For our season four debut episode, we decided to catch up on the top issues brewing over the summer, with kids back in school and plenty of topics to discuss. Industry Minister François-Philippe Champagne meetings with the big five in Ottawa certainly caught our attention. Sylvain was there and shed some light on how the meeting came about and the objectives and deliverables coming out of those meetings.
For our season debut episode, we decided to catch up on the top issues brewing over the summer, with kids back in school and plenty of topics to discuss. Industry Minister François-Philippe Champagne meetings with the big five in Ottawa certainly caught our attention. Sylvain was there and shed some light on how the meeting came about and the objectives and deliverables coming out of those meetings.
Food inflation has been a hot topic, easing at 6.8%. How is Sylvain thinking about food inflation for the rest of the year and prospects for 2024?
The Bank of Canada claims that 0.15% of inflation is due to the carbon tax.
Let's zoom out and discuss the state of the food and packaged goods industry in Canada. We've seen a frozen pizza brand exit earlier this year; another brand is also pulling out. What's driving these departures?
On a different note, how important is India to the Ag sector in Canada?
Turning our attention to international matters, there's an update on the war in Ukraine, with Zelensky visiting New York and Ottawa.
We're also saddened to hear about Oylmel shutting down more processing plants, leaving 400 people looking for work. We talk about the industry's future, especially with 40,000 open positions in manufacturing in Canada. It's time to invest in technology rather than relying solely on foreign temp workers.
Moving on to the restaurant industry, Restaurants Canada is raising alarms about government funding extensions falling short, especially with the stats showing that people are eating out less. It's a double-edged sword.
And finally, we'll wrap up by discussing the fantastic world of Portuguese sardines. There's exciting news about a second store location opening in Times Square.
Stay tuned for more insightful discussions and updates on the Food Professor Podcast. Thanks for joining us today!
Coffee Association of Canada conference
About Us
Dr. Sylvain Charlebois is a Professor in food distribution and policy in the Faculties of Management and Agriculture at Dalhousie University in Halifax. He is also the Senior Director of the Agri-food Analytics Lab, also located at Dalhousie University. Before joining Dalhousie, he was affiliated with the University of Guelph’s Arrell Food Institute, which he co-founded. Known as “The Food Professor”, his current research interest lies in the broad area of food distribution, security and safety. Google Scholar ranks him as one of the world's most cited scholars in food supply chain management, food value chains and traceability.
He has authored five books on global food systems, his most recent one published in 2017 by Wiley-Blackwell entitled “Food Safety, Risk Intelligence and Benchmarking”. He has also published over 500 peer-reviewed journal articles in several academic publications. Furthermore, his research has been featured in several newspapers and media groups, including The Lancet, The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Washington Post, BBC, NBC, ABC, Fox News, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.
Dr. Charlebois sits on a few company boards, and supports many organizations as a special advisor, including some publicly traded companies. Charlebois is also a member of the Scientific Council of the Business Scientific Institute, based in Luxemburg. Dr. Charlebois is a member of the Global Food Traceability Centre’s Advisory Board based in Washington DC, and a member of the National Scientific Committee of the Canadian Food Inspection Agency (CFIA) in Ottawa.
About Michael
Michael is the Founder & President of M.E. LeBlanc & Company Inc. and a Senior Advisor to Retail Council of Canada and the Bank of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience with Levi's, Black & Decker, Hudson's Bay, Today's Shopping Choice and Pandora Jewellery.
Michael has been on the front lines of retail industry change for his entire career. He has delivered keynotes, hosted fire-side discussions with C-level executives and participated worldwide in thought leadership panels. ReThink Retail has added Michael to their prestigious Top Global Retail Influencers list for 2023 for the third year in a row.
Michael is also the president of Maven Media, producing a network of leading trade podcasts, including Remarkable Retail , with best-selling author Steve Dennis, now ranked one of the top retail podcasts in the world.
Based in San Francisco, Global eCommerce Leaders podcast explores global cross-border issues and opportunities for eCommerce brands and retailers.
Last but not least, Michael is the producer and host of the "Last Request Barbeque" channel on YouTube, where he cooks meals to die for - and collaborates with top brands as a food and product influencer across North America
SUMMARY KEYWORDS
talk, inflation, canada, food, sardines, summer, meeting, happen, prices, ottawa, interesting, work, grocers, minister, called, industry, feel, years, kleenex, big
SPEAKERS
Michael LeBlanc, Sylvain Charlebois
Michael LeBlanc 00:04
Welcome to The Food Professor podcast season for our debut episode. I'm Michael LeBlanc,
Sylvain Charlebois 00:09
and I'm The Food Professor Sylvain Charlebois
Michael LeBlanc 00:13
it's great to be back on the mic after our SIAL bonus episode summer. You may hear some sound in the background little bit of Eagles is playing right now. I'm coming to you live from Las Vegas at a conference called grocery shop. How was your summer?
Sylvain Charlebois 00:26
Viva Las Vegas?
Michael LeBlanc 00:28
Viva Las Vegas baby!
Sylvain Charlebois 00:29
We can you hear in the background some music, so it seems like you're having a good time there?
