Evaluation of market development activities

Abbreviations

AAFC

Agriculture and Agri-Food Canada

FPT

Federal-Provincial/Territorial

Executive summary

Purpose

The Office of Audit and Evaluation of Agriculture and Agri-Food Canada (AAFC) conducted an evaluation of the Department’s market development activities to assess: relevance; design and delivery; efficiency; and effectiveness.

Scope and methodology

Market development activities are one component of the Trade and Market Expansion Program in the International Affairs Branch. Market development activities from 2016–17 to 2020–21 were evaluated using multiple lines of evidence: a review of program documents, data, and literature; interviews with internal and external stakeholders; and case studies.

Background

Market development activities are intended to incentivize export activity and minimize the risks associated with entering new markets. AAFC’s market development activities are comprised of three key activity areas:

• Global Analysis, which produces market research and intelligence for internal and external stakeholders;
• Flagship trade shows, delivered by Trade Show Strategy and Delivery, involves designing and delivering the Canada Pavilion at select international trade shows and providing financial support to Canadian exhibitors; and
• The In-Market Partnership Fund (”the Fund”), which Agri-Food trade commissioners use to support targeted market development activities, such as non-flagship trade shows, networking events and promotional activities in AAFC’s priority international markets.

Findings

• The design and delivery of AAFC’s market development activities have evolved in the last five years to meet the needs of the Canadian agriculture and agri-food sector. The need remains strong for both in-person and virtual approaches to deliver market development. The COVID-19 pandemic accelerated departmental efforts that were already underway to adopt virtual platforms and use information technology to stay relevant in the competitive international marketplace.
• There are many participants in the market development space who provide services which overlap with AAFC’s market development activities; however, the unique design and scope of AAFC’s market development activities, as well as the regular involvement of provincial and industry partners in the planning and delivery of events, limit the potential for duplication.
• AAFC provides affordable access to market intelligence and in-market activities, and functions as a leader in the market development space. AAFC’s market development activities align with federal and departmental priorities, including export growth and market diversification.
• While the three activity areas collected aggregate data on a number of measures, a lack of indicators and targets specific to market development activities in the Trade and Market Expansion Performance Information Profile make it difficult to fully assess program performance over time.
• Market development activities have been delivered efficiently, leveraging partner dollars and yielding a positive return on investment. While AAFC invested comparably less in market development activities than other similar countries, Canada has had comparatively higher levels of agriculture, agri-food and seafood exports. This suggests that Canada is receiving a higher return on its market development activities, notwithstanding other factors that may contribute to export levels.
• Market development activities contributed to increasing stakeholder awareness of international market opportunities, maintaining the visibility of Canadian products in international markets, and supporting companies to take advantage of international market opportunities.

Conclusion

The evaluation found that AAFC market development activities are relevant to the needs of stakeholders, with the design and delivery of program activities evolving over the last five years to meet changing needs, including in response to the 2020 COVID-19 pandemic. The evaluation confirmed market development activities were delivered efficiently and supported intended immediate, intermediate and long-term outcomes. The Market Development Division would benefit from assessing whether to formalize and expand its hybrid approach to market development activities and from identifying key performance indicators and targets for integration into the Trade and Market Expansion Performance Information Profile.

Recommendations

• Recommendation 1: The Assistant Deputy Minister, International Affairs Branch, should assess the feasibility of formalizing and expanding the Market Development Division’s hybrid virtual/in-person approach to international market development.
• Recommendation 2: The Assistant Deputy Minister, International Affairs Branch, in consultation with the Corporate Management Branch, should integrate market development specific key performance indicators and related targets into the Trade and Market Expansion Performance Information Profile.

Management response and action plan: Management agrees with the evaluation recommendations and has outlined an action plan to address them by March 31, 2022.

1.0 Introduction

The Office of Audit and Evaluation conducted an evaluation of AAFC’s market development activities as part of the 2020–21 to 2024–25 Integrated Audit and Evaluation Plan. This evaluation was conducted in accordance with the Treasury Board’s Policy on Results and is intended to inform current and future program and policy decisions.

2.0 Scope and methodology

The Trade and Market Expansion Program was last evaluated in 2016. Consultations with program staff during a 2019 Preliminary Assessment of Trade and Market Expansion determined that, of the five program components, the following three would be prioritized and evaluated individually to enable a more focused examination of each:

• Market development activities;
• Trade Commissioner Service; and
• AgriMarketing Program.

Market development activities are the first component to be evaluated during this planning cycle. Other components of the Trade and Market Expansion Program, including Trade Agreements and Negotiations and the International Collaboration Program, as well as the activities of the Canadian Food Inspection Agency, are out of scope for this evaluation.

This evaluation assessed: the relevance; design and delivery; efficiency; and effectiveness of market development activities delivered by the Market Access Secretariat, International Affairs Branch between 2016–17 and 2020–21. Market development activities were evaluated using multiple lines of evidence including: a review of program documents, data and literature; interviews with AAFC staff, agri-food trade commissioners, other government departments, provincial government representatives, and industry stakeholders; as well as case studies. For the detailed methodology, see Annex A.

3.0 Program profile

3.1 Overview of market development

AAFC’s Market Development Division defines market development as export support activities which help Canadian exporters succeed by incentivizing export activity and mitigating risks to entering international markets. AAFC’s market development activities are intended to foster coordination among provinces, territories, industry, trade commissioners and other Canadian stakeholders, and encourage a pan-Canadian approach to market development in key markets.

The Market Development Division depicts market development as a continuum, as shown in Figure 1. AAFC’s market development activities primarily fall under the categories of market information and intelligence and in-market engagement, with some focus on market readiness.

Description of above image

Figure 1. Market development continuum

Market information and intelligence

• Exporter preparedness
• Market readiness
• In-market engagement

3.2 Governance

The Trade and Market Expansion Program’s market development activities are administered by the Market Development Division, which is part of the Market Access Secretariat within the International Affairs Branch. Market development activities are delivered by three teams: Global Analysis, Trade Show Strategy and Delivery, and Market Development Coordination and Branding.

Federal-Provincial/Territorial (FPT) coordination and collaboration is facilitated through a governance structure which includes federal, provincial and, sometimes, industry representation. The Federal-Provincial Market Development Council, established in 1988, is comprised of AAFC, provincial government and regional representation. Through FPT Assistant Deputy Ministers, the Council provides direction and facilitates cooperation toward the further growth and development of Canada’s agriculture and food trade. The Council provides leadership to coordinate federal and provincial strategies and activities in developing markets for Canadian agriculture and food, guiding federal and provincial agencies on issues related to the gathering, analysis and dissemination of market information. The Council also works with industry and government agencies to facilitate coordinated and effective government market development program design and delivery. The Council oversees:

• Seven International Market Engagement Teams in Canada’s key priority markets.^Footnote1 These teams are responsible for creating market development strategies and work plans for their region, as well as communicating with industry associations and companies to ensure International Market Engagement Team activities are responsive to export needs. Membership includes federal and provincial government representation, in-market trade commissioners, other government departments and industry associations (which are primarily involved in working groups).
• The Export Market Analysis Consortium, which enables sharing market information resources, collaborating on the producing market intelligence and exchanging best practices. The Export Market Analysis Consortium, which has representation from the Global Analysis team and all provincial governments, also plays an advisory role to the International Market Engagement Teams.

