We are live from Montreal's SIAL's Food Innovation Show. We discuss our first day at the show and our numerous interactions with industry professionals. Our special guest here in Montreal is Marc Vaucher, Senior Investment Director at Scale AI, Canada's AI Global Innovation Cluster. We also talk about the state of Canada's supply chain, changes at Saputo and Chuck E. Cheese, and a big new plant for the Little Potatoe Company in Alberta.
In the latest episode of The Food Professor podcast, we are live from Montreal's SIAL's Food Innovation Show. We discuss our first day at the show and our numerous interactions with industry professionals. The episode features an insightful interview with Marc Vaucher, Senior Investment Director at Scale AI, highlighting the organization's role in enhancing productivity for Canadian companies through AI adoption. Marc explains that Scale AI, backed by substantial federal funding, has supported 120 projects, adding significant value to the Canadian economy. The conversation covers various AI applications in agriculture and grocery retail, including predictive analytics for crop management and optimization of retail operations.
In the news, we delve into the state of the Canadian supply chain, discussing potential labor disruptions at Vancouver Ports and on the rails with CN, and their potential impact on businesses. We underline the importance of recognizing the food supply chain as an essential service to avert such disruptions. Furthermore, we explore the current trends in the food industry, noting a shift towards creating recession-proof products and the increasing focus on catering to millennial preferences.
We conclude with discussions on the strategic movements of major companies like Kraft Heinz, their divestment from certain product lines, and the growing trend of consumers shopping at a greater variety of retailers. We mourn the end of the automatronic band at Chuck E Cheese, celebrate the opening of a big new facilities by The Little Potato Company.
Michael LeBlanc 00:05
Welcome to The Food Professor podcast, presented by Caddle, season 4, episode 34. I'm Michael LeBlanc.
Sylvain Charlebois 00:11
And I'm The Food Professor, Sylvain Charlebois.
Michael LeBlanc 00:14
We are live-, live together in Montreal at the big SIAL Food Innovation show. Sylvain, my friend, it is wonderful to be in person with you as always.
Sylvain Charlebois 00:23
It's our Super Bowl.
Michael LeBlanc 00:24
It is our Super Bowl. It's our third year. I-, we're back in Montreal, where that was my first experience with SIAL just coming out of the-, out of COVID and I barely made it out of here. We've got a beautiful studio here.
Sylvain Charlebois 00:37
Yeah.
Michael LeBlanc 00:38
Shout out to the folks at SIAL.
Sylvain Charlebois 00:39
Yeah.
Michael LeBlanc 00:40
They built us a beautiful sight and-, but it's for you it's like a revolving door, like, everybody sees you and they just want to shake your hand and say hi, you're so well known in the industry.
Sylvain Charlebois 00:49
They run into a window.
Michael LeBlanc 00:52
Maybe we should put those bird things up.
Sylvain Charlebois 00:53
It looks like a big aquarium, but people just stop to look at it, they don't even hear us. They look at us. They come by and they take pictures.
Michael LeBlanc 01:00
Yeah, it's fun. Now listen, we've been, you know, we just-, day one. We just started. We've already done a couple of interviews. Chuck Hughes, who's been on the show, Chuck Hughes just left.
Sylvain Charlebois 01:11
Yeah, absolutely, quite, quite a few good interviews.
Michael LeBlanc 01:13
He just-, he just left. So, we'll get to an episode with Chuck a little later in-, in season four. This episode, we had a fantastic interview with Marc Vaucher, who runs or is with a Scale AI and I didn't know much about Scale AI. But when he started talking about how that was where the prime minister did their announcement about what was a 2 billion plus more funding, the kind of light bulb started going off, I guess my artificial and real intelligence started kind of clicking in.
Sylvain Charlebois 01:44
From artificial non-intelligence to artificial intelligence.
Michael LeBlanc 01:47
Exactly, so that started kicking in for me, and now I understand more about what they do, but we understand a lot more after talking to him. So, we'll get to that interview a little later. So, let's talk about SIAL for a while. So, we've talked about in previous episodes, you're hosting a bunch of stuff, you're doing a bit of media. I'm doing an innovation panel tomorrow, which will just be a pile of fun. You know, you haven't been here that long. Any early first impressions of the show, we've met a few wonderful people, we've tasted some amazing beverages and some charcuterie which was-
Sylvain Charlebois 02:20
This year, people come to us and bring us over to their kiosk. So, we can-, so you can tell that the podcast is aging well-
Michael LeBlanc 02:29
Yeah, yeah.
Sylvain Charlebois 02:30
Within the SIAL Community, which is nice. I mean, people-, we're not-, we're not fetching-, we're not actually looking for interviews anymore, they just come to us which is great. But-
Michael LeBlanc 02:39
Folks from Austria just dropped off a goodie bag for us. They've been on the podcast before. I mean, we-, you know we've done a lot of interviews in and around and by the way for the listeners we're gonna do-, a couple of these interviews will be our full show and then all summer we're going to record enough bonus episodes that will be-
Sylvain Charlebois 02:55
You know what's going on. I think people know we're not paid for this. They come, they come by with food. Please eat, eat, eat, you cannot leave your fishbowl, eat.
Michael LeBlanc 03:07
You know listen, I got-, we got, I drove here. I always drive here instead of fly here from Toronto because I'm like, I got to bring a bunch of stuff back to the people who are so generous, samples are amazing. Chuck gave me a bottle of his mustard coleslaw which I've just got to try.
Sylvain Charlebois 03:21
You're a fanboy, aren't you?
