THE FUTURE OF FOOD

MEAT WILL GROW IN LABS, NOT FIELDS

When the revolution finally comes to a grocery store near you--in five to 10 years, if test-tube meat proponents are to be believed-- it won't be a big juicy steak you'll be sinking your teeth into. The food of the future--meat raised in industrial labs instead of on a farm--will make its debut in the decidedly less epicurean form of chicken nuggets and sausages.

Researchers know how to "grow" meat now, says Jason Matheny, co-founder of New Harvest, a non-profit group in the U.S. that promotes research into in vitro meat. The problem is cost: Producing those chicken nuggets using current technology could cost $20,000-plus a kilo.

How to bring the price down to what a consumer would spend? Matheny says the solution lies in fixing the "soup"--a broth of nutrients that acts as a growth medium by stimulating starter cells (harvested from animals) to grow. Researchers are working on finding a replacement for the very pricey fetal bovine serum, the soup's prime ingredient. "If the recipe can be nailed down, then the five- to 10-year timeline is definitely within reach," Matheny says. That may be the toughest hurdle, but it's certainly not the only one. While scientists can grow meat in the lab in tiny batches, technology does not yet exist to do so on an industrial, mass-market level.

Nevertheless, even skeptics like Dr. Peter Purslow, professor of food science at the University of Guelph in Guelph, Ontario, are impressed by the "spectacular" progress made by researchers of in vitro meat. But he remains unconvinced by Matheny's optimistic time frame, likening his ambition to that of proponents of manned space flights to Mars: "They have the ambition and the vision and a pretty deep understanding of the technical feasibility of how to get there, but the reality is the timeline is still very long."

Purslow says the greatest challenge for researchers will be to replicate the meat-eating experience, which isn't just taste but also texture--"the juices and how meat breaks down in the mouth." Take the example of a great steak: It may have the same proteins as lesser cuts, "but the texture, the perceived eating experience, is completely different," he says.

That is precisely the reason why experts believe chicken nuggets and sausages will be the first in vitro meats in grocery stores: Because producing them requires processing as well as mixing in spices and additives, it will be easier to get the texture and taste right. And given that Canadians eat about $120 million worth of frozen chicken nuggets each year, that's not a bad market to tap. Consumers will have to wait a lot longer for their test-tube filet mignon. --By Noreen Rasbach

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FISH FARMS IN CONDOS

An abandoned inner-city warehouse is probably the least likely place you'd choose to set up a fish farm, but Dr. Yonathan Zohar insists it is possible. And not just any fish farm: a saltwater system that produces high-end fish like gilthead sea bream, a European delicacy that is becoming scarce in the wild and is priced accordingly, at $10 to $20 a kilo. ¦ Zohar has spent almost 20 years developing such a system in his basement lab in Baltimore, where he works at the University of Maryland Biotechnology Institute. He says he has built a better fish farm--one that's self-contained and recirculating (which means it does not need a natural water source nearby for top-ups or waste discharges), not to mention environmentally friendly and financially viable. ¦ His final challenge, which may be the toughest, is to find a commercial partner that will use the technology and create a facility to mass-produce fish. The centre has drawn up a business model that envisions a $4-million (U.S.) investment for a warehouse and equipment that can produce about 180,000 kg of sea bream annually. Zohar says the system could be built "anywhere--in urban communities, rural communities, whether it's the Midwest, near an airport or in any inner city." ¦ In Canada, fish farms are big business, with the aquaculture industry reporting record revenues of $753 million in 2005, the most recent Statistics Canada figures available. More than two-thirds of that production involves salmon. What Zohar is proposing--an enclosed saltwater system made for mass production--is "very rare," says Christopher Pearce, a research scientist in Nanaimo, B.C., who is also president of the Aquaculture Association of Canada. ¦ The industry has been plagued in the past by environmental concerns, as when farmed fish escaped pens and mated with fish in the wild, and when fish waste, viruses and bacteria ended up in oceans and waterways. Zohar's system has an answer for every concern: The enclosed system won't allow fish to escape; computerized diagnostic tools monitor for viruses and bacteria levels; and fish waste is processed and recycled by adding microbes. The sludge that's removed from tanks can be converted to methane. ¦ Zohar sighs when he acknowledges his system "sounds too good to be true" and cites it as the main reason why, after close to two years of trying, the university has yet to secure a commercial partner. His investor, he says, will need to be "a bit of a visionary." Those, apparently, are very hard to find. --N.R.

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SOY WILL BE OUR BREAD AND BUTTER

(AND EVERYTHING ELSE)

Quick: Name a product made with soybeans. Better yet, name a few dozen--it's easier than you think. These versatile legumes, which can be used to make oil, flour, protein and animal feed, have become an essential element of the processed food industry. Soy-based additives are used as stabilizers, starches, thickeners, emulsifiers and bulking agents--and incorporated into a broad range of non-food items, from hair conditioners to paint strippers. Between 2000 and the end of 2005, manufacturers in the United States offered more than 2,100 new foods with soy as an ingredient--averaging about 350 new products annually. The rise of the soybean is a postwar phenomenon, and global production has grown almost three times as quickly as wheat since the early 1960s. While the U.S., Argentina, Brazil, China and India produced most of the 222 million tonnes harvested worldwide in 2006, Canada ranks seventh in terms of global production. Between 1961 and 2006, Canadian production of the legume has grown from 180,000 tonnes annually to about 3.5 million tonnes--a 19-fold increase that truly reflects the mighty bean's versatility. --Steve Brearton

Common additives on labels that may contain soy:

soy concentrate, soy protein, soya flour, textured vegetable protein (TVP), vegetable protein concentrate, protein, miso, soy nuts, shoyu, sobee, soy panthenol, soy sauce, yuba, gum arabic, bulking agent, emulsifier, guar gum, hydrolyzed plant protein (HPP), hydrolyzed vegetable protein (HVP), lecithin, mono-diglyceride, monosodium glutamate (MSG), protein extender

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ALL OUR APPLES WILL BE RED

Howard Staff was on his way to the Ming Dynasty Tombs when he saw his apple orchard's future.

It was 1987, and Staff, a Niagara grape and apple grower, was in China consulting on how to improve local wine production. During a break for a bit of sightseeing, he stumbled upon an enormous apple orchard that had been planted during the Cultural Revolution. "It was just huge--500 acres, just coming into production," he says. Nearby, there were even larger orchards. "Thousands and thousands of acres of apples," Staff says. "When you see that kind of thing, you think, 'Oh my goodness!'"

Staff and his colleagues abandoned their trip to the Ming Tombs and instead sought out the orchard's foreman to learn more. It emerged that the young orchard didn't yet have what Staff calls a "good apple"--a nice, round, sizable, eating fruit--but it was capable of producing massive amounts of juice. The trees weren't the advanced varieties Staff had back in Canada, and the technology was antiquated: Labourers were spraying pesticide by hand, chemicals slopping down their backs. But Staff knew then and there that his time in the apple business was limited. "By the sheer volume, they were going to snow us under," he says. "Whether they were using old technology or not, they had enough people to make it work.

"I told the fellows, 'We're in trouble.'"

Two decades after Staff's visit to China, Ontario apples bound for processing are worth less than they were in the 1980s. While cheaper Chinese apples have invaded the market--just as Staff foresaw--the cost of production in Ontario has risen. The resulting squeeze has forced some farmers to tear out their apple trees in favour of other crops. Two other apple-growing provinces, British Columbia and Quebec, enjoy slightly stronger markets, but farmers there are also finding the apple business to be an ever tougher struggle.

The cutting edge of the apple invasion is concentrated juice. After a decade of rapid growth, China makes most of the world's concentrated apple juice, exporting almost 500,000 metric tons, with further expansion predicted. Last year, Canada imported more than seven million litres of fresh concentrate from China--the vast majority of what's used here--to make fruit cocktails. Apple slices, used to make prepared foods like turnovers and pies, are imported from China, too.

And China has no intention of limiting itself to apples. Having established itself as the world's manufacturer--dominating the production of prac-tically every consumer good from baubles to sofas--China has turned its attention to food. The country already grows half of the planet's fruit and vegetables, and has captured more than 60% of the market in categories such as pears, asparagus and black beans. In other words, the endangered domestic apple may be a harbinger of the future of farming and food in Canada.

The erosion of the Ontario apple industry goes back to the late 1980s, says Brian Gilroy, vice-chairman of the Ontario Apple Growers. That's when apple powerhouse Washington State had a bumper crop that flooded the market with cheap fruit. "Then China came on the scene gangbusters and started to export huge amounts of apple juice concentrate, and the price came down and down," Gilroy says.