Michael LeBlanc 00:33
It would seem so, it would seem so! we're in we're in the Vantage podcast studio that we set up on the beach to do our interviews which which is a pile of fun. Tough Life. Yeah, it's not bad. It's not bad actually. Now I saw you. I was just gonna say How was your summer but I must have seen you 100 times on television. I do feel like you had to react a restful summer. But how was your summer you tell me?
Sylvain Charlebois 00:57
Oh, my summer was busy. It was really strange. I was hoping to rest a little bit. But we do we do have a lot of work at the lab. Lots of projects. It's great. But right now we actually have 17 people on payroll, supporting different projects. So it's it's busy. It's busy meetings every week. And so we're looking at salmon fishing, we're looking at local foods, we're looking at farmers markets, we're looking at forecasting, we're working. And of course, we're prepping our candidates who probably support our 40th edition, which will be released on December 5, we're actually looking also, we're working with different groups across the country. So it's been really a busy summer. And I'm hoping that over the holidays, we'll get some rest. But you know, since COVID, I don't know about you, Michael. But since COVID, summers are a little different. Well,
Michael LeBlanc 01:56
it was a busy summer for me. I was in New York, and I was in Orlando. I did some traveling did some vacation stuff, too. And but I did some work as well. I mean, it was funny. I went to conferences in mid July (at the end of July - first day of August). And I'm like who goes to conferences, but they were both sold out. So I think you know what my interpretation is a lot of people trying to figure out get a handle on what's happening, right? Very dynamic environment. Yep, grocery in all environments, right? The customers changing, the environment is changing. We got to spend some time kind of getting used to it. Now. You and I had actually planned to be together. And we actually did a post on LinkedIn together in person in Halifax last week, but events transpired against us. But we are going to be live together podcasting from the Coffee Association or Canada's annual conference again, our second time they are what's called the road ahead November 9, we'll put the link in the show notes. So run, don't walk we'll do some great great roster speakers. So we're going to do our our interviews. Now this episode is a catch up episode. So we don't have a guest this episode, but we will resume having guests starting in our future episodes. We got some great guests lined up. Yep.
Sylvain Charlebois 03:03
Talking about catch up. I mean this. There's so much going on.
Michael LeBlanc 03:08
Oh, where do we start? God? Well, I you know, I'm looking at where we start. And I tell you, I did have the scripted out last week, you know, because there's a lot to talk about. And then our prime minister changed everything summoning the Big Five to Ottawa, the closed door meetings and you were there now, the whole thing felt very performative to me like last week, it's like I summon thee be in my office on Monday, like the principal's office or something like it seemed very performative. I think it started from whatever intentions about, hey, let's, let's work together to solve problems. But you were there, you probably can't share confidence, it is a closed door meeting. I've seen some stuff that you've said in the media. But take us, give us a bit of context. First of all, how did you wind up in this mix? And then, you know, what can you share about the meeting that we don't already know? What's your perspective?
Sylvain Charlebois 04:00
Well, so I'll basically tell you the story as to why the meeting actually happened in the first place. So back in July, I was at the cottage and I got a phone call out of the blue and it was Mr. Champagne himself. Yeah, he called me and said, Listen, Sylvain, you
Michael LeBlanc 04:16
know, did you know him before he called you? Have you talked to him before?
Sylvain Charlebois 04:20
No, no, not at all. He knew of me. And so he just called me up as I know your work. It's great stuff that you do. I know you do a lot of work on pricing and forecasting and inflation, but I need your advice. France is about to freeze the price for 5000 food products. Should we do this in Canada?
Michael LeBlanc 04:47
So let me stop you there is that France? Government was going to mandate the groceries car for whoever to freeze prices. Is that what you're
Sylvain Charlebois 04:55
saying? It wasn't it wasn't mandated. So Lamere the Minister of the Economy In France basically call everyone in the same room started with manufacturers to get industry to freeze prices essentially. So it's not mandated industry complied essentially, okay for a while. And so he was asking me whether an AI would be a good idea to do that in Canada and I, and I'm sure you know how I responded. I said, I don't think it's a good idea. And so we chatted, and he did call me a couple of times in August, and we chatted some more. But two weeks before the fall session started, which was this Monday, he calls me, I was I remember, I was actually walking to the parking lot on campus to get into the car. And he said, Well, by next Thursday, which was when Prime Minister Trudeau said, we're, we're actually getting the Big Five in Ottawa, by next Thursday, if you were me, what would you do? And I said, Well, if you absolutely need to do something, absolutely need to do something. And I knew, I knew I was talking to a minister under a lot of pressure poles are down. And he's
Michael LeBlanc 06:18
not the Minister of Agriculture. To be clear. For the listeners, he is the miniature Minister of innovation?
Sylvain Charlebois 06:23
I'll get to that in a second. It's a really important point that you're raising there. And so he said, What would you do? I said, Well, if you absolutely need to do something, and actual thing, just call a meeting, call a meeting with the Big Five and see what happens, you're gonna get some intention, you're gonna you're gonna look like a minister who cares about inflation. And, and that's how it happened, basically. And so I
Michael LeBlanc 06:46
It felt like it spun a little bit more than that, because the prime minister came out with some pretty performative stuff.