Previously, AAFC Regional Offices played a larger role in market development activities; for example, participating in International Market Engagement Team decision making and acting as a communication bridge between provinces and industry. During the Going Forward 2 policy framework (2013–14 to 2017–18), the role of Regional Offices in market development was reduced and the mandate shifted to supporting corporate activities and ‘pathfinding’, or sharing information on market development with regional companies.

3.3 Activities

The following section provides a more detailed description of the three key market development activity areas being evaluated, based on a review of program documents and discussions with program staff.

Global analysis

The Global Analysis team produces and distributes market research and analysis to inform decision-making, identify market opportunities and build export capacity within Canadian industry. Following the Government of Canada’s Open Data mandate, Global Analysis’ responsibilities include:

• Developing eleven different types of market intelligence materials, which are publicly available on AAFC’s website and distributed to clients (for example, industry, other AAFC divisions and FPT stakeholders) through an email distribution list. Some clients receive early access to reports most relevant to their sector of interest through the “Red Ribbon Service”;
• Distributing trade data reports to clients through an email distribution list;
• Responding to internal and external requests for market analysis;
• Providing market intelligence reports to event attendees, such as trade show exhibitors and attendees of the Annual Market Access and Market Development meeting; and
• Providing training and access to several databases, which AAFC stakeholders can use to provide services to clients.

Flagship Trade Shows

The Trade Show Strategy and Delivery team facilitates flagship trade shows. Through the Canada Pavilion Program, the team provides financial support to Canadian agriculture and agri-food companies to attend international events ‘where the world shops’ and delivers a nationally branded pavilion under which exhibitors can show their products.

Trade Show Strategy and Delivery’s roster of nine annual and biennial flagship events includes

• Seafood Global Expo in Brussels, Belgium
• Seoul Food and Hotel in Seoul, South Korea
• SIAL Paris in Paris, France
• ANUGA in Cologne, Germany
• China Fisheries and Seafood Expo in Qingdao, China
• Food and Hotel China in Shanghai, China
• Gulfood in Dubai, United Arab Emirates
• FOODEX in Chiba, Japan
• Food and Hotel Asia in Singapore

In-Market Partnership Fund

The Market Development Coordination and Branding team delivers the In-Market Partnership Fund (”the Fund”), established within the Canadian Agricultural Partnership policy framework to assist industry in getting Canadian agriculture and agri-food products into export markets. The Fund was implemented in 2018 and provides $1.75-million over five years to:

• Strengthen the ability of FPT partners to deliver targeted agriculture and agri-food specific branding and market development activities in AAFC’s priority international markets;
• Enhance awareness of Canadian agri-food products; and
• Help develop long-term commercial relationships with local and regional stakeholders.

The Fund makes use of International Market Engagement Teams to prioritize projects. Funding is channeled directly to agri-food trade commissioners, who play a key role in leading project conception and delivery. In 2018–19 and 2019–20, the Fund was most commonly used for non-flagship trade shows, business-to-business meetings, and retail, food service, and e-commerce promotions, as well as networking and education events often aligned with trade show activities.

3.4 Resources

AAFC’s market development activities account for nearly $18-million in departmental spending and an average of 15 full-time equivalents from 2016–17 to 2020–21 (see Table 1).

3.5 Intended outcomes

Four outcomes in the Trade and Market Expansion logic model are being examined as part of this evaluation:

• Immediate outcome: Stakeholders are aware of domestic and international market opportunities;
• Immediate outcome: Recipient sectors are supported to maintain the visibility of Canadian products and/or increase their capacity to identify and seize market development opportunities in targeted markets;
• Intermediate outcome: The Canadian agriculture and agri-food sector is successfully supported in its efforts to take advantage of new domestic and international market opportunities; and
• Ultimate outcome: The Canadian agriculture and agri-food sector contributes to growing the economy.

For the full Trade and Market Expansion logic model, see Annex B.

4.0 Relevance

4.1 Continued need for the program

To be competitive, Canadian agriculture and agri-food companies need financial, informational and logistical support to understand market opportunities, showcase their products to the world and engage directly with international buyers. AAFC market development activities address these needs.

The international marketplace is growing increasingly competitive, which requires countries to constantly evolve and invest in supports for food and agriculture exporters. Emerging markets and changing consumer demands have created opportunities for Canadian agriculture and agri-food businesses to enter new domestic and international markets, increase and diversify agricultural exports and contribute to growing the Canadian economy. Taking advantage of these opportunities supports the agriculture and agri-food sector, which is a key economic contributor to Canada’s gross domestic product. Within this context, the evaluation found evidence of ongoing need for AAFC market development activities.

Accessibility and affordability

Industry, provincial and federal stakeholders acknowledged a need to make international market development accessible and affordable, especially for small and medium-sized enterprises. For example, costs to exhibit at international trade shows can be prohibitively expensive, yet trade shows remain important venues for Canadian exporters to gain exposure to new markets and increase Canada’s profile on the global export stage. The Trade Show Strategy and Delivery team’s investment in flagship trade shows has made attending events more accessible and affordable for Canadian agri-businesses by offsetting exhibitor costs and managing logistics.

Reviewed literature pointed to small and medium-sized enterprises being most vulnerable to the challenges and risks associated with exporting. Further, they are less likely to have the financial resources to purchase market information from other sources or the internal expertise to properly collect data and perform analyses. Global Analysis provides access to customized knowledge products free of charge to the user, approaching analysis from a strategic lens to meet the unique market information needs of industry partners.

Federal leadership in market development

There is a need for FPT collaboration and federal leadership in agriculture and agri-food market development. Program documents noted strong FPT collaboration with stakeholders helps Canadian companies overcome obstacles and maintain or enhance market opportunities. The FPT governance structure for market development, including the Federal-Provincial Market Development Council, International Market Engagement Teams and Export Market Analysis Consortium, has helped facilitate a pan-Canadian approach to promoting Canada’s agricultural products.

The importance of national branding efforts was acknowledged in literature and supported by interviewed stakeholders. Trade Commissioner and industry interviewees acknowledged the importance of Canada branding as a general part of market development activities, as the Canada brand communicates a message of product quality and was noted to have a greater recognition and impact than provincial branding.

Innovation in delivery of market development

The emergence of the COVID-19 pandemic in 2020 highlighted a need for innovative market development activities in response to public health restrictions and travel limitations. Stakeholder interviews and program documents described a hybrid approach of in-person market development activities supported by an online/virtual presence as an important driver for market development going forward. AAFC market development activities started to integrate a virtual presence prior to the pandemic, and have since been adapting and leveraging new tools and ways of doing business to help meet this need.

