It has made it the pandemic has actually enticed people to understand it even more understanding different nodes the different people involved like i said i mean right now we're seeing uh labor disputes being settled a lot of employees are making more money but obviously as you guys know in a high volume low margin environment you have to adjust prices and this is kind of what's going on right now and i've been trying to explain that to media uh making food is not like making cars margins aren't the same and dynamics within the supply chain starting with farmgate economics aren't the same,
Often people don't necessarily know that but it has to be recognized but more and more you're seeing you're seeing people trying to understand what's happening around the world so the three meal institution is actually uh being revisited right now actually we have a survey coming out tomorrow just a little scoop for you a lot of canadians are are rethinking the three meals they're looking at snacking and looking at eating four times a day five times a day instead of just three times just because of the fact that people are working from home uh sometimes twice a day instead and having some some snacks along along the day,
So all of that really is getting people to look at meat fish pasta dairy cheese everything very differently what role will you play in that chain it will actually uh be impacted by where people work how people live uh the obviously the uh well the uh split between service and retail is also being revisited before the pandemic i'm not sure if you knew this but about 35 of our budget of our food budget was dedicated to food consumed outside the home so at the restaurant 35 so the split was 65 35. on march uh 13th or in march 2020 that ratio went down to 9.91 so big shift now we're back to about 27 uh 73 that's basically the split that we're at right now and i'm not sure it's going to change anytime soon so these are i mean we're talking seven percent uh it may not sound like a lot but seven percent is is probably about 20 billion dollars worth of business,
Which is a lot i mean you can actually support many grocery stores with 20 billion dollars and uh 20 billion is close to sobe's business really at 27 20 20 26 or 37 billion so you can see that really it adds up that people will be spending their money in different places um but there is hope um now let's forget omicron let's forget about the negative press going on right now i must say uh canadians are actually out there again 65 percent of canadians in the last month okay in the last month uh actually god has gone to a restaurant so people are active but they're not spending the same way they're not buying that bottle of wine,
They are not having that extra dessert they're very careful and more frugal and this is what's going to happen in 2022 consumers will be trading down trading sideways they'll be looking for deals they'll be looking for the enjoy tonight deals they'll be looking for rebates frugality is going to be back similar to what we saw in the 70s during their great oil crisis people will be looking to buy things at a discount all the time so they'll be looking at flyers they'll be using coupons and so on and so forth that's the reality for for 2022 and probably beyond as well so that's one thing that that uh that we need to consider the other thing that's happening also is the online business,
And this is really where things get really excited skip the dishes actually announced yesterday that it was building 38 dark stores across the country to support their e-commerce strategy so skip the dishes which is based out of winning the company is known to deliver food from restaurants it that's it started that way now it was bought but now it's looking at food retail and they want to build dog stores now a dark store is a micro fulfillment facility uh which doesn't accommodate consumers it's there to support uh e-commerce orders to fulfill e-commerce orders for a small market,
That's basically it so they'll probably build a dark store in halifax in calgary in edmonton and winnipeg in brandon probably in different places to really support their online strategy as much as possible and they and they don't want to charge you that's on so if you order 25 bucks or more they won't charge you a fee so this is kind of what we're seeing more and more 15 of canadians in the last month have actually ordered food retail online 15 so if you haven't bought into this online stuff well talk to a millennial talk to a generation said person they'll tell you especially with kids they gonna tell you this is convenient even if you charge me four dollars or five dollars this is convenient,
I don't have to go get out more of course because people will be working from home people will try to figure out ways to get out at home but more and more people are starting to really think well if i can get my food delivered and not waste time and not commute or anything like that why not and get someone to actually empowering someone else a total stranger to do your groceries a concept that it was totally foreign for a lot of canadians only two years ago now that two percent is now 15 and for restaurants it's 28 and last month 28 of canadians have actually ordered food online so as a farmer if you're a farmer out there you got to think about the market very differently,
And say okay maybe there is a new model emerging i think there is a new model emerging something interesting for you to consider how to connect with the consumer there are endless possibilities now because of how democratized the supply chain actually is compared to just a few years ago it's amazing now some of the changes that we're expecting in the future so for one we actually believe at the lab that the cost of food will continue to rise i know that a lot of people actually think that that prices will drop eventually i don't think so,
That's due to a lot of things happening around the world so the supply chain is going to get more efficient but as soon as you get tension some tension it will really impact the cost of food and right now what we're seeing is a global recovery a global economic recovery but it's like it's like steering a cruise ship with paddles you will eventually get to the uh to your destination but it will take more time and when it takes more time it costs more money and i think things are only going to get a little bit more complicated but the other thing i want to talk to you about is is the carbon tax the carbon tax or the fact that we are pricing carbon not only in canada,
But around the world the industrialized world there is a momentum towards a carbon market pricing carbon and this is in my view a game changer uh so i was actually i was proud to testify before parliament in june for bill c-206 to exempt farmers from paying a carbon tax and i was actually quite pleased to know that to learn that we did win the vote i was testifying uh against the david suzuki foundation and uh i what i heard from the foundation i find it very troubling because uh they were saying well if farmers uh if farmers need to do their part for the environment well they do they're environmental stewards of course they're actually playing their part but when i actually was hearing that you can clearly hear that they absolutely have no understanding what farm gate economics,
What price taking comics are and so that's why i think i was glad that that farmers did get that vote however i think things will get more complicated so we're slowly marching towards a carbon tax of 170 a metric ton and nobody really knows what's going to happen to food prices or food affordability how it will impact supply chains but let me tell you something some things that i'm seeing right now i think as a result of a of a market that we that prices carbon even more we're seeing more near shoring more on shoring craft heinz investing in canada lovingly in calgary rocket merit foods nestle there's more investment in processing in canada much more,
So in the last two years than in the last 10 years now why is that i think it has a lot to do with the fact that companies are now looking at supplying servicing markets very differently before a a few years ago a company that was designing a supply chain looked at their supply chains like a table with water you put water on a table the water will always go to the lowest point so if you needed to grow something you went to the cheapest place if you wanted to go and package something you went to the cheapest place the other day my daughter actually brought me a uh a a can of peaches and on that can it was saying produced in argentina uh packaged in malaysia and we were here in halifax looking at this,
We were about to eat peaches and we grow a lot of peaches in canada i've gotten to accept that and with globalization it's fine but as the world changes i actually think that companies will be compelled to think at supply chains a little bit differently and that cheapest spot won't be as cheap anymore we were expecting that about 30 years ago but things actually just got more intense in asia for example and in south america but now the world is kind of won i mean the economy uh has grown which is which is fantastic but but i actually do think that there's a bright future for canada's agri-food sector from farm to fork and the drum that i'm banging a lot on is processing the last few years why because in order to support farmers you can't support farmers there's no other better way to support farmers,
Focus more on processing if you have a decent forceful processing sector you can support farmers and this is why i'm a bit of a fan of uh of prone protein industries canada which is a super cluster out of saskatchewan but it supports different initiatives from across the prairies what they've done so far is is absolutely phenomenal and i i think what pick is bringing to the table no pun uh is is it is an open-end innovation model which is something we've never had before in agri-food in canada uh you know the the most brilliant food super cluster we've had in canada was president's choice uh from laws but what came out what has come out of that super cluster is amazing lots of limitation but it was only for laws now pick is kind of creating a case study for and for open innovation and i think it's going to be quite beneficial and i actually think that brafu should think about doing something similar for animal proteins as well and different kind of commodities what's that what's happening in the prairies in particular and in in manitoba is fantastic and you're and for manitoba in particular the protein strategy.
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