Michael LeBlanc 03:22
I am a fanboy. I'm a big fan of Chuck, I got we, you know, even before. Whatever. I got a couple of his-
Sylvain Charlebois 03:29
It's incredible.
Michael LeBlanc 03:30
Cookbooks. You and I are having dinner at his restaurant tomorrow, which is a tradition for us. We always go to garde manger.
Sylvain Charlebois 03:36
Yeah.
Michael LeBlanc 03:37
When we're in town.
Sylvain Charlebois 03:37
And you take three years to pay for it, but that's okay.
Michael LeBlanc 03:39
That's alright, the quality is there.
Sylvain Charlebois 03:41
Yeah, exactly.
Michael LeBlanc 03:42
We love it. So. So anyway, first impressions. I mean, I haven't even been to the second floor yet.
Sylvain Charlebois 03:46
I mean, overall, it's so I haven't really spent. I did spend maybe a couple of hours on the floor talking to people and I mean, there are a couple of themes that are coming up. Yeah, we have to kind of come up with a product that is recession proof. So, in other words, inflation proof.
Michael LeBlanc 04:04
Food affordability, people know.
Sylvain Charlebois 04:07
So that's top of mind for a lot of people anywhere around the world, really not just in Canada.
Michael LeBlanc 04:11
Yeah, but that’s not a Canadian-, you know, to reinforce the things we've been saying.
Sylvain Charlebois 04:14
And South global and so this is certainly not something that is surprising to me, in terms of, I mean, you're always looking for the new flavors, and like I'm seeing cakes that are now flavored and all sorts of different things and so I think there's some daring going on. I think a lot of people are paying attention to the millennials and the younger generation, because I mean, that's-, that's that number you want to aim for, right, because they're looking at food very differently.
Sylvain Charlebois 04:44
I mean, millennials just, just got a reality check with higher interest rates. So, they're-, they're, they're just pulling back right now, but-, but they didn't come back. Like we're going to talk again about sustainability. We're going to talk about again about all sorts of different things and I mean, 20 years ago was pumpkin spice now what's the next flavor, what are some of the next things that are coming up and so, actually, we're going to be interviewing this week, a cake company and and you're gonna, you're gonna hear a lot of different flavors you probably didn't even know-
Michael LeBlanc 05:16
Michaud, Maxine from Michaud, I was looking through his brochure.
Sylvain Charlebois 05:21
It's a 40-year-old company and they're the biggest Christmas log manufacturer in Canada.
Michael LeBlanc 05:26
You know what I asked him, he popped by just to kind of say, hey, what do you want to talk about, because we just sent him a quick note, I said, I'm super interested in how you see innovation. Like you're-, you're a 40-year-old company, what's the next flavor, how do you determine the next flavor, you know, what's the next, what's the next big thing for you, so I'm also excited to get a bunch of samples. Not that we invite people because we like their food but-
Sylvain Charlebois 05:48
If you go to their booth, and they have samples, and those samples are pretty darn generous, I think-, their-, their-, their mandate is to fatten up people.
Michael LeBlanc 05:59
Their mandate is to make people happy, I would say.
Sylvain Charlebois 06:02
Yes, of course. We're happy. Everyone's happy. Its SIAL.
Michael LeBlanc 06:06
Everybody's happy and-, and, you know, listen to that, you know, you can't spell-, spell retail without talking AI. So that's why we thought we'd kick this episode off with our first interview he was actually-, Marc was our first interview of the show, actually talking about AI, which was very appropriate, I think, because, you know, it's something that we talked about. We probably could talk more about it, but I think the-, the agricultural scene is any-, he goes into it a little bit more.
Sylvain Charlebois 06:28
Yeah.
Michael LeBlanc 06:29
Well, let's jump into the news. Let's start at the supply chain, this country's supply chain, we've got-
Sylvain Charlebois 06:35
What supply chain?
Michael LeBlanc 06:37
Well, we've got-, we've got labor disruptions pending at the ports in Vancouver and on the rails. What do you hearing? And-, and-
Sylvain Charlebois 06:45
So yeah, just ran into Jean Gattuso, the former CEO of Lassonde and he was tasked by the government two years ago, if you remember, Michael, we talked about-
Michael LeBlanc 06:54
The big report, the supply chain, that was a great report, actually.
Sylvain Charlebois 06:57
Yeah, it was the chair of the-, co-chair actually, of that task force and I participated to that task force and we were just talking about the report, and it was actually table more than a year ago, and nothing has happened and-, and to be honest, really what's going on right now is that people are wondering, okay, is the federal government taking logistics and supply chains seriously. I mean, the last-
Michael LeBlanc 06:58
The government not to be-, to be I don't know, fair, or whatever, I noticed the minister stepped into the rail and submitted, he said he, I don't think you guys are ready to take care of Canadians. So, I'm going to put you to the sea of the adjudication board so.
Sylvain Charlebois 07:38
To assess the safety and security of a potential labor dispute basically.
Michael LeBlanc 07:42
Basically of what are the contingency plans to make people-, sure people get what they need to get and so that could, you know they're paying attention.
Sylvain Charlebois 07:50
But look at the track record, the last five years, this could potentially be the third railway strike we experienced in Canada.
Michael LeBlanc 07:57
What's the answer? Do you think it should be-
Sylvain Charlebois 07:59
Wait one second, ports in BC, the Port in Montreal, the St. Lawrence Seaway, all in last five years, like if you're a business and you're dealing with this uncertainty, it's a killer. I mean, what do you do?
Michael LeBlanc 08:12
Surely, we're not the only country. I mean, I, you know, I spent a lot of time in the US.
