Source: The Standard
It is no secret that agribusiness — the totality of all agriculture and agri-foods businesses — in Niagara is well-established and forms a vital piece of the region’s iconic global brand as a “green paradise.”
In addition to its natural beauty, the region is endowed with critical advantages of favourable soils and microclimates. It boasts some of the most seasoned entrepreneurs and specialized operators. It has a world-class pool of researchers and research facilities that together make the region the envy of most places.
The agribusiness value chain in Niagara runs the full spectrum of the sector, from basic farm-based operations to high-end, value-added industrial processes and products — spanning a range from the globally renowned viticulture to cash crops, dairy farms, and greenhouses — including flowers, fruit, vegetables and the more recent developments in cannabis growth. It’s not surprising then that agribusiness is one of Niagara’s top three economic drivers, along with tourism and manufacturing.
The story gets even better. Over the past decade, Niagara’s agribusiness sector is not only well-established but growing fast and outpacing Ontario and Canadian growth rates.
As Table 1 indicates, between 2013 and 2023 Niagara registered the highest overall percentage employment job growth for the agribusiness sector, reporting an increase of 22 per cent, compared to Ontario’s modest three-per-cent increase and a general stagnation for all of Canada.
| Region | 2013 Jobs | 2023 Jobs | Change | % Change |
| Niagara | 7,736 | 9,433 | 1,697 | 22% |
| Ontario | 208,82 | 214,863 | 6,037 | 3% |
| Canada | 638,834 | 640,805 | 1,971 | 0% |
Breaking down this positive sector-wide trend into component industries, Table 2, we found Niagara’s exponential job growth of 484 per cent in animal food manufacturing substantially dwarfs the Ontario growth rate of seven per cent and the national rate of 13 per cent. We saw similar trends in farm product merchant wholesalers. This trend is repeated in meat product manufacturing (46 per cent, 22 per cent, 12 per cent), and other food manufacturing.
In farms, Niagara’s job growth of 17 per cent is in stark contrast to the contractions in Ontario (-17 per cent) and Canada (-16 per cent).
| Description | Niagara | Ontario | Canada |
| Cannabis product manufacturing | Insuf. Data | Insuf. Data | Insuf. Data |
| Animal food manufacturing | 484% | 7% | 13% |
| Farm product merchant wholesalers | 72% | 34% | 19% |
| Meat product manufacturing | 46% | 22% | 12% |
| Beverage manufacturing | 45% | 51% | 66% |
| Other food manufacturing | 36% | 8% | 35% |
| Dairy product manufacturing | 21% | 31% | 21% |
Judging by these industry job growth figures, Niagara has not only maintained resilience over the past decade but has reinforced its core strengths with notable performance in agri-food manufacturing industries.
To further probe into the state of Niagara’s agribusiness sector, another vital lens is the composite of industries with the highest employment concentration (measured by what is referred to as location quotients or LQs). Specifically, LQs allow us to compare Niagara’s job concentration in a given sector relative to the job concentration in the sector at the national level.
An LQ greater than (less than) 1.0 shows a level of concentration above (below) the standardized national average. A score of 1.5 or higher shows a high degree of specialization.
As Table 3’s scores indicate, Niagara reports the highest employment concentration in the following farm product merchant wholesalers (4.55), grain and oilseed milling (4.50), beverage manufacturing (3.42), cannabis product manufacturing (3.13) and farms (1.72).
Table 3: National location quotient
for agribusiness jobs
| Description | Niagara | Ontario |
| Farm product merchant wholesalers | 4.55 | 0.90 |
| Grain and oilseed milling | 4.50 | 0.83 |
| Beverage manufacturing | 3.42 | 1.06 |
| Cannabis product manufacturing | 3.13 | 1.42 |
| Farms | 1.72 | 0.70 |
The above figures unpack some trends behind Statistics Canada’s most recent census data, which reported that in 2021, agriculture contributed $1.71 billion to Niagara’s GDP and provided 24,000 jobs. This amounts to an increase of 21 per cent over five years (2016-2021).
Although Niagara lays claim to only 23 per cent of the Golden Horseshoe-area total farms, it commands 41 per cent of the total agricultural economic impact. Niagara boasts 75 per cent of Ontario’s tender fruit orchards and 90 per cent of grape production in Ontario.
Stretching one’s gaze beyond Ontario, Niagara is responsible for 80 per cent of Canada’s total grape and wine production. It is Canada’s viticulture “capital” by virtue of being the largest wine-producing region in the country.
All those numbers should bring a smile to the face of a proud Niagara resident.
But should we rest on our laurels?
Complacency would be dangerous in a fast and furious world of breakneck change in global markets and technologies. Building on the region’s current strengths and adapting them to ever-shifting conditions requires understanding the nuances of emerging trends, opportunities and challenges in agribusiness.
One way to do this is to shift our mindset from the traditional tendency to think of agriculture as a standalone sector and focus on emergent fusions of industries that transcend sectors, such as agriculture, manufacturing and tourism.
For instance, a close look at the tables above reveals a fusion of agriculture and manufacturing through strong growth trends in a cluster of industries such as animal food, meat product, beverage, other food, dairy product, and pesticide, fertilizer and other agricultural chemical manufacturing.
What is happening in Niagara is a merging of two sectors as industries blend and new industries emerge. Identifying these industrial fusions and pinpointing component industries with the greatest growth potentials is vital to a region building on its core strengths as it carves a greater niche in global markets and cements its economic resilience in the face of cutthroat competition with other regions.
Academics use the fancy term “smart industrialization” to describe this strategic approach of identifying and intensifying connections among industries that transcend the boundaries of traditional “sectors.”
