Winnipeg Free Press

Winnipeg Free Press (Newspaper) - September 28, 2021, Winnipeg, Manitoba C M Y K PAGE B4 BUSINESS BUSINESS EDITOR: SHANE MINKIN 204-697-7308 ● BUSINESS@FREEPRESS.MB.CA ● WINNIPEGFREEPRESS.COM B4 TUESDAY SEPTEMBER 28, 2021 Companies in process of figuring out best way to reboot S O many businesses and organiza-tions that depended on the physical gathering of people pre-pandemic are now in the process of figuring out the best way to reboot. Some enterprises were thriving to varying degrees before March 2020 because they’d built up momentum. The question for some will be how to re-energize after losing the veloc- ity they had worked for some time to generate. The technology startup infrastruc- ture is an example of efforts that have been ongoing for some time whose successes are immediately obvious but take a while to materialize. In order to get to that point, compa- nies need to be nurtured with all sorts of different community supports. In Winnipeg, North Forge Technolo- gy Exchange has been busy during the pandemic laying the groundwork for a large-scale angel investor network that would be available to financially support, if they so choose, the dozens of companies it is assisting in starting and scaling up. But one way or another every new company needs public awareness or exposure to its target audience of some sort. One way for nascent companies to be able to do that is to get in front of people and “pitch” the company’s concept. None of that was happening during the pandemic in Winnipeg or anywhere else. But public health regulations in Manitoba now allow enough vaccinated people to get together in the same room to get that ball rolling again. Next month, North Forge is holding a celebration for the 10th anniversary of the North Forge Fabrication Lab, which opened its doors as AssentWorks on Oct. 27, 2011. It’s now the largest non-profit publicly accessible fabrica- tion lab in North America and has been the home workshop for the creation of numerous products and enterprises in cleantech, medtech, femtech, AR-VR, robotics, AI, and machine learning industries. Last week, the Manitoba Technology Accelerator (MTA), in collaboration with the Bioscience Association of Manitoba (BAM), held the first of what they plan to be quarterly pitch compe- titions. One of the reasons these events need to be regular occurrences is that during the pandemic, the new business incubators and accelerators have been busy attracting new clients. In particular, the MTA has been growing its roster of international startup clients through its association with the federal government’s Startup Visa Program. The program that was formalized about three years ago targets immi- grant entrepreneurs with the skills and potential to build businesses in Canada that are innovative, can create jobs for Canadians and have the potential to scale up to compete globally. The MTA, which boasts SkipThe- Dishes as an all-star former client, basically rewrote its business plan after being named one of dozens of organizations designated to participate in the program. Marshall Ring, the enterprising chief executive officer of MTA, believes he has the right to refer to the MTA as the gold standard in the Startup Visa Program. All the statistics are not immediately accessible, but MTA has now con- tracted to provide management service to close to 400 of these companies through this program. Some of them are still in their home countries, some are in other parts of the country and some are in Winnipeg. One of the winners of last week’s pitch competition, SamPlas.co, is an Iranian medical technology company developing a process to treat derma- tological conditions such as acute and chronic wounds, skin cancers, and post surgical wound closures. The compa- ny’s principals are planning to relocate to Winnipeg where the verification, validation, and clinical evaluation will take place. “What we are trying to do is make as many of the companies want to come to Winnipeg as possible,” Ring said. It’s already bolstering MTA’s abil- ity to help local startups like FasTab, another of the winners of the pitch competition. The company is develop- ing a payments application that could, among other things, allow you to pay your restaurant cheque without having to wait for the busy service staff to deliver it to your table. It’s partly because of its increased revenue from the Startup Visa Pro- gram that MTA was able to submit the winning bid in the city’s request for proposal to take over the restaurant space on the Esplanade Riel. They are just in the process of finalizing the lease agreement. The MTA hopes to be able to deploy the space as offices and an event centre to show off the city’s innovation culture and help attract others here. “We’re pretty excited about it,” Ring said. “The vibrancy we think we can bring through that building will help show that Winnipeg is technology hub and a city on the rise with lots of compelling enterprises building good companies here.” martin.cash@freepress.mb.ca MARTIN CASH More dough for a cup of joe? Rising farmers’ costs to grow beans could filter down to coffee drinkers S ILVER SPRING, Md. — As if a cup of coffee wasn’t expensive enough, a confluence of factors is driving up farmers’ costs to grow the beans and it could begin filtering down to your lo- cal