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Canadian Agri-Food Innovation:

Establishing Rosemary Farms in


Canada

Name: E’layna Baker

Student Number: 0996089

Section Day/ Time: Thursday @ 8:30 a.m

Due: Tuesday, November 27, 2018

AGR*1110 Intro to Agri-Food Systems


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Introduction
Rosmarinus officinalis, often referred to as rosemary, is a small but powerful herb that is

indigenous to the Mediterranean and Asian region (Wikipedia, 2018). It is a perennial herb with

fragrant, needle-like leaves (Wikipedia, 2018). In the North American region, the rosemary herb

is probably most noted as a garnish or flavorful addition to a variety of dishes. However, there is

immense potential for this herb to create a new name for itself in this part of the world. This

report with explore the feasibility of rosemary cultivation on a large scale in Canada. There will

be emphasis placed on aspects such as sales and marketing of the product, cost analysis of

developing farms, barriers to trade, export potential and other factors that influence the

feasibility of this innovation within Canada.

Rosemary Origin and Growing Conditions


The rosemary herb is native to the Mediterranean region which has a climate

characterized by hot, dry summers and humid, cool winters (European Commision, 2018). It is

home to a rich mixture of plant species and is one of the world’s richest regions in terms of

biodiversity (European Commision, 2018). Unlike the Mediterranean region, a description of

Canada’s climate is not so straight forward. Four distinct seasons can be seen in some of the

more populated regions of Canada (CEC Network, 2018). Daytime summer temperatures can

reach 35 degrees Celsius while -25 degrees Celsius can be seen during the winter. Summers can

be hot and dry, humid or mild depending on what area of Canada is being considered. Winters

are generally cold with bouts of snow, but can be mild and wet on the west coast (CEC Network,

2018). Certainly it is necessary to pinpoint a specific region in Canada if one would like to assess

the climatic condition of that area. However, there are a few specific growing conditions that the

Mediterranean born herb, rosemary, is able to thrive in.


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Firstly, rosemary needs at least 6-8 hours of sun exposure daily and warm, dry conditions

are ideal. (Wikifarmer, 2017) Rosemary’s growth is also boosted with atmospheric temperatures

between 20 and 30 degrees Celsius and soil temperatures above 18 degrees Celsius. However,

due to the robust nature of the herb, it is able to tolerate temperatures below this. The rosemary

plant yields best in sandy to clay loam soils with a pH of about 7 and good drainage.

(Wikifarmer, 2017) Water requirements for rosemary depends on whether it is a newly establish

plant or a mature one. Mature plants can be sustained with rainfall as long as it exceeds 450

millimeters. Young plants require more water that mature ones due to the fact that it must

develop an efficient root system in the beginning stages of growth. (Wikifarmer, 2017) Root rot

and fungal diseases can arise from excessive water so it is equally important to ensure that too

much water is not given to the plant. (Wikifarmer, 2017)

Health and Nutritional Benefits of Rosemary


Rosemary is an herb that encompasses a wide range of health and nutritional benefits.

Rosemary contains an abundance of chemical compounds that contain antioxidant properties that

can protect and strengthen body structures. (Daya, 2018) Here are a few effects that rosemary

can have on the body:

 Prevention of Macular Degeneration – carnosic acid found in rosemary leaves can help to

prevent the Age-Related Macular Degeneration (Daya, 2018).This disease effects the

macula of the eye and causes a blurring of the central vision (National Eye Institute,

2018).

 Soothing Infections – Rosemary has powerful antibacterial components and if gargled as

a tea can combat throat infections (Daya, 2018).


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 Treating and Preventing Diabetes – Rosemary ingestion is a natural and safe way to

lower blood glucose levels because it promotes the secretion of insulin (Daya, 2018).

 Anti-inflammatory effects – There are a number of phytochemicals found in rosemary.

One of them is gallic acid which is a very strong antioxidant. Gallic acid is also known to

have anti-fungal, anti-viral and cell protective capabilities (Daya, 2018).