In British Columbia, it's a slightly different situation, says Joe Sardinha, president of the BC Fruit Growers' Association. While farmers in B.C. have a healthier local market for fresh fruit than their Ontario counterparts, their prices have nonetheless been indirectly affected by Chinese exports. Whereas Washington apples used to sell in Asian markets like Hong Kong and Singapore, cheaper Chinese fruit has taken over there. "The displaced Washington shipments of fresh apples flood the Canadian market with extras," says Sardinha, who farms in the Okanagan Valley. It's the late '80s all over again.

China's biggest advantage is, of course, its famous cheap labour. For the cost of one farm worker in Canada, you can hire around 65 in China, Gilroy says: Wages there are about $1.50 a day, whereas the total cost of farmhands in Canada is $12.50 an hour. And apples, which must be handled just as carefully as eggs because they bruise so easily, are a high-labour crop. "Unless growers get something more in return, we are all going to be pushed out of existence," says Gilroy.

Howard Staff, whose family has worked the same strip of rich Niagara Peninsula land since 1814, has already been pushed out. Today, grapes are his mainstay crop; the apples are gone, even though Staff's 100 acres of high-density trees, which represented a $2-million investment in the late 1970s, enjoyed a production ratio of more than double the provincial average. In 2003, Staff picked all of the orchard's best eating apples. Normally, he would have then gathered the "cull" apples--fruit that is either bruised or too small for the supermarket--to be pressed for juice. But the price for cull apples had fallen from the 12-to-14-cents range to just 4.5 cents. So he raked over 275 tonnes of fruit into piles and ground them with a brush cutter. "It was more expensive to sell them than to destroy them. It was our cheapest way out," he says. The next year, he replaced the orchard with grape vines.

If you take a stroll down the juice aisle of the local grocery store, you'd never know that there are ever fewer apples being grown in Canada. Almost all the jars, Tetra Paks and jugs of apple juice and apple fruit cocktail are proudly marked "Product of Canada." But the drinks are likely made from Chinese concentrate. Under federal policy, if at least 51% of direct production costs are incurred in Canada, products that come into fruition here, so to speak, can bear the label "Made in Canada."

Apple juice processors are doing well. Thanks in part to a series of acquisitions, Quebec-based A. Lassonde Inc. is the dominant player in the juice business east of the Prairies. Its stable now includes the Oasis, Allen's and Fairlee brands. In the West, the equivalent company is B.C.'s Sun-Rype Products Ltd., which has enjoyed a slow but steady increase in profits over the past five years. The two are now the only companies in Canada that operate apple juice concentrators, so their clout is considerable.

Farmers feel shut out. This year, the farmer received 5.38 cents a pound for juice apples at the orchard gate. Or, to put it less abstractly: On a $4 container of fresh juice, the farmer makes, at most, 10 cents. "The profitability that [the processors]are enjoying currently isn't being passed on to their Canadian suppliers," says Gilroy. "If they would pay even two cents a pound more for our product, it would make a huge difference for our industry. Even a penny a pound more would make a difference.

"Their ability to source enough juice apples is going to disappear if they don't start paying more."

That industry dynamic is as invisible to consumers as the ultimate source of much of what they buy in the grocery store. In light of recent scandals out of China--tainted pet food, lethal antibiotics, lead-coated toys--the fact that more and more of the food we eat is coming from that country worries some apple growers.

Daniel Ruel, director general of the Federation of Quebec Apple Producers, says that Chinese apple growers may be using a number of pesticides that are outlawed in Canada. Staff raises a similar concern, saying that even if the Chinese use pesticides that are permitted in Canada, they likely don't adhere to the same spraying schedule that Canadian farmers are obligated to follow. (Here, spraying is forbidden for a designated period before harvest to minimize pesticide residues.)

However, Henri Bietlot, national manager of the Chemical Evaluation Section of the Canadian Food Inspection Agency, says that all foods sold in Canada are held up to the same regulatory standards, no matter where they originate from. The agency checks apple juice for safe levels of approximately 260 pesticides.

If anything can topple the Chinese apple, it's the cost of fuel. Harriet Friedmann, a professor at the University of Toronto's Munk Centre for International Studies, researches global food systems. She argues that the Chinese ability to sell juice concentrate so cheaply is dependent on many factors, including the current low price of fuel.

"If fuel becomes more expensive, which could happen suddenly, everything that seems to be a comparative advantage at the moment could disappear," Friedmann declares. In the meantime, she adds, the more farmers tear up their trees, the more we lose our ability to grow our own apples--or pears or grapes or whatever crops we are turning away from.

Until now, it's been the juice concentrate that has made the dent in the Canadian market, but this year Chinese fresh eating apples have arrived in produce sections.

It's news like this that may push one grower on the edge of Ontario's greenbelt toward selling the family farm. For now, he prefers to remain anonymous for fear of damaging what's left of his business. But he's got an exit plan: The subdivisions that are spreading toward his fields are also bringing offers for his land. "Let them come; I'm ready," he says. "Farming is for the birds." --Sarah Elton

ARE TOMATOES NEXT?

Ross Siragusa, CEO of the California Tomato Growers Association, returned this August from an industry-sponsored visit to China's new tomato fields. What he saw in the Xinjiang province resembles the rustic--but ultimately dauntingly competitive--scenes that Ontario apple farmer Howard Staff saw in China's apple orchards of the late 1980s. The arid tomato fields are run by collectives and have relatively low yields. The tomatoes are hand-picked for the most part by older people, placed into 50-pound sacks and then driven to processing plants in small trucks and tractors. On his return to California, where tomatoes are irrigated, mechanically harvested and then shipped in 25-tonne trucks, Siragusa sent out a communiqué to his colleagues: "Visit to China draws conclusion that it will not supplant California any time soon."

Perhaps not for fresh tomatoes. However, tomato paste is a different matter. Ending the traditional dominance of Mediterranean countries such as Italy, China has suddenly become the world's top exporter of tomato paste.

Staff cautions against Siragusa's confidence. "The tomato grower should look over his shoulder.

It's come home to roost in the apple industry, and it could happen in the tomato industry, too."

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PORK BELLY FUTURES WILL BECOME PASSÉ

Back in 1983, the hundreds of yelling, arm-waving traders in the pork bellies futures trading pit at the Chicago Mercantile Exchange were featured in the Dan Aykroyd-Eddie Murphy comedy Trading Places. These days, you'd be lucky to find half a dozen of them there. "Nobody watches bellies any more," says Mark Ferguson, policy analyst at Sask Pork, the industry association for Saskatchewan hog farmers. ¦ The exchange plans to close the pit next May and shift pork bellies, along with several other commodities, to entirely electronic trading. Why has almost everyone lost interest? "It's kind of a chicken-and-egg question," says David Ward, senior risk manager at Chicago-based Commodity & Ingredient Hedging LLC. ¦ Contracts that guarantee farmers a future delivery price have been around for hundreds of years--and any time you have futures contracts, you also have speculators who deal in them purely as financial instruments. The Merc opened its pork bellies pit in 1961, and they were soon the first commodity to trade more than one million contracts a year. Frozen bellies are used for "streaky" or American-style bacon, which surged in popularity following the Second World War. "Just a ton of money flowed into the market," says Ward. ¦ But since the 1980s, pork processors and other major buyers, including fast food chains, have demanded more fresh product, so trading action has shifted to the fresh, lean whole-hog futures pit. Commodities funds, and mutual funds that use commodities to help hedge against inflation, recently included lean hogs as well. "Everything but the squeal" has a value, says an old industry joke. And maybe those will eventually trade on carbon dioxide emissions markets. --John Daly

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EVERYONE WILL WANT FRIES WITH THAT

McCain Foods knows its spuds. The 50-year-old company, based in Florenceville, New Brunswick, produces almost one-third of the world's frozen French fries and commands an army of agronomists, engineers and potato specialists in more than 110 countries, including Brazil, Poland, China and South Africa. Its quest? To develop the perfect potato--but not just one or two varieties for the global market. McCain's strategy is to identify the ideal spud for each country it operates in. Take India. When McCain first started poking around the country in 1995, farmers there were primarily growing a single variety of potato that just wouldn't do for the company's frozen French fries and wedges--spuds for processing must be larger, denser and contain less moisture than plain old table-variety taters. Besides, the average yield was just seven tonnes per acre. Indian reports say that McCain's scientists tested 13 varieties of potato in several regions across India before settling on the sandy soil of northern Gujarat and three varieties: the local Kufri Chandramukhi and two imports, the Kennebec and the Shepody. With help from McCain's experts, farmers also replaced old-fashioned flood irrigation--a major water-waster--with drip irrigation. The average yield in McCain's fields is now 110% above the Indian average. In 2006, McCain flipped the switch on a $18-million (U.S.) plant in Gujarat that can process 30 million tonnes of potatoes a year. McDonald's, for one, is sold on McCain's new potatoes--the fast food giant uses the spuds in its Indian specialty, Chatpatey potato wedges. --Dawn Calleja

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THINGS WILL BE WORTH THEIR WEIGHT IN WHEAT (UNTIL NEXT SEASON)

This fall, Canadian farmers are planting what they hope will be a record wheat crop, to take advantage of a recent surge in price. The Canadian Wheat Board set wheat at $294 per tonne in September--a $95 increase over the previous year. So, what's feeding the price of wheat? And why aren't farmers getting richer?

