Good to Great

“Hedgehog Concept” for the

Canola Sectors and

Industry

July 19, 2005

Canola Growers

Participants:Clarence Assenheimer, Wayne Bacon, Kevin bender, Jim

Bessel ®, Tom Borgen, Brian Chorney, Doug Chorney, Ernie Doerksen, John Kubin, Kelvin Meadows, Bill Ross, Ernie Sirski (F), Charles Turcotte, Cherie Turcotte, Brian Besley, Jim Caughlin, Nolita Clyde, Bruce Dalgarno, Hugh Drake, Judie Dyck, Steven Fosty, Greg Fyfe, Stewart Gilroy (F), Andrew Haarsma, Lorne Henkelman, Will Hill, Tom Kieper, John Mayko ®, Fred Meister, Brian Tischler, Kevin Waslaski, Kenton Ziegler, Graham Caskey, George Corneil, Dale Gryba, Brett Halstead, Murray Hartman ®, Max Polon, Greg Porozni, Ross Ravelli (F), Dave Starner, Dale Thorenson, Ward Toma, Tim Wiens, Brian Wiley

• Delivering customer needs through IP/traceability• Producing a low cost product that is highly

differentiated• Innovators and risk takers• “We are the best in the world at risk taking”• Adaptable, Resilient, Responsive to market signals• Quick adoption of new technology (from genetics to

grain trucks)• Production with “top management practises” or

“best management practises”• Agronomic and mechanical expertise

Canola GrowersStrengths:

• Environmentally sensitive stewardship

• Comittment to Food safety • Good research infrastructure• Industry and grower organizations• Geographic location for some

growers - close to US market

Canola GrowersStrengths:

• Producing the healthiest edible oil • Producing a quality product with

good quantity for the industry to ensure continued market commitment and re-investment in R&D

Canola GrowersBest in the World at:

• Profit/acre (unit) relative to other crops

• Net return/acre• Revenue/bu (or tonne) • $ earned/ac of land in operation• Profit/rotation • Time and simplicity • “lives saved per acre”

Canola GrowersEconomic Drivers:

Seed/Input Sector

Participants:Scott Chapman, Dave Charne, Brian

DeKock, Dave Dzisiak (F), Mark Empie, Gary Galbraith, Harley House, Rick Istead, Brent Jarva, Jim Johnson, Mark Kidnie, Cory McArthur, Freda Molenkamp, Trevor Rempel, Roger Rotariu, Michael Schmidt, Norm Sissons, Diane Wreford ®, Clare Stanfield

Canola Seed/InputsStrengths

• R&D investments• Innovative• Broad portfolio• Quick response in providing new

technology• Quality assurance• Good farmer knowledge base• Passion and attitude• Technology transfer• Committed to advancing canola

Canola Seed/InputsBest in the World at:

Adding value through technical innovation (new traits, competitive technology)

Consistent profitable production

Canola Seed/InputsEconomic Driver:

• Contribution margin/acre• Increased ROI per acre• Contribution margin/bag of seed• Profit/$ of R&D investment• Farm profit/acres• Competition for R&D $ is based on crop• Needs to be a competitive return on

investment/acres

Canola Crushers/Processors

Participants: Tim Chen, Angela Dansby, Simone Demers Collins, Thomas Erickson, Brent Fenton, Kevin Flanagan, Woody Galloway Carl Hausmann, Dave Hickling ®, Herb Schafer, Ken Stone, Ernie Unger, Pat Van Osch (F), Rick Watson, Jim Wispinski, Chris Wolf

Canola Crushers/ProcessorsStrengths

• Processing experience compared to other countries (e.g. chlorophyll)

• Excellence in food safety• Ability to bring new innovations to the market

quickly • Product differentiation• Proximity to a large and health conscious market

(U.S.)• Consistent seed supply (year round)• Consumer demand (value driven)

Canola Crushers/Processors

• BITW: • Marketing and providing a healthy

and functional oil product

• Economic Drivers:• Profit/tonne • Must be balanced with ROI

Exporters

Participants: Chris Beckman, Brenda Caners, Lach Coburn, Brian Conn, Paul Erickson, Brad Fowler, Kelly Funke ®, Brian Hayward, Jill Klusa, Paul Koltek, Adrian Man (F), Penny Mah, Dean McQueen, Ichiro Otani, Dave Parsons, Dan Stirling, Thorsten Tiedeman, Lawrence Yakielashek

Canola ExportersStrengths

• Logistics• Lowest cost seed provider• Consistency – supply and quality (doesn’t always

mean the lowest price)• Reliability• On-time delivery• Volume/quality• Stay in the food channel• Higher quality product on a consistent basis• “Quality first”• Providing information on conditions, marketing

information etc.• Best at providing the customer what they want

Canola ExportersEconomic Drivers:

• Timely delivery• Tonnes delivered• Margin/tonne• Incremental premium

received/tonne

Regulatory Group

Participants: Dale Adolphe Tyler Bjornson ®, Matthew Cahoon, Russ Freed, Harold Hedley, Terry Harasym, Lorne Hepworth, Bob Ingratta, Yoshinori Komura, Rob MacDonald, Rob Meijer, Dwight More, Judy Shaw, Rick Smith, Brain Treacy, Richard Wansbutter (F), Rick White

Regulatory Systems:

Question:What process and structures need

to be changed in Canada's regulatory system to improve the ability of the canola industry to generate profit for its value chain participants?

