed in a solvent such as propylene glycol
or alcohol. Usually, the flavour portion of a food product doesnt exceed two percent.
Its also important to note that some flavours contain natural or artificial colours that could be
transferred to food products. This may be desirable or undesirable, depending on the application.
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Cost
There is a wide range in cost among flavours. Some can be purchased for as low as $3 a kilogram,
while others can cost more than $40 a kilogram. Cost usually depends on the following:
the form in which the flavour is ordered (liquid, powder);

whether it is natural or artificial;
the cost of the raw material from which it is derived;
the flavour house from which it is ordered; and
the amount you use in your formula.
Common Flavour Forms

In Canada, natural, naturally fortified and artificial flavours can be added to most food products.
There is no restriction on the level of flavour allowable in foods. It is up to you to exercise safe
usage levels.
Natural flavour is made entirely of materials derived from the named source of the material.
For example, natural apple flavour must by law contain only apple extracts.
Naturally fortified flavour (W.O.N.F.) is made entirely of natural material. Fifty-one percent
must be from the named flavour and the rest must be from other natural sources. (W.O.N.F. is
an acronym used in the industry that stands for With Other Natural Flavours.)
Artificial or imitation flavour is made entirely or partly of substances that are
synthetically produced.
Flavours in Liquid Form
Liquid flavours include the following:
Essential oil: an aromatic oily liquid derived from the most flavourful part of the plant.
Folded oil: an essential oil that has been concentrated. For example, a four-fold oil
has had its original volume reduced four times. It is important to note that the flavour
character is not the same as the original because the ratio of its components is distorted.
Isolate: raw material isolated from its natural source (for example, vanillin from vanilla).
Extract: material separated from a liquid or solid by a solvent.
Oleoresin: solvent-free extract from spices and plants.
Juice: liquid obtained by expressing fruit.
Concentrate: fruit juice that has been concentrated by removing water.
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Flavours in Solid Form

Flavours are available as powders in two forms:
Plated: A liquid or solid material is dispersed on a dry carrier such as salt.
Spray dried: A liquid is atomized into fine droplets and then dried.
Herbs and Spices

Technically, herbs and spices are considered to be flavours because they impart flavour to food.
More information about herbs and spices can be found in the next section of this part of the guide.
Flavour Enhancers
Flavour enhancers are compounds that increase the taste
of any flavourinherent or addedthat is present in food
products. These compounds themselves dont have any taste
or aroma; they just enhance others.
Flavour enhancers are often used in soups, stock cubes and
meat products.
Monosodium glutamate (MSG) is a flavour enhancer that has seen some controversy in the past
few years. It is estimated that less than five percent of the population experiences an allergic reaction
when MSG is ingested. However, many processors are eliminating it from their food products in
order to protect their customers.
Storing Flavours
Flavours can be quite costly, so its important to maintain their integrity for as long as possible
by storing them properly. They should be tightly sealed and stored in full containers. Even a little
headspace can cause flavour deterioration through oxidation.
When you order flavours, be sure to get storage directions from the flavour house, because
each flavour reacts differently to different conditions. Some flavours, when exposed to too
cold conditions, precipitate or crystallize. Others, when exposed to too warm conditions, may
lose flavour, oxidize or change colour.
Generally, as a flavour ages it will lose its flavour intensity and possibly darken in colour.
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Sourcing Food Flavours

Answering these questions will aid you in your search for the perfect flavour
1. Make a list of descriptors to describe the flavour you wish to impart to your product.
(For example, for vanilla ice cream: creamy, sweet, subtle, aromatic, little vanillin notes).
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
2. What type of flavour do you require?

Natural
Artificial
Liquid
Powder
3. Do you wish to have a flavour that contributes colour to your product?

Yes
No
Doesnt matter
4. What is your estimation of flavour cost in your product?
$__________ per unit
5. At what stage in your process will your flavour be added?

At very beginning
At very end
Before heating
After heating
6. Does your flavour need to be heat stable?

No
Yes
If yes, what is the maximum temperature your product would undergo during manufacturing?
______ Celsius
______ Fahrenheit
HERBS, SPICES AND SEASONINGS

A spice is any root, bud, seed or bark derived from a plant grown in a tropical zone that is
used to season foods. A herb comes from a seed plant that has no woody tissue and is grown
in a temperate zone. Both herbs and spices vary in colour and flavour from crop to crop.
The word spice is commonly used to refer to any vegetable substance that flavours food. For
example, basil is a herb, but it is often grouped under the spice category. In this section, spices
will refer to both spices and herbs.
Spice combinations and levels used in pre-packaged foods typically stem from consumer trends. For
example, 15 to 20 years ago there were very few, if any, salsas on the retail shelves. Today, however,
consumers can choose from a wide variety of flavour combinations to best suit their particular taste
and intensity of preference. As a food processor, you must be careful, especially when marketing to
the mass population, that the majority of your market prefers the level of spice you use.
Cultural impacts have been very influential in sparking the idea for new food products in recent
years, and we can expect an increase in ethnic foods in the future. This gives you many opportunities
to experiment with various spice blends.
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Functions of Herbs and Spices

Herbs and spices have the following functions:
Flavour: The flavouring portion of spices is found in their volatile essential oils and their
non-volatile oleoresins.
Appearance: Spices make foods appealing by adding a colour contrast to products.
Antioxidant: Some spices retard the oxidation of fats in certain food. An example is
rosemary in sausages.
Preservative: Certain spicesfor example, mustard, cinnamon and clovescontain

antimicrobial compounds that retard or inhibit the growth of moulds, yeasts or bacteria.
Medicinal properties: It is believed that some spices impart beneficial health aspects
when they are eaten.
Forms of Herbs and Spices

Herbs and spices are available in the following forms:
Dehydrated: Water is removed to increase the stability and shelf life of the plant
component. The most common dehydrated spices are onion and garlic powders.
Ground: Spices are often milled into different sizes, ranging from cracked and coarse
ground to table ground, fine ground and pulverized. Ground spices offer the advantage
of being easy to handle and weigh accurately.
It is generally true that the finer the grind, the quicker the flavour is detected in a food
product. However, its also true that the finer the grind, the shorter the shelf life of the
spice, because the flavour is lost more quickly. When choosing the grind size, consider
the spice visibility and uniformity of the flavour you want. A larger size of grind will add
contrast to foods, but the product wont have an equal intensity of flavour throughout.
Ground spices have the following drawbacks
loss of flavour during grinding;
variable flavour strength;
microbial contamination;
54
easily adulterated;
flavour loss during storage;
poor distribution of flavour in liquid products; and
bulk handling thats dusty.
Some ingredient suppliers have devised a way to standardize the intensity level of ground
spices. When you are sourcing ground spices for your product, be sure to ask the supplier
if a standardization system is in place.
Sterilized: Spice houses began sterilizing spices to overcome problems of contamination

of food products with unclean whole or ground spices. The process involves exposing
the ground spices to ethylene oxide gas to reduce the bacterial load. Its important to note
that bacteria is only reduced, not totally eliminated. One application for sterilized spices is
processed meat products.
Blends/seasonings: A spice blend, or seasoning, is made up of two or more different

spices, for example curry or chili spice.
Essential oils: An essential spice oil is the extract obtained from a particular spice.
You can purchase essential oils in liquid or dry form. The advantage of using this
type of spice is that:
a standard flavour and intensity are obtained;
the oil is free from micro-organisms;
the oil is stable under proper storage conditions; and
the oil doesnt add colour to food products.
The main drawback in using this type of spice is that many spice oils lack components that are
present in fresh ground spices, resulting in an incomplete flavour.
Oleoresins: Oleoresins are different from essential spice oils in that they possess all
the flavouring ingredients of a particular spice. An oleoresin is an extremely concentrated,
viscous extract prepared from freshly ground spices. Oleoresins are free from bacteria, and
they may be standardized to a desired degree of flavour strength.
Because oleoresins are highly concentrated liquids, they are somewhat difficult to
weigh out in small quantities and incorporate into food products, especially dry mixes.
To overcome this problem, you can buy them dispersed in a solvent.
55
Dispersed spices: A dispersed spice is one in which flavour components are extracted
from spices and dispersed onto a soluble carrier (for example, salt or whey powder). This
makes the spice more soluble in food products and rids it of microbial contamination.
Ideally, these spices will possess the same flavour strength as freshly ground spices, so
they can be substituted directly. You would need to do further product testing, however,
to ensure appropriate substitution and usage levels.
Storing Herbs and Spices

Most spices should be stored in cool, dry conditions. However, the conditions may vary depending
on the processes the spices have undergone. Whole, ground and liquid spices all require different
conditions for proper storage.
If spices are improperly stored, they could lose their flavour and aroma, and they could pick up
water and turn mouldy. Its best to contact a spice house for specifics on the appropriate storage
conditions for each product.
Outside Blending Suppliers
Very few manufacturers today blend their own spices. Most food processors buy from suppliers
that specialize in blending seasonings. Youll find that using these suppliers is very economical and
can often be cheaper than buying individual spices.
When youre sourcing seasonings from such suppliers, you can opt to:
purchase one of the suppliers standard spice formulas;

purchase a standard formula that is slightly modified to meet particular
flavour requirements; or
develop a custom blend that the supplier will blend for your sole use.
Some suppliers will also pack the spice blend in convenient pre-weighed, unitized measures
to make it easy to use during processing.
Because a single spice can be purchased from various parts of the world, spice houses have the
challenge of providing spices to their customers that are consistent in flavour and intensity from
month to month and from year to year. This is often a difficult task, so its important that you
evaluate the quality of the supplier. That is, consider the suppliers reliability, hygiene record,
manufacturing capacity and level of quality control.
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FOOD ADDITIVES
A food additive is any food-grade component that is added to food during preparation, processing
or packaging in order to improve its quality. Food additives may be natural compounds derived
from plants or animals or they may be derived from inorganic compounds found in nature, or
even synthesized in laboratories.
Food Additive Control
The Health Products and Food Branch of Health Canada is responsible for controlling food
additives. You cant sell a food containing a food additive other than those listed in the Food
and Drugs Act and Regulations, Part B, Division 16. These regulations also outline the levels
allowable in specific foods.
The safety of all food additives is reviewed before they are accepted. The additives must
also demonstrate their usefulness. Some additives, such as citric acid, have multiple prescribed
purposes and can be used in a wide variety of foods. However, other additives, such as TBHQ,
are very restricted in their use.
In all cases, you should have the food additive reviewed to ensure that it is permitted in the
food, is permitted for the prescribed function in that food and is present at a level within any
prescribed limits.
The Food Additive Controversy
Consumers are becoming more skeptical of any foreign food substance in their food products. This
is usually because they are unaware of the technological reasons for adding these substances. Many
consumers are also unaware that not all compounds with chemical sounding names are synthetic
food additives. For example, the food gum carrageenan is a naturally derived product from seaweed.
Some food additives have received more public attention than others due to their questionable
health concerns. Sodium nitrite and MSG are just two examples.
Why Use Food Additives
Many people feel that the use of food additives stemmed from the need to satisfy consumer
demands. To some extent this is true; clumped salt, green oranges, fat pockets on bologna and
grainy ice cream are all unacceptable to consumers.
But what has likely had a greater impact on food additive usage is the discovery that, in
many cases, functionality can be attained by innovative food ingredients at lower costs. There
is often a cost advantage in using a food additive over a traditional food ingredient. You have
the responsibility to ensure that an additives functionality imparts the best possible quality at
the lowest possible cost.
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Some Common Food Additives

Many food additives are available for food processors.
Preservatives
These are used to lengthen the storage life of food products by slowing the growth of
micro-organisms. By doing this, they reduce spoilage and lower the chance of food poisoning.
Like all other food additives, the use of preservatives is regulated by the Food and
Drug Act and Regulations. This specifies the foods in which certain preservatives
may be used, along with their permitted usage levels. Some examples of preservatives
and their applications include:
benzoic acid: prepared mustard

sulphite: potato flakes
sodium nitrite: frankfurters
Antioxidants
Antioxidants prevent oxidative rancidity in fats and oils. They act by tying up oxygen so
it is unavailable for oxidative reactions. Both natural and artificial antioxidants are available
to food processors.
Of the following examples, the first two can be found in nature or synthetically derived, while
the third can only be synthetically derived.
Antioxidant
L-ascorbic acid
Tocopherols
BHT (butylated hydroxytoluene)
Nutrient Source
Vitamin C
Vitamin E
Not applicable
Example of Use
Canned applesauce
Vegetable oil
Dry breakfast cereal packaging
Thickeners and Gelling Agents

A thickener increases the viscosity of a food product, whereas a gelling agent imparts a
jelly-like consistency to food. Some thickeners can also form a gel under appropriate conditions.
Many types of thickeners and gelling agents are available to food processors. However, their
behaviour in different applications varies greatly. Some examples of gelling agents and their
applications include:
acacia gum: beer, salad dressings, ice cream

pectin: jam, milk, salad dressings
gelatin: jelly desserts, relishes, skim milk
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Food manufacturers often use hydrocolloidsreferred to as gumsto thicken or texturize their

food products. Many gums are available, including carrageenan, alginate, locust bean gum, xanthan
gum and guar gum.
When youre choosing a gum for a particular application, you need to consider the following:
solubility;
viscosity and texture effects with respect to concentration, time and temperature;
stability to pH, temperature and shearing;
effect on taste;
regulatory status; and
cost.
Although its helpful to know the properties of the gum, only by experimenting with it can you
determine the proper gum and level for a certain application.
Stabilizers and Emulsifiers
An emulsion is a mixture of two immiscible liquidsthat is, two liquids that cant be mixed.
For example, a salad oil is an emulsion of oil and vinegar. Other examples include mayonnaise,
margarine, ice cream and frankfurters.
Emulsifiers help to make an even distribution of one immiscible liquid in the other. Stabilizers help
to maintain an emulsion; they are generally gums. Examples of emulsifiers and their uses include:
mono and di-glycerides: chocolate

lecithin: margarine
Colours
Colours are added to foods to make them more attractive to consumers or to restore natural
colour that was lost during processing. Because colour is used simply for aesthetic purposes,
there is a controversy surrounding their use. Also, some colours have been banned for use in
Canada because of detrimental side effects.
Natural, inorganic and synthetic food colours are available to food processors. Examples of colours
permitted in Canada and some of their uses include:
annato: cheese
caramel: ketchup
allura red (known as Red #40 in the U.S.): candy, fruit juice beverages
59
Flavours
Flavours enhance the taste of pre-packaged food products. Natural or artificial flavours are available
to food processors. (For more information, see the earlier discussion under Food Flavours.)
Artificial Sweeteners
Artificial sweeteners replace sugar in reduced-calorie or diabetic foods. There are generally two
types of sweeteners, one being caloric and the other non-caloric. (For more information, see the
earlier discussion under Sweeteners.)
Leavening Agents
Leavening agents are used in baked goods to get more volume and an airy structure. Examples of
leavening agents and their uses include:
yeast: bread
sodium bicarbonate: cake
Flour Improvers and Dough Conditioners

These compounds speed up the leavening process and improve the texture of bread. For years
potassium bromate was the main dough conditioner used in bread. However, based on public
health concerns, it was withdrawn as a permitted food additive in 1995. Bromate has been replaced
with sodium stearoy l-2 lactylate in most commercial applications.
Anticoagulants
Anticoagulants decrease the moisture absorbency of dry powders. As a result, they can prevent
clumping and improve flowability. Some examples of anticoagulants and their uses include:
silicon dioxide: icing sugar

calcium stearate: salt
Anti-foaming Agents
These compounds are used industrially to prevent foam formation during processing. Examples and
uses include:
dimethylpolysiloxane: lemonade
mono and di-glycerides: jam
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5. FOOD PROCESSING AND PRESERVATION

