Tofu’s Canadian comeback: Soy industry bets new Health Canada claim will help boost $100-million market

Twenty-four hours a day, six days a week, Sunrise Soya Foods’ tofu factory on the edge of Toronto crushes Ontario soybeans and processes them into the staple protein found in vegetarian and Asian diets. On Sunday, the factory rests.

But Diane Jang, president of the 60-year-old private company that dominates Canada’s $34-million tofu industry with at least two-thirds of the market share, believes that might not be the case for much longer.

Jang and her counterparts in the soy food industry expect demand for their products to get a boost from the recently approved Health Canada claim that “soy protein helps lower cholesterol” — a label that, once finalized this summer and squeezed onto already crowded packages, is expected to be seen in time for the back to school season.

Producers hope the claim will have an outsized effect on a slow-growth industry that remains relatively paltry despite Canada’s large population of immigrants from places where tofu has been consumed for centuries, such as China, Korea and Japan.

Fuelling their optimism is that the U.S. soy foods industry experienced “dramatic” growth when that country approved a similar claim in 1999, according to industry statistics that claim sales ballooned to $4.5 billion in 2013 from about $1 billion, with soy milk enjoying the biggest spike from health-conscious consumers.

By comparison, the entire Canadian soy market — which includes tofu, soy meat alternatives and soy cheese — is still only worth almost $100 million annually, according to Nielsen market research data.

Peter J. Thompson/National Post

Peter J. Thompson/National PostDiane Jang, president of Sunrise Soya Foods, the 60-year-old private company that dominates Canada’s $34-million tofu industry.

“The good news is because of what’s happened in the U.S., we think the impact in Canada is going to be very positive,” Jang said. “We expect growth.”

But food economists and marketers are skeptical that Canada will get the same boost in a world inundated with health labels and conflicting nutrition information. The label may have provided novel information in 1999, but the ease of accessing health information online means the claim is likely old news for people seeking cholesterol-lowering foods via Google searches.

Historically, food fortification claims (such as vitamin D in milk and the mandatory ionization of salt) were used as public health interventions, said Charlene Elliott, Canada Research Chair of food marketing at the University of Calgary.

Research shows health claims increase consumers’ intentions to purchase a certain product, she said, but consumers must choose from an endless army of “better-for-you” products.

Dimas Ardian/Bloomberg News

Dimas Ardian/Bloomberg NewsSoybeans used to make tofu.

“You’ve got so much information on a package, it’s incredibly challenging to know what is fact, what is marketing and what I should be paying attention to,” Elliott said. “(A health claim) will probably help an increase in sales, but a lot of it is about marketing, not nutrition.”

Tofu remains a bit of a mystery to people who didn’t grow up eating it. About 17 per cent of Canadian households (and 26 per cent of Quebec households) purchase tofu, said Jang, citing Nielsen market data. But the average household only spends $9 annually on tofu, according to Statistics Canada’s annual household spending survey — about as much as they spend on celery ($11), peanuts ($11) and cured fish ($8).

Tofu tends to “fly under the radar,” said Dror Balshine, president of Mississauga, Ont.-based Sol Cuisine Inc., which makes soy burgers, meat substitutes and tofu.

Many people don’t know how to cook tofu, it’s only made by a few larger producers and many restaurants still get it from very small producers that are nearly impossible to track.

Sunrise is an exception. The company expanded east in 2002 from its origins as a Vancouver mom-and-pop shop founded by Chinese immigrants and it now sells through 95 per cent of national grocery stores and more than 1,000 shops serving ethnic markets.

A tour of its Toronto factory shows making tofu is quite simple. Soybeans are soaked in water overnight then crushed through a hopper to create slurry, a liquid that curdles when coagulant is added. The leftover pulp, called okara, is recycled into livestock and chicken feed, while the slurry is poured through cheesecloth and pressed into tofu slabs before being sliced, pasteurized and packaged in the containers found in stores.

FP0701_TOFU_C_MFCompetitors use different coagulants and temperatures to set their products apart — details that are fiercely protected, much like a baker would never share an exact cake recipe.

