Despite the province’s declared intention to continue to "invest in Manitoba’s growing food and agri-product processing sector as this sector is one of the key drivers of growth in Manitoba" — as stated in Wednesday’s budget documents — it has decided to decrease its investment in the Food Development Centre in Portage la Prairie.
The province has decided to strip the Food Development Centre of its Special Operating Agency (SOA) status — and its $2.02 million annual operating grant — and place it back into the general operations of the Agriculture and Resource Development department.
Instead of providing research and development services for dozens of Manitoba food companies — as well as international operations including the meat alternatives brand, Impossible Foods — the Food Development Centre (FDC) will now limit its focus on protein industries development and large-growth oriented clients with existing production facilities.
That means the small-food product development companies like Gorp, Solberry and Yomm Beverages who have used the FDC to test and commercialize their products, will now have to find other venues to do so.
Six staff of the previous 30 person workforce at the FDC have been laid off, including some senior technical people. Blaine Pedersen, Minister of Agriculture and Resource Development, said administrative staff that were required because of its SOA status will now work for the department and the FDC workforce will be cut back to about 12 people.
In the 2018-19 fiscal year the FDC had expenses of $4.1 million and in addition to its $2 million grant from the province as well as $1.3 million in other grants, it also brought in about $1.4 million in fees for service.
Pedersen said the department has budgeted $1.8 for operations for the FDC this year.
Pedersen said the thinking is that with the development of the Prairie Research Kitchen at Red River College and the existence of 60 permitted commercial community kitchens those small food startups that had previously used the FDC’s R&D facilities will have other places to go.
"We are not in competition with everyone else," Pedersen said. "Let them do that. When they get to a size that they become commercially viable if they want to do further research, especially if it is protein-based, then come to FDC."
One former industry official aware of the FDC’s history said the Portage facility has long been pressured to be self-sustaining and reduce its reliance on the annual grant from the province.
The official, who asked that we not use the person’s name, said, "Alberta and Saskatchewan both made big investments in their facilities. Manitoba never did."
Just last month Alberta announced a $24 million investment in the Agrivalue Processing Business Incubator in Leduc that serves the same function that the FDC did.
Pina Romolo, the president of the board of Food & Beverage Manitoba and the president of Piccola Cucina Inc., a Winnipeg company that makes almond flour, pie crusts and macaroons, said the status change at FDC is disappointing for the industry.
"It is unfortunate," she said. "So many products went through there. I used it for my own business. This industry can do great things for the province in terms of creating jobs and opportunities."
Romolo said she hoped there was a good plan in place for the facility, and while Pedersen said there was, officials at Red River College’s food development centre as well as officials from both the two large new pea protein production operations in the province — Roquette and Merit Functional Foods — said they were not aware of the new business plan that Pedersen said the FDC is working with.
Peter Zahradka, a principal investigator in molecular physiology with the Canadian Centre for Agri-food Research in Health and Medicine, said he is involved in protein extraction research.
He said, "We’ve been working on trying to get involved in the protein initiative. It is one of these things where we are trying to find a place that will and can make new protein isolates from new source so we can test it out."
He said they had to go out of province to get some of that done.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.