BerriesIndustry Update

BC’s BEVERAGE INDUSTRY: Needs a Little More Juice

By Paul Pryce

Beverages are among British Columbia’s largest and fastest growing manufactured food products, according to Statistics Canada. Much of this strength can be attributed to the more than 600,000 litres of wine produced each year by the province’s 929 vineyards. But there are other recognized brands that produce non-alcoholic beverages using BC’s high quality fruit, such as Kelowna’s Sun-Rype, as well as emerging players like Triple Jim’s Juice of Chilliwack. With Sun-Rype generating annual revenues in excess of $150 million, juice could be a major economic driver.

Unfortunately, the growth of the BC beverage industry is somewhat hampered by the lack of an effective industry cluster. Initially made popular in the 1990s by economists like Paul Krugman and Michael Porter, clusters are conceptualized as geographic concentrations of interconnected businesses, suppliers, and research institutions that work in a similar field. This concentration of resources in one area allows for a more efficient exchange of ideas and the pooling of resources necessary to develop new, exciting products and technologies. Clustering has proven effective for other industries in BC, such as biopharmaceuticals, as Vancouver (especially the University of British Columbia’s campus) has emerged as a research hub. Several successful start-ups, like Boreal Genomics and Aquinox Pharmaceuticals, were established, and continue to operate, there.

One way to encourage the formation of a cluster could be to establish a business incubator specifically focusing on the development and commercialization of non-alcoholic beverages in the province. Such an incubator could be a fee-for-service enterprise, a not-for-profit organization established by growers looking to create more demand for local fruit, or a government-led initiative. Its purpose would be to help entrepreneurs with innovative ideas for beverage products conduct the research necessary, test their product, obtain certification, and begin to bring the results to market.

Essentially, an incubator levels the playing field for the small business owner hoping to carve out a share of the market from well-established, global industry giants. There have been efforts to establish a “food business incubator” in the Columbia Valley, but no specific focus has been identified yet for this institution. Elsewhere in Canada, successful incubators have developed a specialization as their reason-to-be; take, for example, POS Bio-Sciences in Saskatoon, Saskatchewan, which has made itself the leader in oil fractionation, ranging from the development of fish oil supplements to canola oil.

The establishment of an incubator specializing in the development and commercialization of innovative fruit juice products could be the catalyst necessary to form a cluster somewhere in BC. Start-ups that graduate from the incubator would be inclined to establish their own commercial operations nearby, drawing upon the professional network and labour force that helped launch the company in the first place.

Much as the University of British Columbia has become the focal point of a biopharmaceutical cluster, and the University of Saskatchewan has become the home to a growing number of institutions working on functional foods and nutraceuticals, a community in BC could become known across Canada as the place to be for those thirsty to succeed in the beverage industry.

It may be difficult to do without any investment from the federal or provincial governments, however. The Canadian Agricultural Partnership (CAP), a five-year, $3 billion investment by federal, provincial, and territorial governments in the agriculture and agri-food sectors includes no specific funding opportunities for the BC beverage industry. As CAP will be in place from 2018 until 2023, it may take some years yet before a BC beverage cluster can be achieved.

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