Sylvain Charlebois 06:52
So that was, that was the Friday before Prime Minister Trudeau announced that the meeting was going to happen. So on Thursday, he makes the announcements I knew was coming. What I didn't know it was that he would say he basically threatened the Big Five if they didn't comply to some sort of plan. So that I didn't know that. But he did say that. My guess is that the pm the pm just wanted to give his minister a stick, basically. Yeah. And so. So on Friday, of course, I did. Mr. Champagne, I did ask me if I am calling a meeting, would you come? And I said, Yes, I would come, I would, I would support you. And no problem I can, I can brief you, I can provide you some with some insights, whatever you need. And I'm not paid. This is just voluntary work. I just, I
Michael LeBlanc 07:49
really, I call that public service, right, the public service,
Sylvain Charlebois 07:53
it doesn't matter who's in power. And I think it's important for us to actually engage with politicians to help them. And so that's what I did. And so, so over the weekend, of course, things were being planned. And I was the first one to know and I was getting calls from, from different companies, they had no clue this was coming, zero clue. They were they were learning this on Thursday. And on Friday, I was starting to get some phone calls from different groups, I want to tell you who but lots of ice now just basically spend the whole day on the floor. And you can feel that the industry was panicking. And then of course, they realized that I was actually going to be part of this. And so I'm sure they understood that. I was in a rough spot, because I'm here to help the minister, but at the same time, he's under pressure to deliver something.
Michael LeBlanc 08:48
Well, you you like them were summoned. You know, I
Sylvain Charlebois 08:52
was summoned. Absolutely, of course. But for different reasons. Yeah. And, and so the big five came and so the way things worked on Monday, which was really interesting. So I was escorted from my hotel at nine o'clock to another hotel, to meet Mr. Shabang and his team, not in the building where the meeting was going to be held. What they wanted to do was to save me from the media, zoo. I mean, there was so much media oh my god, it was just you know, when
Michael LeBlanc 09:31
the Prime Minister makes a request like that, that gets a lot of people's attention. So
Sylvain Charlebois 09:35
so they just wanted me to avoid the zoo, which I'm very thankful for. And I got into the building from from from the side, essentially, it's a CDL building in Ottawa. Yeah, you're from Ottawa so you know where it is. And so, I got in at 9:30-9:45. I was with the Minister for an hour and a half like an hour and 15 minutes to prepare to prepare him prepare his steam the chair of the parliamentary committee. Was there many MPs were there the deputy was there. A couple of ATMs were, there was about 15 people in the room. So I was basically talking to the minister in terms of what my expectations are, what I was actually what a tenant to say no to the big fine. Now, I did tell him that I was going to make a case for, for for the fact that I don't believe that there is profiteering going on, it's important to say that it's important to present the facts to them. Facts are important facts. And I wanted because I wanted the minister and the CEOs to live to hear my my message at the same time. So so everyone can pivot and focus on what really matters. And so we got into the room. Deputy Prime Minister Freeland was there. So, so I said, Hello, she provided some opening remarks. She left and then champagne took over. And then I was asked to present for about 20 minutes or so. And so I basically focused on food inflation. Why are we here? It's not the grocers fault, but stuff happens and basically kind of build the case for the problem. But essentially, the real problem, I think, for all of us was consumer trusts. I mean, 82% of Canadians actually believe, actually believe that greed is behind higher food prices. That's a big problem. It's a big problem for grocers. And they know that. And so we went through some of the things that perhaps should could be addressed. And but I did actually went through things like the snack tax, the carbon pricing policy, some of the things that the government is responsible for. So kind of throwing a bone to grocers, so they can actually have a dialogue with government saying, you know, what, why don't we actually partner and try to figure out ways to make food more affordable. It's not just because of us, or it's not just about us, it's about this policy strategy combination that we have here.
Michael LeBlanc 12:17
Interesting. And so you went into the meeting with some sort of expectation of outcome. I mean, there was kind of a imperative placed in front of all of you, which was a plan for or by Thanksgiving, like there is a deliverable out of all this, not just another discussion, so versus your expectations, and again, what you can and cannot share as a closed door meeting. But what you know, at the end of the day, you know, a lot of very important people who run big important companies that employ hundreds of 1000s of Canadians all got together in a room and talk about an important issue. So what's your net net outcome? In terms of good, you know, was it a great Was it a good meeting was a productive time? And do you think, you know, there's a there's the mandate there, there's going to be some, some outcome. I
Sylvain Charlebois 13:02
think the meeting went as good as it could have. To be honest. I mean, I was when I walked in CEOs were there for a while, they were probably there for at least 10 minutes, and nobody was talking to each other. It was it was awkward. It was awkward. And I felt awkward, too, because they're
Michael LeBlanc 13:19
all there in person. Right? They were all because and they were all there. Yeah.