Sylvain Charlebois 08:15
I've been to the US and I spoke about the supply chain in the US and let me tell you, Americans are not impressed. They see Canada as an unreliable source because of these labor disputes.
Michael LeBlanc 08:26
And they've had-, but they've had their own labor disputes. That feels like a little bit of projection to me. It's not like they're without disputes themselves. I mean, I track the US pretty closely and you know, they're-
Sylvain Charlebois 08:37
But they can afford to screw up once in a while. We can't, I mean, we need the US to do business and frankly, we are a large country and no population density either.
Sylvain Charlebois 08:46
So, so we need to build a Kansas City we need to build like, basically deliberately build a Chicago and, and the hubs that they do have in the US, we just don't have that in Canada. We have to be deliberate about it and right now, I mean the Freeland budget that was tabled a few weeks ago. The budget and I was talking to Jean Gattuso about this, $4.6 billion dollars over five years. It's peanuts, peanuts and-, and right now ports in Canada are ranked the lowest-, in the lowest tier around the world and railways are a disaster. I mean, we're maintaining-
Michael LeBlanc 08:46
Of course.
Michael LeBlanc 09:24
They seem to work pretty well when you steal a car and want to get it offshore. I mean, they seem to be very efficient at doing that.
Sylvain Charlebois 09:29
Today. Prime Minister Trudeau announced that it was that we as taxpayers, we’re actually buying back the Quebec bridge, okay. This is the big news right now in Quebec, where we are listening to the news tonight. That's the big news. He was in Quebec today, buying back. Okay, the Quebec bridge, a very well-known bridge around the world. It was actually the longest bridge in the world in iron when it was built more than 100 years ago. So it's an historical bridge. It was sold to the CN many years ago and right now it's about to fall. So, we don't take care of railways, we don't take care of infrastructure in Canada, we're actually forced to buy back to take care of it and spend $40 million a year for the next five years now.
Michael LeBlanc 10:19
I've heard it said that one of his possible solutions to this infrastructure challenge is to and this happened during the Mulroney government where he privatized actually a fair bit of CN, Air Canada, is to make these assets more interesting to the big pension funds, because the pension funds like to invest in these big infrastructure, like if you talk about CPP, Teachers or Ommers there by ports and Holland.
Sylvain Charlebois 10:45
Yeah.
Michael LeBlanc 10:45
So is that part of our-, is that part of the answer is, you know, how do we-, how do we square this circle?
Sylvain Charlebois 10:52
If you can make the issue political and frankly, how do you make supply chains political, it's impossible. It's an obscure part of our world, really, people go to the grocery store, they think that food actually will magically appear on shelves, they don't see the logistics behind. So, you can't politicize, the issue, but perhaps to your point, you can perhaps make the sector more visible to investors and that's when you actually can move the needle on this issue, but until then, I actually don't think that we're-, we're really supply chain focused in Canada.
Michael LeBlanc 11:29
What do you think of the new bridge between Windsor and Detroit, the Gordie Howe bridge, that's a private public venture, yeah, I mean, that could be a model for talking about.
Sylvain Charlebois 11:40
Absolutely. That's a-, that's an exciting project, for sure. Yeah. I mean, yesterday, I was-, actually I had the pleasure to visit friends at Metro in Terrebonne. We spoke about it a few months ago on this podcast, they were opening up a new distribution center in Terrebonne. So I actually had a chance to visit yesterday.
Michael LeBlanc 11:57
What did you think?
Sylvain Charlebois 11:58
A jewel. It's amazing. Amazing. I was very impressed. They have lots of capacity to grow and that-, that center is designed to support 700 stores and they actually did learn from some mistakes in Ontario when they actually bought A&P back in 2005. A&P had lots of land and so they actually built a distribution center in the Brampton area. So, I think, and they actually did some learning there to build that Big Kahuna in Terrebonne and I mean, I gotta tell ya,
Michael LeBlanc 12:32
And that DC is exclusively store for stores, right, did they-, did they mention direct-to-consumer at all?
Sylvain Charlebois 12:37
It's frozen and fresh.
Michael LeBlanc 12:39
And it serves the Quebec area?
Sylvain Charlebois 12:42
The Quebec market, yeah, exactly. So fresh, and-, and frozen, both. The frozen is actually 120 feet tall. And you got these massive lifts. No humans. I mean, it's minus 28. Why would you want humans in there, you'd be miserable all day and so when I was walking around with Yannick, and Manny-Claude the two people who were with me, I really didn't, I saw one human and a lot of boxes being moved around.
Sylvain Charlebois 13:12
It was pretty impressive. I thought and state of the art. Right next door is the Sobeys distribution center that was built, I think it was dang a decade or 15 years ago. I didn't visit that one, but if I walked in, I probably felt like it was 10, 15 years ago. So, things are moving fast and what Metro is doing is-, it's-, it is working with suppliers to work on packaging, because it's all about-, they pallet things. They pallet all the time, but it has to be perfect for eyes and sensors to continue the work. So, they move products around. If there's one mistake, it could lead to ruptures and waste and damage machinery.
Michael LeBlanc 13:52
Did they talk about-, I don't know how technical they got, RFID. Did they talk about RFID at all?
Sylvain Charlebois 13:57
Yeah, it was all over the-, it was, that's what they use. Yeah, they use RF technologies and RFID. It's incredible.
Michael LeBlanc 14:05
For the-, for the listeners, they're little microchips. If you pick up a book at a library, if you go shop at Decathlon, or wherever there's little chips and all the products that they just have to wave a wand, they don't have to scan it and so they're using that kind of technology.