 Source of Nutrition – Rosemary can be an excellent source of B vitamins, copper,

potassium, magnesium, manganese, calcium, iron, fiber, vitamins A and E (Daya, 2018).

 Promotes a Healthy Heart – Rosemary has the ability to dilate blood vessels which has

the effect of reducing blood pressure (Daya, 2018). Furthermore, it prevents the

oxidization of bad cholesterol, inhibiting it from sticking to artery walls. Lastly, rosemary

helps to prevent platelets from forming clots within blood vessels which can be a cause of

heart disease (Daya, 2018).

 Aiding with Memory and Concentration – For centuries rosemary has been renowned for

its power to boost memory and stimulate the brain and is historically referred to as the

“Herb of Remembrance” (Jenny Hope, 2013). The brain depends on a compound called

acetylcholine as a neurotransmitter (Alzheimer's & Dementia Weekly, 2018). The brain

makes fresh batches of it. In order to keep the brain from getting flooded with it, there is

an "esterase" that breaks it down after use. In Alzheimer's, there is a shortage of

acetylcholine, so its important to inhibit the esterase, so that more acetylcholine stays in

the brain. To do that, a person must consume an ACh esterase inhibitor. Currently the

number 1 drug therapy for Alzheimer’s is a drug called Aricept. Aricept has one function;

it prevents the breakdown of acetylcholine. Rosemary contains an abundance of

compounds reported to prevent the breakdown of Ach, naturally (Alzheimer's &


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Dementia Weekly, 2018). Furthermore, carnosic acid found in rosemary boosts

circulation in the brain and enhances the production of nerve growth factors or NGFs

(Daya, 2018). NGFs are protein structures that are responsible for the survival and repair

of nerve cells (Daya, 2018).

Market Opportunity associated with Rosemary Production

Without a doubt, the Canadian population is aging. Today, 14% of Canadians are over

the age of 65, and by 2031, it is estimated that this number will grow to 25% (Agriculture and

Agri-Food Canada , 2015). Seniors will continue to make up a large portion of the Canadian food

market and it is important that the Canadian food industry adapts to the changing needs of this

target group. Everyday, media advertisements are broadcasted of food products that are

beneficial to ‘the athlete’, or the ‘mother-to-be’, or ‘the hardworking man’. It is certain that the

aging members of society are underrepresented when it relates to diet and nutrition. With the

myriad of physical, metabolic and psychological changes that accompany aging, these

individuals deserve to be educated on how their lifestyle and diet must change in order to

maintain a healthy mind and body. The Canadian agricultural system is tasked with the

production of products that can potentially aid in the aging process of a person. The rosemary

herb is packed with nutrients and disease fighting antioxidants, as previously stated. The

marketing strategy for this product can be based mainly on health appeal.

For example, Canada stands at number 22 in the world today for death rate per 100,000

due to Alzheimer’s/ Dementia.(World Life Expenctancy , 2017 ). As previously mentioned, the

number one drug therapy for Alzheimer’s is Aricept® which is manufactured in laboratories and

contains man-made compounds that stop the breakdown of a chemical called acetylcholine
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(Alzheimer's & Dementia Weekly, 2018). This drug presents elders with a number of adverse

side effects such as nausea, vomiting, diarrhea, weight loss due to loss of appetite, weakness

muscle cramps and more severe cases such as trouble breathing and irregular heartbeat (Web

MD, 2018). More elders should be educated on the capabilities of rosemary to diminish

symptoms of Alzheimer’s without the side effects that is presented by the mainstream drug. It is

important for the aging Canadian population to know that there are natural options available that

they can pursue to help their mind and body to age gracefully. Elders should not have to wait

until they have been given a diagnosis to start looking for options, and the Canadian food and

agricultural industry should make natural preventatives and remedies more accessible.