Need for market intelligence

Identifying market potential and achieving export growth in an efficient manner requires a strategic approach. The Global Analysis team addresses this need, in part, by using models to identify specific priority markets as well as opportunities, trends and challenges within those markets. Timely market intelligence information is then provided to internal and external clients, thereby directing the allocation of resources to achieve maximum impact.

The need for market intelligence and export capacity building grows and changes as markets and export conditions change. Research suggests companies which are able to learn faster than their competition may have a competitive advantage in the marketplace.^Footnote2 Knowledge acquired through sources such as market intelligence materials should then be integrated into business practices to position industry for success.^Footnote3 Canada’s key international competitors have programs and systems providing similar types of market intelligence to industry, indicating a universal need for this information among international exporters.  

Impact of reduction or absence in Market Development Funding

A 2016 study by Informa Economics, entitled ‘Economic Impact of USDA Export Market Development Programs’, modelled the impacts of cancelled market development programs in the United States. The study found exporters will spend less on market development in the absence of federal programming. Reduced spending by government and industry was projected to cause a substantial reduction in agricultural exports each year, highlighting the importance of federal funding for market development activities.

Without federal support for market development, interviewees asserted Canadian exporters would not be able to compete in international markets and Canada may lose its position as a quality food producer on the world stage. Financial responsibility for market development would shift to exporting firms, with a greater burden on small and medium-sized enterprises which may no longer be able to afford to engage in market development activities or would need to participate at reduced levels. Larger firms with greater capacity to invest in export activities would still likely be able to engage in market development activities; however, overall funding levels would be lower with fewer opportunities pursued.

4.2 Alignment with AAFC and government priorities

Market development activities align with AAFC and Government of Canada priorities to help expand trade opportunities and support global export growth and market diversification in Canada’s agricultural sector.

Federal Budgets in the last five years have re-confirmed that Canada’s agriculture and agri-food industry is vital to the Canadian economy. Speeches from the Throne (2015 and 2019) highlighted the Government’s commitment to expanding trade opportunities, pursuing opportunities in emerging markets and removing trade barriers for businesses and farmers.

Since 2016, AAFC’s departmental mandate has focused on supporting global export growth and market diversification in Canada’s agricultural sector. The 2019 Mandate Letter to the Minister of Agriculture and Agri-Food highlighted “identifying additional tools to help Canada’s agricultural and agri-food businesses export their products and diversify info global markets”.

AAFC’s market development activities were found to align with the Government of Canada’s objectives for market diversification and export growth, as well as AAFC’s priorities to support the competitiveness of the sector and increase opportunities to export domestically and internationally. Departmental market development activities support companies through access to market intelligence, the provision of financial and logistical support to attend flagship trade shows, and targeted in-market promotional and business development opportunities.

5.0 Program design and delivery

This section summarizes evaluation findings on the evolution of the design and delivery of market development activities. It also describes promising practices and lessons learned, and provides an analysis of overlap with other market development programming.

5.1 Evolution of AAFC’s market development activities

The Market Development Division has improved the design and delivery of market development activities by implementing innovative tools and programs and integrating virtual activities in response to the 2020 COVID-19 pandemic.

The five-year reference period for this evaluation spans two iterations of the AAFC policy framework: Growing Forward 2 (2013–14 to 2017–18) and the Canadian Agricultural Partnership (2018–19 to 2020–23). The Growing Forward 2 policy framework saw AAFC reduce and refocus resources for market development activities. The Canadian Agricultural Partnership policy framework continued the delivery of market development activities with a focus on:

• Improving FPT coordination and collaboration through an enhanced International Market Engagement Teams structure;
• Increasing pan-Canadian investments through the creation of the In-Market Partnership Fund; and
• Building small and medium-sized enterprise export capacity through an increased footprint at flagship trade shows and improved recruitment strategies.

The evaluation confirmed AAFC adapted and evolved the design and delivery of its market development activities over the last five years to meet the needs of stakeholders, including adapting to the virtual space in response to the 2020 COVID-19 pandemic. Findings related to the evolution of each market development activity, as well as changes during the pandemic, can be found below.

Global analysis

The evaluation found Global Analysis adopted innovative tools and collaborated with provincial partners to improve the design and delivery of its services. Program documents and interviews with program staff confirmed that Global Analysis implemented an integrated strategic framework in 2015, which included the Country Ranking Model and Sector Prioritization Tool. This framework has been used to identify priority markets, as well as opportunities and challenges for specific sectors. Information from these tools is incorporated into Global Analysis products and helps to align these products with other departmental efforts, such as International Market Engagement Team strategies and Trade Commissioner activities. Further, Global Analysis staff co-chair and participate in the Export Market Analysis Consortium to increase collaboration and share market intelligence resources with representatives from provincial government.

Although Global Analysis uses promotional materials to advertise its services, almost half of industry interviewees were either not aware of or did not mention Global Analysis market development tools and services. This may be because Global Analysis takes a strategic approach to marketing, which targets clients relevant to the priority markets and sectors identified by its integrated strategic framework. Program staff explained this targeted approach was designed to maintain a high quality of service delivery by controlling client numbers. Global Analysis exceeded its targets for service delivery in each quarter of the evaluation reference period (Q4 of 2020–21 does not yet have data).

Flagship trade shows

The evaluation found the Trade Show Strategy and Delivery team made improvements to the design and delivery of flagship trade shows, including streamlined financial support for exhibitors and revised recruitment strategies.

During Growing Forward 2, trade associations were responsible for exhibitor recruitment, following a ‘first-come, first-served’ model which favoured returning exhibitors. Trade associations administered funding through the AgriMarketing Program, reimbursing exhibitors for 50% of eligible expenses following the submission of receipts. This approach evolved with the implementation of the Canada Pavilion Program under the Canadian Agricultural Partnership in 2018, following a two-year review of existing programming and a scan of trade show programming in other countries. The Canada Pavilion Program includes $1.5-million in annual program funding to foster a pan-Canadian presence at events and reduce barriers to participation for new-to-market first-time exhibitors and small and medium-sized enterprises.^Footnote4

The Canada Pavilion Program replaced the AgriMarketing Program at most flagship trade show events, except for two shows which are seafood-focused and dominated by provincially-led programs. The Canada Pavilion Program streamlined financial support by directly subsidizing 50% of costs for turn-key exhibitor booths, which reduced administrative burden for participants. The Program also included federal and provincial governments in exhibitor recruitment to prioritize new and first-time exhibitors.