The Canadian soy industry grows approximately five million acres of beans annually. Last year marked the seventh consecutive year of record soybean production, according to Statistics Canada. Most beans are exported to Japan for tofu or used for animal feed.

Jeff Schmalz, president of industry advocate Soy 20/20, led the four-year effort to convince Health Canada to approve the cholesterol claim. His group put forth thousands of studies regarding the link between soy protein and cholesterol before Health Canada ultimately approved the claim in 2015.

Eleven countries already have similar claims. Meantime, Canada’s soy food market has been fairly flat as trendy almond milk steals sales from soy milk, Schmalz said.

“We’re playing catch-up,” he said. “I think soy is poised to make a comeback once we get the labels out there.”

I think soy is poised to make a comeback once we get the labels out there.

But Schmalz recognizes the marketing challenge of teaching consumers that 25 grams of soy protein per day reduces cholesterol.

“It’s one thing to have a claim, but then you have to communicate that health claim to consumers,” he said.

There’s also a pesky backlash against soy due to concerns about the hormones (specifically, phytoestrogens) contained in soy. Some fear the intake of estrogen could cause feminization in men, although this claim isn’t backed by research on humans, said Alison Duncan, a soy protein expert and professor at the University of Guelph’s Department of Human Health and Nutritional Sciences.

Duncan said Health Canada has a “very rigorous” health-claim process that completely relies on scientific literature. Before such a claim is approved, Health Canada analyzes research supporting the positive claim and conducts a safety assessment.

Peter J. Thompson/National Post

Peter J. Thompson/National PostRaw soy waiting to be processed at the Sunrise Soya Foods plant in Toronto.

“Canadians can feel confident that there is evidence to support this,” she said.

John Cranfield, professor and chair of the University of Guelph’s Department of Food, Agricultural and Resource Economics, said the health claim is good news for both the soy industry and consumers looking for more information. 

But although the new information might tip the balance for casual consumers, people tend to buy what they bought last week, and he doesn’t expect as big of a boost as the U.S. enjoyed.

“I’m holding my breath about a sizable increase,” Cranfield said. “What’s different now than 1999, we’ve got far greater access to information as consumers… I would expect there’s consumers that have already internalized this.”

Canadians can feel confident that there is evidence to support this (health claim).

Tofu is already capitalizing on numerous eating trends, not least the move to plant-based protein after the World Health Organization last fall classified red meat as a probable carcinogenic, Sunrise’s Jang said. Soaring meat prices haven’t hurt either, she added.

“People are just wanting to eat healthier,” she said.

Buying local, using non-GMO crops and organic ingredients, and health safety are other trends Canada’s handful of larger tofu producers has responded to by adopting standards and slapping on labels.

The vast majority of tofu sold in Canada is made locally out of local ingredients, because tofu is stored in water and heavy to ship, said Collin Chan, sales manager at Vancouver-based Superior Tofu. (His company made headlines earlier this year when a flock of seagulls got trapped in a bin of okara slated to become livestock feed. The fibrous pulp is oily, so the seagulls needed a wildlife oil spill rescue treatment to fly again.)

Peter J. Thompson/National Post

Peter J. Thompson/National PostTemperature gauges at Sunrise Soya Foods plant in Toronto.

Superior, which was founded by Chan’s grandparents and now sells through more than 200 retailers, has non-GMO and organic products, but especially touts the food safety aspect with its Global Food Safety Initiative certification.

Sol Cuisine’s Balshine has also seen an uptick in business from consumers wanting to buy local, organic and non-GMO products.

“We’re really focused on the sustainability of a vegetarian, plant-based diet,” he said, adding the company was started by vegetarian restaurateurs looking for good tofu.

His biggest growth products are meat replacements such as soy burgers, whereas tofu sales only edge up annually.

For the tofu producers that sell at the retail level, it may be hard to separate the effect of the new health claim from the rest of the healthy eating marketing tactics.

“It’s a combined effect,” said Jang, who is trying to get key influencers such as nutritionists and doctors to help promote the information, and, ultimately, a product that is often eschewed by meat eaters.

“People may not eat vegetarian every day,” she said, “but they’re starting to incorporate it into their diets.”

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