Global demand Blame consumers in China and India for higher bread prices. Burgeoning middle classes in growing Asian economies are expected to buy more meat and dairy products, accelerating demand for grain. In India, wheat imports are forecast to hit a record 6.3 million tonnes in 2006-'07. Global wheat stockpiles are now at a 30-year low.

Weather During the 2006-'07 growing season, Canada was the only one of the big five wheat-producing regions largely spared from devastating weather. French, German and British yields were damaged by too much rain, and in Russia and Ukraine, crops withered from the heat and drought. Heavy rainfall in the U.S. reduced harvests, while a catastrophic spring drought in New South Wales--Australia's breadbasket--ravaged cereal crops. In Argentina, drought and low winter temperatures reduced plantings.

Competition from other crops Canada contributed to the global wheat shortfall because farmers, attracted by strong prices, switched to other crops. In 2007, Canadians seeded 10% less wheat, but 12% more canola and 19% more barley.

Farm inputs Prices are up, but so are farm costs. Diesel fuel and fertilizer costs rose 35% between 2001 and 2006, according to Statistics Canada, and have continued to climb, while pesticide expenses rose 19% over the same period.

Rising Canadian dollar The loonie's skyrocketing performance against the greenback hit farmers adversely because wheat trades in U.S. dollars. The Canadian dollar's rise to near parity in late summer meant 15% lower returns over the previous six months alone. --Steve Brearton

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WE'LL COUNT CARBON, NOT CALORIES

Remember those halcyon days when we knew nothing of trans fats in potato chips or the sugar count of our Cocoa Puffs? Now there's another issue to agonize over as you scour the back of the cereal box: carbon footprints.

Consumers in the U.K. are already eating carbon-quantified crisps, thanks to a new pilot project aimed at assessing the total greenhouse gas (GHG) emissions of a grocery item, from raw material production and manufacturing through to distribution and disposal. The results appear on product labels, and companies that submit a product commit to a "reduce it or lose it" clause that requires them to decrease the item's GHG count within two years. The Carbon Trust, the private consultancy that runs the program (funded by the British government to the tune of £100 million), rolled out the first set of labels in March. Walkers Cheese and Onion Crisps bear a respectable footprint of 75 grams of GHGs.

Walkers, a PepsiCo company, has since agreed to assign labels to all its chips, but the numbers won't mean much to consumers until more companies sign up for the program. As of late September, about a dozen more had joined the program, among them Cadbury Schweppes and Coca-Cola, which should give the project some legs. Meanwhile, Tesco, the U.K.'s largest grocery chain, has announced its own plans to develop carbon-counting labels.

The challenge, of course, is to develop standards that are meaningful--easy for the consumer to understand, rigorous enough to endure scrutiny and universal enough to apply to thousands of different products. As the program stands right now, the science isn't exact: Transportation estimates can vary widely depending on whether an item is sold and consumed in London or in Inverness, so Carbon Trust has opted to calculate an average distance travelled from packaging plant to supermarket.

Here in North America, we've been slower to jump on the carbon bandwagon, even though a recent study shows that nearly 50% of consumers are willing to pay a 10% to 30% premium for food from supply chains that emit half as much greenhouse gas as conventional chains. The North American organization that may have the most comprehensive certification program to date is based in Toronto. Though Local Food Plus doesn't publish GHG emissions on its labels, certified farmers and processors must adhere to strict standards for low-impact production methods. LFP goes even one step further: It also evaluates labour practices. This may be the closest we'll get to guilt-free potato chips. --Sasha Chapman

EVERYTHING WILL BE A GUILTY PLEASURE

SAY GOODBYE TO SEASONAL FOODS

(EXCEPT THIS ONE)

To everything there is a season, or so goes the Old Testament line. Pity the author, who obviously never savoured a succulent raspberry in December or a sweet parsnip in June. A couple of millenniums on, the average supermarket produce section barely changes with the seasons. So where can the devoted foodie find a truly seasonal experience these days? Try the cookie aisle. ¦ Aficionados of Nabisco Mallomars, a marshmallow-filled treat produced at the cookie manufacturer's factory in Toronto, know they can't expect to find their favourite confection year-round. Because sweltering summers pose a melting hazard to the cookie's delicate chocolate skin, they are produced only between September and March. In the metropolitan New York area, where 70% of Mallomars are sold, fans have been known to horde cases in anticipation of summer shortages. ¦ Since debuting in 1913, the Mallomar has become a cultural icon. In When Harry Met Sally, Billy Crystal's character called them "the best cookies in the world," and Tony Soprano once threatened to whack an underling over a stolen box. But don't try looking for them in Canadian stores--demand is so great in the U.S., Nabisco doesn't sell them north of the border. Competitors such as Mr. Christie's sell similar creations, but connoisseurs insist they don't compare. --Patrick White

Those bananas could be linked to death squads in Latin America--Chiquita now faces fines of $25 million (U.S.) for making protection payments to paramilitary groups in Colombia.

Mmmm, pastry baked with trans fats. Too bad they account for between 2,000 and 3,000 Canadian deaths from heart disease annually

The $60-billion (U.S.) global bottled water market uses 2.5 million tonnes of plastic, produces greenhouse gases and clogs our landfills at an alarming rate. Cheers!

The steak is delicious, and beef production contributes $26 billion to Canada's economy. But about eight barrels of oil are required to raise a feedlot steer, and for every kilo of beef produced, the industry sucks up as much as 45,000 litres of water

About 65% of all the shrimp we eat comes from Asia, where mangrove forests are cleared to make way for shrimp farms, and aquacultural waste kills natural marine life

Foie gras? Enjoy it while you can: The fattened livers of force-fed ducks and geese were banned in Chicago in 2006, and Philadelphia and six U.S. states seem poised to follow suit

Okay, the red pepper is local--and a good source of Vitamin C--but it also contains high levels of pesticide residue.

Too bad it isn't organic

Great, you're eating organic, but those greens were grown in California and flew here on a wave of fossil fuels

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THIS MAN WILL GROW A BIG SMILE

Steve Bromley, the CEO of SunOpta Inc., the self-touted "healthy products company," is devouring a chocolate bar. Not just any chocolate bar, mind you. This one is certified organic and vegan diet-approved, with "70% cocoa solids" and an ethically irreproachable brand--Green & Black's, of the U.K.--on the wrapper. Didn't know that organic chocolate existed? Then you probably don't know about the organic shampoos and soaps, vitamins, cleaning supplies, soy-based waxed paper and "natural" paper plates--or that organic soybean snacks come in roasted, toasted and flavoured varieties. A credenza in the boardroom of SunOpta's main distribution complex in Concord, Ontario, displays some of these products, which are among 18,000 wholesome goodies the company delivers to retailers across the country. If a label says "organic," there's a good chance SunOpta had a hand in developing, growing, processing, fermenting, grinding, dry-blending, packaging or shipping it--possibly all of the above.

"I tell people, 'Probably not a day goes by that you don't eat something we're involved in, and you don't know about it,'" says Bromley, a tall, gregarious guy who seems as if he'd be equally comfortable chatting up a corn grower or a futures trader. Even without a business suit, he'd never be mistaken for a granola-cruncher--he has spent most of his career in meat and dairy businesses, knows that everything from food-grade washing chemicals to goo (his technical term) goes into our food, and still continues to consume it all with gusto. Yet he now leads a company that, since 1999, has ridden the trend toward healthier eating to 39 consecutive quarters of record revenues, almost 50% average annual earnings growth, and sales that are expected to crack $1 billion (U.S.) by the end of next year. SunOpta has been in the news lately because of its tiny division that produces a form of ethanol, but healthy food is its bread and butter, constituting more than 90% of its revenues. In the era of carbon footprints and "the Goracle," SunOpta can legitimately claim to have been green before green was cool.