In-Market Partnership Fund

A review of program documents showed the In-Market Partnership Fund was implemented following the 2014 sun setting of the Canada Brand Advocacy Initiative and a successful pilot program process. The Canada Brand Advocacy Initiative was a five-year, $32-million program designed to enhance the competitiveness of Canada’s agriculture and agri-food industry using consumer-oriented promotions in four target markets with significant opportunities for growth. In response to the refocusing of resources during the Growing Forward 2 policy framework and in response to changes in program funding for in-market promotional activities, AAFC allocated $83,500 in 2015 for nine business development and promotional projects proposed by agri-food trade commissioners. This was followed by a formal pilot in 2016–17 for the In-Market Partnership Fund, which allocated $150,000 towards 16 International Market Engagement Team projects focused on consumers, market readiness and non-flagship trade shows. The positive results of these pilots informed the design and implementation of the In-Market Partnership Fund. A review of documentation and interviews with AAFC stakeholders confirmed the design and delivery of the Fund responded to a need to provide in-market development supports.

Evolution of market development activities during the COVID-19 pandemic

The 2020 COVID-19 pandemic was found to have a negative impact on the delivery of market development activities, including cancelled In-Market Partnership Fund and flagship trade show in-market events. Despite this negative impact, the evaluation confirmed efforts are being made to update program design and delivery by accelerating virtual activities in the market development space to stay relevant in a competitive international marketplace. For example, the Market Development Division has:

• Played a leadership role to identify and invest in e-commerce and virtual platforms and coordinate a pan-Canadian response;
• Engaged in e-commerce, hybrid online/offline and virtual business-to-business events; and
• Announced a refresh of the Canada Brand Program to equip industry and partners with new graphics and a suite of digital-first marketing products appropriate for e-commerce, social media and virtual events.

The evaluation found individual activity areas have made changes to program delivery as well. For example, Global Analysis responded at the start of the pandemic by shifting priorities to internal analysis, temporarily interrupting delivery of its customized reporting service to support departmental needs. Global Analysis also moved to focus on virtual market platforms, export readiness and e-commerce trends, and made critical changes to its databases to accommodate requests for new types of information during the pandemic.

Program documents showed Trade Show Strategy and Delivery continued to host pavilions at flagship trade show events (when possible) by relying more on technology, in-market sales staff and trade commissioners to oversee trade show logistics and conduct business. This remote approach, which involved smaller pavilions and fewer exhibitors, is expected to continue as long as travel restrictions remain. Exhibitor feedback on the updated trade show approach collected by Trade Show Strategy and Delivery was generally positive, although there were several identified challenges:

• A reduced pavilion and buyer presence led to fewer sales and leads;
• Exhibitors noted fewer on-the-ground staff from the Government of Canada and a reduction in service; and
• Technological challenges impacted program delivery.

A review of program documents found exhibitors indicated a preference for returning to in-person activities, but also acknowledged the importance of maintaining a presence in-market with a remote approach despite lower sales and lead results.

In-Market Partnership Fund project reports from before and during the COVID-19 pandemic showed the team supported virtual activities to raise awareness of Canadian products in international markets and increase sales. Examples include:

• 2020 Canadian Food Promotion on the Momo e-commerce platform, a month-long promotion in Taiwan which led to an increase in pet food and seafood sales and increased consumer awareness; and
• 2021 Taste of Canada Mexico, a virtual business-to-business and exporter education event which led to meetings with buyers and sales leads.

The evaluation identified a number of challenges experienced during the shift to virtual initiatives including: virtual fatigue, technical issues during events, time zone management issues, increased need for FPT coordination, and higher than expected time and financial costs. Nonetheless, program documents suggested virtual market development activities are likely to continue, so there is value in AAFC continuing to invest in a hybrid virtual/in-person market development approach.

5.2 Promising practices and lessons learned

The evaluation identified several promising practices and lessons learned for the design and delivery of market development activities.

Promising practices are approaches which work effectively to produce intended results or successful outcomes, but have not necessarily been replicated in other contexts. Promising practices emerging from this evaluation include:

• The design of the In-Market Partnership Fund, which makes use of existing FPT committees (for example, In-Market Engagement Teams) to pool resources and expertise and facilitate a pan-Canadian approach to highly relevant market development activities in key priority markets. The Fund was implemented following a successful pilot process, which demonstrated a relatively small amount of federal funding could be used to attract investment of partner dollars and support FPT collaboration towards similar market development goals and interests.
• The design of the Canada Pavilion Program, which was informed by a careful review of past programming, consultations with stakeholders and a comparative analysis of programming from other countries. The Canada Pavilion Program streamlined access to financial support for exhibitors, eased administrative burden for exhibitors and prioritized first-time exhibitors through updated recruitment strategies.
• The integrated strategic framework, which uses qualitative and quantitative assessment through the Country Ranking Model and Sector Prioritization Tool to identify priority markets and sectors and ensure FPT activities are aligned with identified priorities. The framework’s process “is meant to drive coherence, set common objectives, align and direct resources to achieve maximum impact, and lead to teams that are invested in each other’s success”.^Footnote5 The priority sectors identified through the framework are used as the foundation for International Market Engagement Team market strategies.

Lessons learned identify risks and issues of programs, projects and activities to encourage or avoid the practice in future by highlighting strengths, weaknesses, or considerations which may help in program delivery. The evaluation identified the following lessons learned:

• Differing priorities, objectives, and fiscal and human resources policies among industry and provinces can make it difficult to coordinate funding for In-Market Partnership Fund events in a timely and consistent way. Partners are not always able to make funding commitments early in the calendar year, which means companies may be unable to participate in In-Market Partnership Fund activities as planned or events may be altered or cancelled due to unanticipated budget limitations. Program staff have tried to address this issue by communicating timelines with partners.
• Creating space for new exporters at market development events does not ensure Canadian companies are ready to enter international markets with their products. Although not explicitly asked during interviews, four highly knowledgeable federal and provincial stakeholders identified the need for enhanced federal focus on exporter preparedness and market readiness to create a pipeline of export-ready companies with the support of provinces and territories. However, it is important to note that under Growing Forward 2 and the current Canadian Agricultural Partnership, exporter preparedness is a provincial/territorial responsibility. Enhanced federal focus on exporter preparedness could be considered in discussions leading up to the next policy framework.
• Almost one-third of interviewees, including industry, trade commissioners, other federal departments and provincial representatives, identified a need to help Canadian businesses navigate supports and services across the spectrum of market development activities offered by different stakeholders. For example, a centralized website connecting AAFC market development activities with other relevant market development programming was identified as being an ideal tool. This finding suggests interviewees may not be aware of the Single Window or AgPal programs, or these programs may not be meeting the needs of all stakeholders.

5.3 Overlap and duplication

Many government, private and not-for-profit market development programs overlap with AAFC’s market development activities. The evaluation determined this overlap is often productive or complementary, while the unique features and governance structure of AAFC’s market development activities has helped to prevent duplication.

The following analysis defines ‘overlap’ as occurring when there is a degree of similarity between programs and ‘duplication’ as replicating other programming. After reviewing over 100 federal, provincial, private sector and non-profit programs, the evaluation found most include market development services which overlap with those offered by AAFC’s Market Development Division. In some cases, there is the potential for duplication. Examples of overlapping programs are listed below, with a fuller sampling in Annex C:

• Global Affairs Canada’s CanExport Small and Medium-sized Enterprises Program, which facilitates access to market intelligence and funds to participate in trade shows and other in-market activities;
• Provincial Ministries of Agriculture, which offer cost-shared programs under the Canadian Agricultural Partnership to support participation in trade shows, business-to-business events and other in-market promotional activities; and
• Industry associations like Canada Beef, which help businesses access market intelligence and attend in-market events like trade shows.