Canadian consumers want safe, nutritious, inexpensive food throughout the entire year.
Unfortunately, Canadas climate limits the production of food for up to six months of the year.
Just store the food? Impossible. Once food is harvested, it begins to deteriorate immediately due
to the following factors:
micro-organisms (yeast, mould, bacteria);

intrinsic enzymes;
temperature;
moisture; and
insects and vermin.
Because of the risk of spoilage, much of our food is processed in some way to increase its
availability. A food is considered preserved once it is stabilized with respect to safety and quality.
Its important to note that no type of food processing can transform poor quality raw materials
into good ones. It can only increase the products shelf life. To ensure that your product meets
your high standards:
use the highest quality raw ingredients;

establish good processing techniquesand follow them; and
maintain an appropriate product environment after processing.
Not all processing methods are applied to foods to achieve preservation. Some are also used to
change or stabilize food texturally.
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PROCESSING METHODS
Methods of processing food can be divided into two main categorieschemical and physical.
Chemical Processing Methods
The following techniques use the chemical approach in processing food.
Intermediate Moisture Foods (IMF)
Binding the water thats present preserves intermediate moisture foodsfor example, cookies,
cake and bread. This reduces the availability of the water for deteriorative reactions.
Water is immobilized by adding permissible humectant additives such as glycerol, glycols, sorbitol,
sugars and salts.
Generally, IMFs possess water activities that range from 0.6 to 0.85. This enables the food to be
stable at room temperature, because the growth of most micro-organisms is inhibited at these levels.
Water Activity (aw)
Water is the most important factor in controlling the rate of deterioration of a food. However,
knowledge of the moisture content of a food isnt sufficient to predict its stability. It is the
availability of water for microbial, enzymatic, or chemical activity that determines the shelf life
of foods. This water availability is measured as water activity (aw).
Water activity is measured on a scale of 0 to 1, where 0 indicates no water and 1 indicates all water.
Food spoilage micro-organisms, in general, are inhibited in food where the water activity is below
0.6. However, if the pH of the food is less than 4.6, micro-organisms are inhibited when the water
activity is below 0.85.
Addition of Chemicals
The addition of some chemicals inhibits microbial growth in foods. These chemicals include not
only those classified as preservatives. Salt, sugars, wood smoke and some spices also inhibit the
growth of micro-organisms. For more information on chemical preservatives, see Part 4: Food
Ingredients in this guide.
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PH Control
Almost every food, with the exception of egg whites and soda crackers, has a pH value of less than
7. Foods can be broadly categorized on the basis of their pH as high acid, acid, medium acid or low
acid. Examples of each category include:
high acid (3.7): apples, lemons, raspberries

acid (3.7 to 4.6): oranges, olives, tomatoes (some)
medium acid (4.6 to 5.3): bread, cheese, carrots
low acid (over 5.3): meat, fish, most vegetables
Most micro-organisms grow best in the pH range of 6.5 to 7.5. Yeasts and moulds are capable
of growing over a much broader pH range than bacteria. Few pathogens will grow below pH 4.0.
This information is important, because it will help you in determining food stability with respect to
microbial spoilage.
Physical Processing Methods
A number of physical methods are available to you for processing foods.
Sterilization (Retorting)
First, a science note: a pathogen is any microorganism that causes illness. Food pathogens
cause food-borne illnesses such as food poisoning or food intoxication.
Sterilization destroys all pathogenic and spoilage micro-organisms in foods and inactivates enzymes
by heating. All canned foods are sterilized in a retort (a large pressure cooker). This process enables
food to have a shelf life of more than two years.
Foods that have a pH of more than 4.6, such as meat and most vegetables, must undergo severe
heating conditions to destroy all pathogens. These foods are heated under pressure to 121C for
varying times.
Severe conditions are applied to ensure that Clostridium botulinum spores are destroyed during
processing. These spores produce the deadly botulinum toxin under anaerobic conditions (that
is, where theres no oxygen). The spores are destroyed by heat or are inhibited at pH values of
less than 4.6. Therefore, a food with a pH of less than 4.6 that is packaged anaerobically, such as
spaghetti sauce, doesnt need to undergo such a severe heat treatment.
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Pasteurization
Pasteurization is the process of heating a foodusually a liquidto or below its boiling point
for a defined period of time. The purpose is to destroy all pathogens, reduce the number of bacteria,
inactivate enzymes and extend the shelf life of a food product.
Foods with a pH of less than 4.6, such as milk and spaghetti sauce, can be pasteurized.
Permanent stabilitythat is, shelf life of about two yearsis obtained with foods that can withstand
prolonged heating, such as bottled juices.
There is a greater loss of flavour from foods that are exposed to a longer time-temperature
relationship. Therefore, temporary stability (that is, limited shelf life) is only obtained with some
foods where prolonged heating would destroy its quality. These foods, such as milk, usually require
subsequent refrigeration.
High temperature short time (HTST) and ultra high temperature (UHT) processes have been
developed to retain a foods texture and flavour quality parameters.
Blanching
Blanching is a slight heat treatment, using hot water or steam, that is applied mostly to vegetables
before canning or freezing.
Blanching is used before freezing to inactivate enzymes present that cause deteriorative reactions to
foods during frozen storage. These reactions include colour and texture changes, off-flavours and a
decrease in nutritional value.
Blanching is used before canning for different reasons, because enzymes will inevitably be destroyed
during canning. Blanching induces a vacuum in canned goods, and its also used to control the fill
into containers (for example, spinach).
Microwaving
Microwave ovens are rarely used for processing large quantities of food. They are mainly of interest
if you cater to the convenience food market, with products such as frozen entres.
Microwave ovens use electromagnetic radiation to excite water molecules in food. The actual
waves penetrate only about 10 inches from the source of the radiation. Within the food, the waves
only penetrate to 1 inch on all sides. As a result, the actual ovens must be limited in size. Heat is
produced within the food by the friction of water molecules, which spreads to the centre of the food
by conduction.
Small portions are cooked rapidly in microwave ovens. As the quantity of food increases, however,
the efficiency is lost.
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Frying
Frying differs from other methods of heat processing in that the cooking medium is hot oil.
Because of the big difference between the temperature of the oil and the food, as well as the
small size of the food pieces, cooking is completed in a relatively short timeanywhere from
20 seconds to six minutes.
Fried foods are known for their characteristic crispy outer surface as well as their high fat content.
The fat that is absorbed by the food product varies from 10 percent to 40 percent, depending on
the time the food is immersed in the oil. Continuous fryers are often used in the food industry.
Refrigeration
Refrigerators should be set to below 4C to control the growth of micro-organisms in foods.
This lowered temperature also reduces the respiration rate of fruits and vegetables, which retards
reactions that promote spoilage.
Refrigeration is generally used to:
reduce spoilage during distribution of perishable foods;

increase the holding period between harvesting and processing; and
extend the storage life of commercially processed foods.
Not all foods benefit from cold temperatures. For example, bananas turn black and bread goes stale
when refrigerated.
Freezing
While many home freezers are held at -10C, commercial
freezers are under -18C. At this temperature, the growth of
micro-organisms is almost stopped. Deteriorative microbial
reactions will still occur, but over a much longer time.
In addition, deteriorative enzymatic reactions will still take
place during frozen storage. Uncooked fruits and vegetables
must be blanched before freezing to prevent these reactions.
During freezing, the water in food forms ice crystals. The rate of this phenomenon has a big impact
on the quality of frozen foods:
Slow freezing
(e.g. home freezer)
Rapid freezing
(e.g. blast freezer)
- large ice crystals formed, which puncture cell walls

- cellular fluid released
- results in shrunken appearance of thawed food
- small, numerous ice crystals formed
- no change to cell structure
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The shelf life of frozen foods is largely dependent on storage conditions. Under ideal conditions,
frozen foods can have a shelf life of one year.
However, if foods are continuously exposed to warmer temperatures, such as the opening
and closing of freezer doors, then heat shock occurs. Heat shock is when ice melts and re-forms
into larger ice crystals. The best example is ice cream, which has a gritty texture if large ice crystals
have developed.
Irradiation
Irradiation is the controversial process of applying low doses of gamma radiation to food products.
Forty years of research have shown that the process exhibits no safety hazard. As a result, irradiation
is permitted in Canada to:
prevent sprouting in potatoes and onions;

control insect infestation of wheat flour; and
reduce the microbial load of ground spices.
If irradiation becomes more widespread among various other food products, it is expected to replace
fumigation, ensure hygienic quality and reduce the dependence on refrigeration.
Weigh Your Options:
Batch vs. Continuous Processing
Food is processed in either discrete batches or a continuous system. Although there are advantages
and disadvantages to each method, choice in the matter is restricted only to those replacing or
setting up a new processing line. Generally, batch systems are used to produce small quantities
of food, whereas larger volumes are required for continuous systems.
Advantages of Batch Processing
Advantages of Continuous Processing
Greater flexibility to change product

formulation and rates
Lower equipment costs
Lower operation and labour costs
Easier operation and control
Greater product uniformity
Less floor space required
Evaporation
Evaporation is the partial removal of water from liquid foods by boiling. When the operation
is done under vacuum, boiling is avoided and the foods flavour qualities are retained.
Some of the foods that have undergone evaporation are evaporated milk, tomato paste and
juice concentrates.
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This process is carried out for three main reasons:
to reduce the weight and, therefore, reduce storage and transport costs;
to preserve foods by decreasing the water activity and increasing the solids content; and
to provide consumers with convenient foods.
Dehydration
Dehydrationor dryingis the nearly complete removal of water from solid foods. One of the
oldest methods of food preservation, it was traditionally carried out by the sun.
This application is used for the same reasons that liquid foods undergo evaporationpreservation,
convenience and cost savings. Dried soup mixes, dried fruit, powdered milk and spices are just a few
examples of dehydrated foods.
Spray drying and freeze drying are two drying methods used widely today. Spray drying is when a
liquid food is atomized into a fine, dry powder. Examples include natural and artificial flavours and
milk powders. Freeze drying involves first freezing the food and then driving off the ice, leaving a
high quality, porous dried food such as instant coffee.
Emulsions
An emulsion is a system containing two liquid phases that dont mix, where one phase
(dispersed phase) is distributed throughout the other phase (continuous phase) in the form
of very small droplets. Generally there are two types of emulsions:
1. oil in water (O/W)
2. water in oil (W/O)
An example of an O/W emulsion is salad dressing, and an example of a W/O emulsion is butter.
Homogenization
Homogenization is used to stabilize an emulsion. More specifically, it is the reduction in size and the
increase in number of droplets of the dispersed phase by the application of intense shearing forces.
Generally, homogenization is applied to change the functional properties or improve the texture
of emulsions. For example, most fluid milk sold at the retail level is homogenized to improve its
stability, and most caramel fillings are homogenized to increase their smoothness.
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Extrusion
Extrusion is the process in which a food is compressed and worked to form a semi-solid mass.
This mass is then forced through a restricted opening, or die, to create a desired texture or shape.
The purpose of this application is simply to provide a greater variety of textured foods to
consumers.
Food may also be cooked while extruded. This is referred to as extrusion cooking,
or hot extrusion.
Some extruded food products are licorice, puffed wheat and cornflakes.
Hurdle or Combination Processing
Hurdle technology is a concept that was developed to address the consumer demand for more
natural, fresh-like foods. It is a way for food processors to employ only mild preservation techniques
to their food products.
The idea is to use deliberate low-level combinations of existing and novel preservation techniques
(hurdles) to eliminate the growth of micro-organisms. Lower-intensity individual methods can
be used because of the collective effect of the combined methods.
Some of the more common hurdles include:
pasteurization;
water activity (aw);
salt;
blanching;
freezing; modified atmosphere packaging (MAP);
pH;
preservatives;
refrigeration; and
irradiation.
Some micro-organisms present will be able to survive the individual treatments applied.
However, no microorganism will be able to overcome all of the combined hurdles. Thus
the food is stable and safe.
The only way to ensure that the correct combination of hurdle technologies is used is to make
sure that a qualified resource conducts quality and safety shelf-life studies. For a list of product
development laboratories that can do these studies, see the Resources section of this guide.
Examples of hurdle processing can be found in traditional and recently developed foods, such
as yogurt and prepackaged fresh salads. The hurdles employed in yogurt manufacture include low
temperatures, high acid and competitive microbial flora. Those used to prepare prepackaged fresh
salads include low temperatures and modified atmospheres.
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6. QUALITY ASSURANCE
Obviously no one can have a perfect product, but the goal of all companies should be to produce
quality products. Quality is putting the best possible product together, and doing it consistently.
CREATING QUALITY
Every company has constraints that must be dealt with. You may not always be able to afford the
best possible ingredients, or you may not be able to obtain enough. Equipment isnt perfect or exact,
and it does break down.
With problems like these, you need to set up a program that will help you maximize the quality of
your products.
Quality in a food product includes:
consistency;
food safety;
physical appearance;
value;
nutrition; and
shelf life.
Quality Control
Quality controlthrough proper production and quality inspectionsprevents unsatisfactory
products from being delivered to customers. Quality control is primarily the responsibility of
your production staff, and should be built into the manufacturing process.
Your employees need to have access to the proper tools and training. This will enable
them to maintain product specifications through effective monitoring and decision making.
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Quality Assurance
Quality assurance establishes written specifications and standards. This preventative measure is
the responsibility of management, which must put in place the necessary programs for producing
a quality product each and every time.
Quality assurance is also an important aspect of your companys marketing activities. Future sales are
directly and significantly affected by the level of quality and consistency of your product. Consumers
wont want to deal with other companies once you have built a solid reputation for the quality and
dependability of your product.
A quality product begins with quality ingredients. You need to work closely with your suppliers to
ensure that they all meet your tight standards. These should be created for ordering raw materials,
packaging materials and other supplies.
You can test quality either subjectively or objectively, depending on the factor being measured.
Objective Testing
There are several ways to test objectively. Some examples include:
Physical tests:
weight and/or volume checks;
colour analysis;
particle size analysis;
viscosity measurements;
homogeneity checks;
water activity; and
presence of foreign objects.
Chemical tests:
protein, fat and moisture contents;
pH check;
residue analysis; and
vitamin levels.
Microbial tests:
total plate count;
moulds and yeast;
coliform count;
thermophile and thermoduric count; and
salmonella presence.
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For objective testing, you may need simple test equipment such as a weight scale or a pH
meter. On the other hand, you might have to use expensive and complex equipment such
as a high-pressure liquid chromatograph (HPLC) or a sophisticated spectrophotometer
(which measures colour).
Throughout the food industry, literally thousands of tests are used routinely to monitor
product quality.
Subjective Testing
A number of different sensory tests are used to measure food quality subjectively. Although the use
of the human palate and nose for measuring flavour and aroma quality is often not as consistent as
chemical testing, in many cases it will give a more appropriate qualitative analysis.
Quality Testing Accuracy
A test can only be as accurate as its sample, so proper sampling is vital to proper quality
testing. Many people not fully familiar with the science of sampling inadvertently bias the
results by inappropriately collecting a sample.
You must take care to ensure that:
the sample avoids contamination from other sources;

the sample is representative of the entire batch;
the sample doesnt lose the characteristic properties during its collection, handling,
transport and storage before testing; and
the sampling utensils and container remain free of extraneous materials.
In general, samples should confirm the process of quality assurance. You can accomplish this by
gathering the sample throughout the process at regular intervals and in suitable storage containers.
When you are testing a composite sample (that is, more than one sample is taken), the collected
samples are mixed and weighed on a scale to get the correct size. More than one sample is taken
as a back-up in case the first one was mishandled.
The sample should be clearly identified with the product, date and time. It
should then be tested for the required attributes. (You might want to look
at reference material on statistical sampling procedures, available through
your local library.)
When youre analyzing food quality, be aware that foods and food
ingredients are ever-changing materials. For this reason, the testing must
be done as soon after sampling as possible. By the same token, remember
that even though a food product may pass all the initial tests, by the time
it reaches the customer, the quality may have changed substantially.
Shelf tests are one way that companies ensure that a purchased product is a quality product.
These are performed to find out what happens to the product over time. This provides a baseline
to measure whether product complaints are due to mishandling or poor quality.
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Quality Testing Laboratories

The Resources section of this guide includes a partial list of laboratories that provide quality testing
services. For the names of other quality testing labs that operate in Ontario, contact the Ontario
Ministry of Agriculture, Food and Rural Affairs, Business Development Branch, at 1-888-466-2372.
QUALITY PROGRAMS
The Hazard Analysis Critical Control Point (HACCP) system is a way of analyzing a food processing
system to identify potential hazards to food safety. We have already discussed the Ontario Ministry
of Agriculture, Food and Rural Affairs HACCP Advantage Program in Part 2: Your Responsibilities
and Obligations of this guide.
ISO 9000:2000
ISO 9000 is a series of standards designed to prove that organizations meet global benchmarks
in the consistency and quality of their goods and services. These standards can be applied to
almost any business and style of management.2 A revised core series of the ISO family of
international standards was published in December 2000 under the name ISO 9000:2000.
The ISO 9000 standards measure suppliers systems rather than specific products or services.
Suppliers are successful when they can prove that they have carefully documented their processes
and follow their systems consistently.
As more and more countries adopt these standards as national standards, ISO 9000 is becoming
necessary to compete in the global marketplace. Many domestic and global customers are starting
to demand that Canadian suppliers adopt the standards.
Nationally registered suppliers are licensed to use an ISO 9000 registration mark in marketing and
communications efforts to capitalize on their improved quality systems. Registered businesses are
also listed in a directory that is widely available to public, corporate and retail buyers.
Once you can conform to your systems, you can apply to a third-party registration organization
accredited by a national accreditation body such as the Standards Council of Canada. The
organization will assess your quality system, identify areas for improvement and then assess the
workplace to confirm that the quality management system is being followed.
__________________________________________________________________________________________
2 Lets Talk Business. ISO 9000: Improving quality is the bottom line.
Supply and Services Canada and Industry Canada. SQI 01 (06/93)
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Business Development Bank of Canada
www.bdc.ca
Ontario Regional Office
150 King Street West, Suite 100
Toronto, Ontario M5H 1J9
Tel: 416-952-6094
Fax: 416-954-5009
You can also get information through any of the Business Development Banks
22 offices in Ontario.
PRODUCT CERTIFICATIONS
The two most common kinds of product certification are Halal and kosher.
Halal
Halal is an Arabic word meaning lawful or permitted. When used in relation
to food or drink, Halal means it is permitted and fit for consumption by Muslims.
For a product to be Halal, it must, as a whole and in part:
be free of, and not containing any substance or ingredient taken

or extracted from a haram (forbidden or unlawful) animal or ingredient;
be made, processed, produced, manufactured and/or stored by using utensils,
equipment and/or machinery that has been cleansed according to Islamic law;
have never come into contact with, touched or been close to a haram substance
during preparation, making, production, manufacture, processing and/or storage.
For more information on product certification, contact:

Islamic Social Service and Resources Association
www.issra.ca
2375 Sinclair Avenue West
Toronto, Ontario M6N 1K9
Tel: 416-767-9358 or 416-767-1531
Fax: 416-767-0328
Islamic Society of North AmericaCanada HQ
www.isnacanada.com
2200 South Sheridan Way
Mississauga, Ontario L5J 2M4
Tel: 905-403-8406 or 416-626-0001
Fax: 905-403-8409
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Kosher
Kosher food is made fulfilling the requirements of Jewish law. The basic concepts of
kosher food are no mixing of dairy and meat, no pork or pork products and no shellfish.
This also applies to food products containing such ingredients. For example, a food colouring
made from a shellfish would be considered unkosher and would taint a food in which it was used.
Similarly, using an animal fat together with dairy ingredients renders the product unkosher and taints
even the implements used to make it.
For information about kosher certification, contact:
Kashruth Council of Toronto
www.cor.ca
4600 Bathurst Street, Suite 240
Toronto, Ontario M2R 3V2
Tel: 416-635-9550
Fax: 416-635-8760
PRODUCT SPECIFICATIONS
Specification sheets are an essential part of a quality product. The sheets are used to
ensure that the products leaving the processing plant are of the required quality. They
contain detailed specifications about packaging, storing, cooking, ingredients, physical
appearance and batch processing.
Specification sheets are used for:
standard procedures;
raw material specifications;
finished product standards;
daily formulation records; and
product inspection reports.
Product that is Off Specification

