So Close And Yet So Far
Quebec may be nearby, but exporting food to Canada requires skill and patience.
Written onNovember 15 , 2016
Ask people in agriculture about the challenges of selling Vermont food in Québec, and folks tend to have the same first reaction.
“There’s paperwork—which nobody loves,” observes Dave Ellis of Butternut Mountain Farm.
“There’s always red tape and bureaucracy [in international sales],” admits John Belmont of Food Export Northeast.
“There’s legal back and forth, there’s forms…that’s why we have a compliance officer, and he’s a lawyer,” says Hallie Picard of Caledonia Spirits.
Some people refer to the height of the stacks of forms, some to the number of times forms need to be re-filled out, some to waiting for clarification on how to fill out said forms. The road from Vermont to Québec may be short, but it’s paved with paperwork.
Of course, paperwork isn’t the end of the world.
John Belmont, whose organization assists Northeastern food producers in exporting their products around the world, notes that Canadian red tape is less onerous than most. Dave Ellis describes the transportation of maple—after all the paperwork is done—as “fairly manageable.” And Caledonia Spirits has a compliance officer who helps navigate the paperwork because they face new regulations and new sets of forms whenever they cross any border, including state borders (they’re in 20 states already).
Nonetheless, no one in Vermont is loading up a truck with local food to sell and driving it north without a nod to bureaucracy.
The Maple Trade
If you’re looking for an example of a strong food trade between Vermont and Québec, maple may be the place to start. This trade in maple has existed since before anyone even drew a Canadian border, and it remains relatively large. In 2015, Canada exported more than $32 million U.S. dollars worth of maple products to Vermont. That’s almost three times the value of all the farm products that Vermont sent to Canada that same year. The value of Vermont maple entering Canada is lower, around $3 million—a difference that is proportional to the countries’ populations.
At Butternut Mountain Farm, based in Morrisville, they’ve handled syrup from Canada almost since the day they opened more than four decades ago. They’re one of the largest maple packers in the country, packing not only a little more than half of all of Vermont’s roughly 1.5 million annual gallons of syrup, but also maple from beyond our borders, too. The cross-border syrup transportation works well. It still isn’t flawless, though.
“There’s always a bit of biting your nails [when trucks reach] the border, and you wonder ‘How. is this going to go?’” says Dave Ellis, purchasing and supply chain manager at Butternut Mountain Farm. There are always questions. Plus, the way agents read the regulations can change—so, for example, a label that has been accepted for 20 years suddenly needs to be rewritten. “They’re not being mean,” says Dave. “There’s a certain amount of subjectivity… Maybe they’ve just been to a refresher course that led to a new interpretation or new attention to some detail.”
Producers also need to think about bilingual labels and differences in the sort of information (such as nutrition) that each country requires. Up until a few years ago, the U.S. and Canada didn’t even agree on the fundamentals of maple syrup grading; an enormous amount of work has gone into creating a uniform system between the two countries and between states within the U.S. In 2104, Vermont formally adopted the new labels, which combine the term “Grade A” with flavor and color descriptors and reduce five classifications (including Grade C) into four.
The majority of Butternut Mountain Farm’s international trade consists of bringing syrup into Vermont from Canada. These imports allow Butternut Mountain Farm, to commit to purchasing sugarmakers’ whole crops. Buying by the crop means that the sugarmaker may not be providing barrels in the exact mix of grades that Butternut Mountain’s clients are looking for. When a large buyer who doesn’t care about a Vermont-specific origin places an order, Butternut knows they can supplement what they’ve received from Vermont with barrels from Canada to match the buyer’s specific requests. Finding a way to fill these types of bulk purchases is important—they account for more than 80 percent of our total maple syrup sales.
Could our famous Vermont syrup sell as Vermont syrup in Canada? “Well,” Dave Ellis says diplomatically, “just like Vermonters would rather have Vermont syrup, Canadians would rather have Canadian syrup.” No word on where New Hampshire syrup falls in that hierarchy.
Gin Mixes It Up
Maple syrup might find its footing in international trade through anonymous bulk purchases, but other Vermont foods are trading as premium products sought out by name. One of these products with name cache is Barr Hill Gin.