Key distinctions between AAFC and other market development services

Despite similarities in the types of activities supported, a review of programming confirmed AAFC and other market development services often differ with regard to program scope (for example, range of supported activities), intended beneficiaries (for example, eligibility of business size and sector) and/or program delivery model (for example, governance and budget). These differences help to prevent duplication of programming.

The evaluation found AAFC’s market development activities are unique from other market development programs in the following ways:

• Trade Show Strategy and Delivery is responsible for establishing the physical structure of the Canada Pavilion at flagship trade shows, whereas other programs only provide cost-sharing support. Unlike other programs, Trade Show Strategy and Delivery targets its efforts on nine flagship events.
• In-Market Partnership Fund dollars are distributed to trade commissioners in key priority markets, rather than given directly to businesses and industry associations. These funds are used to facilitate partnerships with provinces and industry, and leverage support for joint activities.
• Unlike most other market intelligence services, Global Analysis provides market intelligence at no cost to clients and does not require an application. Global Analysis serves industry as well as AAFC, other federal government departments, and provincial and territorial governments. Further, Global Analysis products are aligned with a set of common priorities which inform other departmental efforts, such as International Market Engagement Team strategies.

Productive overlap

Overlap and duplication of programming may be productive if similar programs are oversubscribed (for example, Global Affairs Canada’s CanExport Small and Medium-sized Enterprises Program) and in cases where programs complement one another by enhancing programming or filling a gap. For example, most industry interviewees said they obtained market information from industry associations or private companies in addition to Global Analysis, while large companies may have the resources to conduct analysis internally. In this case, as in others examined, the evaluation found simultaneous use of resources is complementary.

Prevention of overlap and duplication

Interviewed AAFC staff noted collaboration and communication between key players is an effective way to prevent duplication of programming in the market development space. It helps key players learn about other available programming to then offer distinctive services to clients and fill gaps in services. Collaboration and communication are facilitated, in part, by AAFC governance structures (for example, Federal-Provincial Market Development Council, Export Market Analysis Consortium and International Market Engagement Teams). Half of interviewees who commented on these FPT committees described formal FPT relationships as a mechanism to facilitate clarity, consistency and coordination of roles, and to prevent duplication of efforts in the market development space (for example, reviewing In-Market Partnership Fund plans and identifying potentially duplicative activities).

A majority of Trade Commissioner and industry interviewees, as well as half of provincial interviewees, identified challenges to FPT collaboration; for example, differing priorities between different levels of government and among provinces, overlap between federal and provincial services, and conflicting branding messages, which can confuse consumers.

6.0 Performance

This section provides an overview of the performance of market development activities, including its efficiency and achievement of expected outcomes.

6.1 Performance measurement

A lack of indicators specific to market development activities in the Trade and Market Expansion Performance Information Profile make it difficult to fully assess program performance.

Trade and Market Expansion Performance Information Profile

The Trade and Market Expansion Performance Information Profile and logic model are designed to incorporate the multiple program components of Trade and Market Expansion Program; however, the indicators related to market development activities were found to be under-developed and lacking sufficient granularity to adequately reflect the specific outputs of each market development activity area. Without additional activity-specific indicators tied to program outcomes, it is difficult to assess program progress. Further, several Trade and Market Expansion Program outcomes overlap with one another and there is no reference to Gender-Based Analysis Plus in the logic model.

Performance data and targets

The three market development activity areas collected aggregate data on a number of performance and administrative measures during the evaluation reference period. While not directly linked to the Trade and Market Expansion outcomes under evaluation, these data were used in this evaluation to support an assessment of market development effectiveness. Setting performance targets and/or benchmarks and standardizing data collection for three to five key measures directly linking market development activities to Trade and Market Expansion outcomes would enable a better assessment of program effectiveness over time. This sub-section outlines observations on the performance data of each activity area.

Global Analysis collects data on activity outputs, including the number of reports published and internal/external requests addressed. Considerations which could help improve performance measurement include:

• Standardize the tracking of client information to better identify unique and repeat clients, as well as change in client base over time;
• Identify targets and benchmarks to assess key program outputs and performance (for example, quality and usefulness of reports); and
• Use web analytics to understand use of online resources.

The Trade Show Strategy and Delivery team collects data from Canadian exhibitors at its flagship trade show events. Data is collected through a pre-show survey, to understand why exhibitors decide to participate in flagship trade show events, and a post-show survey, to get feedback on the trade show itself, services provided and actual and anticipated sales as a result of participating. Trade Show Strategy and Delivery has set targets for some, but not all, performance measures. Targets for key performance measures (for example, number of leads, on-site sales, etc.) would help to measure success of activities.

The Market Development Coordination and Branding team used experience from the early implementation of the In-Market Partnership Fund to refine its reporting process and data collection needs. Setting performance targets and collecting standardized performance data for the Fund is complicated by the diverse types of activities funded, as well as the different performance reporting criteria and systems used by the various delivery partners (for example, trade commissioners and provinces). While acknowledging these challenges, it remains beneficial to establish targets for a small number of key indicators to help assess program performance over time.

6.2 Efficiency

The Market Development Division provides efficient in-market activities and market intelligence for federal, provincial and industry stakeholders.

The evaluation found AAFC’s market development activities were delivered efficiently. An analysis of market development data from 2016–17 to 2020–21 revealed the Market Development Division spent nearly $18 million on activities, leveraged $13 million in partner funding,^Footnote6 and supported almost $500 million in on-site sales and an estimated $2.9 billion in anticipated exports. Although the Market Development Division provided services at reduced or no cost to clients, there are salary and non-pay operating costs to deliver these activities. The division was successful in leveraging partner dollars to supplement program funding and realized positive outcomes relative to the investment made.

International comparison of market development expenditures

The Government of Canada’s spending on agriculture and agri-food international market development activities is comparably less than other countries with respect to the level of exports. Agriculture, agri-food and seafood exports were examined within the context of spending on market development activities by federal governments in Canada, United States, Ireland and Australia. In 2018–19, the Canadian government spent one dollar on market development activities for every $2,115 worth of exports. In comparison, for every dollar spent, the United States realized $297 in exports; Ireland, $201;  and Australia, $1,443 (See Annex D). Excluding other contributing factors,^Footnote7 this simple comparison shows that for less expenditures, Canada is generating a higher level of exports. This suggests Canada is receiving a higher return on its market development activities than other similar countries.

If Canada increased its market development spending to a ratio similar to Australia, for example, an increase in spending of $14.9 million (a 47% increase), literature suggests that the return on investment of market development activities would average $10.8 per dollar spent, with a range of $3.5 to $25.7 per dollar spent.^{Footnote8,Footnote9,Footnote10} Based on the most conservative estimate, such an increase in spending in Canada could increase the sector’s revenues by $52.1 million or more.