SylvainCharlebois 14:18
Absolutely and so whenever-, what they're realizing is that a lot of their suppliers actually have packaging that just doesn't fit well with the technology that they have, but here's the thing with Metro. They're moving, actually, in lockstep with Sobeys and with Loblaws, and so on. Everyone's doing the same Loblaws building at 1.2 million square feet distribution center in Newmarket right now. So they're all doing it and frankly, in order to, you know, manage a-, a deflationary market that we're about to see because I actually do think things are gonna get tighter and tighter and tighter. People out there thinking oh my god, grocers are printing money, they're gouging.
Sylvain Charlebois 15:02
That's not what we're seeing, of course, and-, but it's gonna get even tougher over the next several months and so with AI with ice cream, if you know exactly how much ice we're gonna sell at a store number 52, next week because of the weather, then-.
Michael LeBlanc 15:19
Oh, that's interesting.
Sylvain Charlebois 15:20
Yeah, and that's what the center is all about, right, you reduce waste as much as possible and you, you increase efficiency, and the luxury of a distribution center like that you can actually accommodate more SKUs, you can actually have more choices, because you're not screwing up as much with products that won't sell. Okay, so that's the minimum, we all know who the last mile leader is in this country. That's Amazon, but the middle mile battle is ongoing, which is great. So, grocers distributors understand that game, but up the food chain, you need a government to work on the supply chain and that's where-, that's the missing link.
Michael LeBlanc 15:59
Again, I'm going to give you a magic wand. What are the three things you would do, would you make you know, like for CN, they would make it that they can't strike, would you make them?
Sylvain Charlebois 16:10
Oh, there's one simple solution.
Michael LeBlanc 16:11
What's the simple solution?
Sylvain Charlebois 16:12
Make the food supply chain and essential service across the country. In BC, if you remember, with the BC port situation last year, commodities weren't impacted because in BC the food supply chain is an essential service, but everything else, it wasn't moving, I think it should be across the country. That's it. That's-, that's the only thing you need to do. I'm a unionized employee myself, okay. I recognize the right for people to strike, but, when you're actually holding hostage farmers out there, okay. That are-, and they need-, June, they need railways in June to move product if they don't have a railway to-, that the quality of their product. People are thinking, well, once the labor dispute is done, they can catch up. Well, that's not how it works with wheat and barley.
Michael LeBlanc 17:02
And in general, you know, soccer, one of my clients, their estimation is for every day that they're on strike, it's a week to two or two weeks to catch up.
Sylvain Charlebois 17:12
Yeah.
Michael LeBlanc 17:12
And really, you know, what we haven't talked about is it's one thing for the disruption to happen, but the disruption, the disrupting part is already happening. It's been happening for three months, you know, people are already putting stuff on trucks, because they-, they can't hope that the strikes or the interruptions don't happen so that the disruption is already happening. That's a point we like to make the government all the time. You know, when we're talking to the government about this stuff, it's not disruptive when it happens, it's disruptive that it could happen and we can't make the bet that it will or won't, up until the 11th hour or so.
Sylvain Charlebois 17:43
Right, but the point I wanted to make is on the quality, it-, let's say, for example, you're shipping your wheat two weeks later, it's affect-, it affects the grading, and affects the money, the amount of money that farmers will get back for their product. So they're not happy and so even if you recognize the right to strike, and they do go on strike, it's going to cost farmers money. That's the problem.
Michael LeBlanc 18:11
All right. Well, you know, we'll talk about that next week, because I think the balls,
Sylvain Charlebois 18:15
May 22nd. Well, unless there's a delay due to Minister O'Regan's request.
Michael LeBlanc 18:22
Yeah, I think that's definitely gonna get pushed out. It's hard to see that not but who knows, right?
Sylvain Charlebois 18:27
It's-, so it can happen on May 22nd or later.
Michael LeBlanc 18:30
Or later, yeah. Let's talk about other things in the news. So, I don't know if you caught this in The Globe and Mail but changes at Saputo where Lino Saputo is moving up and out, basically, and they're bringing in some professional management. What do you-, what do you make of this just just change in the company, do you-, I mean, we've talked, you know, tough times, sometimes for some of the processes. What do you-, what do you think about Saputo?
Sylvain Charlebois 18:54
You know, I-, you're-, you're in Ontario, so you kind of missed out on all the controversy around Saputo and-, and the-, and FC Montreal, they own the team, you know, Lino Saputo actually acted a little bit like Stein Briner. Like, yeah, he was in the news a lot and it's not like Galen, Western Ontario, but it was in the news a lot for the wrong reasons for a long time. Like he basically he's seen as a person who's actually coaching and managing the club.
Michael LeBlanc 19:26
Really?
Sylvain Charlebois 19:26
Yeah and I think it didn't help their image. It really-,
Michael LeBlanc 19:30
How about Saputo's image?
Sylvain Charlebois 19:32
For the last-, I think for the last month or so they all the headlines relate to Saputo was-, was about-, was about soccer. Yeah, so it wasn't-, it wasn't great. So my guess is that they're just trying to kind of protect the family, maybe I don't know, I-, how do you how do you read that?
Michael LeBlanc 19:51
Well, I didn't have that context to go by. Like that's why I'm kind of curious because I wouldn't say Saputo's, but off the radar screen in the rest of Canada.
Sylvain Charlebois 19:58
Oh, well they own the company, yeah.