Sylvain Charlebois 13:24
And frankly, Michael, I don't think it has ever happened before. Like, well, how many times have you seen the head of Walmart, Costco, Canada, Loblaws, Sobeys, and Metro all in the same room physically, at the same time, I can recall it. Never ever to happen before. So that in and of itself, and I did say the Mr. Just doing that is a lot. I think it's great that you got all five in this. So they take they they've showed respect. They they're they're playing along. They understood. I mean, they all understood why they were there. And it wasn't about economics. It was all about politics. So they got it. But I actually felt that the meeting was constructive. I think we'll actually end up with a plan. Whatever plan that is going to be I don't think it's going to be like a forceful out there. You sort of plan. I don't think it's going to be that at all, I think I mean, Mr. Champagne, is an action oriented guy, but he's also he's also after compromises. And he's also he's also is always trying to understand II that's his thigh with telecoms. And to your point about the fact that he's not the Minister of ag. This is this is really interesting because my world or our world is ag and ag moves at a very at all, everything's about farm gate. Everything's about farm gate. Not Monday, Monday was all about the consumer. It was all about the consumer consumer consumer. And it was was about actions, like now, not the code, not something in three years from now, actions now. And frankly, it's, I feel it was a bit of refreshing to be honest.
Michael LeBlanc 15:19
That's good. I'm very, I'm very happy to hear all this that you came out of that. With that perspective. Now, I guess, one clarifying question. I mean, there's a plan to be put forward or a plan to come together now. Unlike the, you know, the unlike the code of conduct, they're not all getting together and their associations getting together, that's an individual to put a plan in place, like how does it out? Where was it left? I guess, if you can share, where was it left? What do you what's going on? So
Sylvain Charlebois 15:46
I have to be careful here, there are things that I want, I would want a minister to put forward himself and say you can't what I can say is that there'll be other meetings. There'll be other individual meetings with roasters, and they'll also be meetings with I recommended that Mr. meets with, with manufacturers as well, that's important, and I think it's going to happen.
Michael LeBlanc 16:12
Well, I'm just gonna say we haven't even talked about the manufacturers in this. And then I was gonna say it's important to get him on the podcast, of course. Industry Oh, yeah. But
Sylvain Charlebois 16:25
it's where, where ag Canada fits. In the pecking order in Ottawa, when, when the food inflation fall is given to the Minister of innovation.
Michael LeBlanc 16:37
I gotta tell ya, interesting point. Now. Let's shift gears a little bit. And let's talk about food inflation. So you actually posted on on social media, a bit of positive news around so to speak around inflation? I think it was for the month of August 6.8%. How are you thinking about, as you said that off the top, you're working on Canada's Food price report. So you're, you're no doubt deep into the forecasting part. But you seem to have a little bit of optimism that I don't know, the momentum is slowing. What's your perspective right now on food inflation?
Sylvain Charlebois 17:06
Well, actually, you know, I don't know if, if we're allowed to to feel positive about food inflation, but I think we should, I mean, things are going in the right direction. In fact, going back to our discussion, about Monday's meeting, if we are aiming at stabilizing food inflation, that's kind of what we're seeing, right. This despite auto was intervention, I mean, actually, right now, the market inflation rate, it went down to 6.8%. The only place in the g7 where food inflation rate is lower is where you are right now in the United States. After it's Canada, and the gap between food inflation inflation is down to 2.8. And I'm actually on Monday I set the the big five do expect on Tuesday, which was the day after to see that gap narrow and that's a big deal for you guys. It's a big deal for the industry and that's exactly what happened and went down to 2.8% which is almost half of what it was before in July.
Michael LeBlanc 18:09
Well it's so it's important from a consumer confidence as you said again, off the top the the issue is what consumers think about how food inflation comes about and how it ends. Oh, yeah,
Sylvain Charlebois 18:21
absolutely. And when you look at food categories, only fish what got more expensive in August, month a month everything else produce bakery dairy, meat, all cheaper. So interesting. Oh, yeah, those it's it's all good news. So I wrote a piece in the Toronto Sun today and tomorrow in that price, and it's kind of so the the title of my column in today's paper is Chicken Little and Canada's Food inflation. Because you can't you post on X you post on LinkedIn, good news about inflation. People want to hit don't want to hear it. They just don't know it's too expensive. It says pensive prices should drop. Well, if prices should drop. Canadians spend 10% of their budget on food, which is the six lowest percentage in the world. What else do
Michael LeBlanc 19:10
you need? Yeah, seriously. One more thing about food inflation. You I saw the Bank of Canada made some claim that component of that inflation was the carbon tax point one five, and you you, you challenge them to as a as a professor show their work. Have you got any indication of
Sylvain Charlebois 19:30
why I didn't want to challenge I didn't challenge him. I just said listen, I find it odd that the governor actually would state something like this, which is, let's face it, the carbon taxing policy again is quite is a bit controversial. And if you actually come up with a coefficient like that, you may want to show the arithmetic behind behind this coefficient. Like I said, That's what I
Michael LeBlanc 19:53
students and one of your programs is like I love your I love your conclusion. That's interesting, but how did you get there right out of that so
Sylvain Charlebois 19:59
I I made a request, I think it was the day after the claim was made by the governor never got a reply, not a reply. So I went on x and say, Listen, can we get something? And of course, today, I got an email from Bank of Canada. So they're looking into it. Okay, just so you know,