As a further example, the tables above point to fusions and complementarities between agribusiness and tourism, with strong growth numbers in industries related to agri-food tourism. Understanding and strategizing along the lines of these trans-sectoral fusions of industries are the necessary elements of “smart industrialization.”
As one United Nations study points out, opportunities in agri-tourism are some of the most underutilized economic potentials in mid-sized regions like Niagara. Thankfully, most agribusiness stakeholders in Niagara get this.
The region’s vast sprawl of wineries and its global brand present low-hanging fruit that can be exploited by taking a more thorough inventory of assets and synergies between wine, food and tourism. The region’s vast assets present a massive potential for linkages and synergies among agrifood, tourism and creative industries that could match or exceed places like the much-celebrated Napa Valley and Okanagan Valley.
All this means the growth trends reported above do not by themselves automatically make agribusiness a vibrant, resilient and adaptive cluster. Understanding the fusions between agriculture, manufacturing and tourism and pinpointing component industries with the highest growth trends and location quotients can be the beginning of smart industrialization strategy that highlights the region’s specific strengths. And this is only the beginning.
Viewing agribusiness in Niagara through the lens of what researchers call economic clusters and innovation systems, the region has some work to do in building on its strengths and positioning itself for seismic changes in global markets and technologies. Addressing these challenges could be grouped into what some leading thinkers term as three broad categories of cluster syndromes, namely: lock-in, organizational thinness and internal fragmentation.
Lock-in refers to the tendency of a sector, such as agribusiness, to become stuck into a mould of cognitive seizure from which reinvention and renewal seems nearly impossible or staunchly resisted.
For example, changes in markets and technology are disruptive forces that need to be leveraged and managed for a region’s key economic sectors to remain relevant and competitive. Practically, this means building conduits of research and innovation that transcend sectors in order to maximize synergies along the full spectrum of value-chain activities from primary agricultural activities to tertiary or advanced agribusiness processes. The latter end of the value chain spectrum thus intersects with other sectors like manufacturing (equipment manufacturing, for instance), tourism (as in viticulture) and the like.
The second syndrome, organizational thinness, refers to lack of institutional platforms or networks for strategic visioning and planning to sustain an economic cluster’s resilience and adaptability in the face of change. Organizational thinness speaks to the quality of local governance but should not be confused with government.
Governance refers to any platform that commands the legitimacy to mobilize key actors from government, the private sector, post-secondary institutions, research centres and other community groups to co-ordinate efforts and align strategies.
For instance, in addition to industry associations, some of the central players within Niagara’s agribusiness innovation infrastructure support system consist of the following: Brock University’s Cool Climate Oenology and Viticulture Institute, Brock-Niagara Validation, Prototyping and Manufacturing Institute and Brock LINC, among others. Niagara College also has a wealth of research and innovation assets that include the Walker Advanced Manufacturing Innovation Centre, the Canadian Food and Wine Institute, the Agricultural and Environmental Technologies Innovation Centre and the Greenhouse Technology Network.
Beyond these, Vineland Research and Innovation Centre (VRIC) is a world-recognized horticultural science and innovation centre. Similarly, Niagara Parks Botanical Gardens and School of Horticulture is a distinct centre of excellence in its own right. Furthermore, there are technology incubation platforms like Innovate Niagara and the Niagara Falls-Ryerson Innovation Hub that offer a range of support services in their specialized domains. These institutional assets and their pool of research talents point to a region with the vital foundations of a vibrant agribusiness innovation ecosystem.
While each of these organizations is a distinct centre of excellence, a resilient cluster requires building synchronized platforms that leverage and share knowledge across these organizations and the specific industries they serve. This means building an infrastructure of knowledge generation and mobilization that is well aligned with the needs of key industries that make up the cluster across the value chain of activities.
This is what transforms a sector in the traditional sense into a cluster and innovation system in the modern sense of a resilient and adaptive knowledge-driven economy.
This leads to the third syndrome mentioned above, internal fragmentation. This refers to the absence of shared cognitive frames and narratives that provide the glue for binding together the key actors in the vital industries that make up a cluster.
One key characteristic of agribusiness (and all sectors) in Niagara is the vast majority of firms are small businesses, as Table 4 reveals. The table highlights a well-known fact that small businesses account for 97.8 per cent of all firms in Niagara.
| Sector | Businesses without employees | Businesses with employees | Number of Employees | |||||||
| 1 to 4 | 5 to 9 | 10 to 19 | 20 to 49 | 50 to 99 | 100 to 199 | 200 to 499 | 500+ | |||
| Agribusiness | 960 | 565 | 166 | 98 | 108 | 113 | 49 | 25 | 6 | 0 |
The prevalence of small businesses in a region need not be an unsurmountable weakness. The most adaptive industrial ecosystems worldwide are known for the prevalence of SMEs.
The key question is whether industry actors and other stakeholders share a common understanding of sector trends, including emerging trans-sectoral opportunities and challenges.
Such challenges include the fact small firms often do not have the internal capacity to address productivity bottlenecks, such as undertaking their own R&D or de-risking adoption of existing technologies. Capacity constraints of this nature can take a profoundly heavy toll on competitiveness of small businesses and, thus, on their potential to expand or take advantage of new opportunities.
A shared cognitive frame positions a constellation of actors to jointly exploit emerging opportunities and address challenges. Such a cognitive frame sustained by institutionalized and regular policy deliberations is a prerequisite for strategic information flows between research centres and industry groups and across the industries that make up a cluster’s value chain.
To conclude, we have provided some analysis of recent agribusiness trends in Niagara. The numbers are pleasing to the eye. We then explored next steps for building on the region’s core strengths and creating a more integrated, resilient and adaptive agribusiness cluster to navigate the next frontier of innovation, productivity and job creation.