Michael LeBlanc 19:59
But I mean, it's just a brand there. I think of them more as a Quebecois brand and they would have more prominence here. So, I would just kind of take your temperature on-
Sylvain Charlebois 20:06
I suspect that they just wanted some-, some fresh air, some-, some newness, they did that. I mean, some companies do that. Family owned businesses will do that once in a while. Is it permanent, I doubt. It may be-
Michael LeBlanc 20:20
It's a big change when you move it out of the family. Right?
Sylvain Charlebois 20:22
It may be a pause. I mean, Loblaw just did it..
Michael LeBlanc 20:25
Loblaws just did it with Per.
Sylvain Charlebois 20:27
Yeah.
Michael LeBlanc 20:28
Loblaws if you're listening once again, open invitation for Mr. Bank to join us on and chat about what he thinks of this now about the Canadians and Canadian grocery store. Let's take a break now and get to our interview with Marc from a Scale AI right after we listen to this important message from our presenting sponsor, Caddle.
Michael LeBlanc 20:48
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Michael LeBlanc 21:40
Marc, welcome to The Food Professor podcast. How are you?
Marc Vaucher 21:43
I'm great. Thank you very much.
Michael LeBlanc 21:45
Well, thank you for joining, Sylvain and I. You're our first interview, Sylvain and I are here live at the SIAL Food Innovation show and what a way to start our interviews with Scale AI, you know, you can't say retail anymore without saying AI. So, we're happy to have you here.
Sylvain Charlebois 22:01
Exactly. Yeah. Welcome Marc.
Marc Vaucher 22:03
Thank you. Thank you. I'm very pleased to be here. I'm Senior Investment Director at Scale AI and if you-, if you don't recall what Scale AI is you can remind yourself of the recent announcement from Justin Trudeau $2.4 billion for AI, yeah, recently, and it was in our offices. So, that's where it took place.
Michael LeBlanc 22:04
Now. So you are, as I understand it, a cluster of expertise, both solution providers and you know, businesses who are trying to figure out AI, how do you describe what you do?
Marc Vaucher 22:40
So Scale AI is an Innovation Cluster. At this point, we have funded 120 projects, and the total amount of projects is $600 million of projects.
Sylvain Charlebois 22:52
So 120, wow, so are these projects all Canadian or-
Marc Vaucher 22:56
All Canadian, so it's to improve the productivity of Canadian companies all across Canada. So, we put together, we put in contact organizations that want to adopt AI and organizations that can provide AI services, support them, guide them throughout their AI journey.
Sylvain Charlebois 23:15
Wow, that's incredible and so are you getting more applicants coming in or the 120 actually happened in the-, during the first cycle of funding.
Marc Vaucher 23:24
So we had, we are five years old so during these five first years, we got those 120 project but that momentum is continuing to grow and we have more and more projects being submitted to us and we are going to fund but besides the funding it's we are really a player that is meant to empower AI the Canadian economy and, and guide companies throughout their journey to help them adopt AI as soon as possible and there is no good time or good moment to start AI, well yes, there is a good it's now because at the end of the day, even if you're not-, you think you're not enough-, big enough or enough, digitally mature in fact, you're already ready to do maybe in some first steps towards your AI journey and transformation.
Michael LeBlanc 24:13
I'm on your site and I'm looking at your-, your partners and members. So how does it work, you know, I see Air Canada, Ag Report or I see-, I see Couche-Tard, I see lots of members and partners, are they funded, are they funding do they have projects, unpack that for us.
Marc Vaucher 24:30
So Scale AI is a small organization we have a federal funding, from the federal government and we use this funding to fund a portion of the projects with support on top of the guide-, guidance we provide and-, and-, and we build the ecosystem by putting together big AI events the next one being in September called All In and, and also by putting together and contact different players of that ecosystem and funding that but we don't do our self, the AI work. We have many examples in the aggro world.
Sylvain Charlebois 25:04
Yeah, talk to us about those.
Marc Vaucher 25:05
Yeah. So, so one example I like very much is-, is Semios, for example. So Semios is an ag-tech startup based in BC, that is helping farmers using sensors provide them with great information to make the right decision in their crop. So when do I need to water, when I need to put pesticides et cetera, and-, and the-, and the question is, how do I predict what's happening where I don't have sensors, and smaller farmers, thanks to the AI solution they put together, were able to-, to have good prediction of micro variation of temperature of weather in their crops, and taking better decision is-, should I prevent any frost, should I water my plant and my crop, should I put some pesticide but with very targeted decisions, thanks to these predictions that AI is made possible.
Marc Vaucher 26:00
You have other examples very different from that and for example, you could have in the retail world, so, Canadian Tire for example, or Loblaw. They used AI to do some promo optimization. So, one, what is a good price, when should I do a promo plan, what is the success of that promo plan but also another examples of interesting planograms. Okay, Canadian Tire is-, is using AI to automate help workers all across their 500 stores, place the product in themselves the right way.
Michael LeBlanc 26:34
I interviewed a senior person at NVIDIA last week and they were talking about retailers using a digital twin, as opposed to-, so they're setting up a complete store in virtual reality in the metaverse with AI, and they call it a digital twin and that's how they're figuring out their merchandising, right and shelf allotment. Is that a good example?
Marc Vaucher 26:55
Yeah, exactly a great example. Another great example is McCain, for example. So they-, they use AI to help the farmers know when to harvest the potatoes, also use AI to take good decisions in the manufacturing process to reduce waste and maximize throughput and at the end of the day, it's helping the farmers and also helping the overall McCain value chain using AI and-, and that's-, that was a major project of theirs and here Scale AI again, they-, they have-, they challenge them also on is your project realistic on that front, given the $600 million of funding we-, we provided 600 million projects we saw, that seems to be a bit too ambitious, or this should be maybe-
Michael LeBlanc 26:55
Or maybe you should be more ambitious?