Options for dealing with product that is off specificationthat is, it doesnt meet the
required specificationsinclude:
reprocessing the material;

selling the material to a processor of animal feed;
disposing of the substandard material;
donating the material to charitable organizations; or
blending the off-grade material with subsequent batches.
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Donating the material or blending it isnt generally advisable. Donated foods must meet the same
health and safety standards as foods sold to the general public. The best way to avoid product that
is off specification is to take the appropriate precautions to prevent the problem in the first place.
If in doubt, contact:
Health Canada
www.hc-sc.gc.ca
Food Inspection Branch
Tel: 416-973-1600
SANITATION IN FOOD PROCESSING

A good sanitation program is crucial to the success of your business. Sanitation is affected
by everything from the design of your facility to food handling practices, controlled processing
procedures and a pest-control management system.
John A. Troller, in his book Sanitation in Food Processing (Second Edition, Academic Press, Inc., 1993),
describes the purpose of a sanitation program this way:
The goal of any sanitation program should be to provide a clean manufacturing operation capable
of producing wholesome and safe products. The program should provide guidance and training for
employees in good sanitary practices and should be able to identify process stages that are pivotal in
producing acceptable products. Last, the program should keep management informed of the sanitary
condition of the plant and its workers.
Troller includes the following topics under the term sanitation:
hazard avoidance;
quality management;
cleaning;
personal hygiene;
the control of insects, rodents and birds in the food environment;
sanitary aspects of food plant design;
sanitation of raw materials;
equipment and process sanitation;
packaging sanitation;
sanitation during food transport; and
food regulations.
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The Code of Practice

Your best guideline as a food processor in Canada is the Code of Practice, General Principles of
Food Hygiene for Use by the Food Industry in Canada. This code is intended to help you comply
with the requirements of Canadian food law.
The code recommends general hygienic practices for use in handling (including growing and
processing, packaging, storage, transport, distribution and sale) of food for human consumption
in order to ensure a safe, sound and wholesome product.
The code covers the following topics:
1. Hygiene requirements in the production/harvesting area
environmental hygiene in areas from which raw materials are derived;
harvesting and production; and
storage at the place of production/harvesting.
2. Establishment: design and facilities
location;
buildings and facilities;
sanitary facilities, including water supply, rest rooms and toilets,
lighting and ventilation; and
equipment and utensils.
3. Establishment: hygiene requirements
maintenance;
cleaning and disinfecting;
hygiene control program;
storage and disposal of waste;
pest control;
storage of hazardous substances; and
personal effects and clothing.
4. Personal hygiene and health requirements
hygiene training;
injuries;
washing of hands; and
personal cleanliness.
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5. Establishment: hygienic processing requirements

raw material requirements;
use of water;
processing;
packaging;
lot identification;
processing and production records; and
storage and transport of the end product.
6. Quality control
individual responsible for quality control; and
laboratory procedures for quality control.
7. End product specification
sampling procedures;
analytical methodology; and
limits for acceptance.
8. Recall procedure
A procedure to permit the complete, rapid recall of any lot of the
finished food from the market.
You can get a copy of the Code of Practice from:
Health Canada
Health Protection Branch
Ontario Regional Office
2301 Midland Avenue
Scarborough, Ontario M1P 4R7
Tel: 416-973-1600
Fax: 416-973-1554
DEVELOPING A SANITATION PROGRAM

The best people to ask for help in developing a sanitation program are the various government
inspectors that would be inspecting your business. Many people treat them as unwanted guests
and intruders, but their interest is in the safety of the buying public, and their approach is
preventative in nature, not punitive. An inspector can point you to many relevant resources.
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Federal and provincial inspection departments are key contacts. You can also contact:
Agriculture and Agri-Food Canada
Blueprints, Plants and Equipment Section
174 Stone Road West
Tel: 519-837-9400
Fax: 519-837-9770
Health Canada is responsible for plants that produce food products not covered by Agriculture
and Agri-Food Canada. (Contact information is included previously in this section of the guide.)
Some private firms can help you to establish or assess a sanitation program. Check with industry
associations; some of them will be able to give you referrals. Contact:
Ontario Food Protection Association
P.O. Box 24010
Guelph, Ontario N1E 6V8
Tel: 519-463-6320
Fax: 519-463-6321
E-mail: ofpa-info@worldchat.com
Sub-sector associations may also have their own sanitation programs or information. Contact:
Ontario Food Processors Association
7666 Mill Road, R.R. # 4
Guelph, Ontario N1H 6J1
Tel: 519-767-5594
Fax: 519-763-4164
E-mail: ofpa@sentex.net
Ontario Dairy Council
www.ontariodairies.ca
6533 Mississauga Road, Unit D
Mississauga, Ontario L5N 1A6
Tel: 905-542-3620
Fax: 905-542-3624
E-mail: info@ontariodairies.ca
Baking Association of Canada
www.baking.ca
7895 Tranmere Drive, Suite 202
Mississauga, Ontario L5S 1V9
Tel: 905-405-0288
Fax: 905-405-0993
E-mail: info@baking.ca
Companies that sell approved cleaning chemicals can also help you establish a sanitation program.
For other contacts, see the Resources section of this guide under Food Safety Information Sources.
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7. PACKAGING AND LABELLING

The way you package and label your product is important. First, packaging protects it from physical,
chemical and microbiological invasion.
The package also provides a medium for presenting advertising messages and other important
information to the consumer.
And finally, the package is one of the greatest influences on a consumers decision to
try your product.
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THE IDEAL FOOD PACKAGE

The perfect food package has all of the following criteria:
meets current legal requirements;

compatible with food;
protects against contamination from the environment;
controls the products environment;
resists mechanical damage;
sanitary;
tamper-proof;
attractive;
convenient;
inexpensive;
lightweight;
environmentally sound;
functions as a preparation and/or serving vessel;
sells itself;
identifies the product; and
supplies the required information.
Its important to note, however, that not one food package available today meets all of these
criteria. Its up to you to decide which are most important for your particular application and
which can be compromised.
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REGULATORY CONSIDERATIONS
Regulatory issues around packaging are very complex, and you must consider them in detail
with respect to each food products unique needs and the properties of its potential package.
The following is a brief summary of some of the regulatory issues you will want to investigate
more closely as you examine your packaging options.
Packaging Materials
Packaging materials for food are regulated in Division 23 of the Food and Drug Regulations.
The regulations are broad in scope and limited in specifics.
You can contact Health Canada with specific questions about the acceptability of food packaging
materials or for a voluntary review. Packaging suppliers may also have additional information about
the acceptability of packaging materials.
Standardized Sizes
Certain products sold in Canada are federally or provincially regulated with regard to the container
size. One example is provincial dairy regulations, such as those in Quebec. Other common examples
include products regulated under the federal Processed Products Regulations (PPR), such as many
canned fruits and vegetables.
The federal Meat Inspection Regulations specify standardized sizes for a few products such as
luncheon meat (retail consumer product only). Sizes for refined sugar syrups, peanut butter and wine
are regulated under the federal Consumer Packaging and Labelling Regulations for retail products.
Before you commit to packaging, you would be wise to determine if the products meet standardized
size requirements. If they do, they can only be sold in the unitsweight or volumeas prescribed
in applicable regulations.
Your choice of packaging materials may have an effect on whether the product meets standards
of identity or standard container sizes. For example, tomato paste should meet standard container
sizes under the PPR. If a tomato paste is packaged in a squeeze tube, it wont comply with the
canned standard, and so it cant be called tomato paste. The product will have to be identified
as an unstandardized product such as concentrated tomato extract.
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Other Considerations
In certain cases, your choice of packaging could have provincial considerations. For instance,
beverages in cans are prohibited in Prince Edward Island.
Provincial governments regulate environmental issues related to beverage containers. Not
all beverages are regulated, only those that each province classifies. A common example is
carbonated beverages. The requirements vary from province to province, with some requiring
returnable, redemption (deposit and return) or recyclable containers.
The Food and Drugs Act and Regulations contain more information. Check your library for a copy,
or on the Internet at www.hc-sc.gc.ca/food-aliment/e_index.html. You can also buy a copy from:
Renouf Publishing Co. Ltd.
www.renoufbooks.com
5369 Canotek Road
Ottawa, Ontario K1J9J3
Tel: 613-745-2665
Toll Free: 1-888-551-7470
Fax: 613-745-7660
E-mail: order.dept@renoufbooks.com
SOURCING FOOD PACKAGING

Before you begin contacting food packaging suppliers, you should have a good idea of the
type of packaging you need, as well as the dimensions and volumes required. Like food ingredient
suppliers, packaging suppliers deal only with those customers that can fulfill a certain volume order.
Because of this, you may find it easier to source your materials through food packaging distributors.
You could encounter a problem, however: these distributors usually carry only standard types of
packaging. For generic packages, look in the Yellow Pages for distributors near you.
Packaging Association of Canada
www.pac.ca
2255 Sheppard Avenue East, Suite E330
Toronto, Ontario M2J 4Y1
Tel: 416-490-7860
Fax: 416-490-7844
E-mail: info@pac.ca
RePack Canada
www.repackcanada.com
Mississauga, Ontario
Tel: 1-877-804-4841
E-mail: info@repack.com
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PACKAGING MATERIALS
You can choose from a number of packaging materials. Each has its advantages and disadvantages.
Metals
Metals provide excellent protection to foods, because no moisture or gas transmission can take
place. Metals are:
inexpensive;
non-toxic;
strong; and
coated or plated so that they wont react with the food.
Cans are the primary type of food packaging produced from metals. They allow you to cook the
food inside the sealed can.
The main metals used to make cans are steel and aluminum. Steel cant be placed in direct contact
with food or it will rust. As a result, steel must be coated with tin, chromium or various polymers
for acidic foods.
Aluminum, on the other hand, wont corrode when its exposed to food. However, it is sensitive
to chloride ions and acid in foods.
Can Sizes
Metal cans come in a large variety of sizes, ranging in both height and diameter. Sizing is based on
the American system, so it is read in inches. Two sets of numbers are given, the first set being the
diameter and the second being the height. Within the set, the first number is stated in inches and
the second is stated as 16ths of an inch.
Can Types
You can purchase either three-piece or two-piece cans. Because two-piece cans have only one seam,
they are superior with respect to integrity and appearance. Unfortunately, they are more expensive,
and only small sizes are available.
Sources of metal containers are listed in the Resources section of this guide.
83
Glass
One of the main benefits of using glass over other types of food packaging is that it is non-reactive
with virtually all foods. As well, it contains the product totally, because it is impervious to moisture
and gases.
Like metal, glass allows you to cook the food inside the container. It is also good from a marketing
perspectivebecause it is transparent, the consumer can see the contents.
Not only is glass recyclable, but it is also often re-used by some food processors.
The drawback of glass as a food packaging material is that it is extremely fragile and very heavy,
which adds to distribution costs.
The standard glass for food packaging is soda-lime glass. It can be formed into unique shapes
and sizes. It can also be coloured for an attractive appearance or to screen out light that could
cause unwanted changes in the product.
Sources of glass containers are listed in the Resources section of this guide.
Paper
Food packages made from paper can be formed into simple or elaborate designs, because it is
flexible and easy to work with. Other benefits to using paper include:
light weight;
generally inexpensive; and
excellent surface for printing.
Because paper isnt waterproof, its structural integrity is limited. That is, when paper gets
wet, it becomes weaker. As a result, paper is restricted to certain applications when used
alone. To overcome this problem, paper is often coated with polymers or lined with foils.
Types of paper packaging include:
bags and pouches;

folding cartons; and
corrugated boxes.
Sources of paper containers are listed in the Resources section of this guide.
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Plastic
Plastics are ideal for food packaging because they are:
resistant to breakage;
relatively inexpensive;
corrosion resistant;
lightweight; and
waterproof.
Plastics can be produced easily in complex shapes, and they also possess a wide range of
colours, or remain transparent.
Although plastics have come a long way since their introduction into the food industry, there still
remain some drawbacks to using them for food packaging. For example:
they can bend, crush or crack easily;

some possess little heat resistance;
they pick up dust easily; and
some of the more complex laminates can be very expensive.
Plastics also dont have the excellent barrier properties of glass and metals, so they allow gases
to pass in and out of the package. Plastics differ in how effective they are as barriers to the various
important gasesoxygen, carbon dioxide and water vapour. Selecting the right plastic packaging
requires knowledge of how sensitive the product is to loss or absorption of these gases.
Types of Plastic
Plastics are often classified into two categoriesthermoplastics and thermoset plastics.
Thermoplastics: These can be re-formed into a desired shape after being melted.
This type of plastic is used to produce plastic bags, pouches, bottles, trays and cups.
Thermoset plastics: A thermoset plastic is very strong once formed, and will decompose
before melting (that is, it wont re-form). This type of plastic is commonly used for bottle
caps and can coatings.
Sources of plastic containers are listed in the Resources section of this guide.
85
Laminates
Laminates combine the advantages of several materials into one. For example, one film may
consist of paper, metal (foil) and plastic. In this case, paper is used for its low cost and strength,
metal is added to prevent gas and/or light penetration, and a low-cost plastic is incorporated so
the film can be heat-sealed.
Laminates can often be more costly than other packaging alternatives, such as metal cans or plastics.
Examples of laminates are Tetra Brik drink boxes, potato chip bags, retort pouches and ovenable
paperboard (paperboard that can be heated up to 400F).
Sources of laminated films are listed in the Resources section of this guide.
ENVIRONMENTAL CONCERNS
The Ministry of the Environments Waste Diversion Ontario (WDO) has the mandate to develop,
implement and operate waste diversion programs. The Waste Diversion Act, 2002 (Bill 90), is now in
effect. Before you select your product packaging, get more information on environmental acts and
regulations in Ontario. Visit the ministry website at www.ene.gov.on.ca/en/land/index.php.
In general, food packaging has a bad reputation with consumers. They see it taking up space in
landfill sites and hear how it is using up valuable resources. Its not that they believe packaging
isnt necessary, but rather they view it as excessive and over abundant.
As a result, you must choose the packaging for your products carefully. When youre sourcing,
take into consideration packages that are smaller, thinner and use less material. By doing this initially,
you can save yourself some time and money searching for a new package farther down the road.
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PACKAGE DESIGN
Your packaging must look professional in order to compete, particularly in the food business.
It is the packaging that will determine a first purchase, while the quality of your product will
bring repeat business.
The first and most important step you must take in designing your package is to establish the
product requirements for:
the appropriate amounts in which you will sell the product (these may be
based on adequate portion sizes, competitors offerings or customer preferences);
volume and weights of the different sales amounts;
physical packaging attributes that help the customer use the product;
protective needs, including shipping and handling factors;
the appropriate shape of the packaging, not only for esthetic appeal but also
for efficient shipping and stocking; and
legal requirements.
Once you have determined the required specifications, the design of the packaging can be created
to work within these boundaries.
Packaging design is part of your overall marketing strategy. You can either do the design yourself
or hire a professional graphic designer. Professional help from printers will be necessary in order
to create a package that has impact in the market. However, it is important that you are able to give
the designer specific directions, because he or she wont be as knowledgeable about the target
market as you are.
The more information you can give to the designer about your target market, package structure
and desired image the easier it will be for him or her to create what you are looking for. You can
get information about packaging design from trade magazines, trade shows, competing products
and books on labelling. You can also contact:
Packaging Association of Canada
www.pac.ca
2255 Sheppard Avenue East, Suite E330
North York, Ontario M2J 4Y1
Tel: 416-490-7860
Fax: 416-490-7844
E-mail: info@pac.ca
87
Factors to Consider Regarding Design

Here are some of the considerations you should take into account when you are developing your
product design:
Determine the target market.