That said, SunOpta is unlikely to ever become a household name because most of what it makes appears under other brand labels. "Loblaws doesn't want the world to know which products SunOpta does for them," says Bromley with a touch of chagrin, "and we have to respect those agreements." We don't. Those President's Choice natural fruit bars? SunOpta. Same goes for Costco soy milk and most private-label frozen organic fruit. While not everything SunOpta grows, manufactures or sells is certified organic, that's its fastest-growing segment. And there's room to stretch: While sales of organic foods have leapt by 20% annually over the past 10 years, they still account for less than 3% of total food sales in North America. Based on adoption rates in Europe, 10% to 12% within a decade is a safe projection. Everyone from Wal-Mart to Kraft is investing heavily in organic lines, and at some point in their supply chains, they'll likely knock on Bromley's door.

SunOpta is something of an odd duck in the food business in that it focuses on a niche category that it tackles "from seed to table," as Bromley puts it. "We love vertically integrated models," he says. So much so that the company has built four of them. The strategy is best illustrated by how it handles soybeans. A key building block in modern food processing, the soybean comes in hundreds of varieties. SunOpta's grains and foods division works with seed developers to come up with just the right variety for what its customers want--though never through genetic modification. Those seeds are sold to growers in the U.S. and Canada, from whom the company then usually buys the crop. That crop goes into a processing facility where it's genetically tested, cleaned, screened, dehulled and sized, after which it heads to another plant where it's turned into food ingredients such as organic soy concentrates (used in soy milk and ice cream), or soy powders and oils, and perhaps combined with other ingredients SunOpta has developed, such as an organic sweetener--all of which vividly shows that "organic" is certainly not the same as "unprocessed."

At the end of this chain may appear a rectangular box of organic soy milk, such as the one Bromley holds out that bears the WestSoy brand of the Hain Celestial Group, a U.S. food giant and SunOpta's biggest customer. SunOpta makes about 180,000 12-packs a week of organic soy milk products, but nowhere on the box will you see its name. When it launched its own soy milk brand a few years ago, it found itself up against Hain Celestial for a restaurant account, and Bromley got a call from that company's president. "'Stevie,' he said to me, 'are you a supplier or a competitor? All I need is one word, and when we figure that out, we'll talk about how we go forward,'" Bromley recalls. "I clued in pretty quick: I think we're a supplier. We'd love to have our own brands, but. . .we're in a great niche."

Another niche the company has claimed is fruit. After only 2 1/2 years, the division's sales of frozen organic fruit are already approaching those of its grains and foods operation. Starting by sourcing fruit from farmers around the world, SunOpta delivers the produce to its processing facilities across the continent, where it's cleaned and frozen, and then polybagged or transformed into fruit ingredients, such as juices or the fruit layer in yogurts. SunOpta is already the dominant player in this category.

The ingredients group centres largely on one thing--oat fibre, of which SunOpta is the world's largest producer--and one major trend: the spreading panic about obesity. "Food companies know they're the next cigarette companies," Bromley says. "Those that can be proven to contribute to obesity are going to be the next people to get sued, so they're working to offer healthier options." Enter SunOpta: Its fibres are added to baked goods to help them move quickly through the gastrointestinal tract.

The last of SunOpta's four tentacles is the distribution arm, which supplies organic, natural and specialty foods (such as kosher) to retailers across Canada. The company got into the business in 2002 after seeing organic-food uptake lagging here. Bromley recalls asking one American food manufacturer why his products weren't available in Canada and being told that with a dispersed population, a complex web of 15 tiny wholesalers, unique labelling requirements and French translation, it was too much of "a pain in the rump." So SunOpta bought up half a dozen small operators and formed a nationwide network, the largest of its kind. Distribution is the only SunOpta division with a significant presence in Canada--most of the company's decentralized operations are in the United States, with each division run by its own executive hierarchy. SunOpta's head office, in Norval, Ontario, just north of Toronto, is in a farmhouse on a 10-acre property. Out of 2,000 employees, only 16 people work there.

While the labels "organic" and "natural" still conjure images of small co-operatives, the man who set Sun-Opta on its trajectory has always been a pure businessman. Jeremy Kendall, the company's long-time CEO, who ceded control to CFO Bromley in February, glimpsed the promise in organic food when his wife started seeking it out for the family. Before the late 1990s, SunOpta (then called Stake Technologies) was a marginal business involved mainly in the production of cattle feed, employing the technology that is today used to make cellulosic ethanol. When the possibility arose to buy an organic soy processor, followed by a soy milk manufacturer, Kendall began to see the opportunity in consolidating the supply chain in the fragmented industry. Kendall, who is now company chairman, notes that vertical models are particularly well suited to the organic world, where the ancestry and purity of materials is crucial: "With some countries, even if a single per cent is genetically modified, back comes the ship."

Because the company has grown largely through acquisition, it's had its share of hiccups. It entered the fibre business just as food makers began responding to the Atkins diet craze and switching en masse to non-soluble fibres. When the low-carb fad died, however, demand dropped off the cliff, leaving SunOpta with unused production capacity. Around the same time, the company, new to the sunflower market, gambled on a seed, rushing it to farmers without taking its usual time for testing. The seed flopped, making the crop useful for little more than bird feed. The combination pummelled 2006 profits, but both businesses have bounced back. In fact, the company is on track to earn 35 to 40 cents per share this year--almost double the 2005 figure. Keith Howlett, an analyst with Desjardins Securities, thinks SunOpta has proven it learns well from mistakes. "They've overcome an array of challenges to this point, pieced together many companies. I'd say they're through the toughest stage."

Still, SunOpta is in an agriculture-based business and thus subject to vagaries of weather, crops and commodity pricing that even its hedging program can't fully neutralize. What's more, if a large customer were to become a competitor in any of its niches, that could sideswipe its operations. But Edward Aaron, an analyst with RBC Capital Markets, believes the company's major challenge will be to deal with the good fortune of its rapid growth. "It's in a complex business for a company of its size," he says. "But I think there's a lot of value in being the only real supplier of scale."

That scale has to continue expanding if North America's adoption of organic food catches up with Europe. Organic supply here is badly lagging demand, and is made worse by high corn prices that are luring farmers to ethanol production. A year and a half ago, SunOpta got a call from Wal-Mart requesting a certain fruit-based ingredient for its new line of organic juices. SunOpta, the largest maker of that ingredient, manufactured 200 semi-tankers' worth a year; Wal-Mart wanted 300. "We told them, 'You can't have it. There is none!'" recalls Bromley. "You'd have to convert farms. They can't do it this year, next year or the year after."

SunOpta has been snapping up food processors and manufacturers at a rapid clip, recently expanding its supply network into Europe and South America. True to its eco roots, whenever it buys another operation, a tree gets planted at the back of its farmhouse. The president of the company that's being acquired selects the tree and participates in a planting ceremony. "It's quite emotional; quite often they break down in tears," says Kendall. Over the past eight years, 30 trees have sprouted in Norval. Before the decade is out, it may be a forest. --Joanna Pachner

WHO'S BUYING ORGANIC?

In Canada, fruits and vegetables represent the biggest chunk of the organic food market (41%), based on supermarket sales in 2006; meat, fish and poultry represent the smallest segment (1%). But raw meat is the fastest growing, with a gain of 81% from 2005 to 2006, while overall meat sales dropped by 2% during the same period. As for who's buying organic foods, Ontario consumers purchase the most, making up 38% of certified organic sales nationwide; however, on a per capita basis, B.C., with 23%, is the strongest market.

WE'LL EAT MORE FROZEN FOOD (JUST ASK JULIE TER WOORT)

I started as a product developer at President's Choice 15 years ago. Dave Nichol interviewed me for the job. There are 14 of us. I worked in hors d'oeuvres and boxed meats for a couple of years, and deli. But for eight years I've been in frozen grocery, building up the frozen entrees segment. For my area, restaurant quality is the number-one goal. Consumers are spending more and more money on restaurant takeout. How do we tap into that? So, especially with some of our single-serve items, we're really pushing for premium ingredients and pushing the flavours--we're trying to make them as authentic as we can.

We get ideas from all over. I've been to Italy to learn about regional Italian cooking, and to Valencia, in Spain, to investigate paella. And then, from that trip, they wanted me to investigate cassoulet, so I went to Paris. We have group tastings every day. They can last two hours--you're tasting anything from mayonnaise to chocolate to canned tomatoes.