Sales and Marketing Strategy


It is important for greenhouse farmers and stakeholders in the Canadian agri-food sector

to know that there is a reliable system of ideas relating to the sale and marketing of any new

innovation. The rosemary herb must be profitable enough for farmers to take on the

responsibility of growing the herbs on a large enough scale for the Canadian (and potentially

global) market. Rosemary can be made in the form of a powder, tea, aromatherapy extracts and

oils. The harvesting method employed by farmers depends greatly on the intended use of the

plant (Wikifarmer, 2017). However, it may be most profitable to market this product as tea in the

Canadian market. The amount of tea that the average Canadian drinks has increased in the past

few years. In fact, it has doubled (Roberge, 2015). In 2015, Canadians consumed 85 litres of tea,

per person per year, which is a dramatic increase from only 36 litres in 1991 (Roberge, 2015). Of

all surveyed tea drinkers, 35% are heavy drinkers, 41% consider themselves medium drinkers

and 23% are light drinkers (Roberge, 2015). Canada’s very first tea farm, Westholme Tea

Company, specializes in the production of “teas and herbal infusions” despite the notion that
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these plants only have the ability to grow in tropical and sub-tropical climate (Walker, 2014).

The farm is located in the Cowichan region on Vancouver Island (Westholme Tea Company ,

2018). The soils in this region is fertile and the unique climate in this region encourages growth

of tea plants (Westholme Tea Company , 2018). The pricing of their Canadian grown tea

products ranges from $25 for a 10-gram bag of ‘Island Green’ to $190 for a 50-gram bag of

‘Tree Frog Green’ (Westholme Tea Company , 2018).

Tea is already one of the most preferred beverages in Canada so it can be enjoyed even

more when the tea drinker understands the immense benefits it holds for the future of their

health. This is a wonderful way for Canadian farmers to introduce rosemary to potential buyers.

The goal should not be to present buyers with a luxury tea option, but to stimulate awareness of

the herb and its health benefits. Studies show that tea drinkers today do not consider price first

when picking tea (Roberge, 2015). In order of importance, consumers look out for the type of

tea, flavour, brand and lastly price (Roberge, 2015). Taking this into consideration, farmers can

possibly use a cost-plus pricing approach, where cost of producing a certain quantity of rosemary

is considered then a small mark-up can be added to make some profit from growing the herb.

Benefits Rosemary Production Presents to Canadian Agriculture


If rosemary production is carried out on a large scale in Canada, a great deal of positive

effects would be on the horizon for the Canadian agri-food sector. Here are a few of the benefits

that can be reaped from this innovation:

 Greenhouse Farm Diversity – Many of the greenhouse operations across Canada contain

little or no herbs. In 2016, there was a total of 878 greenhouse vegetable operations in

Canada and the majority of these were located in Ontario (355) (Agriculture and Agri-

Food Canada, 2017). Tomatoes, peppers and cucumbers are the commodities which have
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the highest numbers in terms of harvest area. About six million, five million and four

million square meters respectively were harvested in 2016 while only 270 square meters

of herbs were harvested (Agriculture and Agri-Food Canada, 2017). Greenhouses all

around Canada can begin to grow the rosemary herb and harvest it for a variety of

purposes.

 Local Awareness of Herbal Remedies – Canadian consumers will become exposed to and

educated about herbs that have the potential to greatly benefit human health. This

education will be stimulated through various advertisements broadcasted and marketing

activities conducted. Consumers of all ages will be enlightened with knowledge of the

nutritious and healing ability of often trivially considered plants.

 Potential Profit for Anyone – The rosemary herb can be cultivated indoors on a small

scale so it is possible for members within a town or community to grow the herb and sell

to the interested members of the community. People may want the rosemary for culinary

purposes, herbal tea infusions or for an ingredient in a homemade cosmetic product.

Everyday citizens can be advocates for the product and educate their neighbors and loved

ones of its benefits all while making a small profit.

Drawbacks of Rosemary Cultivation in Canada


Though this herb presents the Canadian agri-food sector with an array of current and

future benefits, there are a few things to keep in mind when considering growing rosemary on a

large scale in Canada. Here are a few of the drawbacks of this herbal innovation:

 Atmospheric Requirements – Rosemary grows optimally in about 60-65 Degrees

Fahrenheit although growth can still be seen in temperatures around 30 degrees (Kittek,

2014). For that reason, it may be best for the rosemary herb to be cultivated in
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greenhouse farms for year-round enjoyment as the herb is not able to withstand the winter

climate in most areas of Canada.

