to Commercialization

2013 Annual Report

To provide expertise and services enabling ouragri-food industry to develop new products andmarket opportunities through innovativeprocessing technologies and training.

The leader in advancingSaskatchewan’s agri-food industry.

I recently attended a meeting where Minister Lyle Stewart, of the SaskatchewanMinistry of Agriculture, was a guest speaker. He eloquently highlighted the significantgrowth in the provincial economy, the growth in the provincial population base andprovided a convincing forecast for a buoyant, vibrant future for Saskatchewan.Agriculture, value-added ventures and food production will play a significant andimportant role in this positive outlook. I was delighted to hear Minister Stewart singleout the work of the Saskatchewan Food Industry Development Centre as a key playerin this future. He commended the high quality of services provided by staff andexpressed enthusiasm for the growth that the Food Centre is planning. I was proud tobe associated with such a positive contributor; The Saskatchewan Food Centre.

This will be a year of considerable change at the Food Centre. The management, staffand Board of Directors are confidently taking the steps needed to grow the Food Centrethrough the construction of a new facility at a new site location. The Food Centre willexpand to include greater space for extrusion, product development, processingtechnologies and will incorporate the potential for incubation space. The high qualitydevelopment, training and market expertise that has always been a part of the FoodCentre, will continue to grow and flourish in the new space.

We are grateful for the substantial support of the Governments of Saskatchewan andCanada. Through their financial contributions, the Food Centre will grow to meet theneeds of the food and agri-food development industry. We are also very pleased tohave retained highly qualified, committed and enthusiastic management and staff atthe Food Centre.

Our goal is to support the advancement of the food industry in the province ofSaskatchewan. This includes entrepreneurs who are in the start-up phase of theirbusiness, processors who are expanding into new markets and food companies whoalready have a strong business and want to diversify with new production ventures.The Saskatchewan Food Centre, through its scientific expertise, market knowledgeand creative production solutions, provides a service our food industry needs.

The Board of Directors are proud to highlight the accomplishments of the Centre inthis Annual Report.

Muriel Garven

chairman’s message

Food Centre 2013 Annual Report 2

The Food Centre had a successful 2013 year; taking on a leadership role in conceptdevelopment for food and ingredients in the value-added agri-food sector. Throughour continuing commitment in technology development, innovation and incubation,the Food Centre assisted clients to launch 18 new food products, solved hundreds oftechnical problems and provided training and information to the food processingindustry.

Working with our funding partners and the agri food industry, we have leveraged ourresources to successfully provide commercialization and incubation activities in a costeffective way. The Centre supports interim processing to industry entrepreneurs forthe development and test marketing of new food products.

Year to year, the demand for the Centre’s services continues to grow. Our staff areconsidered some of the most qualified people in the industry with a true passion forfood and entrepreneurship. They are relied on to provide expertise to the food industrythrough consultations, product development activities, sensory analysis, training andindustry support. In 2013, an estimated 5,038 industry consultations, meetings, andtelephone inquiries were fielded by the Food Centre staff. This is a strong indicationof the trust and knowledge we share with the agri-food industry..

The Food Centre’s federally inspected pilot plant is continuously changing to meet thefood industry’s needs, generates enthusiasm to capture opportunities and is key toour success. In 2013, the Centre added extra capabilities for fruit and vegetableprocessing, expanded our reach in drying technologies and increased the variety ofpackaging options for clients. We continuously strive to adopt and adapt newtechnologies that may open the door for new innovations for processors and our agri-food sector.

In 2013, the Food Centre had the opportunity to work closely with Agriculture Councilof Saskatchewan (CAAP), National Research Council (IRAP Program), and Ministry ofAgriculture (SAVI) to aid agri-businesses in development, technical troubleshootingand training workshops. These partnerships demonstrate another example of poolingresources to address industry needs quickly and effectively.

The Food Centre continues to poll the industry to meet their emerging needs. In doingso, we have begun to implement a strategic process to build on our expertise, expandour special capabilities and focus on our strengths to expand Saskatchewan’s agri-food industry. Our goal is to ensure the industry has the capacity, supported with thenecessary resources, to access national and international markets through innovationand technology.