Michael LeBlanc 20:20
man of action. Let's say let's take a step back and think about the overall state of the food and packaged goods industry in Canada. So, you know, before we went on to our SIAL summer, frozen pizza brand exited the market. And then during the summer, you know, we shed a few tears was a Kleenex decided they were pulling out and, you know, can't stay you know, is this a can't stand the heat getting out of the proverbial kitchen, there was some op eds that I just did. I thought were nonsense, but about why and, you know, there's ideas, you know, some of
Sylvain Charlebois 20:52
these will say, Oh, are you are referring to the op eds in The Globe and Mail? I might
Michael LeBlanc 20:57
be. Oh, my God, I thought it was just nonsense. But what's your take? Yeah, there
Sylvain Charlebois 21:02
were a few calls this summer. That, to be honest, I think the Globe and Mail leads to do some fact checking here. I'm like, seriously,
Michael LeBlanc 21:11
I'll come on bed doesn't mean anyway. But what's your take? I mean, it to me, it was like a big corporation make their $15-20 billion. Kimberly Clark makes a decision. They're going to exit the market. Because whatever. I you know, to me, it's just like the how competition works. But do you have any other take? Or do you have a different take? Or do you have the same take or what do you what were you thinking, what were you I
Sylvain Charlebois 21:32
honestly, I can't really comment about the Kleenex situation, because it's not it's not necessarily something I follow very closely. It's indsutry
Michael LeBlanc 21:38
dynamics. I mean, it's a lot of move through the Yeah, the Nestle
Sylvain Charlebois 21:41
exit, though. I mean, I would say the summer and pizza exit. Yeah, yeah, exactly. And I think I think the Void is being filled by other products. The challenge though, I and as you know, Michael, I've always been concerned about competitiveness and manufacturing in Canada, I actually do think that we need to make sure that we take care of CPG companies, when you talk to CPG companies there, it's tight, it's tight. It's hard for them to get go to head office and justify more investments in Canada because of some of the tightness. And I'm not sure you share that perspective. But
Michael LeBlanc 22:19
crocodile crocodile tears here $15 million.
Sylvain Charlebois 22:22
You can't get a Kleenex anymore. You can't get a Kleenex. I'm looking
Michael LeBlanc 22:26
at one right now. It might not be the same brand anyway. All right, speaking of warm places, frosty relations in a warm land, asking for a friend how important is India to the ag sector in Canada? Because
Sylvain Charlebois 22:39
yeah, so China was off the list. Now India's off the list. That's almost 3 billion people on Earth, we sell for about $4 billion worth of stuff to India a year. A lot of it is actually agri food, including including fertilizers, lentils, pulses in general. So yeah, it's a big deal. And then frankly, the hurt will be felt in the prairies, mostly non ag stuff will be your uranium. And so yeah, the prairies will feel it. If something happens, they would probably feel it not necessarily central Canada or even here in the Atlantic. But again, when the main ones our case erupted in Vancouver a few years ago, within days, China actually a basic patient embargo on canola, canola, and again, the prairies were impacted. So it's always, whenever there's, there's some geopolitics going on the parries actually pay the price, unfortunately. So I'm very concerned about what's happening. Because India, we were actually looking so right now diplomatically, we halted negotiations for a trade agreement with China for obvious reasons. And everyone thought, well, India's next are the India Pacific region is certainly key for our growth. And now, and now all of a sudden, within one statement by the Prime Minister, everything is just err on the side, or one action
Michael LeBlanc 24:12
by the Indian government in murdering someone in Canada. So, you know, I don't know all the details. But allegedly, allegedly, but I don't think I listen, I you know, listen, I'm not sure the prime minister of our country, whether you like him or not, would do something like that, if he, you know, was pretty confident that there is an issue because it's anyways complicated. It's well beyond the scope of this point.
Sylvain Charlebois 24:32
I know it is. It is. I can't comment on the diplomatic part of this, because it's not my area of expertise. But I'm certainly concerned about how this can really hurt our agri food sector for sure over the long term and we saw what happened with China a few years ago.
Michael LeBlanc 24:50
Atlanta does affect the Atlantic too, right the lobster Atlantic lobster as
Sylvain Charlebois 24:54
well. So and and a lot of people right now are concerned that this could actually happen again. And but with NDF so unfortunately whatever for whatever reason they'd happen. Yeah. Again, I can't comment on what happened. But in terms of ag of agri food and our sector, that's it's just not good news. Well,
Michael LeBlanc 25:12
we'll keep a close eye on it's developing stories. Speaking of developing stories, let's let's I wanted to get an update from you on the war in Ukraine and as Alinsky is in Washington soon to be in Ottawa. What do you know about grain movements?
Sylvain Charlebois 25:26
I mean, the summer was super surprising. I was absolutely flabbergasted when the Black Sea deal ended, no one panicked. No one panics. So I thought, Oh, my God, black deal is dead. Poutine is walking away. We're gonna see corn go up again. And we're gonna see we go up again. It went down. You know what that means, right? No, it means that it means commodities are finding a way to the market. By train by by a truck. They figured out a way. And of course, there's China who needs grain, so they're not gonna, they're not they don't want to suffer as a result of this invasion. They'll make they'll make darn sure to have access to, to to the commodities they need in order to feed their people. So I think the market really just figured it out. That Putin was just weaponizing the deal not food, it was weaponizing the deal. And as soon as the deal was over, people just went on and, and nobody really talked about the deal. Another incident rice in India, right, right again, I thought oh, my god. Rice, rice, rice prices are gonna go up.