Marc Vaucher 26:57
Yeah, or you shouldn't be more ambitious. Exactly, but we know what's possible, what's not. Thanks to this experience we've-, we've put together and thanks to the ecosystem, we can tell companies, no, you're not too small to start AI or not, you're not-, you're not you think you're not mature enough, but you can be maybe you have a small portion of your processes, you could improve because you have good data there and then you can improve your data structure over time, instead of thinking you need to have your data infrastructure already before studying your AI journey.
Michael LeBlanc 28:12
Interesting.
Sylvain Charlebois 28:13
Can a-, like how do you qualify for-, for Scale AI? Do you-, can you be at a restaurant and qualified?
Marc Vaucher 28:21
Yes, in fact, any company can-, can, can be involved in a project with Scale AI depending on their-, their process needs and their let's say the business needs, AI could apply in-, in one field or another. The important thing is really for a company to take the AI transformation decision at the strategic level. So, the highest level in the company. It's not an IT decision, it is not a technology decision. It's a business decision and then once you have taken that business decision, you need to involve the end users.
Marc Vaucher 28:54
So the operations need to involve the one that will be providing data, you need to involve the right AI partners and you need to have the right level of data quality and all of these you will you are going to play that together and you can start with a small scope to make that possible and involve people start to learn and then go and bigger and bigger and at the same time, transform digitally and improve your data structure.
Michael LeBlanc 29:19
If I applied to you today, how long would it be until I get funding, what's a typical cycle of approvals and reviews, well, how long does that take?
Marc Vaucher 29:28
And so for a company to get funding from Scale AI, it can take three months and a half for the fastest if the project is-, is almost ready to go.
Michael LeBlanc 29:38
That's quick.
Marc Vaucher 29:38
We are going to help them throughout the last steps of the project structuring and and depending how, how long they need to take to get the partners together and refine that project because what we want then is not only to start the project quickly, but also to have the greatest chance of success. So having those pair of eyes from Scale AI on their project, that-, that is leveraging the 600 million projects we've seen is also helping them-, we don't have financial interest, we are fending that with it's a subsidy.
Michael LeBlanc 30:13
How do you-, how do you measure success?
Marc Vaucher 30:15
So success can be measured in different ways. First, revenue impacts, cost reduction, but also job creation, training. So, we have all sorts of KPIs, we look also deep in the matrix. So how much things did I move with the same amount of resources? Did they do more with the same amount of resources, did I do? Did I use less resources to do the same thing, all of that is really where AI can help you. AI, in fact, can do-
Michael LeBlanc 30:44
But as your organization, how do you measure success? I get how you might measure the success of the projects, but you know, when you and your team members say, did we achieve our objectives, how do you how do you measure that the number of grants you give the money you give out the-
Marc Vaucher 30:58
Of course, the number of projects we have, the amount of-, total amount of projects is an important KPI for us, but also how well the project did for the company. So those revenue impacts on cost reduction, job creation, et cetera, KPI is very important for us to measure how active and successful those projects were.
Sylvain Charlebois 31:16
Do you have any data showing us how much growth you have achieved helping the different businesses that you actually got involved with?
Marc Vaucher 31:25
Let's say overall, what we have measured is that we managed to bring five additional billion dollars of value to the economy. Thanks to the projects,
Sylvain Charlebois 31:33
$5 billion.
Marc Vaucher 31:34
Yeah, thanks to the project incentive-
Sylvain Charlebois 31:36
In last five years.
Marc Vaucher 31:36
Yeah, in the last five years with a 600 million project investment that was made. So great achievement and-, and often the question we have is also what AI can do for me as a company? What and-
Sylvain Charlebois 31:51
They're hearing things. Yeah, but they're wondering whether they are missing out.
Marc Vaucher 31:55
Yeah, and the first thing they think about is ChatGPT, and copilots and yes, that's, that's useful, that's helping you build documents, get access to information, provide, build content, but there are other elements we are forgetting and in fact, surprisingly, these Gen AI solutions are the smallest portion of AI solutions we see in production in companies. So, there's two other traditional AI solutions we see more, that are also providing great impacts, business impacts or predictions. So how much sales am I going to do in the next 10 months, two months, three months, four months, and prescriptions. So what decision should I take? When should I harvest my crop? And when should I-, yeah, harvest my potatoes in my-, in my crop. So that's the kind of sort of thing that can help-, Scale AI can help you do as a company.
Michael LeBlanc 32:52
You know, I'm-, I'm from Ottawa when I grew up, I came to Montreal a lot to watch baseball, the Expos. So it's wonderful to be back here in Montreal. So, I'm gonna ask you a baseball question.
Sylvain Charlebois 33:05
He looks like a baseball guy.
Michael LeBlanc 33:07
You look like a baseball guy. What inning are we in-, in terms of AI and business impact? Are we halfway through? Are we nowhere in the first inning? Are we in the seventh inning stretch? What do you think?
Sylvain Charlebois 33:19
Or is there a rain delay?
Marc Vaucher 33:21
That's an amazing question. Let's say, what they can tell you, it's-, between 2000 and 2022, our productivity decreased by 71% compared to the productivity in the United States. So, this shows how productivity is a super important, crucial element for our country, and AI in Canada and Canada is at the forefront of AI research has been at the forefront of AI research, but lagging behind in terms of AI adoption and the work we do at Scale AI is making that knowledge transfer to the companies to make sure
Michael LeBlanc 33:59
Close that gap.