Global analysis

On average, AAFC spends $1 million per year on Global Analysis, with the majority of spending for AAFC staff (57%) and the remaining covering costs to acquire data and for the development of databases.

Global Analysis minimizes costs and improves program efficiency by using a strategic approach to identify and target priority sectors, and by using information technology to generate reports and automatically distribute them to clients. Information and data obtained by Global Analysis is shared with multiple groups in AAFC, preventing the need for each group to purchase the information or coordinate data sharing agreements. Additionally, Global Analysis provides good value for external stakeholders by providing reports at no cost and including analysis and interpretation of the data.

Global Analysis has proven efficient in its development of market intelligence reports. The cost to Global Analysis for fulfilling requests is, on average, $1,499 (see Table 2). Typical market intelligence reports provided by private companies (for example, Euromonitor) can cost between USD$4,000 and USD$25,000. Industry interviewees noted the use of information from Global Analysis has saved their organizations thousands of dollars, even up to $100,000.

Flagship trade shows

AAFC spent $10.5 million on flagship trade shows between 2016–17 and 2020–21.^{Footnote11,Footnote12} Program expenses to cover the cost of trade show events account for the majority of program spending (72%). The cost of flagship trade shows is also shouldered by industry partners, who provided an additional $10.4 million in funding.

The implementation of the Canada Pavilion Program in 2018–19 resulted in a number of financial changes, including lower partner contributions (by 48%), decreased cost per event overall (by 14%), and improved cost-savings for industry (by 35%). However, Trade Show Strategy and Delivery had increased costs with the transition to the Canada Pavilion Program (by 25%) (see Table 3). The introduction of the Canada Pavilion Program shifted more of the cost to participate in flagship trade shows from industry partners to AAFC. This change lowers the financial barrier to participate in flagship trade shows, enabling smaller industry partners to participate.

Flagship trade shows have proven efficient in terms of their industry cost per sales lead generated. Trade Show Strategy and Delivery has identified an industry-accepted benchmark, confirmed by long-time exhibitors, of $2,000 cost per lead generated. Since 2016, the team has reported an average of $175 cost per lead, which is significantly lower than the $2,000 benchmark (see Table 4). Cost per lead ranged from a low of $61 to a high of $866, so even the trade show with the highest cost per lead value came in under the $2,000 benchmark.

Return on investment may also be a useful measure of efficiency; however, Trade Show Strategy and Delivery has not yet established a baseline or targets against which to measure return on investment data. The return on investment based on only self-reported on-site sales is $24.22 per dollar spent by AAFC and industry partners, including AAFC salary costs (see Table 5).^Footnote13 Return on investment based on anticipated sales was not included, as anticipated sales values were unverified estimates.

In-Market Partnership Fund

Between 2018–19 and 2019–20,^Footnote14 AAFC spent $1.0 million on the In-Market Partnership Fund, with the majority of spending designated for disbursements to projects (63%) and the remainder to cover staff salaries. Industry partners contributed to the financial outlays associated with program activities and have, on average, contributed $2.09 per dollar disbursed by AAFC (see Table 6). The cost-sharing between AAFC, industry, and provincial/territorial partners has the potential to be further leveraged; however, program staff noted an increased financial requirement from partners may prevent smaller firms from being able to participate.

The In-Market Partnership Fund disbursed, on average, $5,603 per project or $392 per company (see Table 7). A review of program documentation and interviews with program staff showed the Fund presents good value for stakeholders by supporting a wide variety of activities, products, and companies. The Market Development Coordination and Branding team has not set targets for cost efficiency.

Program staff explained the return on investment from In-Market Partnership Fund events may not be realized until two years after the event. In the absence of on-site sales, preliminary analysis on unverified anticipated sales for 2018–19 showed return on investment may reach up to $27.40 per dollar expended by AAFC^Footnote15 and partners.

6.3 Effectiveness

Market development activities have contributed to immediate and intermediate intended outcomes, and supported the long-term goal of economic growth.

Evaluation evidence indicated market development activities have contributed to immediate and intermediate outcomes, and supported the long-term outcome, by:

• Sharing market intelligence about international markets with government and industry stakeholders;
• Creating the space to showcase Canadian products to international buyers at trade shows and other in-market promotional events;
• Facilitating face-to-face interactions between exporters and buyers at in-market events, which interviewees described as vital to seizing business opportunities;
• Facilitating online, virtual, and e-commerce market development events; and
• Helping Canadian agriculture and agri-food companies increase export sales to foreign markets.

The following section outlines how each market development activity area contributed to relevant Trade and Market Expansion outcomes.

Global analysis

The evaluation found Global Analysis has contributed to increasing stakeholder awareness of international market opportunities, and in doing so, contributed to successfully supporting the Canadian agriculture and agri-food sector in its efforts to take advantage of international market opportunities.

Trade and Market Expansion outcome – Increased stakeholder awareness of international market opportunities

A review of program documents and interviews with stakeholders found Global Analysis increased stakeholder awareness of international market opportunities by sharing market intelligence information with industry, other areas of government, and trade commissioners through various means:

• publishing market intelligence reports on its website;
• distributing market intelligence reports directly through email;
• responding to internal and external requests for information; and
• raising awareness of market intelligence through social media, promotional cards, and presentations at industry meetings and events.

Outputs from Global Analysis’ integrated strategic framework, including the Country Ranking Model and Sector Prioritization Tool, are incorporated into market intelligence reports along with additional information and analysis related to market opportunities, trends, risks, and challenges. Global Analysis reports on e-commerce trends help industry to identify and seize market development opportunities within this emerging business model.

The evaluation’s review of program data revealed Global Analysis published approximately 60 reports on AAFC’s international market intelligence webpage per calendar year from 2017 to 2019 and published 45 reports in 2020. Since 2016–17, Global Analysis responded to over 2,000 internal requests (from AAFC) and over 1,400 external requests^Footnote16 (from non-AAFC stakeholders) for market intelligence. Requests for intelligence were lower in 2020–21, as services were interrupted from March to October 2020 while Global Analysis shifted its priorities to respond to emergent needs for market intelligence during the pandemic. Although these data are evidence Global Analysis is likely contributing to increased stakeholder awareness, there are no indicators in the Trade and Market Expansion logic model against which to quantitatively assess the effectiveness of Global Analysis relative to this outcome.

Industry, Trade Commissioner, and provincial interviewees described significant use of Global Analysis products to better understand market conditions and opportunities. Market intelligence from Global Analysis was identified by one provincial interviewee and almost half of AAFC interviewees as particularly helpful for small and medium-sized enterprises that lack the resources to conduct market research themselves or risk entering unprofitable markets. Fewer than half of industry interviewees commented that Global Analysis reports may be too high-level to meet the specific informational needs of industry; however, the majority of provincial and industry interviewees agreed the reports provide a useful foundation to better understand markets of interest or guide further research.