cafe before the end of the year. After hovering for years near US$1 per pound, coffee futures — the price large-volume buyers agree to pay for coffee upon delivery months down the road — doubled in late July, reaching heights not seen since 2014. Though prices have eased a bit, they remain ele- vated at about US$1.90 per pound. Coffee lovers already paying US$8 or more for a bag in the supermarket or up to US$5 for a cup may despair over even-higher prices, but a spike in cof- fee prices on the international futures market doesn’t always trickle down to the consumer. Here’s a look at some factors that could determine whether Americans will be paying more for their morning jolt in the near future. WHAT HAPPENED? A sustained drought followed by two July frosts blew a hole in Brazil’s coffee output, immediately sending wholesale prices for the popular Arabica bean to more than US$2 per pound. The frost will significantly affect the 2022-23 harvest, said Carlos Mera, who analyz- es the coffee markets at Rabobank. The Brazil frosts followed COVID- related supply chain snarls, a dearth of shipping containers, labour shortages and other production hiccups. Add in rising costs for virtually everything and you have a bitter cup brewing for coffee drinkers. “This is unprecedented,” said Alexis Rubinstein, the managing editor of Cof- fee & Cocoa for commodities brokerage StoneX Group. “It’s never been this per- fect storm before. It’s usually just been a supply-and-demand scenario. “We’ve never been dealing with a supply and demand issue on top of a logistics issue, on top of labour issues, on top of a global pandemic.” WHY MIGHT RETAIL PRICES RISE? While it’s difficult to determine the size of the crop loss in Brazil, Mera said estimates vary between two million and six million fewer bags of coffee. That’s about 12 per cent of the output from the world’s largest producer of Arabica, the bean used for most coffee sold around the world. Lower supplies almost always mean higher prices. Grace Wood, an industry analyst for market research firm IBISWorld, said if consumers don’t see coffee prices rise by the end of this year, they almost certainly will in 2022, as per capita de- mand is expected to increase. “That is just going to contribute to more demand that is going to further disrupt operations and make it more difficult for operators who are already experiencing supply issues,” Wood said. Mera said people who buy coffee beans in the grocery store will likely see a more noticeable increase in prices because about half the cost of that bag on the shelf comes solely from the bean itself. However, in large coffee shops, he added, the cost of the bean only rep- resents about five per cent of your cup of hot coffee, so roasters “may not need to carry over the increases right away.” IS IT A CERTAINTY THAT RETAIL PRICES WILL RISE? It seems likely, although higher cof- fee prices on the international future market is not a guarantee that prices at your favourite roaster will go up. The damaged crop in Brazil is still more than a year from harvest, plenty of time for many factors to reverse course. Rubinstein said higher prices on the international market can often stimu- late production — farmers will have more money to invest in their crop — and if there’s more coffee on the mar- ket, prices will retreat. But that will also depend on whether the big roasters have enough beans hoarded to get them through however long prices remain elevated. Starbucks, the world’s biggest coffee retailer, suggested that it won’t need to raise its prices because of Brazil’s low- er output. On a call with investors at the height of the Arabica price spike, the Seattle-based coffee chain’s president and chief executive officer Kevin John- son said his company has 14 months of supply, which he says will get it through 2021 and most of fiscal 2022. WHAT ABOUT MY LOCAL ROAST- ER? Even smaller, independent specialty roasters sign contracts to buy their beans well in advance, enough so that when shortages like the ones in Brazil happen, it doesn’t paralyze them. They also source from countries all around the world, so gaps from one place can often be filled by another. Chris Vigilante, co-owner of Vigi- lante Coffee with stores in the Mary- land suburbs of Washington, D.C., said most specialty roasters don’t buy beans on the same international commodities market with the big players like Nestle and Keurig Dr. Pepper. “So we’re not as impacted by (Brazil), but we will feel the pressure of it,” Vigilante said. Vigilante said he pays between US$3.50 and US$5.50 per pound for most of his beans, which are higher quality and produced by smaller farms. He has no plans to raise prices, but if other small shops raise theirs, he said it’s likely because the cost for other es- sentials have risen. “I’ve seen other specialty coffee roasters talking about raising their prices, but I think that’s more not be- cause of the cost of coffee, but maybe because the cost of some of our other supplies, like cups and equipment,” Vigilante said. — The Associated Press MATT OTT JULIO CORTEZ / THE ASSOCIATED PRESS FILES A sustained drought followed by two July frosts blew a hole in Brazil’s coffee output, immediately sending wholesale prices for the popular Arabica bean higher. B_04_Sep-28-21_FP_01.indd B4 9/27/21 8:19 PM ;