Going back over the years, I'd say I've developed well over 500 items. I've done some of the holy grails: The biggest one is butter chicken. We did a three-day trip to London and picked up about 45 frozen butter chicken entrees. Retailers in the U.K. have had Indian entrees for years--we wanted to know, what are they doing right? We rented an apartment for the day. We had the microwave in high gear; we had the oven going. We were looking at the dishes, the packaging, the photography, the ingredients. And we literally cooked and ate our way through 45 items. President's Choice butter chicken was a category transformer. It's our No. 1 entree--it outsells single-serve lasagna. It took us by storm. But I don't think that apartment will ever smell the same. --As told to Chris Nuttall-Smith

HALAL HAPPY MEALS?

The figures are impressive: There are about 800,000 Muslims in Canada--a number that's expected to jump to roughly 1.2 million by the end of the decade. And the market for halal meat--which is prepared and killed according to Islamic law--is already worth more than $214 million a year. Yet when it comes to eating out, it's slim pickings for observant Muslims. Those looking for a quick bite are relegated to either small ethnic restaurants or a rather incongruous option: fried chicken, southern style.

Popeyes Chicken & Seafood has been serving halal meat at its more than 30 Canadian outlets--all of them in the Toronto area--for well over a decade. Head office in Atlanta is reluctant to talk about it, however, and the company doesn't promote the fact in its corporate advertising. Thanks solely to word of mouth, the chain--which had revenues of $153 million (U.S.) in 2006--has a dedicated following in the community. One Toronto franchisee says sales take a downturn during the month of Ramadan, when Muslims fast from sun-up to sunset.

Dixy Chicken, meanwhile, is all halal and proud of it. The chain was started by British entrepreneurs Amjad Ali and Abid Mahmood in 1986, and so far it has more than 100 fried-chicken franchises in the U.K., along with a few in Norway, India, Syria and Brunei. It's moving into the U.S. this year. No plans have been announced for Canada, although it's safe to assume Muslim Canadians would embrace some new options. In 2005, the government of Alberta surveyed Muslims across the country, in search of new markets for the province's beef farmers. Three-quarters of respondents said they'd eat out more often if more restaurants put halal options on the menu. The problem, says Omar Subedar, spokesman for the Toronto-based Halal Monitoring Authority, is that it's easy to slap the word "halal" on your restaurant's sign without actually living up to the designation. "There's huge demand for halal," says Subedar, "but it's expensive, and there's not enough supply--not exactly music to franchisees' ears." There's even talk that Popeyes isn't truly halal these days. Still, Subedar has good news for Muslim diners: A foreign-owned halal chain is now looking at the Canadian market. He wouldn't give specifics, but it's a good guess there'll be fried chicken somewhere on the menu. --Dawn Calleja

AND YELLOW MARGARINE FOR ALL, BIEN S Û R!

Quebec is a distinct society--even in matters of margarine. Buy it anywhere else in North America and it's coloured yellow. But not in La Belle Province, where a robust dairy lobby has succeeded in preventing margarine producers from selling yellow product, lest customers confuse the water-and-oil emulsion with butter. ¦ The two-decade-old battle between the Quebec government and margarine manufacturers--notably food conglomerate Unilever--has produced some dramatic moments, including Unilever's defiant dumping, in 1997, of almost 500 containers of coloured margarine at a Quebec grocery store. And it isn't over yet. Vegetable oil producers, who say the regulation costs them $30 million in production expenses and lost sales annually, have adopted a new strategy in their fight to standardize the regulatory environment. ¦ An industry group representing some 85,000 canola growers in Western Canada, as well as vegetable oil producers such as Unilever and the Archer Daniels Midland Co., has teamed up with organizations that include the Canadian Chamber of Commerce and the Canadian Council of Chief Executives, to lobby Ottawa and the provinces to ban all interprovincial trade barriers. ¦ Their plan? To argue that the very idea of federalism is at risk because of cross-country variations in everything from accountant qualifications to securities regulations--and, of course, the colour of margarine. --Heather Sokoloff

EVEN CANDY WILL BE GOOD FOR YOU

The giant yellow, red and green M&M's that greet people at All Candy Expo are, in fact, the mute, stiffly waving, non-melting foot soldiers in the candy wars. A crowd of 15,000 confectionery and snack professionals have gathered here in Chicago for the industry's annual North American trade show, and even as the three-day event opens, the battle line has been drawn between traditional manufacturers like Mars (a multibillion-dollar empire that includes M&Ms, Snickers, Dove and 3 Musketeers) and the fast-growing organic alternatives--the oxymoronic healthy-candy makers. As big chain-store buyers begin marching across the neon-coloured, ankle-deep carpets of McCormick Place on Lake Michigan, seeking the newest treat that kids will covet, the two sides gird for action. At stake is the $275-billion (U.S.) annual snack industry, and 500 exhibitors have gathered to claim a piece of it.

At the back of the convention floor, in a glassed-in war room, a Mars spokesman is giving a PowerPoint presentation titled the Mars Stand. "Our chocolate will not change," the representative declares. The company's chocolate is somewhere in the middle of the healthy-snacking spectrum: a commercial grade that is not dark and organic, but is still made from cocoa butter rather than palm oil. Mars is hedging its bets with some new products that have darker chocolate, and a Dove Beautiful bar that has "skin-nourishing vitamins." Mostly, though, Mars, Hershey's and Nestlé represent the old guard. Lined up alongside them, rallying behind the enduring appeal of nostalgia, toxins, stickiness and sin, are hundreds of Willy Wonka confections that shout their worth: Lightning Bugs ("Light it up! Eat it up!"), a gummy candy that lights up when squeezed with a set of tongs equipped with an LED light; Nuclear Neon Gummi Worms; Fizz Bombs; WarHeads; Airheads; Lemonheads; Suck-ups; Xtra Sour Goo; Toxic Waste Sour Candy Spray (spraying, along with illumination, seems to be a trend); Stix in the Mud ("Eat one. Don't be one."); and Big Fat Hissee Fit Gummi Snakes. There are jelly beans that come in ear wax, booger and baby-wipes flavours. The tastes range from the sublime (the seductive Belgian chocolate) to the ridiculous (grape-flavoured crystals exploding in my mouth). Everywhere are the ingredients of my childhood--the glucose, corn syrup, modified corn starch, potassium sorbate, palm oil, the citric acid, ammonium bicarbonate and mononitrates that buoyed me, those humble chemicals upon which empires have been built.

The new guard is Pure Fun, an organic, vegan, kosher, pesticide-free non-GMO (genetically modified organism) candy maker. In the Pure Fun booth, president Luna Roth delivers a speech on traditional candy additives, preservatives and artificial colouring. "Do you really want to put that in your body?" she asks. The Toronto-based confectioner is four years old and part of a growing trend--lining up on the organic side are Green & Black's organic chocolate, GoNaturally Organic hard candies, RJ's all-natural black and raspberry licorice, Seeds of Change and a few dozen others.

On the sidelines in Chicago are the Europeans and their superior chocolate: the Germans (Bahlsen, Ritter Sport), the perennially neutral Swiss (Toblerone, Lindt) and the feared Belgians. Present, but keeping a very low profile, are the Chinese, the elephant in every room these days.

The sub-theme at the convention is speed, emphasized by the presence of two race cars (one for Wrigley's Juicy Fruit, the other for Snickers) and a fleet of NASCAR tie-ins (driver Dale Earnhardt Jr.'s image is used to flog the Big Mo' chocolate bar). The alliance is not incidental: While concern grows about hyperactivity in children, the overworked, deeply stressed parents are nodding off. For them, there is Jolt Cola, Jolt Energy Gum, Extreme Sport Beans ("Start me up!"), Kickers 80 Hour Energy Spray and supercharged sunflower seeds that have been roasted in caffeine.

Selling all these ideas, praying that Wal-Mart will visit their booth and take them to the Promised Land, is a glucose-addled, fizz-popped, extreme-beaned, dangerously jolted sales force whose natural conversational level already carries the enthusiasm of birthday clowns. By the end of the second day, their supplies--hundreds of kilos of free samples--are dwindling. But as the sweating soldiers grow weary in their candy costumes, and the spokesmodels' electric smiles wane in the Day-Glo light, the din of war reaches a crescendo. "Do you have any idea what you are putting in your child's body. . ." comes the cry from the Organics. At the Hershey's booth, the rallying troops offer a response: "It's chocolate. You eat it. It makes you happy."

The candy business looks a bit like the car industry did 35 years ago, when the Japanese were making inroads in North America by selling cheap cars to students while the Big Three basked in the afterglow of the Sixties car culture. And now Toyota is the No. 2 car manufacturer in the U.S. Ten years ago, organic/natural food manufacturers held less than 1% of the North American market. But currently, theirs is the fastest-growing segment, and by 2010 it could represent 15% of the snack market, according to some estimates. The road to the future is paved with brown-rice syrup.