Michael LeBlanc 26:46
Yeah. I thought it was going to be the toilet paper. And remember the toilet paper at the beginning of COVID. I thought, you know, I better go get better go stock up on some beautiful basmati rice. Yeah.
Sylvain Charlebois 26:57
And of course, there weren't there weren't there were reports of stockpiling here. And there were there's a big Indian community in different parts of the country, understandably so. But nobody panic. Again, the price of rice prices remain pretty stable along the way. So I'm wondering whether or not investors markets are becoming much more
Michael LeBlanc 27:23
resilient, you're resilient. Resilient, right. It's like, okay, that's a big shock, but we will get through it is that yeah, I
Sylvain Charlebois 27:32
mean, look at wheat is 630 a bushel or something? And so it's really things are really calm. And and of course of Brazil is Brazil is really taking advantage of a whole kind of panic situation right now. And there's lots of uncertainty with the Americans. There's a drought going on there. With Europe with Ukraine. Brazil is going through to harvest it's selling a lot to China. It's thinking about not using the US reserve either US Dollar as a as a currency. Having
Michael LeBlanc 28:09
talked about that you talked about that last season. Yeah, that
Sylvain Charlebois 28:11
you're starting to feel that the ag world is starting to move away from US dollar a little bit. And and I think, really, I mean, we're in the middle of the second Cold War, and it's against, it's it's us against China. And nobody will know. Nobody knows who's gonna win. And nobody knows how long it's gonna last. But I can tell you that Ukrainian war is not done. It's gonna last a long time. repercussions
Michael LeBlanc 28:37
I was reading an article about even if you know, even if God willing it ends. And the Russians leave they've so fields full of minds. So you know, it'll take years, a decade I don't know if react won't crash, maybe Ukrainians, ag
Sylvain Charlebois 28:53
ag sector, agriculture is basically exporting less than half of what it was exporting before the invasion. So that's why Ukraine is becoming less significant. And so right now you got other players like Brazil picking up the pace, which is really interesting. So the market market knows that. And so it's looking at other places to get the food it needs, which is really interesting. So I'm, that's why I'm less concerned about inflation. Now. I mean, I actually think that things are much more sobered and just last year, we were exiting COVID People got nervous. Ukrainian, Ukraine gets invaded. People got nervous again, not this year. Didn't happen. Interesting.
Michael LeBlanc 29:37
Let's shift gears. So let's talk about a couple of things left for us to talk about. Because we got a whole season ahead of us. So yeah, got a whole season ahead of us cover a whole bunch of stuff I wanted to touch on plastic in grocery stores. So you know bags are gone, but there's lots of plastic in grocery stores and you had some thoughts around an ad As I had I, around the this trade off between food safety, economics and plastics, environmental impact, you know, how do we balance these things in your minds, you know, balance food safety? And what are our objectives here? What what can be done from a sustainability perspective from a plastic perspective? And I gotta
Sylvain Charlebois 30:19
tell you, I mean, I saw the P2 notice actually came out in August, and they gave industry like two days to respond. I mean, in the middle of summer, like, seriously, that's reasonable. We so as a lab, we met E, Triple C twice during the consulting period, what's the what's the Triple C for the environment? Climate Change Canada,
Michael LeBlanc 30:43
okay. And that's what what does that tell me? So that
Sylvain Charlebois 30:47
they're responsible for for this file? Okay. And so government, federal government, department, its Environment Canada. Okay. So, basically, yeah, it's so they they're responsible for for P two. And during our discussions, the tone was not very open minded. I mean, it was very, let's just meet the guy, talk to them, and then move on. But I gotta say, I mean, this science, it doesn't really matter, though. You don't seem to really care about food security, how it would impact prices, over the long term, how produce the quality would be impacted the fact that our partners outside of Canada, I've no idea what's going on in Canada. Why would they actually comply to our rules when they can make actually money doing a selling produce elsewhere? There's no There's no real thinking about supply chain economics about trays or anything like that. Because of food safety, because of I mean, plastics are bad for the environment, but at the same time, they're good for food security. I mean, so we're addicted to plastics, because plastics are I have been I've I've served the sector so well and have served consumers. So well. So to replace plastics is not an easy thing.
Michael LeBlanc 32:18
Yeah. Interesting. Well, we will keep an eye on it. I want to
Sylvain Charlebois 32:22
try that. But I do think they'll bold those the the P two. project forward, it is voluntary. It is voluntary. Okay. So but the pressure, they want to put pressure on grocers. That's like, yeah, it's a voluntary approach, putting pressure on grocers, so they can actually ask manufacturers and traders to comply to new rules. That's the strategy at E triple C. And I don't know if it's the right strategy or not, to be honest.
Michael LeBlanc 32:56
Let's talk about Olymel. Did I pronounce that right? Because
Sylvain Charlebois 33:01
Oh, Olymel
Michael LeBlanc 33:05
right. Let's talk about that Quebec pork producing company that we interviewed the president of Yannick now they they they shut down a couple of plants laid off 400 people or at least transfer them around. First of all, what do you what do you make, it's just continued of what we've been seeing from Yannick where he's kind of consolidating and getting the business in order any any broader thoughts around it? Well,
Sylvain Charlebois 33:26
one values are shown close in April. And, and 1000 people will be laid off, I merely said it's not over. That's gonna be another one. So over another
Michael LeBlanc 33:39
hook to drop, so to speak. Yeah.
