Creating Canada’s Natural Product Innovation Cluster

July 2, 2019

NPC is transitioning to a cluster model that will provide more value and growth opportunities for those involved in the natural products industry. We talked to Sue Coueslan, NPC’s VP Communications and Stakeholder Relations, about the model and what it means for members.

You’ve referred to NPC and the ecosystem before. Why this transition to the term Cluster?

It’s definitely more than a wording change. When we talk about the ecosystem, we’re referring to everyone who’s involved in the process of developing or commercializing natural products. It’s a large and diverse collection of companies and organizations—and we’ve worked with a lot of them! But if you asked someone if they were part of “the ecosystem” they’d likely have no idea what you were talking about as it wasn’t a defined, organized community.

Moving to a Cluster model crystallizes this community and its purpose. Those who join get real benefits from programs and services that are targeted to their needs. But on a broader level, it’s a collective of smart, experienced and engaged members collaborating around key industry issues and initiatives. That’s a powerful shot in the arm for the whole Canadian natural product sector.

And who are the members?

We based membership on some well-established models for successful clusters that include SMEs, research institutions, large corporations, investors, and government and service providers, including incubators, accelerators and consultants.

In our case, it would be people in those categories that are involved in our broad definition of natural products, which includes nutrition and natural health products; functional food and feed additives; bioproducts including biochemicals and bioplastics; water treatment and waste streams; agri-tech and value-added agriculture; biotech and clean tech.

You mentioned industry issues and initiatives; what do you mean specifically?

We’ve talked to hundreds of companies, investors, research institutions and commercialization experts since we were formed in 2016. We also had a third party survey conducted in 2018. These helped us crystallize the big issues and the needs of the ecosystem. In really broad terms, they boil down to four things: early stage innovations need strategic support to overcome commercialization hurdles; investors and corporations need a trusted pipeline of high-potential natural product opportunities; early stage innovations in the natural product arena need a dedicated source of capital; and there’s a general need for more coordination and communication among all of the players.

And how does the Cluster address those issues?

We’ve established four key priority areas to address the needs. All our activities fall under one of these areas.

The Commercialization Programs provide strategic support in high-need areas for SMEs and research institutions who are developing innovative natural products and technologies. They were designed to address the big hurdles that prevent innovators from getting their products to market.

Next, we have the Innovation Hub that is based on connecting innovators with corporations and investors. The SMEs and research institutions gain market access, industry insights and capital, and the corporations and investors get introduced to interesting investment and partnership opportunities.

Then we have the Investment Fund, which is a dedicated source of capital for Canadian natural product companies. It also comes with services for SMEs to help them prepare for investment and navigate the investment process. And equally as important, helps investors develop and de-risk their investment through expertise in the unique technical, scientific and business models associated with some of these innovative natural product opportunities.

And all of this is under the umbrella of the Cluster and some very specific Cluster-Building Activities to address sector-wide issues and challenges that individual companies or regions can’t address on their own. We’ll be working with strategic partners to develop working groups to tackle those issues.

Can you break that down a bit? What will each member get out of the Cluster?

First of all, there’s immense value in just being part of the Cluster and having access to the collective knowledge, experience and networks that it represents. We have repeatedly seen the value of introducing members of our network: someone or some company has a technology or expertise or other assets that are game-changers for other companies or organizations. Formalizing this Cluster makes it much easier for members to tap into that resource base.

But there’s also the formal programs and services that I just mentioned. They are set up as a continuum of coordinated and complementary activities to support sustainable innovation commercialization with specific services for specific members and their needs.

For SMEs and research institutions, being a member provides access to the strategic Commercialization Programs that can help them get through challenging parts of their journey to market. They are also part of the Innovation Hub. Many of the companies or researchers developing really great innovations have no strong connections to the market leaders who can help them get to the next level. The Innovation Hub creates those connections to members that are looking for innovations and investment opportunities to help them stay competitive.

SMEs also have access to NPC’s investment fund and the corresponding support services to help them with all aspects of the investment-readiness process. Whereas if a research institution hasn’t turned their innovation into a spin-out company, we’re more likely helping them connect to licensing opportunities than investment.

Large corporations gain access to Canada’s diverse pipeline of innovations that has been developed and supported through the Commercialization Programs and other advisory services. They can access the pipeline through the Innovation Hub where we help them find relevant opportunities and technologies through our custom screening approach, Investor Meetings, quarterly Opportunity Calls where we discuss interesting companies or technologies, and Industry Reports to help them stay on top of key Canadian business and research activities. They can also opt for more advanced custom scouting services such as open Innovation Calls.

Investors get access to the same array of benefits as the corporations, and can also participate in investment. This means we introduce them to interesting companies, provide support with technical and other due diligence activities, and we can partner with them in the investment to help de-risk the opportunity. The whole range of services for investors is meant to make it as efficient as possible to help them participate in this growing Canadian investment opportunity.

And what about the governments and service providers?

Yes! They are crucial to the health of the Cluster, and they benefit from it just like the other members. Service providers, including incubators, accelerators and consultants get access to a pipeline of potential early stage clients that need their services. But more than that, they get access to highly specific and experienced industry veterans, programs, initiatives and events that can help them augment their service offering and expand their network and opportunities.

And of course, governments are an important part of the Cluster. Federal, provincial and regional government departments and agencies can all obviously contribute financial and other supports to move these innovations ahead and make business and investment in Canada an attractive prospect. But they benefit from the coordination and efficiencies that come into play when everyone is communicating and collaborating to help this industry reach its potential for generating revenues, jobs and highly competitive companies in Canada.

Final question. What’s the actual process of joining the Cluster?

Becoming a member of the Cluster is easy. SMEs and research institutions can apply online with a simple membership form. They can pay online or request an invoice. In that process, they can create their profile to describe the innovative products, technologies or expertise they offer.

For corporations, investors and everyone else, they can contact me directly, so we can talk about their needs and how we can customize their membership package so that it’s most effective for them.

Sue Coueslan is the lead on Cluster membership. She has been an active member of Canada’s innovation space for over 15 years and has a wealth of knowledge and networks across the country and beyond. If you have questions about joining the Cluster, please contact her.