Luna Roth established Pure Fun four years ago to create candy without synthetic additives, preservatives, artificial colours or flavours. A heavy smoker who was diagnosed with lung cancer several years ago, Roth survived, and her ruthlessly organic daughter tutored her on the virtues of a healthy diet. The idea for healthy candy followed.

Roth is in her late 50s and possesses a Mary Tyler Moore perkiness; she's an evangelist in the cause of organic candy. The timing is certainly right: A week before All Candy Expo came the widely reported news that food additives contribute to hyperactivity, based on a study published in The Lancet. This was good news for Pure Fun, which has been preaching a version of this message for years. "We don't know what the cumulative effects are," Roth says. "These ingredients are slow killers.

Corn syrup, for example, a staple ingredient in candy, and one of the least dangerous-looking, presents problems, as the corn that is sometimes used is engineered with a virus to introduce a neurotoxic insecticidal protein that causes paralysis in the bugs that eat it. This is a familiar pattern, one that has followed candy ingredients for decades. You can spend a really depressing hour googling the ingredients from the wrapper of the candy you just ate. The ongoing theme, more than anything, is doubt: possibly carcinogenic; may cause diarrhea, blindness and nausea; did produce tumours in laboratory rats. "We just don't know what these ingredients are doing," Roth says. "Why take the chance?"

The history of candy's first battleground--sugar--isn't encouraging. Saccharin, the first artificial sweetener, was developed in the 19th century, and in 1977 the Food and Drug Administration proposed a ban when animal studies showed a link with cancer. Saccharin was followed by cyclamate, aspartame and sucralose, which are all connected to dismal side effects. "Sugar-free" remains a tricky area.

Pure Fun uses brown-rice syrup, evaporated cane juice and colours derived from beets, alfalfa and other fruits and vegetables to sweeten everything from bubble-gum-flavoured cotton candy to ginger "jaw boulders." "It's a return to the natural order," says Roth, "to how things were once made." The candy tastes good, if sometimes unfamiliar--a re-emergence of actual rather than engineered flavours.

The postwar consumer explosion begat the chemical era of candy. Chemicals were cheaper than natural ingredients, and they made the product stable and controllable. Candy makers were no longer at the mercy of the cherry crop for cherry flavour. The common dyes in candy--red #40, yellow #5 and #6, and blue #1--have been banned in many developed nations, but are still in use in Canada and the U.S. Yellow #5, for example, is a synthetic dye derived from coal tar and linked to allergies and cancer. All have sparked scientific debate, and all were present in the Generation Max cookies I was given (and ate) by a giant yellow M&M.

Pure Fun sells in health food stores in Canada and the U.S, and is planning to launch in Canadian supermarkets on Jan. 14. Some U.S. supermarkets already carry the company's products, and about 80% of Pure Fun's business is in the U.S. What Roth hopes to find at All Candy Expo is a factory with excess capacity so she can do her own manufacturing, and broader distribution. "The biggest challenge," Roth says, "is to reduce price points." If Pure Fun can get bigger, it can bring down costs.

And cost is at the crux of the industry. On the one hand, organic foods are a growing trend. But they are more expensive to produce, and the profit margins aren't as high. A bag of Pure Fun Mint Pinwheels sells for $4.99, roughly three times the price of a generic Chinese-manufactured hard candy. Meanwhile, retail space is at a premium. At a seminar on how manufacturers can deal with finite shelf space in grocery and drug stores, the answer was to put increasingly higher-margin products there. Large public companies are dealing with the challenge of maximizing shareholder value in the short term, while embracing the growing, inevitable organic trend for the long term--a difficult balance.

"The large companies don't have a strategy for dealing with organic candy," Roth says. Some are nominally adapting by introducing darker chocolate, and some are considering the response the car manufacturers had: Buy up the competition. In 2005, Hershey's bought Scharffen Berger, a California-based premium dark chocolate manufacturer, and last year purchased Dagoba, a boutique organic chocolate maker. Two years ago, Cadbury Schweppes bought Green & Black's. Others will surely follow--possibly even Pure Fun. "If we could take advantage of the infrastructure of a large manufacturer, sure, of course," Roth says. "Anything to get our message to more people."

How fast the organic candy revolution happens depends on the consumer. If the masses turn against maltitol, red #40 and sucralose, then it will be sooner rather than later. Roth declares the trade show a success: She made inroads with Shoppers Drug Mart and had interest from U.S. retailers. But the old guard is still holding on: Willy Wonka himself is here in Chicago, seven feet tall in purple velour, working for Nestlé these days, scouting the floor for his ideal customer, the defiantly gluttonous Augustus Gloop. He doesn't have to look far. --Don Gillmor

WHO DOESN'T WANT CANDY?

The United States has the biggest appetite for candy in the world, making up about 20%--or $28.1 billion (U.S.)--of the world's confectionery sales last year. But candy manufacturers are eyeing the developing world as the next big market for treats. Last year, confectionery sales in the Asia-Pacific region rose by 9%, according to the trade publication Candy Industry, while Eastern Europeans and Latin Americans increased their consumption by 18% and 23%, respectively. The fastest-growing markets for impulse-food products (salted and baked snacks as well as sweets) include China, India, South Korea, Vietnam and Indonesia.

YOU'LL HAVE ANOTHER REASON TO AVOID LEFTOVERS

Since the dawn of the American Revolution, U.S. troops have treated meal rations with a measure of suspicion, unsure whether the plat du jour would be plain old mystery meat or mystery meat à la botulism. Soon, however, GIs can save themselves the gustatory horrors of taste-test roulette with an innovation cooked up by a Canadian biotech firm.

Founded in 1999, Toronto-based Toxin Alert Inc. has pioneered a food wrap that will take the guesswork out of questionable military rations and fridge leftovers alike. For a penny per square foot, Toxin Alert can imprint flexible polymer wrap with a stamp that indicates when food goes bad. When pathogens start infesting aging chow, antibodies in the stamp begin attacking them, leaving behind a clearly visible "X."

While the U.S. Army may be the first to test the technology--through two research-and-development contracts with Toxin Alert--the real potential lies in grocery stores and kitchen pantries. The U.S. alone unrolls some 45 billion square metres of plastic wrap a year--nearly enough to cover a casserole the size of Nova Scotia. And with the recent glut of E. coli outbreaks, Toxin Alert president William Bodenhamer is betting that his company's innovation is just what the food industry needs.

"With a product like ours, you could forget about all that bad spinach," says Bodenhamer. "And if you're a bachelor like me, you've probably got more than a few science projects sitting in the back of the fridge that could benefit from this."

The potential is there, but, so far, the investors are not. Toxin Alert's initial public offering in 2000 garnered $4 million. Since then, the company has only attracted an additional $2.5 million. "The food industry is very conservative," says Bodenhamer. "Nobody seems to want to make the first move on this." --Patrick White

EVERY GOOD COOK WILL NEED A PETRI DISH

Electric milk, chicken liquid croquettes, mango sorbet sandwiches.. . . Once upon a time, adventurous gourmands had to make a pilgrimage to El Bulli restaurant near Barcelona to experience the culinary revolution known as molecular gastronomy. But now, ambitious home chefs can follow in the footsteps of pioneering chef Ferran Adria, who has launched a line of cooking ingredients that wouldn't look out of place in a science lab. No dish captures the "How'd they do that?" magic of molecular gastronomy better than spheres of flavourful liquid--pea purées and coffee work nicely--made solid by mixing them with sodium alginate gel and immersing the combination in a calcium chloride water bath. Texturas, Adria's retail arm, distributes the necessary ingredients and recipes in slick packages with names like Algin and Calcic (prices range from about $35 to $95 U.S.), inviting daring home chefs to try their hand at kitchen alchemy. U.S.-based distributors LEpicerie.com and Willpowder.net have also begun selling their own branded lines of gelling agents and emulsifiers. Products range from about $6 to $15 (U.S.)--for a supply that would last most home chefs many years. --Rob Mifsud

MENUS WILL CHOOSE FOOD FOR YOU

The whole menu looks pretty good. You might go with the roasted pork chop, or maybe the house-cured sockeye salmon gravlax. Yet those $17 steamed mussels with chipotle, lime juice and coconut milk just kind of jump out at you, don't they? Is it because you're in the mood for mussels right now? Maybe. But your hankering is more likely a result of where those mussels appear on the menu or the fact that the beef carpaccio right above them costs $19. You may even be drawn to them because they're not described as "fresh."