Sylvain Charlebois 33:42
And so. So I so one Paynesville was announced a couple of weeks ago, I was not surprised at all. And, and frankly, I don't think they had much of a choice. So right now, since we left for the summer, the governor Quebec is buying out hog farmers. So if you're a hog farmer, and you want out you can actually have to go buy your way to buy to buy you out. So that's, that's one thing that they're doing right now. But Aldi mail has to recalibrate as well, for two reasons. One, you'll have less supply and two, China doesn't want your product anymore. So you got to and that's a big part of the markets big Mart. And so that's why I think we're just recalibrating all in the mail is doing what it's doing. It's it needs to do in order to survive. And the other thing of course, is this insurance policy called Assa in Quebec and this is something we haven't talked about, but this is this has maintained all the mail artificially alive. It allowed them to mail to expand a log off farmers to survive. It's a program financed by taxpayers, the federal government and the provincial government. If if our prices went go We would go underwater, farmers are compensated. So there's no incentive to leave if you are losing money. And so, so there was no mechanism in place to, to basically keep hog farms out or in and to, if you're an organic farmer like Vinson, for example, which we read on the podcasts. Well, he doesn't. He, he is a he's not part of this system. And he and his product is not recognized by the regime, which I think is ridiculous, because he's got a great product. And he should be recognized by the regime over time. So right now, Quebec is going through this. This, this, this kind of review of how they should be supporting the hog industry, which is an important sector for for the province.
Michael LeBlanc 35:54
So interesting. All right. Well, we'll keep an eye on that. And I'm sure we have guests who will talk about that. I want to touch on something that was brought, by the way
Sylvain Charlebois 36:00
away, Michael, if you like bacon, yeah. If you like bacon, if you like pork? Yes. Which I do lots of deals for you. Good. Lots of deals for you. Good? Well, I
Michael LeBlanc 36:11
do I do like, as listeners might know, duBreton because, you know, I like the like the animals to have a good life and one bad day. I am fussy about the pork I buy from that person that
Sylvain Charlebois 36:26
day happens to be the last one. It does, it does.
Michael LeBlanc 36:30
So there's an op ed that was published by the FHCP. And it talked about just you know, as explored a bunch of issues. And I think some of it was the trigger Kleenex, but there's broader issues about the industry. And it said, Hey, listen, we got 40,000 open spots and manufacturing this country. And one of the tactics was we need an increase in foreign temporary workers. I'm not a big fan of that. I don't think we should be importing cheap talent versus what you've talked about, which is I think it suppresses investment in technology, because it becomes a short term fix. We're flying in talent. And I hate to see the industry kind of reflexively say well just get more foreign temporary workers, because I don't want to spend any money. What are your What are your thoughts on that? You know, invest in technology in Port labor?
Sylvain Charlebois 37:20
I agree with you. Yeah, I wasn't really overly comfortable with that recommendation. I do think we need to in 2023, we did think differently about human capital, we need to think differently about robotics and automation. And frankly, I think companies like Aldi, Mal, are making that that shift right now. They're keeping a couple of plants because they want to modernize those plants. And that was what Maple Leaf did a few years ago. To me, that recommendation just brings back the sector, I think it would have been nicer to
Michael LeBlanc 37:59
it doesn't solve any problems. It doesn't it doesn't solve anything. I mean, it's just exactly it's Yeah. And I
Sylvain Charlebois 38:05
mean, next week, next week, I'm in Montreal, meeting some investors to talk about AI. I mean, that's the future
Michael LeBlanc 38:12
here, talking about it here, man. Yeah,
Sylvain Charlebois 38:15
AI and why? Why do we need to look at AEI. And it's all about efficiency, less waste robotics, more predictability, all the things that really has bothered us for many, many years. And, and, and foreign workers won't do that. Yeah, this is well,
Michael LeBlanc 38:33
let's shift to get it. I've seen this a couple of times. But shift gears again, pretty close to the last time because we've we've had a great discussion, restaurants, let's talk about restaurants. So restaurants, they are ringing the alarm bells marching on Ottawa, I saw the President usually you using harsh language in the context of political language,
Sylvain Charlebois 38:53
because a lot of people are using harsh language these days. So
Michael LeBlanc 38:57
so they as an association representing that industry had been asking for relief on on the on the COVID funding the loans and they got an extension but in according to them, it fell well short, we've seen I've seen other data coming out that spending in the restaurants has gone down, not up so it's not growing. So it sounds like a bit of double jeopardy here. Any any thoughts on what's going on in the in the restaurant industry? And,
Sylvain Charlebois 39:23
you know, it feels like everyone is? Well, I think everyone is expecting a tough fall. So, so this is again, the deal they made with Ottawa will only just delay the inevitable, to be honest. And so I think I mean, the sector was talking about a great reset or some people were talking we're talking about the great reset is it's back it's kind of happening. We're going through a meanie great reset, if you will, because a lot of restaurants are closed or closing they're leaving But at the same time, I mean, somebody's buying subway, for $9.6 billion.