The Food Centre’s success is due to the experience, dedication and commitment ofour staff, the cooperative partnership with our funding agencies and the excitementgenerated by our clientele. The staff embraces the growth opportunities for ourindustry and recognizes our role in realizing its potential.

We look forward to the new innovative opportunities and relationships that will beformed in 2014.

Dan Prefontaine

president’s message

Review of 2013

3 Food Centre 2013 Annual Report

many accomplishmentsThe Food Centre is staying true to its Mission. “To provide expertise and services

enabling our agri-food industry to develop new products and market opportu-nities through innovative processing technologies and training.” We have

proven to the industry, funders and supporters that the Food Centrecan and will lead in advancing Saskatchewan’s agri-food industry.

With over 650 products developed and processed since inception,our track record is pretty good. Almost 50% have made it to the

hands of consumers, putting Saskatchewan food processors on theglobal marketplace. The Food Centre provides “concept to market” services to

approximately 40-50 clients on an annual basis.

Year 2013, the Food Centre saw increases across the board with number of clients,inquiries and consultations to number of innovative products being developed.Sixty-one clients engaged in service contracts with the Food Centre, utilizing ourdevelopment, processing and/or extrusion expertise. Clients range from momand pop operations to large multi-national companies with a majority fromSaskatchewan and several from across Canada and around the globe.

Traditional M

eat

Specialty Meat

Bakery

Fruit & Vegetables

Functional Foods

Snacks

Condiments

Prepared SpecialtyDairy

Other

750

1000

1250

500

250

0

823

298 328411

206

882

242

426

221

1201

Product Development

Extrusion

Interim Processing Assis

t.

Business Consulting

Packaging/Labelling

Regulatory

Mkt’g & Distrib

ution

Technical & Form

Seminars & Training

Informatio

n Request

750

1000

1250

500

250

0

1187

445 468

94199

302

37139

11271040

Consultations and Activities by Service

Consultations and Activities by Sector

highlights

january Food Centre hosted business info sessionto agri-businesses in Nipawin area

february Awake Cereals, extrusion client, launchednew packaging for their product

march Food Centre hosted “Functional Foods”Seminar; Trails End Bison’s Buffalo Stix enjoyed inspace by Canadian Astronaut Chris Hadfield

april 3 Food Centre clients were chosen to besuppliers to the 2013 JUNOs

may 3 Day HACCP Training; Chatty’s Indian Spicessecured listing with Federated Co-op

june Prairie Sun Orchard launched Sour CherrySpread

july Attended IFT show as part of the “Prairie Cana-dian Pavilion”

august Awarded contract to take over the meatinspection services in the Province of Saskatchewan

september Hosted the Tri-National Accord Tours,organized by Saskatchewan Ministry of Agriculture

october Partnered with Jerry’s Burgers and Gelatoin Rayner Dairy Research and Teaching FacilityGrand Opening event

november 3 Day HACCP Training

december Two clients launched their products:Railside Garlic and Grandpa’s Garden

Figure B

Figure A

Review of 2013

proud of our clients’ successWhen entrepreneurs become clients of the Food Centre, theybecome an important part of our family and we are thrilled to putthem in our “brag” book. In 2013, several clients launched some newand exciting products in the marketplace (profiled in the Develop-ment section) and experienced other market successes.

Saskatchewan made foods for the rich and famous! Trails End Bison,Gravelbourg Mustard, and Eagle Hill Foods were selected to be sup-pliers to the 2013 JUNO Host Committee.

Trails End Bison was one of 12 uniquely Canadian foods selected tohead into space through the Canadian Space Agency’s Snacks forSpace competition. Trails End Bison reported increased interest bysuppliers for their products as a result of this exposure.

Chatty’s Indian Spices secured listing with Federated Co-operativesLimited.