One thing is certain, though: Your choice is being affected by the subtle science of menu engineering. "Whether it's a one-page menu, a two-page menu or a tri-fold, your eyes are drawn to certain places automatically," says Norm Myshok, chair of the Canadian Culinary Institute. When you look at a one-page menu, the sweet spot (called "prime space," in the industry) is about a third of the way down the page. On a two-page menu, it's within the top third of the second page.

Myshok, who teaches courses in menu writing and planning, says presentation on the page plays a role, too. Menu writers consider vocabulary, punctuation and capitalization and examine how dishes were itemized by legendary chefs, such as the French gourmand Escoffier, or by cooks who prepare meals for heads of state. If Louis XIV liked his Canard à l'Orange served in upper case, Myshok and his colleagues figure you will too.

Certain words--including "fresh"--should be avoided, he says. "Everything must be assumed to be fresh." And he says that "drizzling" is out, although "drizzles" are still fine. "You can't have something drizzled with balsamic vinegar, but you can have a balsamic drizzle," he says. It's a fine line between fashion and cliché, of course, but in an industry with an across-the-board average profitability of 14.5% (that includes fast food), staying on the right side of the line can mean the difference between hanging up your checkered pants and living to cook another day.

One technique that helps some restaurateurs keep prices where they want them is relative pricing--the principle that there's nothing like a $15 glass of wine to make a $12 glass seem like a deal. Vancouver restaurant consultant Denis Catroun calls it the foot-in-the-door technique. "That's how the B.C. government got us to buy gas at $1.07," he says wryly. "They asked us to buy it at $1.30 first." --Bert Archer

ALL FAST FOOD CHAINS WILL LOOK THIS GOOD

For suburban Toronto, the restaurant at Parkway Mall feels surprisingly chic: chocolate-brown chairs with swooping, Modernist lines, recessed lighting and booths decorated with a subtle fabric. But what's really surprising is the name on the façade: McDonald's.

Yes, good design is landing under the Golden Arches. This Scarborough location is one of dozens across the country that's already gotten a makeover--part of a worldwide reimaging effort by the company, and a broader trend among fast food chains eager to draw younger diners with something more than fluorescent lights and hard benches.

In Canada, the redesign--which also includes amenities aimed at encouraging customers to stay longer, such as flat-screen TVs, WiFi connections and club chairs--is in the early stages: But by the end of this year, 150 of the chain's more than 1,400 outlets will boast the new look. But in markets in which the makeover has progressed further, the results are impressive. In Europe, where more than 1,200 locations will be redone by year's end, the redesign has contributed to a 15% sales increase in the first half of 2007. In the U.S., where 6,000 restaurants have been transformed since 2005, McDonald's Corp. has seen substantial sales growth this year--and bumped up its annual dividend from 67 cents (U.S.) per share to a dollar in 2006, then up to $1.50 in 2007.

Analyst Larry Miller of RBC Capital Markets says the new ambience has played a crucial role in the turnaround. "It certainly helps sales," he says, "but it also lifts the entire brand perception and gives them credibility to sell better products."

McDonald's isn't the only company in the sector to recognize the power of design. Since 2006, Dunkin' Donuts has been testing a more welcoming design in four U.S. cities. And Yum Brands Inc.--the American behemoth that controls Taco Bell, Pizza Hut and KFC--is testing a lofty new model for KFC, featuring large windows, communal tables and knock-offs of Emeco's aluminum Navy chairs.

The common thread is what might be called the Starbucksification of fast food: Just as the Seattle chain brought a higher quality of experience to North American coffee shops, the fast food giants--facing declining demand for cheap and greasy meals--are trying to expand their reach. McDonald's new design helps it compete with "fast casual" family restaurants like Kelsey's and Montana's, while also appealing to the kid-free, 18-to-34 demographic, who appreciate good design.

Still, the burger chain is careful not to talk about going upscale. "You can still get that Big Mac you're craving," says McDonald's Canada vice-president Barry Desclouds. "But you get it in a new and exciting place." --Alex Bozikovic

SPICY PIG'S STOMACH, AISLE 4

When Statistics Canada released its initial numbers from the 2006 census earlier this year, the piece of information that drew the biggest gasps was this: Within 23 years, all of this country's population growth will be a result of immigration. Just as start-ling was the corroborating statistic that immigrants represented 75% of the population growth that has occurred in Canada between the last two censuses--out of an overall increase of 1.6 million, 1.2 million new Canadians were from foreign countries.

These numbers mean many things to many people, but to B.K. Sethi, they mean Canada's big grocers have got a problem--one that's been apparent to him since he first started selling naan about 15 years ago. The chains were reluctant to carry the Indian flatbread, says the Toronto-based businessman, whose distribution company, B.K. Sethi Marketing, supplies ethnic foods to 800 grocery outlets across the country. And their attitude hasn't changed much, even as sales of naan have exploded at corner stores and independent grocers.

"You're at the bottom of my list," one chain buyer told Sethi recently. "What I sell from you, I can match with just two items from one of my cereal guys."

Sethi, a third-generation food distributor whose father and grandfather operated out of India, knows this may be true--he's been in the business for 25 years. But he also recognizes that the grocery business is one of the few whose customer base is the entire population, which means that the industry's growth is linked to Canada's population growth--and its demographic changes. "We bring in the authentic brands to attract the authentic ethnic people," says Sethi, repeating what he tells his clients about the drawing power of ethnic foods. People who come into a store to buy Herdez salsa (his company began importing it from Mexico three years ago and now sells a million units per year) leave with toilet paper and milk. "It's not a profit-building category. It's a traffic-building category."

Sethi sighs. "The smart ones understand."

But industry observers agree that the grocery business still has a lot of smartening up to do. Chain retailers have been slow to respond to the changing needs of Canadian consumers, according to retail consultant Richard Talbot, who says the industry's ultimate success depends on it. "It's critical," Talbot says. "More critical in some communities than others, of course, like Toronto and Vancouver, but anywhere. It's Retailing 101: You need to serve the needs of the area into which you're trading."

The mainstream grocery business is a big ship to turn around. Chain store sales represent $44 billion of the $73-billion retail food business in Canada. The biggest player, Loblaw, which owns Fortinos, Provigo, Atlantic Superstore and No Frills, accounts for about $28 billion of that--which should be good news for Sethi, given that it's generally considered the leader in the ethnic sector. Loblaws put considerable Dave Nichol-era weight behind the President's Choice "Memories of. . ." sauces during the 1990s, and began carrying Patak's Indian products in 1992. Sethi sees more than a little irony, however, in Loblaws' new campaign: naan, the next big thing.

The fastest adapters on the grocery scene tend to be the independent players--mini-chains such as Longo's of Toronto, or Stong's of B.C.--which is why Loblaws and the other big chains are likely watching the rise of a rapidly expanding independent called T&T. Founded in 1993 by Cindy Lee and her husband Jack, a shopping mall developer who needed an Asian grocery store to anchor one of his properties, T&T has been aggressively pursuing the Asian market in B.C.'s Lower Mainland, Calgary, Markham, Ontario, and, as of late August, downtown Toronto. The Richmond, B.C.-based, privately held chain now has 16 stores, and if things go well, the latest opening will mark the beginning of a Toronto-area push, with two more per year planned for the near future.

" Konichiwa, Nicko-san," Melina Hung calls out as she walks the floor of the new 41,000-square-foot store, located in a windswept industrial zone in Toronto's south end. Hung, the chain's marketing manager, stops to say hello to chef Nick Kamida, her Japanese specialist, who has been flown in to help set up the sushi counter. The two chat for a bit in what sounds like very comfortable Japanese before she heads over to another counter where staff are making a Shanghai specialty called fan tuan--sticky-rice roll-ups. She talks to the woman behind the counter in Cantonese and orders a roll-up stuffed with spicy pig's stomach and meat floss. Memories of, this ain't.

T&T knows the Asian market. "Organic's not a big trend with Asians," Hung says. "The Chinese trend right now is baby." She points to the well-ordered stacks of baby yu-choy, bok choy and " gai lan jr." (young Chinese broccoli). "Everyone wants it younger, sweeter."

That clicking sound you hear is the chain-store buyers on BlackBerrys, messaging head office.