Michael LeBlanc 40:07
Yeah. What do you think of that on? I was, I mean, I was, I don't know, where, you know, in a sector that businesses have been in decline for years. I don't know what solution they're gonna have to turn that business around. I think they're gonna anyway, somebody you know, you ever heard of the bigger fool theory of finance? I mean, basically, you're right. To be if you're selling there's got to be somebody more foolish than you. I so I
Sylvain Charlebois 40:31
was I was flabbergasted by the by the amount I actually had no idea subway was actually worth 9.6 billion US dollars. No idea. I
Michael LeBlanc 40:41
don't know. Or is it? I don't know. I guess we worked with I tell
Sylvain Charlebois 40:45
you what I mean, subway with 25,000 outlets is probably worse. $9.6 billion, but they have too many outlets.
Michael LeBlanc 40:53
It's gonna say yeah, assuming that 20 5000s is the right number. I mean, that right number could weigh
Sylvain Charlebois 40:58
more capacity more revenues, you know, because right now I mean the whole the the the obsession for many years was was about number of of outlets and and they basically sold franchises to people who just wanted to buy a job and it's hard to build a franchise system based on that
Michael LeBlanc 41:19
well and you start to have you know, your zone of competition kind of collapse right? So you got to you're building a subway inside of subway kind of thing and some stay exactly subway in the subway anyway, we wish them the best of luck another so many
Sylvain Charlebois 41:31
lawsuits so many. No, there's there's been so many problems with it with our image. And so hopefully things will work out for them because it is popular.
Michael LeBlanc 41:42
As you said, a lot of people it's their life. You know, they retire and this is their job. So there's a lot of livelihoods.
Sylvain Charlebois 41:47
It's just the smell when you enter a subway, I don't know what a mind
Michael LeBlanc 41:51
is the fresh bread smell. I mean, I don't mind I don't mind. Fresh
Sylvain Charlebois 41:55
cake. Fresh cake.
Michael LeBlanc 41:56
Well, you see Yeah, I know. That's maybe that's why I don't. Last but not least, let's end on a fun note. Did you notice the opening of a great new store? Second one on the world? The fantastic world of Portuguese sardine store. Did you see this opening up in Times Square?
Sylvain Charlebois 42:14
I did not. I wonder why you're so interested in Portuguese cuisine as
Michael LeBlanc 42:20
it happens. You know, I love Portuguese cuisine. Like I love my wife. By now. Have you heard of this store? So there's what there was one in Lisbon. In fact, the woman we had from the Portuguese association we interviewed oversell and I talked about sardines are the newest thing. So it's a store that has walls and walls and walls of bespoke canned sardines. And it's now a giant store in Times Square. Like right beside the Hershey store right beside the m&m store. The fantastic world of Portuguese sardines. So anybody heading to New York, go to Times Square and visit that store. I'm gonna go I'm going to be
Sylvain Charlebois 42:58
close to the m&m store. Square. I was actually there last year. It
Michael LeBlanc 43:03
just opened in a busy place a busy place. It just opened a couple of weeks ago. So I'm going apparently now I'll validate this in person. Apparently you can get a sardine can from the year you were born.
Sylvain Charlebois 43:20
sounds fishy?
Michael LeBlanc 43:22
Okay, boom, boom. Let's Alright, well,
Sylvain Charlebois 43:26
I'm intrigued. What's so interesting about sardines. You gotta tell me here
Michael LeBlanc 43:31
they're having a moment like canned bespoke canned teams are having a moment. I'm serving them up as an appy on on on little cream cheese, and people have gone from the plain old, you know, sardines in a tin so these bespoke sauces. And and you and I have had someone from from Scout, which is great Atlanta, right. Yeah, company. Yeah. And so they're having a moment. Sardines, canned sardines are having a moment. This is kind of crystallizing that. Sardines. You know, the Spanish guys I was in I was in Spain, and I bought when I got back here. It's like, they're, they're bespoke sardines. And and they're delicious. So, you know, there you go.
Sylvain Charlebois 44:06
It's true. Wow. I'm intrigued. I'm intrigued. Yeah, I and honestly, I had no idea that sardines are a big thing. And Portugal.
Michael LeBlanc 44:17
Yeah, very big, very big. All right. Well, listen, this big, great episode. Our first one. It's great to be back on the mic with you. I've missed you. We've talked. I
Sylvain Charlebois 44:24
know. It's great. So I think next year, we shouldn't actually stop for three months. We should actually do do a short early September, I
Michael LeBlanc 44:31
think. Yeah. Well, you know, listen that, who knew there'd be so much activity, but I don't think it's going to slow down. So I think that's a great point. But anyway, we'll be together again at the coffee sociation in Toronto. We'll be doing some interviews and we'll be together in person and then, you know, we're back each and every week. So listen, if you're if you're listening to us on the podcast channel, thank you follow or subscribe, share with your friends in the restaurant, food service grocery industry. So they can they can listen into and and from now on. Thank you for listening and Savanna Safe travels. I'm traveling myself tomorrow and be around but safe travels to you and thanks for joining me on the week again.
Sylvain Charlebois 45:13
All right, you take care, Michael