 Difficulty Marketing the Product – The major aging population of Canada is more so

interested in drinking black and green tea (Roberge, 2015). Specialty teas like rosemary

are not readily sought after by older Canadians. Those interested in specialty teas are the

millennial and younger population (See figure below). It may be a challenge to

effectively market rosemary to be consumed as a tea to the intended target market.

Figure 1 (Roberge, 2015)

 Interference with Pharmaceutical Drugs – If ingested, rosemary may interact with

prescription drugs within the body. For example, Lithium which is used to treat manic

depression can reach toxic levels within the body if taken with rosemary so doctor

consultation may be needed if potential consumers on prescription drugs wish to

incorporate rosemary use into their lifestyle (Nordqvist, 2017). This is something that

must be communicated to the target market in the early stages of introducing the product

for the safety of consumers. Hearing news like this may deter consumers from wanting to

make rosemary apart of their diet.


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Rosemary’s Channel of Distribution in Canada


Rosemary must have a means of reaching the final consumer for the risk takers to make a

profit and for the target market to reap the benefits that they seek. Due to the fact that the

rosemary herb would be cultivated for herbal tea purposes and not a powder or oil for example,

harvesting method would be affected and there would also be room for an intermediary to dry

and package the leaves into tea bags and boxes for convenient use by the final consumer. Here is

a model of how the herb would be moved along the chain of distribution from producer to final

consumer: Greenhouse/ Herb nursery  Tea Processing Factory  Wholesaler  Retailer 

Consumer.

  


Figure 2 (Google, 2018)

Inputs and Cost


The cost associated with this herbal innovation is a major determinant of whether or not it

can be executed within Canada. Here is an outline of some of the major costs associated with

producing rosemary in Canada:

 Seeds and Plant – Richter’s Herbs in Goodwood, Ontario sells many varieties of

rosemary starting at $2.95 CAD each or provides quantity discount of $2.20 CAD each
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for 12 or more plants which may be ideal for rosemary cultivators (Richter's Herbs,

2018). Planting seeds would not be advised because of the low germination rate of this

herb. It would require many more seeds and time to get the required amount of vegetation

because only about 30% of seeds can be expected to germinate even under ideal

conditions (Doxon, 2018).

 Greenhouse Construction – Greenhouses, depending on the scale and size, can be

expensive to build and maintain. A commercial greenhouse of the size 30 feet by 100 feet

equipped with heating, cooling and ventilation systems will cost between 15 to 30

thousand dollars (ATTRA Sustainable Agriculture , 2018).

 Labour Cost – Due to the discrepancy of minimum wage values in different provinces of

Canada, the cost of workers to perform maintenance on the greenhouses will vary. In

Ontario minimum wage will increase to $15 CAD per hour of work on January 1, 2019

(Ontario, 2018). For example, if ten people tend to rosemary plants in a commercial sized

greenhouse working 40 hours per week, annual wage expense would be roughly $6,000

CAD. If more workers are hired, this expense would be greater.

 Transportation Cost – There is also costs associated with transporting the harvested crop

to a tea processing and packaging facility. It is unclear exactly what this cost would be

for each greenhouse operator because some greenhouses may be located closer to a

processing plant than others. However, this is an expense that must be taken into

consideration.

 Fertilizer – Rosemary generally responds well to Nitrogen, Phosphorus, Potassium,

Sulfur and Magnesium (Wikifarmer, 2017). Many conventional farmers use NPK 12-12-

17+2MgO which retails for US $200-800 per ton (Alibaba, 2018).


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 Greenhouse Electricity – As previously mentioned, rosemary’s growing requirements call

for 6-8 hours of light exposure and warm soils of 18 degrees Celsius. Depending on the

size and efficiency of the electrical features, the costs to operate the heating and

ventilation systems may be quite expensive. It is unclear exactly what these costs would

be on average.

