Canada’s Food Industries: Confronting Winds of Change

The Conference Board of Canada, February 7, 2018 at 02:00 PM EST
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Several parts of Canada’s food sector are enjoying short-term booms, but challenges loom on the horizon. Three of the industries within the overall sector – food manufacturing, food services, and food retailers – are facing their own changes.

The food manufacturing and food services sector are both enjoying strong short-term growth in output and sales. Led by growth in limited-service and table-service restaurants, the food services industry continues to outperform previous expectations, mirroring the overall well-being in the Canadian economy.

The food manufacturing industry has benefitted from surging exports, supported by strong U.S. demand and a weak Canadian dollar. However, while the food manufacturing industry’s financial performance will remain strong over the medium-term, it will not maintain the same momentum it has produced over the last three years.

Grocery store sales have grown about 2 per cent on average in the past three years, well below the overall retail average of 4.5 per cent. Lower import costs in 2018 will allow industry margins to hover around 2 per cent—higher than in recent years.

Beneath the top-line results, each segment of the industry is facing new challenges, related to the breathtaking pace of technological change, the rise of new competitors, changes in international market access due to evolving trade agreements (e.g. free trade with Europe), and government policies as varied as minimum wage laws and healthy eating guides.

In this webinar, Robert Meyer-Robinson will present The Conference Board of Canada’s latest, exclusive Canadian Industrial Outlooks for Food Manufacturing, Food Services, and Grocery Stores. This analysis examines 5-year outlooks for key industry variables including production, prices, employment, revenues, costs, and profitability.

Webinar Highlights

In addition to an overview of each industry’s financial picture, Robert will discuss the trends affecting the outlooks:

  • Food manufacturing: Food manufacturers will continue to depend on external demand to drive production gains. In 2016, Foreign Direct Investments (FDI) into Canada’s food manufacturing industry grew by 22 per cent. Led by a surge in European foreign capital stocks, food manufacturing leads all other manufacturing industries over the past ten years. Food manufacturers also face evolving food landscape as Health Canada pursues a variety of initiatives under its new Healthy Eating Strategy.
  • Food Services: The industry is increasingly investing in mobile pre-ordering technologies, as operators look to take advantage of Canadians’ love for their smartphones. But in an industry that is extremely dependent on low-wage work, higher minimum wages in several provinces challenge restaurants’ ability to contain labour cost increases or force them to pass the higher costs on to consumers.
  • Food Retailers: Larger grocers are offering non-food items like pharmaceuticals, dry cleaning, and financial services, which can offset some of the low margins associated with traditional grocery products. More ready-to-eat meals are intended to help grocery stores compete with restaurants. Grocers are investing in self-checkout technologies and online grocery ordering as ways to utilize technologies to save labour costs and compete with the intense competition coming from retail giants.

About Robert

Robert Photo of Robert Meyer-RobinsoMeyer-Robinson joined The Conference Board of Canada in 2015 as an Economist within the Industrial Economic Trends group. In this role, Robert is responsible for conducting regular research on several industries across the Canadian economy, and contributes to industrial outlook analysis. Robert holds a Bachelor of Arts Honours degree in economics and German from Queen’s University, and a Master’s degree in economics from Carleton University.

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Price: $249.00 (CAD)