Trade and Market Expansion outcome – Contribution to supporting the Canadian agriculture and agri-food sector in its efforts to take advantage of new international market opportunities

Global Analysis helps the agriculture and agri-food sector take advantage of new international market opportunities by raising stakeholder awareness of these opportunities. A review of documents and discussions with program staff showed International Market Engagement Teams use market intelligence from Global Analysis to inform the development of market strategies, while Global Analysis also provides informational supports in advance of other market development activities. For example, prior to flagship trade shows, Global Analysis provides attendees with market intelligence to better seek out and take advantage of market development opportunities while at these events. A review of program survey data showed an average of 80% of exhibitors found the market intelligence they received in advance of flagship trade show events important.

Flagship trade shows

The evaluation found flagship trade shows have been effective at increasing stakeholder awareness of market development activities, maintaining the visibility of Canadian products in international markets, and helping to successfully support the Canadian agriculture and agri-food sector in its efforts to take advantage of new international market opportunities.

A review of program data from 2016–17 to 2020–21 showed almost 1,500 Canadian exhibitors have attended 31 flagship events in Europe, Asia, and the Middle East, including an average of 227 unique companies each year.^Footnote17 Six events were cancelled or postponed in 2019–20 and 2020–21 due to the COVID-19 pandemic. On average, 29% of companies in all flagship events and 34% of companies participating in the Canada Pavilion Program were first-time exhibitors

Trade and Market Expansion outcome – Increased stakeholder awareness of international market opportunities

Evidence from a pre-show survey by the program suggested flagship trade shows somewhat contribute to increased stakeholder awareness of market development activities, with 27% of exhibitors identifying ‘evaluate the market’ as a top reason for attending events.

Trade and Market Expansion outcome – Contribution to making Canadian products visible in international markets

The evaluation found flagship trade shows make Canadian products visible in international markets by providing a space where Canadian exhibitors can share their products with a vast international audience. A review of program data showed exhibitors are exposed to an average of 80,000 buyers per show and representatives from 40 to 198 countries. In total, flagship trade shows offered access to over 200,000 to 760,000 potential buyers each year.

Interviews highlighted the benefit of participating as part of the Canada Pavilion, a pan-Canadian, nationally branded structure recognizable to foreign buyers which communicates a message of high quality products. The Canada Pavilion is particularly helpful for small and medium-sized enterprises that have a limited international branding presence. These small and medium-sized enterprises could be overlooked if independently positioned on a trade show floor where an average of 3,000 other exhibitors are competing for attention.

In post-event surveys administered by the program, almost all exhibitors said there was a distinct advantage of being associated with the Canada Pavilion and participating in the pavilion represented good value for their company. Three provincial and industry interviewees identified a risk of the pan-Canadian approach to the Canada Pavilion, as the pavilion may take away from the robustness and individuality of regions, provinces, and their unique products, while national branding may encourage buyers to look for only traditional ‘Canadian’ products at the pavilion (for example, maple syrup).

Trade and Market Expansion outcome – Contribution to supporting the Canadian agriculture and agri-food sector in its efforts to take advantage of new international market opportunities

Program data from a pre-show survey showed exhibitors primarily attended flagship trade show events to identify new clients, maintain relationships with existing clients, and make sales. By facilitating face-to-face interaction between Canadian exporters and foreign buyers and creating the space for other networking activities, flagship trade shows supported Canadian agriculture and agri-food companies in efforts to take advantage of new international market opportunities.

A review of program performance data confirmed Trade Show Strategy and Delivery exceeded its target of 20% first-time exhibitors at all Canada Pavilion Program events and exceeded its target to support 250 unique companies each year, except during the pandemic (due to cancelled and postponed events). As a result of participating in flagship trade shows from 2016–17 to 2020–21, exhibitors reported establishing over 59,000 leads with buyers, at least 25% of which were likely to generate sales. Self-reported on-site sales from flagship trade show events exceeded $505-million during the evaluation reference period. There are no performance targets for leads generated and sales, so these data cannot be used to quantitatively assess effectiveness.

The evaluation’s review of program data from a post-event survey of exhibitors showed very high satisfaction with flagship trade show programming. Almost all exhibitors were willing to participate again in the Canada Pavilion and would recommend participation to other companies. Interviews found almost all industry interviewees took advantage of on-site supports, such as meetings with trade commissioners and networking events. The program’s post-event survey data showed a majority of exhibitors indicated these on-site supports were an important part of their experience, with 75% finding meetings with trade commissioners important and 68% finding networking events important. In the first two years of the Canada Pavilion Program, Trade Show Strategy and Delivery far exceeded service standard targets, receiving 98% or higher in all three service standard categories.

Event cancellations and smaller hybrid events due to the pandemic resulted in fewer companies supported and lower sales and leads numbers in 2020–21. Further, program staff indicated Trade Show Strategy and Delivery is restricted in its ability to expand the pavilion, serve more companies, and improve its performance numbers due to limited floor space at several major events.

In-Market Partnership Fund

The evaluation found the In-Market Partnership Fund has contributed to increased stakeholder awareness of market development activities, maintaining the visibility of Canadian products in international markets, and helping to successfully support the Canadian agriculture and agri-food sector in its efforts to take advantage of new international market opportunities.

Trade and Market Expansion outcome – Increased stakeholder awareness of international market opportunities

A review of program documents revealed the In-Market Partnership Fund has funded some activities which increase industry capacity to identify market development opportunities, including exporter education seminars. In 2018–19 and 2019–20, an average of six% of the Fund’s budget was spent on market research studies, while four% was spent on educational activities. Although there is limited performance data to determine the effectiveness of these activities, the 2019–20 Fund report showed positive uptake and impact from two market intelligence products through the Mexico International Market Engagement Team.

Trade and Market Expansion outcome – Contribution to making Canadian products visible in international markets

The In-Market Partnership Fund contributed to maintaining the visibility of Canadian products in international markets by facilitating smaller scale, targeted promotional activities enabling exporters to share their products directly with buyers in international markets. Program documentation identified 115 in-market events supported across all International Market Engagement Team regions during the first two years of the Fund, making Canadian products visible in priority international markets.

Besides supporting non-flagship international trade shows, business-to-business programs, and in-market retail promotions of Canadian products by a retail store or distributor in other countries, the evaluation found the In-Market Partnership Fund also supported online promotional activities and shifts to e-commerce platforms. One example is the 2019 China Pet Food Promotion, which involved creating online promotional materials, posting on multiple online platforms, and sending targeted messages to key buyers. The campaign made Canadian pet food products more visible, with an estimated reach of two million old, new, and potential customers.

Trade and Market Expansion outcome – Contribution to supporting the Canadian agriculture and agri-food sector in its efforts to take advantage of new international market opportunities

In-Market Partnership Fund events offer smaller, targeted opportunities to network and engage with buyers at the retail level, which can help agriculture and agri-food companies find the right buyers and drive consumer demand for products. Program documents confirmed 833 companies in 2018–19 and 809 companies in 2019–20 were supported at In-Market Partnership Fund international market events.^Footnote18 This far exceeds the Trade and Market Expansion key performance indicator for companies served through the Fund, which targeted a 25% increase from a baseline of 200 businesses by March 31, 2021.