Establish the image or personality of the product based on the tastes and preferences
of your target market: bold, elegant, practical, sophisticated, fun, etc.
Determine the most important features of your product to the audience (if too much
information is presented, the design will be cluttered).
Determine where you will be selling the product and the associated distributors regulatory
requirements for the package, including labelling.
Determine the placement of the product in relation to other products, particularly
competitors (your package must stand out against its background).
Colours convey meaning, and the meaning will be different in each cultural setting.
Colours dont usually appear to be as bright or bold when the product is on the shelf. Be
careful that colour rules used in other situations arent being applied to the package design.
Symbols and shapes can often convey information more concisely than text.
LABELLING
High quality labelling, like packaging, requires research, planning and consultation from a variety of
sources. As well, package and label design must be integrated. Its important that they both send the
same message to the consumer.
Your ultimate goal is to produce a label that is educational and user-friendly. It should also
adequately market your product within legal specifications. And, of course, your label needs to
be an integrated part of your strategic marketing approach. (This is covered in more detail in Part 8:
Strategic Marketing.
Before you create a label, you should know:
all the regions where your product will eventually be sold, and through which
distribution channels;
information your customers would find helpful;
the colours and promotional appeals that are suitable for your audience (your designer
can give you input on this);
how the label will be applied;
what labelling material is suitable for the product environment (that is, does it need to
be freezer-proof? Shipping-proof? Smudge-proof?);
what the labelling budget is per unit; and
regulatory requirements for the product.
88
Once you have enough information to answer the above questions, you can approach
a label designer.
Note that it is the manufacturer or distributors responsibility to ensure that the label meets
legal standards. In Canada and the United States, a unique set of specifications is required for
each product, based on a combination of factors, including:
geographic region;
product class;
distribution channel; and
intended consumer.
For information about mandatory and optional labelling elements for products being sold
in Canada, contact:
www.cfia-acia.agr.ca
Food Label Service
Toll Free: 1-800-667-2657
Toronto
1124 Finch Avenue West, Unit 2
Toronto, Ontario M3J 2E2
Tel: 416-665-5055
Guelph
174 Stone Road West
Tel: 519-837-9400
The Department of External Affairs and International Trade provides information and advice
on U.S. labelling requirements. It will review draft or prototype labels and provide comments
and suggestions before you approach U.S. Customs.
You can also get copies of A Food Labelling Guide, published by the U.S. Food and Drug
Administration, from the Foreign Affairs Canada. Contact:
Foreign Affairs Canada
www.dfait-maeci.gc.ca
125 Sussex Drive
Ottawa, Ontario K1A 0G2
Tel: 613-944-4000
Toll Free: 1-800-267-8376
Fax: 613-996-9709
International Trade Canada will help with labelling requirements for the U.S. market and
abroad. Contact:
International Trade Canada
www.exportsource.gc.ca
125 Sussex Drive
Ottawa, Ontario K1A 0G2
Tel: 613-944-4000
Toll Free: 1-800-267-8376
Fax: 613-996-9709
89
Ingredient Listing
In both Canada and the United States, all ingredients must be listed by their common name,
in descending order of proportion. Ingredients for certain formulations of standard products
arent required, but these exceptions are different for each country.
In Canada, ingredient specifications fall under the Food and Drugs Act and the
Consumer Packaging and Labelling Act. In the United States, the Food and Drug
Administration regulates requirements.
The size of the text and its position on the label are also regulated.
Universal Product Codes
Many retails and distributors now require 12-digit, scanner-readable universal product codes (UPCs).
The codes contain product pricing and inventory information that is scanned and processed by the
cash register, allowing the retailer to keep up-to-date product stock and sales information.
GS1 Canada can issue product code numbers within 48 hours. You can also get guidelines on UPC
usage and positioning from the council.
Codes issued in Canada are suitable abroad. However, if a manufacturers number is to be assigned
in the United States, you must join the Uniform Code Council. This organization will also provide
a list of reputable printers that can create film masters.
GS1 Canada
www.gs1.org
Don Mills, Ontario M3B 1L1
Tel: 416-510-8039
Fax: 416-510-1916
Uniform Code Council Inc.
www.uc-council.org
300-7887 Washington Village Drive
Dayton, Ohio 45459
Tel: 937-435-3870
Fax: 937-435-7317
90
NUTRITION LABELLING
In 2002, Health Canada regulations made nutrition labelling mandatory on most prepackaged food
for most manufacturers as of December 12, 2005. For small manufacturers (those who had gross
revenues from food sales in Canada of less than $1,000,000 in the 12-month period prior to
December 12, 2002, the transition period is five years. These companies will have to comply with
the new regulations by December 12, 2007.
The Nutrition Facts table is intended to provide information needed by consumers to make
informed food purchasing choices and to compare products. Under the new regulations, foods will
be labelled with more complete, consistent and accessible nutrition information than was the case
previously.
Previously, nutrition labelling was voluntary and the information wasnt always presented in the
same way. Under the new regulations, foods will be labelled with more complete, consistent and
accessible nutrition information, including:
the number of calories, and the amount of:

fat
sugars
saturated and trans fats
protein
cholesterol
vitamins A and C
sodium
calcium
carbohydrate
iron
fibre
The Nutrition Facts table will appear on most prepackaged foods, but some exemptions include:
Alcoholic beverages;
Fresh fruit and vegetables;
Raw single ingredient meat and poultry except for ground meat and ground poultry;
Raw single ingredient fish and seafood;
Food containing insignificant amounts of the 13 nutrients required in the Nutrition Facts
table;
Food products sold only in the retail establishment where they are prepared or processed;
Individual servings of food intended for immediate consumption.
Foods lose their exempt status if:
Their labels or advertisements carry a nutrition or a health claim;
Vitamins or minerals have been added;
Sweeteners such as aspartame have been added.
Specific regulations for making nutrient content claims and how they are to be presented on food
labels, also exist and should be reviewed to see if they pertain to the way you wish to promote your
product. Free claims and words such as very low or ultra low, and light fall under these
regulations.
Diet-related health claims, which relate to a foods ability to reduce the risk of heart disease, cancer,
osteoporosis and high blood pressure, are also being allowed for the first time in Canada.
91
Until the nutrition facts table becomes mandatory, products may comply with either the new
nutrition labelling regulations or with the previous regulations.
Allergen Labelling, Certified Organic, Best Before Dates and other forms of labelling. The new
regulations for nutrition labelling do not relate to other types of information on the label. For more
information on these and other labelling regulations, please refer to the Canadian Food Inspection
Agency website at http://www.inspection.gc.ca/english/fssa/labeti/labetie.shtml or visit the
interactive nutrition labelling resource at: http://www.hc-sc.gc.ca/fn-an/labeletiquet/nutrition/interactive/inl_main_e.html#5. Your can also e-mail your question to:
labelwindow@inspection.gc.ca
Lab Testing for Nutrition Content Claims

A number of laboratories test for nutrition content. A list of labs is included in the Resources
section of this guide. The list isnt intended to be complete. For information about other labs in
Ontario, contact the Ontario Ministry of Agriculture, Food and Rural Affairs, Business
Development Branch, at 1-888-466-2372.
The Canadian Food Inspection Agency recommends using an in-house or accredited laboratory that
uses methods that have been validated for the food you want to have analysed. A list of accredited
labs can be accessed through the Standards Council of Canada (SCC) website at: www.scc.ca
OTHER POINTS ABOUT LABELLING

You should be aware of the following:
Eco-labelling (or Environmentally Friendly Labelling) falls under separate guidelines in

both Canada and the United States.
Before you finalize the printing of labels, all the work should be proofread several times.
Also, if you are unhappy with the design work, ask the designer or printer for changes.
Printers normally create print plates for label printing. Ask the printer if you can keep the
plates when the job is completed. This will permit you to change printing companies without
incurring the additional cost of creating a second plate.
There is usually a minimum order amount when purchasing labels or packages. Determining
this amount before you order will help you to avoid over-purchasing to meet the minimum.
The cost advantages of bulk printing may be overcome by the cost of disposing of unused
labels if you require a change. Keep this in mind when you order labels.
You can get an informal comment on label prototypes from governmental bodies in both Canada
and the United States. However, these organizations wont issue a legal confirmation that a product
label has met all regulatory criteria.
92
8. STRATEGIC MARKETING
Marketing is a general term used to describe all the steps that lead to final sales. It is the
process of planning and executing pricing, promotion and distribution to satisfy your individual
and organizational needs, as well as those of your customers.
From this definition, it is easy to see that marketing is more than just selling a product or
service. It is an essential part of business. Without marketing, even the best products and
services fail.
Companies constantly go under because they dont know what is happening in the marketplace
and, as a result, they arent fully meeting their customers needs. They mistakenly believe that with
the proper amount of advertising, customers will buy whatever they are offered.
Marketing consists of the decisions you make strategicallybehind the scenesthat affect how
your customer perceives your product. Your marketing decisions need to include the four Ps:
product;
place/distribution;
promotion; and
pricing.
Pricing is discussed in detail in Part 9: Pricing Your Product, and distribution is examined in
Part 10: Distributing Your Product.
93
Your strategic marketing plan is an important part of your business plan; if you have developed a
detailed business plan you are well on your way to marketing strategically. You will have established:
a mission statement;
your overall company objectives, such as profitability, volume or stability;
competitive strategies, such as overall cost leadership, differentiation or niche marketing; and
your marketing objectives
to achieve a viable level of sales or market share;
to increase market share;
to maintain market share;
to maximize cash flow; or
to sustain profitability.
The next step is to establish specific marketing strategies.
MARKETING STRATEGIES
Your marketing strategy outlines exactly how you will achieve your marketing objectives. For
example, if your objective is to increase market share, your strategy will state how this will occur.
A marketing strategy is a way to give marketing orientation to your business by deciding to
position your product or service in terms of buyer needs and wants. Inexperienced business
people often make decisions based on what they like or want, leaving the customer out of the
picture. A marketing orientation brings the customer into the centre of the picture.
You can achieve the marketing objective for profits, cash flow and market share by:
increasing the number of users by

increasing their willingness to buy; or
increasing their ability to buy;
increasing the rate of purchase by
broadening the occasions they use the product;
increasing their level of consumption; or
increasing their rate of replacement;
retaining current customers by
maintaining their satisfaction;
meeting what the competition offers; or
developing or increasing relationship marketing;
94
acquiring new customers by

adding line extensions (variations of existing products designed for
existing markets);
using leaders (lower prices on certain products to increase the sale of more
expensive complements);
bundling (selling products together, usually at a lower price than if
bought separately);
gaining head-to-head market dominance;
using head-to-head price/cost leadership;
differentiating the product;
serving a narrowly defined target market; or
adding flankers (new brands designed to serve new segments).
MARKETING PROGRAMS
Marketing programs are strategic plans that include detailed approaches to the four Ps (product,
place, promotion and pricing). Your approach to making decisions for each of the four Ps should
closely follow your mission statement, company objectives, competitive strategies, marketing
objectives and marketing strategies.
The Strategic Marketing Flow Chart
The chart that follows will give you an overview of the strategic marketing process.
(A version of this chart is known as the Stage-Gate Process for New Product Development.)
If you would like to become more familiar with the theory behind marketing approaches, a
number of organizations can teach it to you. Marketing courses are available at many Canadian
post-secondary educational institutions.
95
Diagnosis
Long Term
Evaluation
(3 Years)
Define the Business

Gathering Information
- Environmental Analysis
- Customer Analysis
- Competitor Analysis
- Internal Analysis
No Go
Decisions
Decision Point
Short Term
Evaluation
and Annual
Assessment
Go
Mission
Implementation
Objectives
- Profit
- Volume
- Stability
- Non-Financial
Competitive
Strategies
Marketing
Strategies
- Differentiation
- Cost Leadership
- Focus
- Increase the number of users

- Increase the rate of purchase
- Retain current customers
- Acquire new customers
Marketing
Programs
- Product
- Distribution
- Promotion
- Pricing
96
PROMOTION
Promotion includes all the activities that are designed to inform, persuade and influence people
when they are making the decision to buy. Promotion consists of:
advertising: non-personal communication transmitted through the mass media;

publicity: free promotion through news stories in newsletters, newspapers, magazines
and television; and
sales promotion: all forms of communication that arent found in advertising and personal
selling, including direct mail, coupons, volume discounts, sampling, rebates, demonstrations,
exhibits, sweepstakes, trade allowances and point-of-purchase displays.
When you are designing a promotion plan, clearly spell out:
which objectives to use. Its possible to have more than one objective, but you
would be wise to target your audience, or you will run the risk of losing focus;
what to say;
who to say it to; and
the criteria that you will use to measure success.
Suggestions for Inexpensive Promotion

As a new food processor, you can promote your product inexpensively and effectively by
advertising through:
food-related trade journals;

product demonstrations;
contests;
flyers;
the Yellow Pages;
business cards;
statement stuffers;
window banners;
personal selling;
newsletters;
greeting cards;
sports team sponsorship;
home parties;
seminars;
ethnic services; and
direct mail.
Of course, one of the best free methods of promotion is good word of mouth.
97
Your Promotion Objectives

Your promotion objectives need to be clearly stated and measurable.
They must be compatible with the objectives of your company as
well as the competitive and marketing strategies.
Your objectives will vary for different products and situations.
For example, you have to promote differently to brokers than
to wholesalers. When youre promoting to a broker, you need to
emphasis what you want the broker to present to the wholesaler.
When you approach a wholesaler, you simply want the wholesaler
to purchase the product.
You have five general promotional objectives to choose from:3
provide information;
increase demand;
differentiate the product;
accentuate the value of the product; or
stabilize sales.
Your Promotional Strategy

Once you have reviewed all the possible promotional tools, the next step is to devise a promotional
strategy. It should address the following issues:
What is the goal of the promotion?

What types of promotion should be used?
What effect should the promotion have on the customer?
Which promotion is working?
Which promotion isnt working?
What are the costs of the promotion compared to the benefits?
__________________________________________________________________________________________
3Beckman, M. Dale; Kurtz, David L.; and Boone, Louis E. Foundations of Marketing.
Fifth Canadian Edition. Dryden Canada: Toronto, Ontario. 1992. p. 480.
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ADVERTISING
Advertising makes use of the mass media to get your message out.
FORMS OF ADVERTISING
You can choose from a number of different media. Each one has its advantages and its
disadvantages. You may find that youll want to use more than one medium to promote
your product.
Newspapers
Advantages:
flexibility;
community prestige;
intense coverage;
reader control of exposure;
coordination with national advertising; and
merchandising service.
Disadvantages:
short life span;
too broad an audience/not targeted readership;
hasty reading; and
poor reproduction.
Magazines
Advantages:
selectivity;
quality reproduction;
long life;
prestige associated with some; and
extra services.
Disadvantages:
lack of flexibility.
99
Television
Advantages:
impact;
mass coverage;
repetition;
flexibility; and
prestige.
Disadvantages:
temporary nature of message;
high cost;
high mortality rate for commercials;
evidence of public distrust; and
lack of selectivity.
Radio
Advantages:
immediacy;
low cost;
practical audience selection; and
mobility.
Disadvantages:
fragmentation; and
temporary nature of message.
Outdoor Advertising
Advantages:
quick communication of simple ideas;
repetition; and
ability to promote products available for sale nearby.
Disadvantages:
brevity of the message; and
public concern over esthetics.
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Media Rates
Promotional and media costs are the most difficult to allocate because their effectiveness is
hard to measure in a concrete manner. Before looking at the dollar costs of different media,
you should decide:
which media are most likely to reach your target audience;

which media suit the image of your product;
whether any product-specific features make one medium more appropriate than
another (for example, is a visual demonstration necessary); and
what is your promotional budget?
Common errors to avoid are:

trying to focus your efforts on too broad a market;
allowing the quality of a promotional piece to lapse in order to afford more distribution,
or lack of planning and coordination of promotional efforts;
no measurement of effectiveness; and
relying on one medium.
Advertising Associations and Publications
Two excellent resources in planning your advertising campaign are:
Canadian Advertising Rates & Data
(monthly publicationsingle issues available)
www.cardmedia.com
Rogers Media Publishing
One Mount Pleasant Road, 7th Floor
Toronto, Ontario M4Y 2Y5
Tel: 416-764-2000
Fax: 416-764-1705 or 416-764-1709 or 416-764-1721
The National List of Advertisers
(annual publication)
www.cardmedia.com
You can get free information or fee-for-service material on advertising topics from:
Advertising Standards Canada
www.adstandards.com
175 Bloor Street East, South Tower, Suite 1801
Toronto, Ontario M4W 3R8
Tel: 416-961-6311
Fax: 416-961-7904
101
Periodicals for the advertising industry, including Marketing & Strategy magazine (weekly)
and Ad Age (twice weekly), are available through your public library.
Setting Your Advertising Expenditures4
How do you determine how much youre going to spend on advertising? The following information
will help you:
Market share: A company that has a higher market share generally has to spend more
on advertising to maintain its share.
Sales from new products: If a high percentage of your sales comes from new products,
you have to spend more on advertising compared to companies with established products.
Market growth: If you are competing in a fast-growing market, you should spend
comparatively more on advertising.
Plant capacity: If you have a lot of unused plant capacity, you should spend more on
advertising to stimulate sales.
Product price: Both very high-priced (or premium) products and very low-priced (or
discount) products require higher ad expenditures. This is because, in both cases, price
is an important factor in the buying decision. The consumer has to be convinced, through
advertising, that the product is a good value.
Product quality: A higher-quality product requires greater advertising effort because of
the need to convince the consumer that the product is unique.
Breadth of product line: If you have a broad line of products, you have to spend more
on advertising compared to companies with specialized product lines.
Media Directories
For contacts as well as market reach, pricing and related information about media outlets, consult:
Bowdens Media Directory
www.bowdens.com
Bowdens Media Monitoring Ltd.
2206 Eglinton Avenue East, Suite 190
Scarborough, Ontario M1L 4T5
Tel: 416-750-2220
Toll Free: 1-800-269-8145
Fax: 416-750-2233
E-mail: info@bowdens.com
__________________________________________________________________________________________
4
See Workbook for Estimating Your Advertising Budget