 Marketing Costs – To raise awareness of the product and to create an established image

of the greenhouse operation to consumers, efforts must be made toward marketing the

herb. Each greenhouse operator may choose to market separately or all rosemary growers

may decide to create a pooled budget to market the herb and establish awareness in the

minds of the target audience.

Global Trade of Rosemary


If rosemary is to be produced on a large scale in Canada it is important to be aware of

competitors that are currently in the herbal plant production business. There are many varieties

of herbal plants, produced all over the world, that can be harvested for a number of purposes to

make it useful to humans. However the rosemary herb is currently mass produced in countries

such as Spain, France and Egypt (Agro Products, 2018). Rosemary is widely used in European

nations for culinary and medicinal purposes, while rosemary is harvested mostly for oil in

France, Dalamatia, Spain and Japan (Agro Products, 2018). In the USA, dried rosemary leaves

are imported mostly into states such as California, New York, New Jersey and Virginia (Zauba,

2018).

Barriers to Trade
If rosemary begins to be cultivated on a large scale in Canada, this can come with direct

implications for Canada’s involvement with international trade. The Harmonized System is an
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international nomenclature for the classification of products (United Nations International Trade

Statistics , 2017). It allows participating countries to classify traded goods on a common basis for

customs purposes (United Nations International Trade Statistics , 2017). At the international

level, the Harmonized System (HS) for classifying goods is a six-digit code system

(United Nations International Trade Statistics , 2017). HS code 121190 corresponds to plants and

parts (including seeds and fruits) used primarily in perfumery, pharmacy or for insecticidal,

fungicidal purposes; fresh or dried, whether or not cut, crushed or powdered (Tridge, 2016).

Plants of this nature have a total export value of $3.1 billion USD and in the last 5 years has

increased by 15.64% (Tridge, 2016). In 2016, China was the number one global exporter of these

plants and plant parts with a 29% share of total exports (Tridge, 2016). The export value of

China’s share in 2016 amounted to $896.5 million USD (Tridge, 2016). Other top exporters in

2016 were India, Germany and The United States. The United States imported almost $400

million USD worth of these commodities in 2016 alone (Tridge, 2016). The global average price

of rosemary today is $9.21 USD per kilogram (Tridge, 2016).

With the United States being such an active importer of herbal plants, Canada’s

proximity to them opens the door for trade partnership for rosemary. However, there are a few

barriers to doing so. Canadian growers must continuously be aware of the global competitors as

well as their prices and quality of product to ensure they are not an inferior player on the global

market. Also, Canadian greenhouse growers who wish to participate in this trade should also be

in receipt of a Certificate for Export of Greenhouse-grown plants to the United States (GCP)

(Canadian Food Inspection Agency , 2016).


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Conclusion
Humanity is at a crucial point where people are starting to become more aware of what

they consume. People want to be more health conscious but simply have no idea where to start

because they were made to believe that processed foods and medicines – the things primarily

marketed to us – are the only things that can be proven to be beneficial to our health. However, it

is important to remember that for generations humans have been curing illnesses and

strengthening body systems with herbs that grow naturally from the soil and that is still the case

in many regions of the world. With all the challenges that come with aging, Canadian agriculture

should seek to provide seniors with natural products to combat ailments and ensure a healthy

mind and body.

The Canadian herb industry can be boosted through large scale production of rosemary

and the marketing of herbs such as this to the aging population of Canada highlighting the

benefits of it on health. Future research and planning toward this innovation would be greatly

beneficial to evaluate the profitability and feasibility of bringing large scale rosemary production

to Canada. The cost associated with this may deter stakeholders from pursuing this idea. Also,

the intended target market may not be welcoming to the idea of consuming rosemary on a regular

basis to improve health. Whether or not this idea is adopted it is recommended that existing

greenhouse operations in Canada educate its employees and surrounding communities of

rosemary and other herbal plants with such promising benefits to health.
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