“They love our gin and they want our Tom Cat [barrel aged gin] up there,” says Hallie Picard, a brand ambassador at Caledonia Spirits. In the world of high quality craft spirits, Caledonia’s products are considered both delicious and relatively local, and its flagship product Barr Hill gin is enthusiastically received at Montreal cocktail bars.
“It’s all about connecting with the right distributor who can make [in-country] connections for you,” says Hallie. Caledonia’s broker in Canada “seems to know everyone cool in the city [of Montreal]” and curates the list of places where their gin appears, establishing it as a sought-after product for craft cocktail connoisseurs. Québecers clearly know the Barr Hill name because, as Hallie reports, they often come to the Caledonia tasting rooms when visiting Vermont, excited to try all of Caledonia’s spirits. (Only Barr Hill is available in Canada).
Finding the right audience to sell to in Canada is particularly important given the high price of Caledonia Spirits’ Barr Hill once it reaches Québec shelves. By the time a bottle lands in a customer’s hands, its price has more than doubled from the U.S. retail price. The increase reflects fees imposed that Caledonia must pay to import liquor, and reflects the overall high price of alcohol in Québec, where alcohol is controlled by the Société des alcools du Québec (SAQ). Luckily for Caledonia Spirits, prices for craft spirits tend to cover a wide range, and many of their competitors in Québec are also imports. Working with SAQ and understanding their rules ranks high on the list of challenges Caledonia Spirits faces in Québec, but the SAQ-abetted high price tag isn’t a deal breaker.
The Cost of Cheese
Unfortunately, price tags can be a deal breaker for one of Vermont’s most popular products: specialty cheese.
Canada structures its dairy industry (along with its poultry and egg industries) using a supply management system. In essence, a committee sets a national milk production target, factoring in trends in demand and the minimum price that dairy farmers should receive. They prod the dairy industry to meet (yet not exceed) that target through instruments such as quotas for domestic production and very high tariffs (in the 250-percent range) on imports beyond what is allowed by the import quota. The goal is to guarantee viability of Canadian dairy farms, which are largely concentrated in Québec and Ontario. That system makes it difficult for Vermont dairy producers to break in, and a strong U.S. dollar isn’t helping. The short story is that even the best deal a Vermont cheesemaker can offer may not come close to competing with a Canadian producer selling domestically.
An additional price problem arises from the small scale on which Vermont cheesemakers operate, notes Zoe Brickley of the Cellars at Jasper Hill in Greensboro Bend. Customs charges by the full pallet or the full truckload, and a small specialty cheesemaker may not have enough product to send a full load. This system adds more cost to a product that was already going to be expensive for Canadian customers. In the end, it proved to be one economic hurdle too many for Jasper Hill selling their cheeses in Canada.
The company did manage to send soft cheese into Montreal markets during two holiday seasons, though, working with an enthusiastic distributor who wanted his customers to have access to “something special” during the holidays. And Montreal remains a tantalizing prospect for Jasper Hill. “It’s our most local urban area, there’s a good cheese culture there, and we still have a good relationship with the [Québec] distributor,” Zoe says, adding that they’re continuing to work on their options.
Figuring out the logistics of navigating sales across the Canadian border can be confusing, and can change with different products. It’s also important to keep in mind that the question Vermont producers face isn’t simply whether they can navigate those logistics but whether it is worth their efforts to do so, rather than focus on domestic markets that have the same (or larger) concentrations of customers. Those outlets may require less paperwork, allow a better price, and carry different marketing implications. For example, Vermont food in Boston may be desirable as a relatively local product, while in Montreal it is a non-local import and requires different marketing as such.
On the other hand, some products might find a niche in Québec—Butterfly Bakery of Vermont’s Heady Topper-based hot sauce, for example, has great appeal to Québecers familiar with “Heady Topper” beer by Vermont’s Alchemist brewery and who know the beer itself will never be easily found in Montreal.
For those with wanderlust, resources do exist to help producers navigate all the intricacies of the border. The Vermont Agency of Agriculture, for example, is part of the Food ExportNortheast trade association, which provides resources ranging from online tutorials to individualized market research to assistance meeting specific guidelines. When in doubt, producers can start with their helpline, which Chelsea Bardot Lewis, business development section chief at the agency, says is their most popular resource.
These types of resources can help producers make smart decisions when looking across the border for a market. It’s not an impossible journey by any measure, but perhaps one that’s best not undertaken alone.