(Boston: Cahners Publishing Co., 1984)
102
Market Wire
www.marketwire.com
48 Yonge Street, 8th Floor
Toronto, Ontario M5E 1G6
Tel: 416-362-0885
Fax: 416-362-6669
PUBLICITY
Publicity gives you free advertising through stories in newsletters, newspapers, magazines and
television. You can get publicity by sending a media release to the various media offices, cultivating
friendships within the media or with those who are known as trend-setters. Positive word-of-mouth
can also generate interest in your story. Or you can attempt to generate your own publicity by
developing a publicity campaign, which could include a media release.
A media release is a one or two page letter identifying a newsworthy event and outlining the who,
what, when, where and why of the story.
You can send out a media release to announce the start-up of your new business, introduce a new
product or announce any other success story related to your company. The media will publish or
announce the story as a news item, and there will be no expense for you.
Publicity is one of the most effective and least costly means of advertising.
SALES PROMOTION
A lot of options are available to you when it comes to sales promotion. Youll probably find that
youll want to use several of them to promote your product and your business.
Three of the most commonly used in the food industry are trade shows, in-store demonstrations
and coupons. You can also use direct mail.
Trade Shows
When you budget for a trade show and include this venue in your overall marketing plan, youll be
giving yourself a highly focused way to:
establish a presence in the marketplace;

gain an overview of the current industry; and
get a list of serious buyers more quickly than you could with a traditional sales approach.
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Although trade shows are relatively expensive, they are widely used in the food industry. If you plan
your participation properly and present your business well, trade shows offer the potential for a high
return in sales and contacts.
You may need several months to a year to get a well-located booth and prepare the appropriate
materials and displays.
Choosing the Right Trade Show
Your first step is to develop a list of several shows you feel would be suitable. Various directories
are available that contain a complete index of trade shows, listed chronologically, geographically
and by subject. As well, each listing has a phone number for the shows contact.
Trade Show Week contains listings of trade shows in the United States, Canada and Mexico in its
domestic edition and other countries in its international edition. Contact:
Trade Show Week
www.tradeshowweek.com
5700 Wilshire Boulevard, Suite 120
Los Angeles, California 90036-5804
Tel: 323-965-5384
Fax: 323-965-2407
Ministry of Agriculture, Food and Rural Affairs
www.omafra.gov.on.ca
Katie Meagher, Communications Officer
Business Development Branch
E-mail: katie.meagher@ontario.ca
Why This Show?
Part of your show-planning process is setting the objectives for the show. First, be aware
of which type of show it isfor the final consumer (consumer show) or for your food chain
partners (trade show).
Examine your goals. Do you want to take orders on the spot, build your brand awareness, introduce
a new product and gather leads?
104
Vertical versus Horizontal Markets

Another thing to consider is whether your product or service should be presented at horizontal or
vertical shows, or both.
Horizontal shows are those with vendors who are selling a broader variety of products or services,
and the attendees usually come from a single market segment. They are looking for either very
specific products or services or a broader variety.
Vertical shows are more narrowly focused to just one type of product and market. The advantage
of vertical shows is that the attendees are all from a very specific market, and your objectives can be
more focused. The disadvantage is that your product or service must fall exactly within the focus for
the show or you wont get the results you want.
Shows for food only would be vertical. However, shows for services to the grocery industry or for
gift basket marketers would most likely be horizontal because the attendees would be from all types
of markets.
Narrowing the List
Unless you have unlimited budgets and resources, youll need to find out which shows from your
potential list are best. The key lies in finding the shows that pull in the most decision makers for
your industry.
To find out who attends, ask the show management for a
demographic profile of attendees. Typically, show literature
will list only their numbers and general titles. Check the titles
and purchasing responsibility if that information is available.
Another route is to contact past attendees. Have a list of questions
ready that will tell you if they are indeed the decision makers and
what value they placed on their time spent in the exhibit hall.
You can also ask non-competing exhibitors from the previous year what their impressions of the
show were and whether they will be attending again. Or, if possible, go to the show as an attendee
yourself so youll know if you want to participate next year. You can get an exhibits-only pass for
many shows, so youre not paying the entire fee.
You should also ask the show managers how they are promoting the show and what their strategy
is for getting people to the exhibit hall. If its a new show, promotion has to be very good to get the
traffic you need to make it worthwhile.
Conference schedules are often set up so that luncheons and socials are held in the exhibit
hall to ensure that attendees spend time with vendors. While its nice to get them into the
exhibits (and to your booth), food-related functions arent always the best arenas for talking
with prospects. Its difficult to handle a plate of food, a drink and your companys literature at
the same time. Make sure the schedule allows for plenty of time around those events so attendees
can eat and visit your booth.
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Preparing for the Show

Get all the information you need to begin your preparations. The contact person for the show
will provide you with basic information. Make sure you have:
a floor plan (preferably with other exhibitors indicated), so you can choose a high-traffic
area. Dont hesitate to pay extra for a good locationthe whole point is exposure;
booth specifications, including dimensions, lighting, tables, chairs, skirting and any
display or sample restrictions; and
information about all the services being offeredaccommodations, equipment rental,
assistance with setup, tear-down or packing storage.
Training Your Booth Staffers

One of the most important steps to take in order to have a truly successful exhibiting experience
is the training of your booth staff. They account for 90 percent of the positive feelings that show
attendees have about the show and your company.
Trade show attendees usually go to shows to get detailed information about products and
services, so they expect your booth staff to be very knowledgeable. You want to send your
most peopleoriented representatives, as well as those who know the most about your
company. Be sure that they understand exactly what your objectives are for the show.
Your staff should also be armed with information about your competition and the competitive
advantage your product or service has. Finally, make sure they can emphasize the benefits of your
product or service instead of simply regurgitating the product features list from your brochure.
A number of excellent resources can help with training trade-show staff. You can narrow down the
ones in your region by conducting an Internet search on trade-show training.
Other Preparations
When youre setting your budget, allow for personnel, accommodations, booth, handouts,
promotional activities, product transportation and travel. If the trade show is outside of
Canada, allow for insurance costs and plan to spend an entire day before and after the show
in the host country.
Contact existing and potential customers before the show. Invite them to drop by your
booth and inform them about special promotions available only at the show or new products
that youre launching.
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Show programs and advertising inserts in the general media or industry publications give you
the opportunity to advertise in specific vehicles aimed at promoting the show and sharing costs.
Its advisable to choose professional design and marketing consultants to help you prepare the
materials for your booth. These will include:
a high-impact display to attract the audience;

professionally prepared information handouts (remember, attendees are there
to gather knowledge); and
samples of your product.
Company Literature and Giveaways

The number of brochures, giveaway items and other handouts you need to bring depends on how
many people you expect to see.
Keep in mind that about 90 percent of all literature never makes it back to the attendees offices.
Perhaps its best to train your staff to always offer to send the literature by mail to the attendees
office. Attendees often dont want to lug your marketing materials all over the exhibit hall and will
jump at the chance to have you send the information to them the following week.
Follow-Up
Prepare a system for recording leads. Several options include:
lead sheets for sales staff;

a business-card exchange system;
a sign-up sheet for more information; and
a guest book.
Be sure to follow up your leads after the show. This should be done immediately, and its
best to let customers know in advance when and how they can expect to be re-contacted.
In-Store Demonstrations
Demonstrationssometimes referred to as product samplingsare an effective and inexpensive
means of promoting a new or existing product.
There are three types of in-store demonstrationslive, mobile and static.
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Live Demonstrations
At a live demonstration, a member of your staff does simple food preparation. This is best
for a new product that requires information or answers to questions, or for a product that needs
special preparation.
One advantage of a live demonstration is that you can encourage the customer to buy the product.
A disadvantage is that a great deal of time is required for the demonstration, so costs can be high.
Mobile Demonstrations
These are a form of live demonstration, where a demonstrator walks through the store offering
samples. The demonstrator usually has a base operation near the product sales display. Not all
stores allow this type of demonstration.
Static Display
This is an area displaying the product and offering unattended samples. One advantage is that
this type of display is very cost effective. A disadvantage is that theres no control over purchasing
decisions or how much sample is used. This type of demonstration needs to have the consumer
familiar with your product.
Steps in Planning Demonstrations
1. Determine what type of demonstration you are going to use.
2. Decide which stores you are going to target. Choose one that stocks your product.
3. Find out the store policy on how to set up in-store demonstrations. Every store has
different policies.
4. During the demonstration, hand out simple information about the product as
well as any coupons.
5. Be unique and try new ideas; you must stand out from the competition.
6. Know the competition, but dont downgrade them during the demonstration.
7. Talk to the store managers. The better the relationship you have with them
and the better they know your product, the more cooperative they will be. Talk
to them about two weeks before the demonstration, so that they will have product on
hand and on the shelves.
8. Be prepared to work the whole weekend, not just peak hours. The normal run of a
demonstration is Thursday, Friday and Saturday.
9. The store may want incentives from you, such as cost cuts on product. If possible,
get the store to special your product during the demonstration. However, be prepared
to pay for this opportunity.
108
You can hire a demonstration company, if you wish. Consider time, energy, ease of
demonstration and your budget when you make this decision. One firm that specializes
in in-store demonstrations is:
In-Store Focus Inc.
www.instorefocus.com
2250 Argentia Road
Mississauga, Ontario L5N 6A5
Tel: 905-817-0119
Remember that demonstrations normally dont give you access to a very wide market,
so they probably should be only one segment of your marketing and promotional package.
Coupons
Coupons can be an effective way to increase your sales and profits. However, you should be
aware of certain costs:
costs of physical distribution, mailing coupons, placing advertisements and paying

the retailer a handling charge for redeeming the coupons;
reduced contribution margins because coupons are price reductions; and
the use of coupons not only by new customers but by existing customers, who would
have paid the regular price.
Most printers in Ontario can print coupons.

You need to estimate various rates to determine the effectiveness of a coupon promotion. The
estimations could be based on past performance or on experiments that run coupons in one city
or one part of a city. Rates include:
redemption rates;
displacement rates;
acquisition rates;
stock-up rates; and
conversion rates.
You can have coupons distributed in a variety of ways. Three organizationsredemption agents,
clearing houses and billing agentscan help with handling coupons.
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You can get detailed information about coupons in An Industry Guide to Couponing Practices.
This is available from:
Food and Consumer Products of Canada
www.fcpc.ca
Toronto, Ontario M3C 1V9
Tel: 416-510-8024
Fax: 416-510-8043
Food and Consumer Products of Canada also negotiates coupon rates with retailers on
behalf of food companies.
If you would like to start a coupon program, contact:
Resolve Corporation
www.resolvecorporation.com
455 Horner Avenue
Toronto, Ontario M8W 4W9
Tel: 416-252-7741
Fax: 416-252-0037
This company is Canadas largest provider of coupon clearing services to retailers. It offers
sorting, invoicing and accounts receivable services relating to coupon redemption.
You can also contact:
A.C. Nielsen
www.acnielsen.com
160 McNabb Street
Markham, Ontario L3R 4B8
Tel: 905-475-3344
Fax: 905-475-8357
A.C. Nielsen provides market research, information analysis and insights to consumer products
and services industries.
110
Direct Mail
One way of reaching a targeted market is through direct mail. Its advantages are:
selectivity and speed;

intense coverage;
flexibility of format;
complete information; and
personalization.
However, direct mail also has some disadvantages:
high cost per person;

dependency on quality of the mailing list; and
consumer resistance.
Your next step in strategic marketing is pricing.
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9. PRICING YOUR PRODUCT

Pricing is much easier when you have only one product. All of the activities you undertake in
your businessfixed (like a mortgage) or variable (like the price)must be covered by the price
of your one product. However, if you are producing several goods, your fixed costs must be applied
proportionately to the various products according to their use.
It would be nice to have both an extensive marketing program and the lowest price. But
in most cases, this just isnt feasible, and trade-offs need to be made. The money for your
marketing programs must come from the consumer, so some programs may not be possible
if you have low prices.
Traditionally, companies have used costs as the basis for setting prices, with no regard to the
value a customer places on the product or how competitors are pricing. A market-driven company
will price on value, knowing costs.5
This is known as target pricing. What you do is study the competition and your customers to
identify a point where your product must be priced to be competitive. Once the target price is
identified, you decide on a desired profit. You then work backward to calculate the costs at which
your product must be produced to meet the profit and target price.
These calculations must take into account the target profit margin, price reductions for retailers,
costs of promotion and future distribution costs. To properly calculate you companys costs, you
must include current and planned activities for distribution, promotion and product development.
__________________________________________________________________________________________
5PricingThink
Value Not Cost, The Best Readings from Business MarketingViews from the Trenches.
PWS-Kent Publishing Company: Boston, MS. P. 255.
112
PRICING STRATEGIES
Pricing strategies specify the role of price in implementing your marketing strategy. Your
pricing strategies state what you want to achieve by setting a particular price. You can have
several strategies; they arent necessarily mutually exclusive.
You should determine pricing strategies for each marketing strategy you have set. And
they should be consistent with the distribution and promotion strategies you have planned.
Marketing Strategy
Pricing Strategies
Reduce economic risk.
Offer low price to

encourage trial.
Offer better value.
2. Increase the overall size of

the market by increasing the
rate of purchase.
Increase frequency
of consumption.
Broaden the number of

usage situations to include
lower priority uses.
3. Increase market share through

retention of customers.
Meet price competition.
4. Increase market share through

acquisition of customers.
Undercut the competition.
Offer premium price.
5. Introduce a line of substitutes.
Encourage trade-up.
Clearly differentiate
quality differences in
a line of substitutes.
Expand the range of

products bought by
existing customers.
Attract new customers

through superior value.
1. Increase overall size of

the market by increasing
the number of users.
6. Introduce a line of
complementary products.
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PRICING PROGRAMS
You can arrive at your pricing strategies through various pricing programs, such as:
Penetration pricing:
a low price to stimulate demand
Use this when:
lower prices will result in overall increased growth in the market or increased
demand for your product;
you sell higher-margin complementary products that are being pulled along
with the sale of lower-priced products;
your company enjoys economies of scale; or
your competitors have high cost-structures.
Parity pricing:
setting the price near or at competitive levels and using other market
variables to implement strategies
Use this when:
your total market volume wont grow with lower prices; or
your competitors can easily match any price decrease.
Premium pricing:
setting a price above competitive levels
Use this when:
your company can differentiate a product in terms of higher quality or
special features; or
you have little excess capacity and its difficult for competitors to enter
the industry.
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MONITORING COSTS
If you are offering a number of products, you cant get the information you need from
a conventional profit-and-loss statement. Instead, you need to track your costs both for
the company and for each product. Without product-specific information, you wont be
able to tell which products are doing well and which need additional marketing support.
In order to gather all the relevant information, you have to track two types of costs:
variable costs: (direct costs of manufacturing): costs that are specific to the manufacturing
of the particular good or service (that is, labour, raw materials and supplies); and
fixed costs: ongoing costs that occur whether your business is shut down for a time or
in full production (for example, depreciation, insurance, taxes, selling and administration
costs, and utilities).
Fixed costs can be broken down into two kinds of costs. Traceable fixed costs can be related to
a product line on a non-arbitrary basis. Non-traceable fixed costs are incurred on behalf of your
business as a whole and cant be assigned to a specific product line.
Contribution Analysis
Contribution analysis studies how the final selling price will contribute to fixed costs. Ideally,
a product would cover all the fixed costs and contribute a net profit, but this doesnt always
happen. Many products in a companys business only cover their variable costs and part of the
fixed costs. You must decide if these products are worth continuingis the product necessary
to the product line?
Fixed costs exist whether you produce the product or not. Ask yourself: Is it better to produce a
product that pays for itself and part of the overhead or to do nothing (that is, not produce it) and
cover none of the overhead?
If your business has excess capacity, you would be better off keeping the products that are
covering only part of the costs. However, if capacity is full, selling a product with low or
negative total contribution may not be advisable. If your resources and sales are going to the
low-contribution product instead of the higher ones, you arent maximizing your profitability.
115
The following is an example of a table used to monitor the contribution of various product lines.
Variable costs of goods

sold
Gross profit margin
Other variable costs
Variable contribution
margin
Traceable fixed costs:
Sales salaries
Manufacturing salaries
Packaging salaries
Advertising of specific
product lines
Rent and utilities
Total traceable fixed cost
Total contribution
(see calculation)*
Non-traceable fixed
costs:
Company advertising
General and administrative
overhead
Total
Net operating profit
Company
Total
Product
One
Product
Two
Product
Three
Product
Four
205
50
70
40
45
$915
30
$885
$250
0
$250
$380
20
$360
$180
10
$170
$105
0
$105
280
180
105
70
50
30
95
70
25
65
40
20
50
20
30
115
70
$750
$135
30
20
$200
$50
50
30
$270
$90
20
15
$160
$10
15
5
$120
($15)
$40
$40
$40
$40
$40
60
$100
60
$100
60
$100
60
$100
60
$100
$35
($50)
($10)
($90)
($115)
Salaries can be split according to hours spent on a product or some other reasonable basis. Rent and
utilities can be split on the basis of volume allocations.
Company advertising and general and administrative overhead cant be allocated to specific
products, so are non-traceable fixed costs.
Determining which products should receive additional support becomes clearer after we calculate
the percentage variable contribution margin (PVCM).6
selling price variable costs
PVCM = --------------------------------------selling price
__________________________________________________________________________________________
6
Guiltinan,Joseph and Paul, Gordon. Marketing Management, Strategies and Programs, Fourth
Edition. McGraw-Hill; Toronto, Ontario. P.226
116
The PVCM shows which products contribute the greatest amount to overhead and profit for each
additional dollar spent to increase sales.
From the above example:
PVCM
Company
Total
0.79
Product One
Product Two
Product Three
Product Four
0.83
0.80
0.77
0.70
Although Product Two has the highest total contribution, additional dollars should be spent on
Product One because this is where the greatest gains will be enjoyed.
SETTING PRICES
The two important tools for setting prices are:
break-even analysis; and

cost-volume relationships.
Break-Even Analysis
You can use this tool for initially setting a products price or for calculating the effects of a price
change. It will help you to understand that for certain prices, you need different levels of production
to break eventhat is, cover all your variable and fixed costs.
The break-even point is where your total revenue equals your total cost. Below break-even, you will
incur losses. Above this point, you will realize profits.
You should ignore sunk costs, such as research and development for a product. Depreciation on
equipment should be used as a cost rather than deducting its full costs.
Total Fixed Costs (B)
Break-Even Point = --------------------------------------Unit Contribution (A)
117
The following table shows an example of a break-even analysis for five different pricings
of one product.
Unit Selling Price
Unit Variable Cost
$21.95
$7.95
$23.95
$7.95
$25.95
$7.95
$27.95
$7.95
$29.95
$7.95
Unit Contribution (A)
$14.00
$16.00
$18.00
$20.00
$22.00
$27,500
$27,000
$25,000
$20,000
$18,000
Revenue
$603,625
$646,650
$648,750
$559,000
$539,100
Fixed Costs (B)
$400,000
$400,000
$400,000
$400,000
$400,000
Variable Costs
$218,625
$214,650
$198,750
$159,000
$143,100
Profit (loss)
($15,000)
$32,000
$50,000
$0
($4,000)
28,571
25,000
22,222
20,000
18,182
Estimated Sales
Break-even (units) (C)
Cost-Volume-Profit Relationships
Economies of scale measure the impact of changes in volume on fixed costs. You could find
that your ability to increase the volume of output will allow you to decrease the per-unit cost.
Product 1
Unit Variable Cost
Total Variable Cost
Total Traceable Fixed Costs
Total Direct Cost
Divided by Volume
Average Unit Cost
2000 units
$40
80,000
240,000
320,000
4000
$80/unit
4000 units
$40
160,000
240,000
400,000
8000
$50/unit
Increases in volume have the greatest impact on products with high PVCM because most of the
costs are fixed for these products.
The experience curve effect is where variable costs decline as volume increases. This can bring
about better results when you increase the volume.
Experience curves can be due to:6
more-efficient production processes;

higher discounts because of greater volume of purchases; or
workers becoming more efficient.
__________________________________________________________________________________________
6
Guiltinan, Joseph and Paul, Gordon, Marketing Management, Strategies and Programs,
Fourth Edition. McGraw-Hill: Toronto, Ontario. P. 145.
118
EXCEPTIONS TO THE PRICING RULES

