Why are Canadian natural products poised for success in the 2020s?

January 15, 2020

Since Natural Products Canada was formed in 2016, we’ve seen steady progress in the industry. But 2019 was a pivotal year with a dazzling array of new products, companies, deals, funding and investment capital.

We’re working on a full report of the major industry activity of 2019, but in the interim, here are the 10 things that make us most optimistic about 2020.

Investment-ready opportunities

With the completion of four more investments in 2019, NPC and its partners have invested in a total of 10 Canadian companies. These deals have attracted $38.5 million in direct and follow-on investment. The investee companies represent the incredibly diverse applications of natural products, including nutrition, food production, human and animal health, water management, green chemicals, and antimicrobial resistance.

A solid strategy

We’re constantly advising entrepreneurs to develop growth strategies based on real market data. We took our own advice and built our new Strategic Plan with data from extensive input from the partners and stakeholders we serve. So far, so good. The early implementation appears to be right on track to meet the Plan’s ambitions to position Canada for global leadership in the trillion-dollar natural product industry with a vibrant 2,500-member cluster of SMEs, corporations, research institutions, investors and government; $50M in targeted commercialization programs; and $200M in new investment in Canadian innovation.

Industry engagement

A key indicator of the growing interest in natural products is the positive reaction to Canada’s Natural Products Innovation Cluster. The Cluster, introduced as part of NPC’s new Strategic Plan, is a connected and collaborative community of stakeholders with a vested interest in the potential of natural products to address today’s biggest global challenges. Over 140 members joined the Cluster within the first few months of its launch, including SMEs/start-ups, research institutes, corporations, investors, government, and others involved in support innovation and commercialization.

Corporate interest

We’ve all seen the game-changing impact of up-and-coming innovations being introduced to the right corporate partner at the right time. But creating meaningful connections between corporations and innovators from the start-up/SME and research community can be tricky. In 2019, NPC facilitated over 60 corporate connections that have led to further discussions, due diligence and exploration of potential partnerships. The new Innovation Hub, a platform to foster these linkages through strategic introductions, open innovation calls, and other industry events and initiatives, will be a valuable addition to the Cluster in 2020.

Capital attraction

One of the most common challenges in commercialization is finding capital. In 2019, NPC saw an encouraging rise in interest in natural product investment both in Canada and around the world. We worked with multiple partners to help cultivate that interest through initiatives including: custom investor introductions; our third Investor Meeting with Nutrition Capital Network; our new virtual pitch series; a delegation of companies at the AgriTech Venture Forum; and showcasing dozens of investment opportunities at various investor meetings such as the NACO World Angel Investor Summit.

Support for entrepreneurs

We saw a flurry of new programs, incubators and accelerators in 2019 as governments and industry try to keep up with the escalating pace of innovation. NPC developed its own programs designed to address the most pressing commercialization challenges for natural products, technologies and services. The programs—designed with input from a national stakeholder survey—focus on strong teams, commercial viability, market data to achieve key growth milestones. Although these programs are just getting started, we’re excited for their progress in 2020 as we’re already seeing tangible results in new hires and increased sales across Canada and the US.

International networks

There was unprecedented global demand for clean, green and natural solutions in 2019. NPC strengthened its international networks to help more Canadian innovations meet that demand in a number of ways, including: developing an official MOU with the extensive food cluster, New Frontiers in Food; strategic discussions with European investors, government, and industry around specific initiatives, investment opportunities, and Canadian expansion efforts; and new relationships with multinationals initiated by the programs and services of the Cluster.

Translating insights to impact

In 2019, we saw many examples of the importance of accessing and integrating industry experience and expertise. Case in point, the NPC team provided over 200 companies with strategic commercialization advice and key introductions to programs, experts and service providers. Watching these entrepreneurs and researchers incorporate these insights to overcome critical challenges in everything from scale-up issues to sales plans makes us incredibly optimistic for their continued growth and success in 2020.

Increased interest in the business of ‘natural’

With the exponential demand for clean and green solutions in a broad range of industries, it’s essential that investors, programs, and others are fully aware of, and prepared to leverage, Canada’s advantages. That’s why we were very encouraged by the overwhelming interest and support we received through our regional, national and international speaking engagements and outreach initiatives throughout the year.

Growing opportunities

Finally, nothing makes us more excited about 2020 than the incredible natural product innovations we discover every day. In 2019, NPC added 240 new opportunities to its pipeline, creating a total of over 600 products, technologies or companies from across Canada’s entrepreneurial and research community. This pipeline, coupled with the incredible partners, programs and platform of our new strategic plan, make us very optimistic about Canada’s ability to meet the global need for sustainable, healthy and natural solutions across diverse range of industries.