T&T's focus on the Asian market is timely given another Statistics Canada projection published this year: During 2006 and 2007, the country will see the arrival of more than 175,000 immigrants from Asia--an influx greater than the combined total from all other groups. But it's the location of the newest T&T store that the big players are likely most interested in. The burgeoning chain's other outlets have all been built within a 15- or 20-minute drive of a major concentration of Asian consumers; the new Cherry Street location isn't 15 or 20 minutes from a major concentration of any specific ethnic group (on several visits made during its first few weeks of business, about a third of the shoppers appeared to be non-Asian). Since its late-summer opening, the store has seen a broad range of customers dropping by for annatto seed and shredded banana flower. The shift away from the chain's traditional customer base is a departure, acknowledges Hung. "But down the line, we believe we will be able to cater to the mix: the tourist, the residents and the Asian population in the neighbourhood. We might not be relying so much on the Asian population in due course."

Joe Virgona can attest to the fact that demand for Asian products isn't driven only by Asian consumers. At Fiesta Farms, Virgona's grocery store in Toronto, sales of Japanese foods have increased by 100% in the past year, and its Indian food sales have soared by more than 300%. And almost none of the sales are to Japanese or Indian customers.

Taking a cue from the independents--Virgona says chain buyers watch his store "like a hawk"--the big chains are slowly beginning to recognize that many ethnic foods transcend ethnic demographics. With the explosion of cooking shows and ethnic restaurants throughout the country, a broad consumer base is interested in products such as chutney and coconut milk. Food imports from Thailand, for example, where most of our coconut products come from, rose more than 1,300% over the past decade, from $157.5 million in 1995 to $2.3 billion last year. According to market researcher AC Neilsen, in the last year, major chains sold more than $18 million worth of basmati rice, a staple of Indian cooking--a 12% increase compared with the previous year: That's double the rate of increase over the prior 52 weeks. Indian breads, pappadums and curry pastes all experienced double-digit growth during the past year, as they did the year before.

Bruce Nicholas, who has worked at the Ontario Food Terminal since 1975 and is now the general manager of one of North America's largest produce way stations, says he walks into some of the vendors' spaces these days and regularly runs into fruits and vegetables he's never seen before--like dragon fruit--and then, within three months, he's seeing them everywhere. "You get one of the Longo kids in asking for something," he says, referring to the buyers of the Toronto-based, family-owned business, "and people are going to start stocking it."

For his part, Sethi is always happy to help the chains figure out what to stock. "If Sobeys calls me and says, 'Can you go to Millwood [Avenue]and tell me what we should put in,' I go and drive around and check how many small ethnic stores there are. Are they Lebanese stores? If there are stores around, there must be consumers, too. We also go around and see what sort of mosques, temples or synagogues there are in a three- or four-mile area. And we can also go to a Wal-Mart. If they've got 16 aisles, and eight of the checkout girls are Indian, or Somalis, that means something. This is the crude kind of research we do, but it works. We've gone to schools to speak to the principals, and we ask them what the mix of their students is, and they'll say, 30% black, for instance--the sort of stats Stats Canada will only tell us five years later."

He also sends notices to his clients three months in advance to remind them, say, that the Indian festival of Diwali is in November this year, and to suggest they stock up on foods people eat more of then (saffron, basmati rice, condensed milk).

And every time, he doubles his orders of everything he mentions. --Bert Archer

WHAT DRIVES SALES OF CARIBBEAN FOOD?

Immigration isn't the only factor behind the rising interest in new foods. Canada only has about 400,000 citizens of Caribbean background, points out Lucky Lankage, president of GraceKennedy Ontario, the largest distributor of Caribbean food products to Canadian chain stores. Not nearly enough, you'd think, to support its $30 million in annual sales. But as travel to the Caribbean has increased--from 129,000 visits to the Dominican Republic in 1997, for instance, to 536,000 by 2006--so has demand for the region's food. Now, Lankage says, "everybody knows about jerk and hot pepper sauce." When the company started selling its coconut-water drink in 2002 to mom-and-pop shops, it sold about $540,000 worth. In 2006, once the chains noticed what was going on, sales more than tripled, to $1.8 million. Lankage is expecting that number to grow by another 14% this year. And that's before anyone has figured out that this low-calorie, high-potassium, all-natural drink could make a decent alternative to Gatorade.

POCARI SWEAT, ANYONE?

Ethnic foods don't just vary based on country of origin--according to distributor B.K. Sethi, they can be broken down based on three levels of customer appeal: ethnic, core ethnic and ethnic-plus. An ethnic product might be a soy sauce made by a North American manufacturer. Herdez salsa, imported from Mexico, and appealing to Latin Americans who use salsa as an ingredient rather than as a dip, is core ethnic--a category that also appeals to mainstream consumers who crave authenticity. Ethnic-plus, comprising items such as mooncakes for the Chinese autumn festival, or the Japanese soft drink Pocari Sweat, refers to specialty products within the ethnic market. While aimed at ethnic consumers, they can also appeal to extra-adventurous early adopters from the mainstream. "The core ethnic is what Loblaws is getting into," says Sethi, but the front lines of the grocery wars have already moved on to ethnic-plus.

BORDEAUX WILL OFFER BETTER RETURNS THAN THE BANKS

Andrew Davison manages the London-based Vintage Wine Fund, which has a net asset value of 115 million euro. Total return on shares has been more than 90% since 2003. Mark Schatzker talks to him about what investors get for a minimum investment of 250,000 euro.

If someone wants to invest in wine, why not just buy cases and store it in the basement?

You won't be able to sell it, for one, because it has to be kept in professional storage in a bonded warehouse. As a private investor, though, your main problems are access to the wine and retail margins. Purchasing wine directly from the growers is not easy, and if you buy it from merchants, you're going to be spending an extra 20%. And it happens all over again when you try and sell it.

How many actual bottles are in your fund?

Three hundred and sixty thousand. It all sits in a warehouse in the south of England, in an underground mine that was used to store munitions during World War II, so security is rather easy.

How do wine funds compare to other investments?

The first thing is that there is extremely low volatility. Wine has a unique dynamic in that it gets consumed and so gets scarcer over time. It also improves in quality over time. That's a good start for any asset class. Over the last 25 years, the top end of the Bordeaux market has averaged in excess of 12% per year after costs have been factored in. The very top end has almost doubled over the last 12 months.

So what are the risks?

The risk is liquidity. It's extremely difficult to sell wine when you have to. If you give me three months, I can find customers. But if you have to sell it today, you can end up getting a poor price.

What wines do you invest in?

Mainly Bordeaux. There's a minor amount of Burgundy, but the quantities produced there are so small it becomes difficult to value the wine. There's a little bit of top-end Rhone and some Champagne, too.

What about other notoriously pricey Old World reds, like Amarones or Barolos?

Absolutely not. To sell top-end Barolos, you'd need a whole sales force. It's the same with mid-range Rhones. No other wine has the same appeal to the brand-conscious wealthy investor as Bordeaux.

Have you ever considered Canadian wines?

I'll have to plead total ignorance. I couldn't name a single one. It would be tricky to move a line of Canadian wines without making a lot of calls and giving people a story.

COFFEE AS PRICEY AS CAVIAR

And you thought Starbucks was expensive. Caffè Artigiano in Vancouver offered a cup of coffee last spring that reset the bar for a shot of joe. The downtown coffee house sold eight-ounce cups of Hacienda la Esmeralda Especial, a rare Panamanian variety that won the 2007 Roasters Guild Cupping competition, for $15. Purchased in an online auction for a record $130 (U.S.) a pound, the coffee is said to boast delicate hints of orange blossom and jasmine. If the price sounds excessive, it may simply be an indication of the new normal: Manic Coffee in Toronto offered a limited run of $15 Esmeralda this fall. Matt Lee, who runs the shop, says java drinkers have become more sophisticated. "People are used to paying $7 or $8 a glass for wine, and when you think about the labour involved in making coffee, we can bring it up to that level, too." --Carol Toller

BIG BRANDS WILL DOMINATE WINE

(JUST ASK JAVIER SANTOS)*

One big opportunity that exists for wine is brand-building. If you look at any other major beverage industry or category, it's dominated by a few brands. But with wine, we have hundreds of brands, so consumers need to always try different things. Most everyday consumers want some certainty--the traditional concept that a product is guaranteed by a firm, by a name, by a label. That's the wonderful thing about Yellowtail, which is our largest brand. We just had the rosé from Yellowtail--rosé is an emerging category--and that product started selling like crazy because of the brand. A lot of consumers are trusting in Yellowtail, and we're using that to expose them to new concepts, like sparkling wine. It's traditionally consumed on special occasions, but you don't have to buy champagne to drink sparkling--there are $12 and $13 sparkling wines out there. And rosé is another example. So that's the power of brands, and we want to harness that. As for other winemakers, I think we've seen great things coming from Gallo--we just tried their new Barefoot wines. Gallo says it's the next Yellowtail. I wish it were--we need another brand like that. --As told to Carol Toller