You should be aware of the types of deals and allowances that are generally used to support the
marketing of your specific products and categories in the targeted food retail outlets: competitive
research is key.
Private label products are becoming increasingly popular in grocery stores. This gives you an
alternative opportunity to access the food retail market. If retail buyers want your product for
store branding, they will expect you to quote a net net pricewhich doesnt include deals and
allowanceswith a cash discount. The retailer will typically absorb the promotional costs and
listing allowances and will determine the retail pricing.
Club warehouses and stores offer foods under everyday low pricing schemesa constant
low product price is offered to the consumer as opposed to high low pricing supported by
trade deals and allowances and special consumer promotions. These outlets will also expect
you to quote a net price for your product.
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TRADE TERMS
The following are some of the options that may form part of your pricing strategy.
Listing Fees
These are normally single payments made to retailers or distributors to encourage them to carry
your products. The listing fee accounts for one-time set-up costs for administration, warehousing,
computer listing, quality control and consumer advertising.
Listing fees are negotiable and depend primarily on the product category and potential success
of the product. The more certain the retailer or distributor is that your product will be successful,
the less the necessity to recapture initial set-up costs. However, if your product isnt a success, the
retailer or distributor will want to recover all initial costs, including the costs of removing the failed
product from store shelves and warehouses.
In addition to listing fees, you must support your product with such extras as promotional ads
and store demonstrations to help get listed. The retailer will often ask for free goods when youre
introducing a new product.
Most retailers dont charge listing fees for certain commodity groups, such as produce, meats,
bakery and bulk items. For grocery items, fees can be as low as $200 to $300 per product or
higher, depending on the product category and the retailers policies.
Cash Discount
This is a discount offered for payment of an invoice within a specified number of days from
shipment or receipt of goods. The industry standard is one percent to two percent off the invoice
if paid in 10 days, or the net invoice payable in 30 days.
DiscountsLeaks and Swells
This is a general allowance thats given to offset the cost of product shrinkage or damage
within cases.
Damaged Goods
Damaged product is usually returned within a certain time for compensation or sent to a
reclamation centre (central warehouse). The supplier is billed via a debit note on a monthly basis.
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Guaranteed Sale
If a product is risky or its potential success is questionable, the buyer will usually expect you to
guarantee the sale of the product. You must agree to repurchase any unsold portion of the initial
order. However, if the product is perishablefor example, produce or meatthe buyer will
normally absorb the risk and take responsibility for the entire lot.
Price Protection
Market conditions might fluctuate so that the product price declines and
becomes lower than the price you originally quoted. If this happens, you
are expected to compensate the difference for any stock the retailer is
holding.
However, if market prices increase, the buyer will expect you to give
sufficient notice so that he or she can purchase some product in advance
of the price increase.
Many retailers wont accept price increases in November and December,
because this is their busiest time.
Product Liability Insurance
Major distributors and retailers probably wont carry food products from manufacturers that arent
insured against lawsuits if consumers were to become ill or injured after consuming their goods.
DEALS AND ALLOWANCES

You can use promotional deals and allowances to encourage retailers to list and sell more of your
products. These tools also help maintain a sufficient turnover of your product so that it doesnt get
delisted due to poor sales.
Deals and allowances alone wont move additional product, but they will motivate buyers to
list or promote your product over another and pass savings on to consumers through lower
retail prices. Deals and allowances are usually negotiable, depending on the product categories
and potential success of a new product.
Often suppliers will offer the same deals and allowances to all retailers and distributors on a
net basis. Published deals are common, where every retailer and distributor is offered the same
allowance for the same period.
Note: Although most distributors and retailers pass on deals and allowances to be reflected in the
final price to the shopper, this isnt always the case. You may be able to recommend the ultimate
retail price, but you cant control it. You can negotiate with the distributor or retailer to gain some
influence in the final price, but ultimately it is the retailers decision. Thats why they call it the
manufacturers suggested retail price.
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Co-operative Advertising
You pay a percentage of the invoice price to the retailer or distributor to cover some of the costs
for advertising the product in newspaper ads, flyers, etc. Generally two percent to five percent of
the invoice value is used for co-op advertising. However, this percentage can vary from as little as
one percent to as much as 15 percent, depending on the product category.
Manufacturers normally purchase a package promotion at various times throughout the year to
meet their advertising needs. These promotional packages and ad costs are set once a year and listed
by retailers for suppliers.
Most retailers book ads up to six months in advance.
The promotional package prices are often negotiable, but only once the product is in the store.
Its important to keep in mind that these co-op advertising funds alone wont pay for retail ads.
Additional funds will be needed to cover ad costs.
Suppliers of produce, fresh meats and bulk foods usually dont pay for co-op advertising. However,
they are expected to offer deals or off-invoice allowances to retailers to lower product prices during
consumer promotions.
Promotional or Off-Invoice Allowance
This is normally a dollars-off-per-case allowance, which lowers the regular cost of the product to
the retailer and offers savings to the shopper. Suppliers usually offer this allowance three to four
times a year.
In general, the trade expects a 10-percent allowance for a minimum of four weeks. When you offer
the allowance, give the retailer a minimum of eight weeks lead time.
Many retailers purchase 80 percent to 90 percent of their products on deals over the course
of a year. In most cases, the allowance is used in conjunction with other merchandising vehicles
such as co-op advertisingto achieve in-store merchandising objectives. A retailer wont buy and
advertise an item if it doesnt have an off-invoice allowance.
Ad Cost/Bill-Back
This is an allowance that supplements costs for such retail advertising as co-operative advertising,
flyers, newspaper ads, point-of-sale material and media (radio or TV) within a store group.
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Display Allowance
This allowance encourages in-store display activity and is paid to the retailer for all cases ordered
and displayed during a specified time. Payment is usually by a separate cheque following proof of
performance by the retailer.
Inventory Deal Allowances of Free Goods
Its good business for you to offer incentives that will encourage retailers to carry your products
for the first time. Incentives may include one case free for each store or a case allowance for a
certain periodfor example, 60 daysafter an initial order.
Free Goods
One free with 10 means order 11 cases, pay for 10. One free with three means order four cases,
pay for three, etc. To calculate your actual cost, multiply the number of cases youre paying for by
the price per case. Then divide that figure by the number of cases ordered. For example:
One free with 10 at $10.75 per case:
10 x $10.75 = $100.75
$100.75 divided by 11 = $9.77 per case actual cost
Heres an easy reference to see what free goods are worth expressed as a percentage.
(The percentages below are rounded off to the nearest 10th):
1 free with 2 = 33.3%

1 free with 3 = 25%
1 free with 5 = 16.7%
1 free with 10 = 9.1%
1 free with 12 = 7.7%
1 free with 20 = 4.7%
1 free with 25 = 3.8%
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Volume Rebates
Volume rebates, usually one percent to five percent, are based on a percentage of the invoice
price paid to the distributor. The volume rebate increases on an incremental increase in sales.
The objective is to encourage the distributor to move additional cases over a given period. At
the end of this periodfor example, one yearan adjustment is made on the final payment to
reflect the actual cases purchased. This is a retail performance incentive.
Volume rebates, once offered to a retailer, are often difficult to withdraw. Before offering
them, you should determine if your competitors are doing so, because rebates arent offered
for all product categories.
Over and Above
On occasion, suppliers may offer allowancesfor example, lump sum payments or per-case
rebatesover and above the originally negotiated arrangements with retailers. This is done
to strengthen promotions, clear out inventory at retailer warehouses or possibly when launching
a new product.
Note that retailers welcome over and aboves, but may expect such deals on a consistent basis.
You should negotiate over and aboves annually, and the activity provided by the retailer in return
for the allowance should be determined in advance of payment.
You might also want to request confirmation that a particular deal or discount was passed on
to the consumer. Ask if the retailer is willing to provide proof of performance, such as a copy
of newspaper advertising or pictures of large or end displays. This material will be useful when
youre selling to other retailers or promoting your products to independent stores.
Truckload Allowance/Minimum Delivery Size
You may wish to offer a purchaser a discount for taking an entire truckload of product. For
example, you could offer $1,000 off a 45,000pound truckload, worked through to a per-case
saving that will vary depending on the weight of the case.
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10. DISTRIBUTING YOUR PRODUCT

In order to get your product to the consumer, you have to go through certain distribution
channelsthe paths that your goods, and title to the goods, follow.
Distribution channels serve various functions, including:
reducing the number of marketplace contacts and resulting in a more efficient system;
matching the requirements of individual consumers to the outputs of various producers;
standardizing to improve the efficiency of the system;
holding inventory to increase market response and lower transportation costs;
physical distribution of products to ensure that they are available for customers to
purchase on demand.
Its important to build good relationships with your distribution channels; remember that they
are acting as babysitters for parts of your business that you arent interested in focusing on.
For example, a retail chain partner acts as your retailing arm to consumers.
The following terms are used in relation to distribution channels:
Direct selling occurs when you sell products directly to consumers. Methods include
catalogues, home parties, door-to-door selling, telephone sales and retail craft shows.
Indirect selling occurs when you sell to an intermediary, as opposed to an end user.
Methods of indirect sales include selling your product to a retail store as well as using
a wholesaler/distributor or broker/agent. Indirect sales can include club chains, hotels
and institutions as well as any kind of retail shop.
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Wholesaler and distributor are two different terms used to describe the same distribution
channel. A wholesaler/distributor buys products from producers and normally sells the
goods to retail stores.
When you use a wholesaler/distributor, you must still convince each individual store to
stock the product. Thats why its best to use this distribution channel when you have
detailed information about retailers or previous sales experience.
A wholesaler or distributor usually represents complementary products and takes title of the
goods. In most cases, you will be responsible for advertising and for getting listed with retail
chains. However, a distributor may share some responsibility for promotions, especially for
smaller retailers.
Broker and agent are two different terms used to describe the same distribution channel.
Unlike the wholesaler/distributor, a broker/agent doesnt take title of products. Instead,
he or she provides a sales force to sell your goods for you. You may want to use this
distribution channel if your product falls into a mainstream category such as frozen food,
dry grocery, deli or beverage.
When youre making decisions about direct selling, indirect selling, broker/agent
or wholesaler/distributor, look at competitor practices and consumer needs.
You dont always have a choice about distribution channels; industry norms often determine which
channels you have to use. For example, large retailers (grocery chains, department stores and club
chains) may prefer to purchase exclusively through wholesalers/distributors and agents/brokers.
TYPES OF DISTRIBUTION CHANNELS7

Seven distribution channels are available for food companies.
Direct Channel
Producer End User:
This is preferable when technical specifications or rigorous performance requirements apply.
The volume of the product delivered to a customer must be of an economic delivery size so
that freight isnt a penalty, or of such value that transportation costs dont matter.
The One-Step Channel (Consumer Markets)
Producer Retailer End User:
In consumer markets, the intermediary is usually a retailer.
You negotiate directly with the buyer for the retail chain.
__________________________________________________________________________________________
Beckman, M. Dale; Kurtz, David; and Boone, Louis. Foundations of Marketing.
Dryden Canada: Toronto, Ontario. 1992. pp. 338-391.
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The One-Step Channel (Hotels, Restaurants and InstitutionsHRI Trade)

Producer Wholesaler End User:
The wholesaler takes title to the goods that are being handled.
The wholesalers sales force is responsible for selling to the end user.
The wholesaler can reach hundreds of HRI accounts more economically than
the producer can.
The Agent Channel (HRI Trade)
Producer Agent/Broker Industrial User:
The agent becomes your sales force, making the sale but never taking title to the product.
Traditional Small Retail Channel (Consumer Markets)
Producer Wholesaler Retailer End User:
This channel is used by small processors who are producing limited lines of products
and trying to sell to small retailers.
Agent/Wholesaler Channel (HRI Trade)
Producer Agent/Broker Wholesaler End User:
Use this channel if you are attempting to market a product into a new market area.
An agent/broker familiar in the new market is used.
All-Aboard Channel
Producer Agent/Broker Wholesaler Retailer End User:
This channel is used when products are produced by a large number of small companies
that then use a broker to bring buyer and seller together.
The broker is an independent sales force used to contact large, scattered wholesalers.
This channel is also used if your product can deteriorate and you must find a buyer quickly.
BUILDING A CUSTOMER BASE

You can go to a number of sources to develop a list of potential customers for your product.
These contacts are given in the Resources section of this guide.
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DECIDING ON A DISTRIBUTION CHANNEL

You need to look at a number of factors when youre deciding on a distribution channel.8
Market Factors
Short channels of distribution tend to be used if:
potential customers are geographically concentrated in a specific region;

there is a small number of buyers;
orders are relatively few in number but large in size; or
specialized knowledge, technical know-how and regular service are required by the customer.
Product Factors
Short channels of distribution tend to be used if:
the product is perishable; or

the product has a high per-unit value.
In general, the lower the per-unit value of the product, the longer the channel.
The Producer
Short channels of distribution are more likely if:
you have adequate resources so that you can hire your own sales force rather
than relying on that of the wholesaler; or
you have a broad product line, making it feasible to cover the selling costs
over a large volume.
Competitive Factors
Short channels of distribution are more likely if you feel that independent intermediaries arent
adequately promoting your product.
__________________________________________________________________________________________
Beckman, M. Dale; Kurtz, David; and Boone, Louis. Foundations of Marketing.
Dryden Canada: Toronto, Ontario. 1992. pp. 400-401.
128
Information for the Distributor

The distributor will want certain pieces of information from you, including the following:
a description of the product;

the products size;
whether the product is fresh, frozen, etc.;
what the products shelf life is;
whether the product is seasonal;
packaging (Is the package prone to breakage? Who takes credit for breakage?);
what market the product is in currently, or what market you would like it to be in;
the distributors costs (what he or she can sell it for);
the stores costs (suggested retail selling price);
current and future sales promotion activities (sampling, merchandising, coupons
or allowances); and
the distributors territory and responsibilities to you.
If youre dealing with multiple distributors, providing this information (and more) in a standard
electronic format is an appealing approach. You may wish to investigate the option of an electronic
catalogue based on your products barcodes or other identifying marking.
An electronic catalogue could include public informationsuch as size and description
that is accessible to all of your customers. It could also have several private sections, where
partner promotion activities and other more confidential information can be stored.
HOW TO GET YOUR PRODUCT LISTED

When a retailer puts your product on the stores shelves, this is often referred to as being listed.
The term comes from larger grocery wholesalers that sell to a network of stores. The store buyers
make their purchases from a central product list of available items.
In most cases, store operators within a chain purchase at least 60 percent of the products they carry
from their wholesalers pre-approved lists. Smaller, independent stores operating outside of a chain
may have more discretion to buy from a variety of suppliers.
Food products proliferate on the market, so getting a listing in a large retail chain isnt a simple
process. Generally, to make room for new products, another product will need to be bumped off
the shelf (be delisted) or assigned less shelf space.
You need to convince the buyer that your product is unique. You will also have to provide specific
product/market information that shows how the product will succeed in the marketplace and bring
more returns to the retailer than a competing product.
Although traditional grocery store shelves are dominated by national brands and private label
products, there are opportunities for smaller businesses to enter the retail market with unique,
quality food products that meet consumer demands.
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Choosing the Right Stores