Several clients were profiled in various print media acrossSaskatchewan and as far away as Bangkok!

meat inspection for the provinceThe Food Centre was awarded the contract by Saskatchewan Ministryof Agriculture to provide meat inspection services to Saskatchewan’s12 provincially inspected meat processing facilities starting January1, 2014. The inspection service was provided by the Canadian FoodInspection Agency (CFIA). Vince Neiser was hired as the ProgramManager for the new “Food Inspection Services Ltd”. The Food Centrewill report to the Ministry of Agriculture on a regular basis. ErinHiebert, Manager of Food Safety and Skills Development at the FoodCentre overseas the operations of this new service.

communication is keyProviding important information to the industry regarding trends,training, new developments, etc. have been an important activity forthe Food Centre since its inception. In 2009, the Food Centre wentpaperless in our quarterly industry newsletter, rebranding it “eNewsBulletin”. Upon further evaluation on the needs of the industry, theFood Centre changed its delivery frequency from quarterly to almosttwice a month in 2013. News disseminated to the food industry wasmore timely and relevant.

The Food Centre was pleased to host tours and visits from provincialindustry organizations, buyers and delegations from Canada, USA,Europe, India, South America and Asia in 2013. Staff alsoattended/presented at local and international tradeshows and seminarsto promote Food Centre’s services and identify opportunities forSaskatchewan’s food industry.

With the global market for functional foods and drinks growing at aphenomenal rate, the Food Centre organized a Functional Foods andProcessing Foods for Health Seminar to shed light on the opportunitiesfor utilization of Saskatchewan’s diverse agriculture in creatinginnovative products for these markets.

Food Centre 2013 Annual Report 4

valuable adviceThe Food Centre staff fields many inquiries through telephoneconsultations, email inquiries or meetings on a daily basis. The timespent on per inquiry ranges from one minute to possibly severalhours depending on the request. Most inquiries are related toprocessing, packaging and labeling, training, product development,extrusion and general information regarding business start up. In2013, the Food Centre fielded 5038 inquiries and consultations fromindustry.

The meat sector, most regulated industry, continues to rank high inneeding assistance from the Food Centre. In 2013, previously in the“Others” category, “Dairy” was moved to its own category as the FoodCentre saw a rapid increase in inquiries from this sector. The “Snack”sector also saw increases since the Food Centre’s acquisition of theFood Centre’s granola bar forming machine and flow wrapper. Thetypes of food products classified under “Others” include fish, animalfeed, grains, oilseeds, etc. (Figure A)

Activities and consultations in product development continue to bethe most accessed service by the industry. Consultation andactivities range from testing of food products, nutritional assistance,literary research and all other information regarding new fooddevelopment. (Figure B)

innovative ideasDemand for healthy food choices has been fuelled by the rise in obesityand other global health related issues. The Product Development Teamworks with clients to target current food trends and identify marketopportunities. Clean label, gluten free, natural and identified healthbenefits were some of the attributes in the foods developed in 2013.

The Food Centre was proud to have worked with approximately 39clients on food research and development. Eighty-nine prototypeswere in development including baking mixes with oats, gluten-freebread, muffin and cookies, fruit honey, boreal bar, sour cherry spreadand garlic jellies.

In addition to prototype development for the marketplace, the FoodCentre has also been working with multi-national companies andseveral research & development organizations with projects involvingover 50 product items. Some involved ingredient applications,analytical and prototype development to promote Saskatchewancommodities.

Staff completed a Beef Quality Research Project for the CanadianSimmental Association that involved beef samples collected from over1000 cattle. The project was “to develop genomic and genetic predic-tion tools designed to improve fertility, feed efficiency, carcass andmeat quality of Simmental cattle”.

Agri-businesses are aided in startup due to funding programs run bygovernment bodies such as the Ministry of Agriculture’s SaskatchewanAgri-Value Initiative (SAVI) Program, Canadian Agriculture AdaptationProgram (CAAP) and Industrial Research Assistance Program (IRAP).

All these types of programs are in place to help with business start upand improve the competitiveness of companies within national andglobal markets.