Marc Vaucher 34:00
Bridge that gap, exactly. To make sure that AI does what it does best, it can improve productivity for companies.
Michael LeBlanc 34:07
It's good. You still haven't answered my question though.
Marc Vaucher 34:10
I would-, I would say I don't know, I don't know. It's the second inning. Thanks to Scale AI.
Michael LeBlanc 34:14
Top of the second or-, yeah, thanks and you just got some more funding. So maybe you went to the top of the second inning versus the bottom of the second inning.
Marc Vaucher 34:20
Exactly.
Sylvain Charlebois 34:21
And Canada's the home team. So-
Michael LeBlanc 34:23
That's right.
Sylvain Charlebois 34:23
We're good, but when you look at your portfolio, how big is ag and food? Like, are you-, are you really committed to ag and food or is this just one of many? What's the percentage, I guess I'm asking?
Marc Vaucher 34:39
I would say that any, the project-, the AI projects that touches ag and food can-, can go up to, I would say, 20 to 30% of our projects, I would say because retail is a big thing for us, and retail has a big impact on ag food.
Sylvain Charlebois 34:52
And the adoption issue you raised is absolutely critical in ag and food as well?
Marc Vaucher 34:59
Yes. Yes, it's very critical, I have another great example I'd like to mention it's Ferme Du Vert. It's a Quebec based company that is-, is the biggest vertical farm in strawberries and they use AI to provide the right amount of light the right amount of water to the-, to the crop. So it allows you to make much better decisions, much more optimized decisions and have much better visibility on what's coming.
Sylvain Charlebois 35:27
Wow. All right. So in farming, it's a big deal and what about processing.
Marc Vaucher 35:31
Processing is, as well, a big deal, we have Patates Dolbec. Another example I like to mention, they use the AI to automate the-, to make sure that they can dispatch the potatoes regarding their size, their quality, and they use the AI to do that. So, it's really a big thing and when you know how to use AI and employ AI, that can transform your business.
Sylvain Charlebois 35:55
That's great.
Michael LeBlanc 35:55
Sylvain have you been to the Couche-Tard Store of the Future at the-, at the-, McGill University, because they combine machine vision with checkout, self-serve checkout, which is so important because retailers are struggling with everything from theft to efficiency, but have you ever tried it you just drop a bunch of products on it reads it it's in seconds, knows exactly what's not. Last couple of questions. What-, what brings you here, what are you doing here at the SIAL show?
Marc Vaucher 36:23
So, I'm-, I'm very glad to be at this great event. I will be speaking in an hour or so with Jack Klejka from IVADO Labs, and I'll be speaking about how AI can transform the food industry.
Sylvain Charlebois 36:38
I'm actually presenting on AI tomorrow, but our, our presentations are complimentary.
Marc Vaucher 36:44
Exactly, exactly. We'll take the-, let's say the, the focus from the company's point of view rather than the user point of view. Exactly.
Michael LeBlanc 36:51
Alright, so where can people go to get in touch with you? Are you a LinkedIn person and learn more about Scale AI?
Marc Vaucher 36:57
I'm a LinkedIn person. I'm not called John Smith. So, you'll find him right away.
Michael LeBlanc 37:02
A little easier to find you. Yeah, so we'll put that in the show notes and scaleai.com?
Marc Vaucher 37:06
scaleai.ca
Michael LeBlanc 37:06
Dot CA. scaleai.ca.
Sylvain Charlebois 37:11
And so to be clear, your funding was renewed up to what year?
Marc Vaucher 37:16
2028 and yeah, and the more we get projects, additional layer of finance will come.
Michael LeBlanc 37:25
Well, fantastic. We wish you continued success, both for yourself, your organization and our country because we sure could use an edge, we've got to close that gap. So, thank you for joining us, Sylvain and I on The Food Professor podcast.
Sylvain Charlebois 37:37
Merci beaucoup, Marc.
Marc Vaucher 37:38
It was a pleasure, thank you very much.
Michael LeBlanc 37:40
Have you ever been to Chuck E Cheese? Did you ever take your kid-, was there a Chucky Cheese and places where you live?
Sylvain Charlebois 37:44
Yes.
Michael LeBlanc 37:44
So, if you remember Chucky,
Sylvain Charlebois 37:46
Unfortunately.
Michael LeBlanc 37:47
You know, I liked their pizza, I have to say, it was greasy and kind of like, if you remember if anybody's been ever there, they had the-, the animatronic band that would play every now and then up on the stage. Do you remember that?
Sylvain Charlebois 37:59
Yeah.
Michael LeBlanc 38:00
So they're phasing that out. And I wanted to-
Sylvain Charlebois 38:03
Lovely.
Michael LeBlanc 38:04
to shed a tear over the-, the demise of the breakup of the band, basically, because their rationale was and I guess I agree, but then the rationale was like kids, they're putting up screens and kids, you know, watch screens. I'm like, but I said to myself, and kids need more screens to watch.
Sylvain Charlebois 38:20
So the band wanted to unionize, is that what happened?
Michael LeBlanc 38:25
I think-, I think one of them slept with the other one's girlfriend or something. So I think it was very complicated. I think the bear and the whatever-. Anyway, anyway-
Sylvain Charlebois 38:37
X rated podcast.
Michael LeBlanc 38:39
Oh, that's it. That's it. So, Chuck E Cheese, Chuck E Cheese is moving out. Let's talk about Kraft. So, Kraft Heinz wants to get out of the Oscar Meyer wiener business?
Sylvain Charlebois 38:50
Yes.
