The Missing Middle: Why Canada Needs More Regional Food Processors

By: Lindsay Toth

Canada’s food system is defined by two extremes: small producers struggling to access markets and large corporations dominating distribution. What’s missing is the middle.

Regional processors once served as vital bridges between local farmers and national retailers, but decades of consolidation have hollowed out this space. Rebuilding it is key to shortening supply chains, reducing waste, and restoring resilience in Canada’s food economy.

A System Stretched Too Thin

In Canada, most food processing capacity is concentrated in a small number of large facilities. This centralization has created efficiency in some areas, but it has also made our food system fragile. When a single plant closes or faces a supply disruption, entire regions can be affected.

Small-scale producers often face high barriers to entry when trying to access these large processing networks. Minimum order sizes, strict logistics requirements, and long transportation routes make it difficult for local farmers and food makers to compete. Without mid-sized processors that can handle regional volumes, many producers are left with nowhere to go.

The result is a system that moves food over long distances, driving up costs and emissions while reducing access to fresh, local products.

The Case for Regional Processing

Rebuilding regional processing capacity is one of the most effective ways to strengthen Canada’s food sovereignty. Mid-scale facilities create a link between small producers and larger distribution channels, allowing local food to reach schools, restaurants, and grocery shelves more efficiently.

Regional processors also keep value within communities. When food is grown, processed, and sold closer to home, more of each food dollar stays local. This supports jobs, encourages entrepreneurship, and strengthens rural economies.

Shorter supply chains also mean greater resilience. During the pandemic, we saw how quickly centralized systems can falter under pressure. Regional processors can act as shock absorbers, maintaining continuity in food production even when global systems are disrupted.

Opportunities for Innovation

The “missing middle” isn’t just a problem; it’s an opportunity. New technology, including automation, digital traceability, and AI-based demand forecasting, can make regional facilities more efficient and adaptable than ever.

Shared-use kitchens, food hubs, and co-packing facilities are already showing promise. These models allow multiple small producers to share equipment, storage, and distribution, reducing costs while expanding capacity. The Saskatchewan Food Centre, for example, has demonstrated how regional facilities can support product development, food safety training, and scaling for hundreds of food entrepreneurs.

By investing in this kind of infrastructure, Canada can unlock new pathways for growth in its agri-food sector — particularly for women, Indigenous, and newcomer entrepreneurs who often face the highest barriers to processing access.

Policy and Partnership

To rebuild the missing middle, collaboration will be essential. Governments, industry, and communities must work together to identify regional processing gaps and create funding models that support long-term sustainability.

Public investment can help lower startup costs for new facilities, while private partners can bring expertise in operations and logistics. Educational institutions and incubators can provide technical training to ensure these facilities have the skilled workforce they need to thrive.

Programs like the Seed to Scale Accelerator are already helping entrepreneurs prepare for growth, but without physical infrastructure to process and distribute at regional levels, scaling will always hit a ceiling.

A Path Forward

The path to a stronger food system doesn’t begin with more centralization; it begins with connection. Canada’s farmers, processors, and entrepreneurs are ready to innovate, but they need the infrastructure to support them.

Regional food processing is not just about efficiency. It’s about sovereignty, sustainability, and self-reliance. By rebuilding the middle of our food system, we can create a future where local food isn’t the exception — it’s the standard.