5 Food Centre 2013 Annual Report

Development

products launchedThe Food Centre’s list of client’s launching new products in themarketplace just keeps growing! In 2013, 18 prototypes were intro-duced into the marketplace with several gearing up for scale upproduction in 2014.

Avena Foods -- Baking mixesBoreal Berry Bar Inc. -- Gluten-free Boreal BarCanadian Prairie Organic -- Organic, gluten-free, flax cookieGrandpa’s Garden -- Various flavours of fruit honeyHerschel Hills Artisan Cheese -- New cheese flavoursPrairie Sun Orchard -- Sour cherry spreadRailside Garlic -- Garlic jellies and crushed garlicKickers Foods -- Flavoured dry pork ribs completed development andready for production

Congratulations to these clients for their success!

Development

from granola bars to baconWhen groups tour through the Food Centre, they are always amazedon the different types of food products that can be manufactured inthe pilot plant. The Food Centre is tasked with assisting all foodprocessing industries out of one facility, which is regulated by CFIAand can be a challenge.

The pilot plant is the only facility of its kind in Saskatchewan. Itsfederally inspected status, along with HACCP accreditation has provencrucial to new entrepreneurs and existing businesses. In addition, thefacility is Organic and FDA approved and is uniquely set up to allowprocessors to manufacture a small batch for test marketing or a largerrun for commercial distribution.

In 2013, approximately 26 clients utilized the federal facility for furtherprocessing, either for incubation, market expansion or test marketing.

Equipment purchased from the funding received through WesternEconomic Diversification in 2011 has been well received by clients.They have been used extensively in dairy processing, health food/bars,natural ingredients processing and applications.

specialized technologiesThe Food Centre is continually exploring technologies that mayprovide increased competitiveness for Saskatchewan’s dynamic groupof agri-businesses. Taking on a leadership role, the Food Centrehouses several specialized technologies that would benefit many sectorsin the food industry.

- numerous meat processing equipment- granola bar former and wrapper- belt press for juicing- pasta machine and dryer- blister packaging technology - fluid bed dryer- pasteurizer and chiller- rheon machine- cup filler and sealer- tea bag machine

The array of technologies enhances the capacity of the Food Centreto support agri-business innovation in Saskatchewan and helps toalleviate business start up costs.

Food Centre 2013 Annual Report 6

Processing

products processed in 2013bison jerky, sour cherry products, haskap, sausages (bison, beef, ostrich, pork), seasoned pork, snack/health bars,artisan cheese, ethnic flavours, condiments, chutneys, fruit honey, gourmet mustards, bacon , samosas, etc.

Processing

new food conceptsThe Extrusion Team is a solution-oriented group with backgrounds infood science, nutrition, microbiology and culinary art. They have vastexperience in extruding a variety of food products in transformingclient concepts to market samples.

The Extrusion Facility consists of a co-rotating, twin screw extruder,extrusion auxiliary equipment and modular post-extrusion processingequipment. Several prototypes have been developed including directexpanded snacks, breakfast cereals, meat analogues, co-extrudedsnacks, utilizing a variety of ingredients and formulations.

Our post-extrusion processing equipment is modular and can bemoved in or out as the processing conditions require. The auxiliaryequipment include: tunnel dryer, continuous fryer, tumbler for coat-ing, particle size reduction equipment, tray dryer and packagingequipment.

The Extrusion Team worked with 15 clients in 2013. List of projectsinclude: pet food, protein fibration, snacks, cereals, vegetarian cheese,pulse nut, and ingredient applications.

One ADF grant approved in 2011 was completed in February 2013which involved High Moisture Extrusion Cooking and imitationcheese.

One ADF grant was approved in 2013 for testing to see if extrudingunder HMEC conditions produced a 5 log reduction in surrogatemicrobes added to the dry mix.

We are attracting companies of all sizes, from fortune 500s to smallcompanies developing new food products and testing ingredients.

The Extrusion Division will increase its focus on cereal based productsfor food, ingredients and natural health products.