Michael LeBlanc 38:51
So, is this-, again, I've kind of asking you these open type questions, but is this that category of goods, because we know there's been a lot of more energy around high-, high processed, ultra processed food, which when I think of Oscar Meyer, that's what I think of.
Sylvain Charlebois 39:06
Yeah.
Michael LeBlanc 39:07
Do you think this is them shedding that or do you think this is just an underperforming asset, doesn't fit in the portfolio or?
Sylvain Charlebois 39:12
I think it's just about performance, I think it's really and frankly, right now, you're seeing more and more major CPG companies divesting, they're trying to focus on their core business a little bit more. You saw that with Pepsi with-, you saw that with Danone, you're seeing that now with Kraft Heinz so, there seems to be-, you know, many years ago was all about diversity. It's about-
Michael LeBlanc 39:39
Diversifying your asset base.
Sylvain Charlebois 39:40
Diversifying assets, expanding your portfolio, we're kind of seeing the reverse right now. They're just, you know, their-, their risk off kind of thing that's kind of I'm, I'm seeing and, and frankly, I mean, you could see that there's some synergy that can be built between the sausage business and the other components but they're really focusing, I think, because I mean, sausage is livestock, it's meat and, you know, it's-, it's more risk and when you actually look at supply chains, you got the produce, you got the different ingredients as soon as you go into animals, things get complicated. Things get volatile, much more volatile and less predictable and so that's probably-, and when you look at Kraft Heinz, there's yeah, there's some stuff that-, that are really selling well, but there's a lot of animal stuff that may actually bring more risks.
Michael LeBlanc 40:33
Okay, last couple things. I was just reading this study from the Wall Street Journal that the average number of retailers where food and beverage were purchased has gone up significantly. This echoes much of the research that you've been doing around how people shop, so get a lot of this and this is us data in 2019-, 2019, 2020. Consumers shopped 16.8 places, that's now gone up to 20.7 and '23, '24. So deal seeking, innovation seeking, you've done a lot of research around this. Is that, it feels like it echoes your research and your findings as well?
Sylvain Charlebois 41:12
Absolutely. So not surprising at all and I mean, basically, people are way more strategic about grocery shopping and that's I mean, it's not a bad thing. I mean, we're at SIAL here, of course, a lot of the focus is on food and products. I think I mean, where it's-, where these products are sold, how it gets there, I think is going to be the key-
Michael LeBlanc 41:36
Private label
Sylvain Charlebois 41:37
Private labels and I think I mean, a lot of conferences are really about-, about that. More so than just, you know, different flavored bagels, or-, do you understand what I mean, it's just really where people are shopping where they want to buy. I mean, Dollarama has done very well with food these days, and people are scratching their heads. Oh, my God, it's the end of the world. Well, not really.
Michael LeBlanc 42:04
Really, I mean, it is tricking the metrics up because I think it is one of those things behind your research that finds if food costs are more, they seem to be spending less, but I think Dollarama doesn't roll up into the Stats Can grocery numbers. So, I think we're losing some of that-
Sylvain Charlebois 42:18
Yeah.
Michael LeBlanc 42:19
Data integrity, would you-, would you agree?
Sylvain Charlebois 42:21
Yeah, I would say so. Absolutely. Yeah, so I'm not surprised at all by these results.
Michael LeBlanc 42:25
Okay. Last-, last, let's give a shout out to the little potato company that opened up a new distribution plant. It's a $39.5 million facility in Alberta. 70% of this capacity is used to export to the US. So, congratulations to these guys. I love their product, because-, hey that's good clap.
Sylvain Charlebois 42:45
Yeah.
Michael LeBlanc 42:45
I love their product because you know what I do? I boil them for 30 minutes and then I-, I squash them, smash them and then I put them in my smoke-, my smoker for another 30 minutes and then you get these crispy bites of smashed potatoes. I gotta try that. You know, check out the Last Request Barbecue show because I just made an episode about that.
Sylvain Charlebois 43:06
Last Request Barbecue, you genios. Making chips even tastier.
Michael LeBlanc 43:13
Making a chip-, that's it making chips even tastier.
Sylvain Charlebois 43:16
The next storm chip. That's SIAL.
Michael LeBlanc 43:18
Well, there you go.
Sylvain Charlebois 43:19
You need a kiosk.
Michael LeBlanc 43:19
I need-, I need my own kiosk. I'm gonna make my own. Well, let's wrap that up. Let's leave it there for the rest of the show. It's so fun to be in person and doing interviews. I mean, you know, it's not always possible. I love this technology, because you can do interviews around the world, but it's a lot of fun being in person. We're kind of more ad hoc and so we got two more great days to go in terms of interviews. So looking forward to that and of course, we'll be back next week. Next week we have Caddle, Colleen is joining us for her monthly regular appearance. We did some research on barbecue season, what's hot, what's happening in barbecue, proteins, all these different types of things. So-
Sylvain Charlebois 43:34
Looking forward to that.
Michael LeBlanc 43:44
We'll have some research for the people, exclusive proprietary research only for The Food Professor podcasts. I'm Michael LeBlanc, media entrepreneur, consumer advisor and a bunch of other stuff and you are?
Sylvain Charlebois 44:11
And I'm The Food Professor, Sylvain Charlebois having the time of his life.
Michael LeBlanc 44:16
All right. All right. All right. Well, safe travels, everybody. We're here for a bit and we'll talk to you again next week.
Sylvain Charlebois 44:23
Take care.
SUMMARY KEYWORDS
AI, Canada, projects, company, years, big, food, talk, world, distribution center, happening, supply chain, move, interviews, put, scale, funding, podcast, railways, labor dispute