In-Market Partnership Fund is generally used as “seed-money” to leverage partner funding for in-market activities. Program performance data and interviews with internal and external stakeholders showed Fund activities have provided Canadian companies with unique opportunities to expand in new markets, meet potential buyers, showcase and sample their products to stimulate sales, and capitalize on Canada’s free trade agreements to diversify their exports. Participating in these events has resulted in contacts with local buyers, on-site and anticipated sales, foreign retailer uptake of products, and sales leads. Fund events also resulted in Canadian companies entering new markets and diversifying their exports.

Although there is a lack of performance data to show cumulative impact based on existing indicators in the Trade and Market Expansion Performance Information Profile, the evaluation identified examples of the In-Market Partnership Fund supporting the agriculture and agri-food sector in taking advantage of new international market opportunities:

• ‘Taste of Canada Bangkok’ involved a two-week in-store promotion at three high-end retail locations. The event introduced three new-to-market products, introduced exporters to importers, and resulted in over $85,000 in on-site sales.
• ‘Canadian Food Week at HEMA’ involved a 10-day promotional campaign at 155 supermarkets across China and through HEMA’s mobile app. The campaign featured products from 35 companies that saw a 36% increase in sales compared to pre-promotion. The social media component generated 30 million views.
• ‘Supplier Day’ brought 15 Canadian companies to Monterrey, Mexico to showcase products and learn about the market through retail tours and structured business-to-business activities. The event led to over 150 meetings with potential buyers.

Support for under-represented groups

Interviewees were not aware of targeted market development supports for diverse population groups (for example, Indigenous, women, youth, persons with disabilities, etc.). There is no standard suite of targeted programming for these population groups as this was not a primary focus in the design of market development activities during the reference period. One exception was a 2019–20 single event in Minneapolis highlighting Canadian indigenous-, women-, and LGBTQ+-owned companies, which resulted in increased awareness of these companies and business opportunities. Almost half of program staff who were interviewed indicated there are plans to further engage more diverse populations in market development activities going forward.

Supporting the ultimate outcome

The ultimate outcome for the Trade and Market Expansion Program is contributing to growing the economy by increasing the value of agriculture and agri-food exports. Export value is an important measure because, “with over half of Canada’s agricultural, fish and seafood production being exported, the growth and competitiveness of the sector relies heavily on export markets and on Canada’s international competitiveness”.^Footnote19 The target value for agriculture and agri-food exports is at least $75-billion by December 2025, starting from a baseline of $62.5-billion in 2016.^Footnote20 Based on departmental reporting, Canada is very close to reaching its target, with $74-billion in exports reported in 2020 despite the COVID–19 pandemic. Preliminary analysis suggests the recent growth in exports is due to high international market prices and increased demand for agriculture and agri-food sector products from China and the United States.

Trade and Market Expansion is one of six program areas contributing to the departmental results framework outcome of growing the economy. Market development activities represent a small fraction of the AAFC departmental budget directed toward this departmental result and ultimate outcome. As such, the growth in exports cannot be directly attributed to market development activities alone. 

Market development activities enable relationship building between Canadian exporters and international buyers. It may take time for relationships to lead to sales following a market development event, and the sale of products in international markets can generate demand for Canadian products beyond the initial buyer relationship. Nonetheless, the evaluation found industry participation in flagship trade shows and In-Market Partnership Fund events have led to sales with buyers abroad, including almost $500-million in on-site sales at flagship trade show events since 2016–17. These sales may not have occurred without the visibility and opportunities afforded to industry through these market development activities. Almost half of industry interviewees stated they would not have made connections in foreign markets without federal support and/or attributed an increase in exports to AAFC market development programming. 

7.0 Conclusions and recommendations

The evaluation found AAFC market development activities are relevant to the needs of industry and other stakeholders, and are aligned with federal and departmental priorities. Market development activities were delivered efficiently and have contributed to achieving intended outcomes, while generating promising practices and lessons learned. Compared to other similar countries, Canada has generated higher agri-food, agriculture, and seafood export levels, despite spending comparably less on market development. Although there is overlap with other federal, provincial, and industry-level market development services, the overlap was often found to be productive or complementary in nature. Further, the unique design of AAFC’s market development activities and FPT governance structure has helped to prevent duplication.

While there were challenges to the adoption of information technology and virtual activities, leveraging virtual platforms and tools helped drive expansion, increased accessibility of programming, and enabled smaller firms to participate. In-person activities remain a vital part of international market development activities; however, the effective integration of a hybrid virtual/in-person approach helped support the achievement of outcomes and improved the accessibility and reach of in-market activities. Current and future lessons learned in the delivery of virtual and hybrid activities can guide strategic investments in this area.

The evaluation found each market development activity area could identify key performance indicators and targets aligned to the relevant Trade and Market Expansion Program outcomes to enable improved analysis of results.  

Recommendations

• Recommendation 1: The Assistant Deputy Minister, International Affairs Branch, should assess the feasibility of formalizing and expanding the Market Development Division’s hybrid virtual/in-person approach to international market development.
• Recommendation 2: The Assistant Deputy Minister, International Affairs Branch, in consultation with Corporate Management Branch, should integrate market development specific key performance indicators and related targets into the Trade and Market Expansion Performance Information Profile.

Management Response and Action Plan: Management from the International Affairs Branch are supportive of this evaluation as well as the recommendations and have outlined an action plan to address them by March 31, 2022.

Annex A: Evaluation methodology

Document, data, and literature review

To assess program relevance, design and delivery, efficiency, and effectiveness, the evaluation reviewed internal program documents and performance data. With support from the Canadian Agriculture Library, the evaluation also examined select literature to support the assessment of relevance.

Key informant interviews

Interviews were conducted with internal and external stakeholders to assess program relevance, design and delivery, efficiency, and effectiveness. The evaluation involved 23 interviews with 25 stakeholders, including AAFC program staff (8), other government departments (1), representatives from provincial governments (4), agri-food trade commissioners (3), and representatives from Canadian agriculture and agri-food companies and industry associations that received support through AAFC market development activities (9).

Case studies

Three case studies were conducted to explore, in-depth, one area of interest in each of the market development activity areas. The case studies explored the following themes: development and delivery of the Canada Pavilion Program by the Trade Show Strategy and Delivery team; the manner in which Global Analysis increases awareness of international market opportunities; and, the shift toward virtual market development activities (with a special focus on In-Market Partnership Fund activities). The case studies were informed by a review of program documents and data, as well as content from key informant interviews.

Methodological limitations

The following methodological limitations were considered in interpreting the data:

Annex B: Trade and market expansion program logic model

Annex C: Abbreviated list of overlapping programs

Annex D: Comparison of market development funding by country