Extrusion

7 Food Centre 2013 Annual Report

Since the acquisition of the twin screw extruder in 2008, the FoodCentre has been successful in creating meatless products that mimicmeat texture with better mouth-feel than other meatless productsmade with textured soy protein already in the marketplace. Theprocess in creating these vegetable based proteins is called HighMoisture Extrusion Cooking (HMEC).

Over the years, lifestyle changes and growing demand for healthierfood alternatives has non vegetarian consumers incorporating

meatless products into their diets -- making the meatless alternativeindustry a booming one. The Food Centre’s alliance with Clextral Inc.to provide technical services on extrusion and post extrusiondevelopment in the areas of HMEC has brought in several multi-national companies.

Using HMEC technology to utilize Saskatchewan crops and pulses isone way to further develop secondary processing in Saskatchewan.

meatless alternatives booming

Extrusion

flexible online, onsiteThe need for food safety training in Saskatchewan is stronger thanever. Finding solutions to food safety issues for small to medium sizedprocessors is a challenging task. A lack of resources, trained personnel,rural locations and specialized markets are putting a strain on alreadylimited resources for processors.

Over the years, the Food Centre has honed a respected reputation forproviding food safety education, technology/information transfer,skills development and food industry support in Saskatchewan. TheFood Centre’s Food Safety & Development Division has put in placeflexible training options for Saskatchewan agri-businesses throughworkshops, onsite training and web based training.

In 2013, almost 200 individuals were educated and trained throughpresentations, onsite training and workshops. An estimated 450inquiries in areas of food safety, regulations and training were fieldedby the Food Safety Division.

Numerous companies were assisted with needs assessment, BRCdevelopment and implementation, HACCP (Hazard Analysis andCritical Control Points) and GMPs (Good Manufacturing Practices)training.

Finding training solutions to alleviate the geographical challenges forrural processors has been an important factor when developing newprograms. The launch of the Food Centre’s online Food Industry Train-ing Centre in 2007 has meant greater flexibility for rural processors totrain their staff any time. The web based training has been wellreceived not only within the province but also nationally.

The GMPs online training was launched in June 2007 and continuesto be a valuable resource for training production staff. GMPs is train-ing on the basic principles of operation a food processor should followto produce a consistent, quality food product and is the basis ofHACCP pre-requisite programs. It is free for Saskatchewan companiesand has garnered over 102 companies since its launch; seventy-fourwere from within Saskatchewan.

The HACCP online training has had 195 students enrolled since itslaunch in October 2008. An impressive 76% have already graduated.In 2013, there were 61 new students -- 17% increase from 2012; and56 graduates -- 55% increase from 2012. Many of the registrants arefrom Ontario, Saskatchewan and British Columbia (Figure C).

Feedback from students/business operators indicate that both onlinetraining courses are a valuable resource and has been beneficial totheir operations or industry employment.

The Food Safety and Skills Development Division was successful indeveloping and increasing knowledge in food safety over severalsectors such as fruit, vegetable, grain & pulse, dairy, natural healthproducts and meat. Training has allowed the industry to increasemarket access and create sustainability both locally and interna-tionally.

Food Centre 2013 Annual Report 8

Training

www.FoodIndustryTraining.ca

Saskatchewan

New Brunswick

Alberta

Ontario

British Columbia

Manitoba

Quebec

Northwest Territ

ories

Nova Scotia

Prince Edward Island

30

40

50

20

10

0

37

1

17

67

36

5

18

41 2

Other

7

60

70 HACCP Online Training

Training

<< Figure C. Number of students enrolled from each province since 2008

to help grow the industryThe Food Centre was founded on a partnership arrangement withGovernment of Saskatchewan, University of Saskatchewan and theSaskatchewan Food Processors Association. This partnership providesa variety of resources targeted at growing and diversifyingSaskatchewan’s food processing industry.

In addition to our formal partnerships, the Food Centre is continuallyforging new relationships with external organizations. Value-addedservices are delivered through coordinated efforts of numerous foodscientists and technical staff with expertise in development, processing,bio-processing, regulations, packaging, marketing and distribution,and many other specialized expertiseS. The ultimate goal is to expanddevelopment and commercialization capacity for Saskatchewan’s foodindustry and accelerate products to market.