By this stage, you will probably have decided the type of stores you are interested in selling to; this is
part of developing your marketing package. To ensure that your product sells well, it must be where
consumers who are likely to buy your product shop, available at the quality/price/value they want,
and meet their needs.
Look at your business goals and resources. If all you want is for your business to provide a
part-time income while you sell locally to two or three stores, you will likely want to consider
small, independent stores run by local businesses.
If you have a unique gourmet or specialty product, you may want to approach gourmet stores
and cooking schools in your town, the province, the country or export markets.
If you have something that you think would appeal to a value
conscious consumer, you may want to consider the mainstream
grocery retail stores that are targeted at the budget shopper, such
as No Frills or Food Basics.
Larger chain stores generally have their own in-house distribution system for
stores across the chain. However, specialty or health food stores tend to be
supplied by a combination of local suppliers and wholesalers/distributors
that arent affiliated with their stores. Much of the information that follows is
aimed at giving you help in selling to wholesalers/distributors.
Who Decides What to Buy?
You should investigate very carefully the buying policies of the food retail companies you want
to approach. The rule of thumb for new products is that buying decisions are made at the retail
companys headquarters, not at the store level. Some managers may have input in identifying
potential new products for their particular store. However, the majority dont have the authority
to secure listings. You may risk non-payment if you close a deal at the store level, even if its an
independent store of a corporate chain.
Within each organization, identify the buyer responsible for purchasing your product. Buyers are
classified by product category or by specific products. Get information about the organizations
purchasing policies from the buyer before you present your product.
Some food retail companies make decisions about buying new items by committee. This process
allows buyers, category managers, merchandisers and executives to pool their expertise so that they
can achieve the right balance of merchandise categories within overall company strategies.
Committees usually meet biweekly or monthly to review new product applications.
130
In some organizations within certain product categories, buyers are authorized to approve or reject
items on the spot if they feel strongly about the product. If the buyer is uncertain about the item, he
or she will bring it before the committee.
You need to provide sufficient relevant information about your product so that informed buying
decisions can be made. In addition to basic product/vendor information, buyers and committees
expect details about consumer preferences, shelf space, distribution allowances, test market results,
advertising and consumer promotional support.
Purchase Planning Cycles
Retailers/distributors may have specific cycles for certain product categories that fit in with seasonal
promotions. If you want to sell products for the Christmas seasonsuch as bakery, confectionery
and poultry productsyou should approach retailers/distributors at least six months in advance.
If you have perishable items such as produce or fresh meats, buyers may order three to six weeks in
advance of promotions. Whats more, some retailers/distributors may forward-contract production
of horticultural products up to one year in advance of actual product sales.
Purchase planning cycles can differ greatly between product categories and retailers. You need to
familiarize yourself with buyers seasonal order deadlines and contracting policies and target your
sales efforts accordingly.
Presenting Your Product
Your critical first step to securing a listing with a retailer/wholesale distributor is presenting your
product. Your presentation skills, level of detail of the information you present and adherence to
correct protocol according to the companys policy will influence the buyers decision to list.
Once you have identified the buyer, telephone him or her to make an appointment to present your
product. Allow at least two weeks to get a meeting scheduled.
Before this meeting, you may have to complete a New Product Presentation form from the
organization. This form is often used for grocery items. It may be mandatory if you are presenting
new grocery items to retailers. However, if youre selling perishable items such as produce, meat
and bakery goods, you may be able to complete a shorter version of the form or even just negotiate
a contract on the spot. The protocol differs among retailer/wholesale distributors and product
categories. Check it out before your appointment.
If you do need to complete the form, you will be asked to provide basic information such as
address, telephone, fax and sales representative/broker. Youll also be asked for general product
information including item description, pack/case dimensions and weights, Universal Product
Codes (UPC), pallet patterns, pricing information, trade terms, deals, allowances, promotional
support, order sizes (that is, minimum quantities) and delivery information.
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At the Presentation
Its important that you provide as much information as possible when
you are presenting your product. This may be the only opportunity
youll have to try to convince the buyer (and the
buying committee, which you wont meet) to list your product.
You should also provide several product samples, company
and product brochures and details about the following:
the unique benefits your product provides;

its planned positioning in the marketplace;
suggested positioning in-store;
cross-merchandising options;
planograms (schematics for shelf-space positioning);
a one-year marketing plan that includes proposed purchases of ad support;
the distribution system;
delivery arrangements;
options/costs;
special terms and allowances;
additional marketing support such as advertising, in-store product demonstrations,
point-of-sale material, consumer product information and special events;
a list of competitors who are currently carrying your product; and
relevant market research on the product, category, size and growth of the market,
and test-market results.
Buyer Preferences
Ontario retailers generally state that they would prefer to purchase Ontario products over imported
products when everything elsesuch as quality, price, supply and allowancesis comparable. When
approaching a retailer, you should emphasize that you are a local supplier, because you may be more
likely to be listed, even on a test basis. (However, once an Ontario suppliers product is on the shelf,
it is expected to perform as well as any other successful productslow sales will result in delisting.)
132
Planograms
A planogram is an electronically generated representation of a section of shelving in a retail
environment. Retailers use the information to develop planograms, which help them to plan for
optimal use of shelf space. The planogram is given to the stores to show the merchandisers how
to set up the shelves.
A planogram can be an impressive part of your sales presentation, providing a mockup of what
a shelf would look like if your product were on it. For more information, contact:
GS1 Canada
www.gs1.org
Toronto, Ontario M3B 3L1
Tel: 416-510-8039
Toll Free: 1-800-567-7084
Fax: 416-510-1916
E-mail: info@gs1ca.org
After the Presentation
Once you have presented your product to the buyer, you may be given approval or rejection at
that meeting. However, its more likely that youll have to wait two to four weeks, depending on
the product category and whether a committee is involved in the buying decision (perishables tend
to have a faster response time).
In some cases, the buyer will agree to test-market the product in a few stores for a set time
(for example, two to six months) before committing to listing the product. However, this is
more the exception than the rule.
If your product was rejected after the initial presentation, that isnt necessarily the end. You can
approach the retailer again if you have made appropriate product modifications or enhanced trade
terms to meet the needs of the retailer. Be aware, though, that many retail organizations only allow
previously rejected products to be reviewed for listing again after three to six months have passed.
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HOW TO BE A SUCCESSFUL SUPPLIER

Retailers have used adjectives such as professional,
efficient, well-informed, ambitious and creative when
asked to describe a successful supplier. However, effective
actions leading to results speak louder than words.
Communication
A successful supplier must consider the buyers needs and
communicate all relevant information concisely and on time.
Important information includes:
price changes;
promotional deals and allowance;
product shortages and date of availability;
new products;
discontinued items;
changes in packaging, labelling or size; and
promotional activities.
You should always have product samples, price lists and deal information readily available
for the buyer.
Frequency of Contact
When retailers were surveyed, they indicated that successful suppliers contact buyers on a regular
basisfor example, every two weeksto ensure that supplier and product are meeting retailers
needs and expectations.
Getting a product listed doesnt mean that it will stay listed. You will have to follow up with
adequate merchandising and promotional efforts to ensure that the turnover rate of your product
meets or exceeds expectations.
Turnover Rate
You and the retailer should agree on the expected turnover rate of your product at the store level.
Then you need to constantly monitor this rate and adjust deals, allowances and promotional efforts
to ensure that retailer expectations are satisfied. Keep in mind that the number of times a case of
your product sells (the case turns) and the size of cartons are extremely important. When buyers
check velocity reports, they usually look at the number of turns, not the case size. It may be to your
advantage to package 12 units per case instead of 20, because increased turns are perceived to equate
to increased sales volumes.
134
Merchandising
Merchandising focuses directly on using the trade and the purchase environment as vehicles for
enhancing consumer sales. It affects the trades acceptance of and support for the product in-store.
Merchandising is an ongoing activity.
Aspects of merchandising include:
in-store location;
shelf space;
shelf position and layout;
shelf communication materials;
distribution;
brand;
size; and
inventory.
Merchandising tools include:
display bins;
signage;
racks; and
point-of-sale materials such as signs.
Suppliers often hire merchandising companies to monitor in-store product displays, product stocks
and so on, to ensure that their products are being presented as expected.
Warehousing and Distribution
You should identify any shipping problems, stock shortages, over-shipments and damages. Then
you need to take immediate action to correct them. Its also important to monitor the service of
freight companies to be sure that they are meeting your needs and those of your buyers.
Category Management
The industry often uses terms to refer to its buying practices and the process of effectively moving
product from the raw stage to the consumer.
135
Category management is a distributor/supplier process of managing categories as strategic

business units. This is a process of maximizing profits on the basis of product movement by
category, not by brand item. Its done through efficient use of item assortment, pricing, promotion,
shelf presentation and other techniques to move goods out of warehouses to consumers.
You should identify which buyer has responsibility for the category that your product falls into.
Talk to retailers about your profitability and provide factual support. For example, you can indicate
the incremental sales gains from merchandising programs and discuss distribution of support.
Be prepared to follow up promotional programs with reviews of the results, and share the
information with retailers so that they can modify efforts to increase mutual benefits.
E-Business and Electronic Data Exchange
These days, its becoming increasingly important for producers
to understand electronic commerce and the ability to use the
Internet to receive orders. You should be prepared to invest
in the equipment that will make this possible.
Becoming an affiliate member of a grocer trade organization
should give you a pipeline to public information about electronic
commerce initiatives.
Find out what type of computer system the retailer operates and how you can interface with it.
Retailers who are wholesalers may have integrated warehouse and store computing; they may be
prepared to allow dial-in access for suppliers. This would enable you to exchange information about
purchase requirements, purchase orders, etc.
CHOOSING A BROKER
Make sure that you need a brokers assistance before you hire one. For example, if youre selling
to Presidents Choice, you may need a broker, but if youre dealing with Sams you may not.
When you use a broker, its like hiring a sales force, and can be immensely important to the success
of your company. Here are some of the benefits of a broker compared to a salesperson:
Food brokers represent the products of many companies and can achieve better market
coverage for lower cost.
You will get a sales force at minimal cost.
Brokers offer you the link to electronic commerce functions.
Most brokers offer a menu of services that covers every area of the business cycle except the
actual manufacturing. Services can include head office contact, retail and end user coverage,
invoicing, warehousing, developing marketing plans, tracking of promotional spending, retail
audit and much more.
A broker can give you wide geographic coverage for less cost.
136
The food brokers main strength is local market and account knowledge.
Your best approach to finding a broker is to contact the Canadian Food Brokers Association
(CFBA). CFBA works, without charge, to educate processors and help them in selecting a broker.
The association also offers a service to aid manufacturers in contacting suitable firms, and you can
get a list of members from the association. Contact:
Canadian Food Brokers Association
c/o Food and Consumer Products of Canada
www.fcpc.ca
Tel: 416-510-8024
You can get lists for the United States from the Grocery Manufacturers of America.
This organization offers several documents on choosing a broker, including:
How to Select Your Broker;

Handling Competing Items;
A Guide for Developing Food BrokersPrincipal Agreements;
Professional Working Relations Between Manufacturers and Food Brokers; and
Guidelines for Manufacturers and Food Brokers Serving the Food Service Industry.

Grocery Manufacturers of America
www.gmabrands.com
2401 Pennsylvania Avenue N.W., 2nd Floor
Washington, DC 20037
Tel: 202-337-9400
Fax: 202-337-4508
Food manufacturers associations often hold exhibitions, inviting brokers from target markets to
attend. Federal and provincial government trade development groups also plan and manage trade
shows in target market areas. These are often cost-efficient because a variety of discounts due to
group participation are available.
There are also national associations of brokerage firms that hold annual exhibitions. At these
shows, companies searching for representation exhibit their products in a trade show format.
137
RESOURCES
PART 1: DOING YOUR RESEARCH
Libraries
Libraries that specialize in government publications include:
Metropolitan Toronto Reference Library
www.tpl.toronto.on.ca
Business and Social Science Desk
789 Yonge Street
Toronto, Ontario M4W 2G8
Tel: 416-393-7131
Statistics Canada Publications
www.statcan.ca
25 St. Clair Avenue East, 10th Floor
Toronto, Ontario M4T 1M4
Tel: 416-973-6586
Toll Free: 1-800-263-1136
Fax: 416-973-7475
Statistics Canada Publications sells government publications and will provide research services
for a minimum fee of $40.
138
The Canadian Agriculture Library

www.agr.gc.ca/cal
Sir John Carling Building
930 Carling Avenue
Ottawa, Ontario K1A 0C5
Tel: 613-759-7068
Fax: 613-759-6627
The library offers a business-oriented service where callers can obtain marketing, trade and
regulatory information over the phone. The library doesnt lend materials to the general public.
University of Guelph Library
www.uoguelph.ca
Tel: 519-824-4120, ext. 52091
The University of Guelph Library contains extensive information about the food industry in Canada
and worldwide. Even if you arent associated with the university, you can still use all the materials
on-site, receive assistance from library staff and photocopy materials to take with you.
On-Line Data Sources
FOODNET
www.foodnet.fic.ca
FOODNET is a database thats accessible on the Internet. It includes information about food
market trends (domestic and international); a supplier listing; sources of food research expertise
(including laboratories); food safety regulations and related information; an events calendar
(including trade shows); and a listing of food labelling consultants.
Or contact:
Food Processors of Canada
www.foodprocessors.ca
350 Sparks Street, Suite 605
Ottawa, Ontario K1R 7S8
Tel: 613-722-1000
Fax: 613-722-1404
AAFC: Agriculture and Agri-Food Canada Online
www.agr.gc.ca
139
AAFC provides easy access to information about news, trade, policies, commodity prices,
regulations, agri-science and technology, federal agri-food programs and officials and expertise.
All you need is a telephone or a fax machine if you want documents faxed to you. A computer
and modem provide access to the bulletin board and Internet versions of the service.
Voice or Fax-Back: 1-800-410-7104 (in Ottawa: 613-759-7959).
Or contact:
The Canadian Agriculture Library
www.agr.gc.ca/cal
Sir John Carling Building
930 Carling Avenue
Ottawa, Ontario K1A 0C5
Tel: 613-759-1000
Fax: 613-759-6726
Ontario Ministry of Agriculture, Food and Rural Affairs
www.omafra.gov.on.ca
1 Stone Rd. West
Tel: 519-826-3100
Toll Free: 1-888-466-2372
OMAFRA provides access to news, information about trade, policies, regulations, trade shows,
provincial agri-food programs and food industry events.
CISTI: Canada Institute for Scientific and Technical Information
www.cisti.nrc.gc.ca
National Research Council of Canada
Bldg. M-55, 1200 Montreal Road
Ottawa, Ontario K1A 0R6
Tel: 613-993-1600
Toll Free: 1-800-668-1222
Fax: 613-952-9112
Fee-for-service.
Reference and Referral Services
Tel: 613-993-5290
Fax: 613-952-8239
Customized literature searches will give you relevant references on any topic in science, technology
or medicine. They can also conduct patent searches and refer you to experts in industry, academia or
government research organizations.
140
Electronic Products and Services

Tel: 613-998-8544
Toll Free: 1-800-668-1222
Fax: 613-952-8244
Provides access to a number of databases, including:
Swetscan, an electronic table of contents service for more than 12,000 journals on science,
technology, medicine, social sciences and business. Updated weekly.
CAN/OLE, an automated information retrieval system that provides a fast, easy way to identify,
locate and order documents on almost any topic.
Canada-Ontario Business Service Centre
www.cbsc.org/ontario
151 Yonge Street, Suite 905
Toronto, Ontario M5C 2W7
Tel: 416-775-3456
Toll Free: 1-800-567-2345
Fax: 416-954-8597
This is a federal/provincial initiative designed to improve business access to a wide range
of information on government services, programs and regulations. Free access is available.
TRADE JOURNALS
General
Canadian Business
http://www.cbp.ca/
Tel: 1-800-465-0700
PlantCanadas Industrial Newspaper
www.plant.ca
Tel: 416-764-2000
Food Industry
Canadian Grocer
www.bizlink.com/cangrocer.htm
Tel: 1-800-268-9119
Fancy Food Magazine (U.S.)
www.fancyfoodmagazine.com
Tel: 312-849-2220
141
Food Distribution Magazine (U.S.)

