Canola Council 2005 Halifax

Kevin FlanaganDirector of Research & Development

McCain Foods (Canada) Limited

Canola and Potatoes

A Partnership of Innovation and Consumer Benefit

Past Present and the Future

Canola and Potatoes , Carleton County NB

Canola and Potatoes

A brief history

McCain Foods

• Canadian Company founded , and headquartered in Florenceville, NB 1957

• McCain has 57 production facilities on 6 continents, supported by over 20,000 employees

• Undisputed World leader in potato processing with >33% global French Fry Market

• Supported by over 100 Agronomists and potato specialists working with local growers around the world

McCain Foods

• Diversified Frozen Food manufacturer with recent factory additions, China and India

• McCain Foods offers a complete line of French Fries and Processed Potato products as well as green vegetables, pizza products, desserts, juices beverages, prepared meals, Chinese Food Specialties and Appetizers

McCain Foods Canada

• McCain Canada employs over 4,000 employees in Canada in 15 processing facilities.

• Major French Fry operations in Alberta, Manitoba, New Brunswick and PEI

McCain (Canada) = Product Diversity

Perspectives

• French Fries can be prepared in a variety of oils – both par fry and finish fry.

• In the past Beef was preferred• Flavour and Price were the main drivers• Delivery, availability, market conditions

had an equal effect on frying oil choices • Oil Stability impacts the flavour of French

Fries

Perspectives - 1970’s

• Virtually all available frying oils were used– Beef, Palm, Soy, Cottonseed, then Canola

• Cholesterol Fears saw the decrease in the use of animal fats

• Hydrogenated vegetable oils used for stability and consistency and rather bland flavour.

Perspectives – 1980’s

• 80’s saw shipments of partially hydrogenated canola oils out east

• Trans Fat discussed as an issue with hydrogenated oils

• Cholesterol Free claims hugely successful with retail French fries

• Saturated Fat a significant consumer issue

Perspectives – 1990’s

• Trans Fat becoming a more compelling issue

• Hydrogenated Canola used extensively in Canadian French Fry Factories

• Experimental hybrid Canola oils and Sunflower oils used for par frying French Fries

The Last 5 years

• Nutritional Labeling : Health Canada requires Saturates + Trans as a combined declaration, USA follows with Trans Facts

• McCain USA launches Retail Fries prepared with Canola Oil

• McCain Canada launches Retail Superfries in 100% Non Hydrogenated Canola Oil

The World’s Largest Processor of French Fried Potatoes

Changing to Non-Hydrogenated Canola Oil

Launch in 2003

• First Mention of the actual oil

• First mention of oil type

Products Made with Canola Oil {non-hydrogenated}

• Superfries changedJanuary 2003

• Regular fries changedFebruary 2003

• Low Fat Fries changedApril 2003

Why Canola Oil ?

• Lowest Saturated Fat Content

• No Cholesterol ( Obvious to you but not to the consumer ).

• (Non-Hydrogenated) Canola Oil is low in Trans Fat

• Healthy Perception, based on saturated fat content

Nutrition FactsNutrition FactsValeur nutritivePer 19 Pieces (85 g)

pour 19 morceaux (85 g)

Amount % Daily Value

Teneur % valeur quotidienne

Calories / Calories 130

Fat / Lipides 4 g 6 %

Saturated / saturés 0.3 g 2 %

+ Trans / trans 0 g

Polyunsaturated / polyinsaturés 1 g

Omega-6 / oméga 6 0.7 g

Omega-3 / oméga 3 0.3 g

Monounsaturated / monoinsaturés 2.5 g

Cholesterol / Cholestérol 0 mg

Sodium / Sodium 360 mg 15 %

Potassium 280 mg 8%

Carbohydrate / Glucides 22 g 7 %

Fibre / Fibres 2 g 8%

Sugars / Sucres* 1 gProtein / Protéines 2 g

Vitamin A / Vitamine A 0 %

Vitamin C / Vitamine C 10%

Calcium / Calcium 0%

Iron / Fer 6%

• New panel is mandatory for all retail packaged foods by December 12, 2005

• Saturate + Trans Fat are a combined as a % Daily Value

McCain Superfries seen to the left

Canola Oil and Potatoes

Current Status of the Compelling Consumer Benefit

The Voice of the Consumer

• McCain has a North American Position– Retail Premium Branded French Fries prepared

in 100% Non Hydrogenated Canola Oil

• Have we succeeded ?

• Does the Consumer Understand the Message ?

• What should we do next ?

What’s the Consumer Saying

• What are you aware regarding current health and nutrition issues ?

• What oil is Healthy ?

• What is important- non hydrogenated oil or 0 grams of trans fat ?

• What will stimulate Consumer Purchase ?

What is consumer awareness ?

1. Sugar leads the issues with 93 %

2. Cholesterol second with 90 %

3. Calories Third with 88 %

4. Saturated Fat fourth at 84 %

5. Sodium fifth with 79 %

6. Total Fat sixth with 78 %

7. Trans Fat seventh with 74 %

What is Very / Somewhat concerning ?

1. Saturated Fat 49 %

2. Cholesterol 49 %

3. Trans Fat close third at 48 %

4. Total Fat 47 %

5. Sugar 44 %

6. Hydrogenated Oil 36 %

7. Non Hydrogenated Oil 28 %

What is Important?

1. Cholesterol 58 %

2. Trans Fat 57 %

3. Total Fat 57 %

4. Saturated Fat 56%

5. Hydrogenated Oil 49%

What Is Very / Somewhat Healthy ?

1. Olive Oil Wins at 85 %

2. Canola comes in Second with 68 %

3. Sunflower a close third at 66 %

4. Soybean follows with 64 %

5. Vegetable Oil, 53 %

6. Palm Oil….16 % { % of respondents }

What About Omega 3 Fatty Acids ?

• Only 28 % of respondents were Extremely or very concerned about Omega 3’s

• But 35 % said they were either not really, or not at all concerned about Omega 3’s

What should we do with Canola ?

• 61 % or respondents said “Low in Trans Fat” has an impact { extremely or very important}on their product selection.

• And only 15 % said not very or not at all important

• Consumers don’t want Trans Fat

• They do not understand why.

Canola Oil and Potatoes

Moving Forward

Canola or Olive

• Olive Oil has a better consumer image and is more likely to be seen in Higher Income Households – data from Canada, Australia and the USA

• Olive Oil is perceived as Healthier

• Why is this ?

Canola or Olive Oil

What’s the difference ?

Lets Check the Facts !

Fatty Acids

Facts for Fryers

• Mono-unsaturated fats are more stable than poly-unsaturated fats

• Linolenic is a liability for flavour

• Solid Fat Content has an impact on the perception of fried foods - Texture and appearance

What should Canola Oil Be ?

• For Consumers• Nutritionally Equal to

or better than Olive oil• In the consumer’s

mind, a preference.• Made in Canada !• “O Grams of Trans Fat

• For Food Processors• Higher in Mono-

unsaturates• Lower in Linolenic• Selection of Saturated

Fat contents• Lowest Trans Fat

What’s the Competition Doing?

• > 70 % of the sunflower crop is mid to hi oleic

• Soy is moving quickly to segment oil offerings including High- Oleic and low Linolenic

• Palm and palm olein remains a stable low trans solution

McCain Research & Development

• Potato Process Technology Centre opened 2002• Full Pilot Plant Facility and Research Labs• Florenceville, NB

Greetings from Carleton County NB – Canola Country too