9 Food Centre 2013 Annual Report

Partnerships

Initial strategic funding and support was provided by:

Partnerships

funding support completed in 2013The Food Centre’s expertise and capacity continues to expand andevolve, thanks to financial support from several agencies for specialprojects that were completed in 2013.

Saskatchewan GovernmentAgriculture Development FundNational Research Council – IRAPAdvancing Canadian Agriculture and Agri-Food Saskatchewan (administered by Agriculture Council of Saskatchewan)

Canadian Agriculture Adaptation Program (administered by Agriculture Council of Saskatchewan)

continuing/new funding for 2014National Research Council - IRAP funding to assist food processors toovercome technical challenges.

Agriculture Development Fund for project titled “Starch fromSaskatchewan Crops Modified Using Reactive Extrusion”.

The impact of these projects will help Saskatchewan companies tofocus resources and energy on building its business and entering newmarkets with limited risk.

The Food Centre would like to acknowledge the funding agencies,past and present for their continued support of the Food Centre andour initiatives in advancing agriculture.

Dan Prefontaine President

Shannon Hood-Niefer Vice President, Innovation and Technology

Carmen LyCommunications Director

Anula PereraFood Scientist, Healthy Foods Specialist

Valerie MenziesAdministrative Assistant

Sherree WoodAccountant

Sara LuiManager, Product Development and Technical Services

Nai-Yee JaySenior Specialist, Product Development

Catherine QuerimitSenior Assistant, Product Development

Kevin ZongAssistant, Product Development

Matthew MarcotteSpecialist, Extrusion Technology

Jordan MoellenbeckSpecialist, Extrusion Technology

Erin HiebertManager, Food Safety and Skills Development

Rhonda MartensSpecialist, Programs and Skills Development

Vince NeiserProgram Manager, FC Food Inpsection Services Ltd.

Brev CheskyOperations Manager, Food Processing

Scott IrvineSupervisor, Pilot Plant

Nolan LangerHACCP Coordinator, Pilot Plant

Barry MotilagMaintenance Supervisor

Sue WaldnerTechnician, Pilot Plant

Phil SarencoSanitation, Pilot Plant

Muriel Garven -- Garven & Associates Management ConsultantsCHAIRMAN

Phyllis Shand -- University of Saskatchewan

Brian Sim -- Saskatchewan Ministry of Agriculture

Paul Rogers -- Saskatchewan Food Processors Association

Carl Flis -- LT Global Services

Rick Green -- POS Bio-Sciences

Jennifer Evancio -- Saskatchewan Trade & Export Partnership

Jason Skotheim -- Horizon Pet Nutrition

Harry Meyers -- Saskatchewan Seed Potato Growers’ Association

members

Rick Burton -- Assistant Deputy Minister, Saskatchewan Ministry ofAgriculture

Greg Fowler -- Vice-President, Finance and ResourcesUniversity of Saskatchewan

Paul Rogers -- Saskatchewan Food Processors Association

board advisors

Michele Kuxhaus -- Agriculture and Agri-Food Canada

Ryan Boughen -- SaskMilk

* Staff and Board of Directors as of December 31, 2013

board of directors

Food Centre 2013 Annual Report 10

food centre staff

FinancialsAuditor’s Report

11 Food Centre 2013 Annual Report

Audited 2013 financial statements are available upon request by contacting the Food Centre by tel: (306) 933-7555 or email: info@foodcentre.sk.ca

624 Duchess StreetSaskatoon, SK S7K 0R1 CANADATel: (306) 933-2970Fax: (306) 933-2981

Financials

to Commercialization

Saskatchewan Food Industry Development Centre Inc.117 - 54 Innovation Boulevard

Saskatoon, Saskatchewan S7N 2V3

Tel: 306-933-7555 Email: info@foodcentre.sk.caCorporate: www.foodcentre.sk.ca Training: www.foodindustrytraining.ca