Regulatory Systems

Four acts that need to be reviewed to ensure canola’s competitiveness:

1. Canada Grains Act2. Seeds Act (Variety Registration, Plants

with Novel Traits)3. Food and Drugs Act (health claims,

labelling)4. Pest Control Products Act (pesticide

access and trade issues (MRLs)

Regulatory Systems• Variety Registration - needs to change (focus on

quality or a list)• Foster the use of contract registration• Recognize regulatory impact on other

commodities if a change is made for canola• Must enable commercialization and innovation• No agreement on PNT – strengths and

weaknesses• Challenge no-split approval policy• Non-Uniformity across Government (e.g., Health

Canada and CFIA)

Regulatory Systems• System must be science-based; market

access must not be a consideration• Do we need Canadian Grain

Commission grading when the industry sells on specifications?

Opportunities:• Smart regulations• Does the Canadian system give us a

competitive advantage compared to other countries

“Fix it”

1. Transportation Constraints• growers & exporters

2. Regulatory • Variety Registration• Need for greater commercialization of

inspection services

3. Tariffs 4. GMO approvals

Canola Industry BITWMost recognized oil Best all round oilseedNumber one consumer choiceProviding the health and nutritional value of canola products to the worldProviding the highest quality canola product“To be successful must tie all sectors together”R&D Focus on commodity canola and specialty canolaReliable and consistent supply of canola seedBiggest supplier of canola seed in the worldProducing the healthiest and most versatile oil in the whole wide world Premium world oilseed to meet consumer demand; producing a superior productSustainability Innovation and collaboration across the value chainProducing the healthiest affordable everyday use food oilMutual respect of all sectorsDelivering quality oil and meal to meet consumer demands through IP programsAbility to change quickly to meet new demandsSupply the food and non-subsidized industrial demands Educating consumers Environmentally friendly production Research and development Aligning all the sectors of the canola industry Most Innovation and collaborationImproving the health of the North American consumerDelivering multi-functional oil to meet consumer health and food demandsCooperation amongst the industry“We are damm lucky to be part of this industry”Speed of change

Health/Quality• Most recognized oil, “Best all round oilseed”• Number one consumer choice • Producing healthiest and most versatile oil in the whole wide world • Producing the healthiest affordable everyday use food oil• Delivering quality oil and meal to meet consumer demands

through IP programs• Improving the health of the North American consumer• Delivering multi-functional oil to meet consumer health and food

demands• Premium world oilseed to meet consumer demand; producing a

superior product• Providing the highest quality canola product• Educating consumers • Providing the health and nutritional value of canola

products to the world

Industry Collaboration

• “To be successful must tie all sectors together”

• Mutual respect of all sectors• Aligning all the sectors of the

canola industry • Cooperation amongst the industry• “We are damn lucky to be part of

this industry”

Innovation and Adaptation

• Research and development • Innovation and collaboration

across the value chain• Speed of change and adaptation• Ability to change quickly to meet

new demands

Differentiation ProductsFood/ Industrial

• Focus on commodity canola and specialty canola

• Supply the food and non-subsidized industrial demands

Supply • Reliable and consistent supply of canola

seed• Biggest supplier of canola in the world

Sustainability Environmentally friendly production (E)

Canola IndustryEconomic Drivers

• Premium for canola vs. other canola • Seeded acres • Return/ac vs. other oilseed • Most profitable across the value chain• Profit/acre or tonne relative to other crops• Profitability in the entire value chain• Product consumption• Global demand that exceeds supply• Economic value for all participants in the value chain• “Growing the chain of value from field to fork”• $ per tonne of marketed components• Number of valuable components extracted

Our Passion:“Made in Canada Crop” Healthy Quality Product Value of the growers contribution to the well-being of the overall industry Something is always happening in Canola Marketing freedom “Canola is the most innovative and exciting crop” ProfitSolutions for growersUnique solutions for the industry'sCompetitiveness and delivering value Increased growth for all industryInnovationCanola provide the value of lifeHealth agricultural economyCanada’s gift to healthSpreading the good word about canolaProfitable growth of the entire industry, feeding the world, environmentally

sustainableCommunicating the message ahead of the curve (E.g. boomers)“Proud to be involved in the fundamental health policies of the world”

“Made in Canada Crop” Healthy Quality Product Value of the growers contribution to the well-being of the overall industry Something is always happening in Canola ProfitMarketing freedom“Canola is the most innovative and exciting crop”Solutions for growers Unique solutions for the industry'sCompetitiveness and delivering value Increased growth for all industry InnovationCanola provides the value of lifeHealth agricultural economyCanada’s gift to healthSpreading the good word about canolaProfitable growth of the entire industry, feeding the world, environmentally

sustainable Communicating the message ahead of the curve (e.g. boomers)“Proud to be involved in the fundamental health policies of the world”

Our Passion:

Common ThreadsHealthy oil product (focus is on oil for food)Value and Profit for Value Chain Differentiation

• Premium products• Increase value• From our competitors …. accompanied by a

continuing low cost strategyInnovation/R&D

• to maximize grower returns/acre• to differentiate canola products

Alignment and collaboration of all sectors of the canola industry

Passion

Next StepsPassion for…

Best in the world’ at…

Economic driver CCC Board

Drafts Industry Priorities

Industry Input

CCC Convention

March, 2006 New York

‘Hedgehog Concept’ for the Canola Industry

“Greatness is not in where we stand, but in what direction we are moving. We must sail sometimes with the wind and sometimes against it – but sail we must and not drift nor lie at anchor.”

Oliver Wendell Holmes