Tel: 561-447-0810
Food in Canada
Tel: 416-764-1755
The Food Institute Report (U.S.)
www.foodinstitute.com
Tel: 201-791-5570
Food Processing (U.S.)
www.foodprocessing.com
Tel: 630-467-1300
Food Technology
www.ift.org
Tel: 312-782-8424
Foodservice and Hospitality
www.foodserviceWorld.com
Tel: 416-447-0888
Gourmet News (U.S.)
www.gourmetnews.com
Tel: 207-846-0600
The Gourmet Retailer (U.S.)
www.gourmetretailer.com
Tel: 305-446-3388
International Food Marketing & Technology
www.harnisch.com
Tel: 49-911/20 18-0
Ontario Restaurant News
www.can-restaurantnews.com
Tel: 905-206-0150
Packaging Digest (U.S.)
www.packagingdigest.com
Tel: 630-288-8000
Prepared Foods (U.S.)
www.preparedfoods.com
Tel: 630-616-0200
Progressive Grocer
www.progressivegrocer.com
Tel: 646-654-7258
142
Western Grocer
www.mercury.mb.ca
Tel: 204-954-2085
Western Restaurant News
www.mercury.mb.ca
Tel: 204-954-2085
Whole Foods Magazine
www.wfcinc.com
Tel: 908-769-1160
Sub-Sector Specific
Bakers Journal
www.bakersjournal.com
Tel: 519-582-2513
Baking and Snack (U.S.)
www.sosland.com
Tel: 816-756-1000
Baking Buyer (U.S.)
www.sosland.com
Tel: 816-756-1000
Beverage Retailer (U.S.)
www.beverageretailer.com
Tel: 662-236-5510
Beverage World (U.S.)
www.beverageworld.com
Tel: 847-763-9050
Canada Poultryman
www.canadianpoultrymag.com
Tel: 519-582-2513
Dairy Foods (U.S.)
www.dairyfoods.com
Tel: 630-616-0200
Manufacturing Confectioner (U.S.)
www.gomc.com
Tel: 201-652-2655
Meat and Poultry (U.S.)
www.meatpoultry.com
Tel: 816-756-1000
143
Milling and Baking News (U.S.)

www.bakingbusiness.com
Tel: 816-756-1000
Oils and Fats International (U.K.)
www.oilsandfatsinternational.com/
Tel: + 44 (0) 1273 407980
Poultry Briefs
www.devalkconsulting.com
Tel: 613-739-7850
PART 2: YOUR RESPONSIBILITIES AND OBLIGATIONS

Measurement Canada
www.mc.ic.gc.ca
Belleville District Office
328 Sidney Street
Belleville, Ontario K8P 3Z3
Tel: 613-969-3306
Fax: 613-969-3665
Hamilton District Office
251 Arvin Avenue
Stoney Creek, Ontario L8E 2L9
Tel: 905-662-5900
Fax: 905-662-6754
London District Office
Federal Building
78 Meg Drive
London, Ontario N6E 3T6
Tel: 519-680-7365
Fax: 519-680-7759
Toronto District Office
232 Yorktech Drive
Markham, Ontario L6G 1A6
Tel: 905-943-8700
Fax: 905-943-8717
144
PART 3: DEVELOPING AND MANUFACTURING YOUR PRODUCT

Product Development Laboratories
Compusense
www.compusense.com
679 Southgate Drive
Tel: 519-836-9993
Fax: 519-836-9898
sensory evaluation
product development
investigative quality control services
time-intensity research
Contract Testing Inc.

www.contracttesting.com
119 West Drive
Brampton, Ontario L6T 2J6
Tel: 905-456-0783
Fax: 905-456-1172
consumer product testing

focus groups
sensory quality maintenance programs

www.gftc.ca
88 McGilvray St.
Tel: 519-821-1246
Fax: 519-836-1281
food analysis
food safety
commodities research
fermentation
packaging
consumer studies
nutrition research
food engineering
145
Silliker Canada Co.

www.silliker.com
90 Gough Road, Unit 4
Markham, Ontario L3R 5V5
Tel: 905-479-5255
Fax: 905-479-4645
Accredited by: Canadian Food Inspection Agency (CFIA),

Standards Council of Canada (SCC)
chemical and microbiological analysis
nutritional labelling
quality assurance programs
shelf-life studies
process improvement (GMPs)
sensory evaluation
packaging (some)
Maxxam Analytics
www.maxxam.ca
6740 Campobello Road
Mississauga, Ontario L5N 2L8
Tel: 905-817-5700
Fax: 905-817-5777
info@maxxamanalytics.com
Certified / Accredited by: Standards Council of Canada (SCC), Environment

Canada, Canadian Association of Environment Analytical Laboratories (CAEAL),
Canadian Food Inspection Agency (CFIA)
microbiological testing
chemical analysis
shelf-life studies
residual testing
foreign matter identification
environmental testing
Ortech
www.ortech.ca
2395 Speakman Drive
Mississauga, Ontario L5K 1B3
Tel: 905-822-4111
Fax: 905-823-1446
Technical consultation
problem solving
chemical/physical characterization
technology transfer
146
Treloar Product Development Inc.

www.treloar.on.ca
P.O Box 58023
500 Rossland Rd West
Oshawa ON L1J 8L6
Tel: 905-433-0598
Fax: 905-433-3861
food product development

technical consultation
Research Laboratories
Compusense
www.compusense.com
679 Southgate Drive
Tel: 519-836-9993
Fax: 519-836-9898
sensory evaluation
product development
Silliker Canada Co.

www.silliker.com
Tel: 905-479-5255
Fax: 905-479-4645

shelflife studies
sensory evaluation
packaging (some)
147
Department of Plant Agriculture

www.plant.uoguelph.ca
Ontario Agriculture College
University of Guelph
50 Stone Road West
Tel: 519-824-4120 ext. 53391
Fax: 519-763-8933
storing and processing of fruit and vegetables
Lipid Analytical Laboratories

www.lipidanalytical.com
150 Research Lane, Suite 100
Guelph, Ontario N1G 4T2
Tel: 519-766-1510
Fax: 519-766-1511
analysis and research on lipids (fats)
University of Toronto
www.utoronto.ca/nutrisci
Department of Nutritional Sciences
Faculty of Medicine
Fitzgerald Building
150 College Street
Toronto, Ontario M5S 3E2
Tel: 416-978-2747
Fax: 416-978-5882
148
Equipment Sources
Canadian Process Equipment and Control News
www.cpecn.com
29-588 Edward Avenue
Richmond Hill, Ontario L4C 9Y6
Tel: 905-770-8077
Fax: 905-770-8075
Food in Canada
One Mount Pleasant Road, 7th Floor
Toronto, Ontario M4Y 2Y5
Tel: 416-764-2000
Fax: 416-764-1755
The October issue annual Buyers Guide contains information on
processing equipment and packaging.
Canadian Institute of Food Science and Technology
www.cifst.ca
3-1750 The Queensway, Suite 1311
Toronto, Ontario M9C 5H5
Tel: 905-271-8338
Fax: 905-271-8344
Food Processing Machinery and Supplies Association
www.fpmsa.org
200 Daingerfield Road
Alexandria, Virginia 22314
Tel: 703-684-1080
Fax: 703-548-6563
The association offers a fax-back service: food companies can fax a
description of their equipment needs.
www.gftc.ca
88 McGilvray Street
Tel: 519-821-1246
Fax: 519-836-1281
149
Food Processing Magazine

www.foodprocessing.com
Putman Media
555 West Pierce Road, Suite 301
Itasca, Illinois 60143
Tel: 630-467-1300
Thomas Register
www.thomasregister.com
5 Penn Plaza
New York, New York 10001
Tel: 212-290-7277
Fax: 212-290-7365
PART 6: QUALITY ASSURANCE

Quality Testing Laboratories
ACCREDITED LABORATORIES
Silliker Canada Co.
www.silliker.com
Tel: 905-479-5255
Fax: 905-479-4645

shelf-life studies
sensory evaluation
packaging (some)
Maxxam Analytics
www.maxxam.ca
Tel: 905-817-5700
Fax: 905-817-5777
150
Certified/Accredited by: Standards Council of Canada (SCC),

Environment Canada, Canadian Association of Environment
Analytical Laboratories (CAEAL), Canadian Food Inspection Agency (CFIA)
chemical analysis
shelf-life studies
residual testing
OTHER LABORATORIES
Laboratory Services
A Division of the University of Guelph
www.uoguelph.ca/labserv
P.O. Box 3650
5 Stone Road West
Tel: 519-823-1268
Fax: 519-767-6240
chemical analysis
nutritional composition testing
sensory evaluation for dairy products, foods and environmental sample
CanTox
www.cantox.com
2233 Argentia Road, Suite 308
Mississauga, Ontario L5N 2X7
Tel: 905-542-2900
Fax: 905-542-1011
Compusense
www.compusense.com
679 Southgate Drive
Tel: 519-836-9993
Fax: 519-836-9898
sensory evaluation
product development
151
Contract Testing Inc.

www.contracttesting.com
119 West Drive
Brampton, Ontario L6T 2J6
Tel: 905-456-0783
Fax: 905-456-1172
consumer product testing

focus groups
sensory quality maintenance programs

www.gftc.ca
88 McGilvray St.
Tel: 519-821-1246
Fax: 519-836-1281
food analysis
food safety
fermentation
packaging
consumer studies
nutrition research
food engineering
Labstat Inc.
www.labstat.com
262 Manitou Drive, Unit #5
Kitchener, Ontario N2C 1L3
Tel: 519-748-5409
Fax: 519-748-1654
complete nutritional labelling program

comprehensive vitamin and mineral analyses
accredited microbiology laboratory
152
Ryerson University
www.ryerson.ca/foodandnutrition
School of Nutrition
350 Victoria Street
Toronto, Ontario M5B 2K3
Tel: 416-979-5074
Fax: 416-979-5204
consumer studies/surveys
packaging
quality assurance
sensory evaluation
irradiation
www.utoronto.ca/nutrisci
Department of Nutritional Sciences
Faculty of Medicine
Fitzgerald Building
150 College Street
Tel: 416-978-2747
Fax: 416-978-5882
nutrition and health

food safety
regulatory affairs
Food Safety Information Sources

Canadian Research Institute for Food Safety (CRIFS)
www.uoguelph.ca/crifs
Department of Food Science, University of Guelph
Tel: 519-824-4120, ext. 58010
Fax: 519-763-0952
CRIFS is co-sponsored by the University of Guelph, Agriculture and

Agri-Food Canada, Health Canada and the Ontario Ministry of Agriculture,
Food and Rural Affairs.
Food Safety ConsortiumUniversity of Toronto

www.utoronto.ca/nutrisci/foodsafe.html
Department of Nutritional Sciences, Faculty of Medicine
150 College Street
Tel: 416-978-0799
Fax: 416-978-5882
153
American Institute of Baking (AIB)

www.aibonline.org
1213 Bakers Way
P.O Box 3999
Manhattan, Kansas 66505-3999
Tel: 785-537-4750
Fax: 785-537-1493
This organization offers both publications and courses dealing specifically with
sanitation, as well as baking in general.
American Association of Cereal Chemists

www.aaccnet.org
3340 Pilot Knob Road
St. Paul, Minnesota 55121-2097
Tel: 651-454-7250
Fax: 651-454-0766
This association offers publications on raw material storage and sanitation

practices as well as many other subjects related to cereal chemistry.
PART 7: PACKAGING AND LABELLING

Sources of Metal Containers
Alcan (Rio Tinto Alcan) Foil Products
www.alcan.com
191 Evans Avenue
Toronto, Ontario M8Z 1J5
Tel: 416-503-6700
Fax: 416-503-6720
Ball Packaging Products Canada
www.ball.com
1121 Walkers Line
Burlington, Ontario L7N 2G4
Tel: 905-335-4780
Fax: 905-319-4083
RePack Canada
www.repackcanada.com
Mississauga, Ontario
Tel: 1-877-804-4841
E-mail: info@repack.com
154
Sources of Glass Containers

Consolidated Bottle Company
www.consbottle.com
77 Union Street
Toronto, Ontario M6N 3N2
Tel: 416-656-7777
Toll Free: 1-800-561-1354
Fax: 416-656-6394
Richards Packaging Inc.
www.richardspackaging.com
3115 Lenworth Drive
Mississauga, Ontario L4X 2G5
Tel: 905-624-3391
Fax: 905-624-2288
Sources of Paper Containers
Container Corporation of Canada
www.containercorp.com
68 Leek Crescent
Richmond Hill, Ontario L4B 1H1
Tel: 905-764-3777
Fax: 905-764-3784
J.J. Marshall Inc.
www.jjmarshall.com
9780 Waverly Street
Montreal, Quebec H3L 2V5
Tel: 514-381-5647
Fax: 514-381-6636
Jones Packaging Inc.
www.jonespackaging.com
3000 Page Street
London, Ontario N5V 5H3
Tel: 519-451-2100 or 1-800-265-9093
Fax: 519-451-2107
155
Cascades Inc.
www.somervillepackaging.com
7830 Tranmere Drive
Mississauga, Ontario L5S 1L9
Tel: 905-678-8211
Fax: 905-678-7233
Tetra Pak Canada Inc.
www.tetrapak.ca
1610 16th Avenue
Richmond Hill, Ontario L4B 4N6
Tel: 905-780-6030
Fax: 905-780-4900
Sources of Plastic Containers
ACO Container Systems Ltd.
www.acotainers.com
794 McKay Road
Pickering, Ontario L1W 2Y4
Tel: 905-683-8222
Fax: 905-683-2969
Consolidated Bottle Company
www.consbottle.com
77 Union Street
Toronto, Ontario M6N 3N2
Tel: 416-656-7777
Toll Free: 1-800 561-1354
Fax: 416-656-6394
Container Corporation of Canada
www.containercorp.com
68 Leek Crescent
Richmond Hill, Ontario L4B 1H1
Tel: 905-764-3777
Fax: 905-764-3784
Curwood Packaging Canada Ltd.
www.curwood.com
114 Armstrong Avenue
Georgetown, Ontario L7G 4S2
Tel: 905-877-5201
Toll Free: 1-800-387-2205
Fax: 905-877-6711
Specialty: trays
156
Polytainers
www.polytainers.com
197 Norseman Street
Toronto, Ontario M8Z 2R5
Tel: 416-239-7311
Fax: 416-239-0596
Specialty: white formed containers
Pretium Packaging
www.pretiumpkg.com
3300 Route Transcanadienne
Pointe-Claire, Quebec H9R 1B1
Tel: 514-428-0002
Fax: 514-428-0011
Par-Pak Ltd.
www.parpak.com
26 Victoria Crescent
Brampton, Ontario L6T 1E5
Tel: 905-792-3000
Toll Free: 1-888-272-7725
Fax: 905-792-3330
Specialty: trays
Sources of Laminated Films

Celplast Packaging Systems Limited
www.celplast.com
67 Commander Boulevard, Unit 4
Scarborough, Ontario M1S 3M7
Tel: 416-293-4330
Fax: 416-293-9198
Curwood Packaging Canada Ltd.
www.curwood.com
114 Armstrong Avenue
Georgetown, Ontario L7G 4S2
Tel: 905-877-5201
Toll Free: 1-800-387-2205
Fax: 905-877-6711
Poly-Cel Packaging Products
6141 Atlantic Drive
Mississauga, Ontario L5T 1L9
Tel: 905-670-2414
Fax: 905-670-2416
157
Winpak
www.winpak.com
85 Laird Drive
Toronto, Ontario M4G 3T8
Tel: 416-421-1700
Fax: 416-421-7957
Nutrition Labelling
Canada
Food Production and Inspection Branch
Canadian Food Inspection Agency - Food Label Service
www.cfia-acia.agr.ca
1-800-667-2657
Toronto
1124 Finch Avenue West, Unit 2
Toronto, Ontario M3J 2E2
Tel: 416-665-5055
Fax: 416-665-5069
Guelph
174 Stone Road West
Tel: 519-837-9400
Fax: 519-837-9783
United States
U.S. Food and Drug Administration
www.fda.gov
5600 Fishers Lane
Rockville, Maryland 20857-0001
Toll Free: 1-888-463-6332
158
Lab TestingNutrition Content

Laboratory Services
A Division of the University of Guelph
www.uoguelph.ca/labserv
P.O. Box 3650
95 Stone Road West
Tel: 519-823-1268
Fax: 519-767-6240
chemical analysis
nutritional composition testing
sensory evaluation for dairy products, foods and environmental samples
Silliker Canada Co.

www.silliker.com
Tel: 905-479-5255
Fax: 905-479-4645

shelf-life studies
sensory evaluation
packaging (some)
159

www.gftc.ca
88 McGilvray Street
Tel: 519-821-1246
Fax: 519-836-1281
food analysis
food safety
fermentation
packaging
consumer studies
nutrition research
food engineering
Labstat Inc.
www.labstat.com
262 Manitou Drive, Unit #5
Kitchener, Ontario N2C 1L3
Tel: 519-748-5409
Fax: 519-748-1654
complete nutritional labelling program

comprehensive vitamin and mineral analyses
accredited microbiology laboratory
Maxxam Analytics
www.maxxam.ca
Tel: 905-817-5700
Fax: 905-817-5777
Certified/Accredited by: Standards Council of Canada (SCC),

Environment Canada, Canadian Association of Environment
Analytical Laboratories (CAEAL), Canadian Food Inspection
Agency (CFIA)
chemical analysis
shelf-life studies
residual testing
environmental testing
160
PART 10: DISTRIBUTING YOUR PRODUCT

Sources for Finding Potential Customers
Trade Associations
The following associations maintain extensive information about the
grocery industry and membership lists, generally for use by members only.
Canadian Council of Grocery Distributors
www.ccgd.ca
1 Concorde Gate, Suite 604
Toronto, Ontario M3C 3N6
Tel: 416-922-6228
Fax: 416-922-5909
Canadian Federation of Independent Grocers
www.cfig.ca
2235 Sheppard Avenue East, Suite 902
Toronto, Ontario M2J 5B5
Tel: 416-492-2311
Fax: 416-492-2347
Canadian Health Food Association
www.chfa.ca
550 Alden Road, Suite 205
Markham, Ontario L3R 6A8
Tel: 905-479-6939
Fax: 905-479-1516
Scotts Directories
Scotts Directories provide comprehensive information about manufacturing
companies across Canada. You can find this directory at your local library, or from:
Scotts Directories
www.scottsinfo.com
12 Concorde Place, Suite 800
Toronto, Ontario M3C 4J2
Tel: 416-442-2122
Fax: 416-510-6870
161

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Winter 2008

The Canada-Ontario Business Service Centre website, www.cbsc.org/ontario.

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

10. Distributing Your Product 125

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

1. DOING YOUR RESEARCH

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

RESEARCHING THE INDUSTRY

published data; and

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Narrowing Your Search

industry profiles and studies;

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

2. YOUR RESPONSIBILITIES AND

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

LIABILITY AND INSURANCE

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

GENERAL OBLIGATIONS AND RESPONSIBILITIES

the location and design of the plant;

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Product Returns and Recalls

use packaging designed to protect and prevent contamination of the product;

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

REGULATORY RESPONSIBILITIES AND OBLIGATIONS

building a new plant;

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

a customs broker or freight forwarder;

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

FEDERAL STATUTES AND REGULATIONS

Agriculture and Agri-Food Administrative Monetary Penalties Act;

The CFIA maintains an excellent website at www.inspection.gc.ca that provides explanations

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

PROVINCIAL STATUTES AND REGULATIONS

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Ontario Ministry of Agriculture, Food and Rural Affairs

Farm Products Marketing Act; and

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Liquor Licence Act; and

For more information, contact:

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Ontario Ministry of the Environment

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Federal Food, Drug and Cosmetic Act;

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

United States Department of Agriculture

Federal Meat Inspection Act;

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

3. DEVELOPING AND MANUFACTURING

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

CHOOSING A MANUFACTURING STRATEGY

developing your own commercial recipe and manufacturing facility;

SETTING UP YOUR OWN MANUFACTURING FACILITY

understanding all the needs of the production process;

Barbara, From Kitchen to Consumer: The Entrepreneurs Guide to Commercial

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

Ministry of Agriculture, Food and Rural Affairs Business Development Branch

USING A PRODUCT DEVELOPMENT FACILITY

CO-PACKING YOUR PRODUCT

no investment in facilities or equipment;