Funding Food: Food and Capital Markets in Canada

The Conference Board of Canada, 55 pages, November 22, 2013
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This report examines the capitalization of Canada’s food industry. Efficient capital markets give Canadians access to a wide variety of relatively inexpensive, high quality food. The food sector is among Canada’s most capital-intensive. Hence, the way that food industry assets are funded is of key strategic importance to the sector’s performance.

Document Highlights

Canadian food companies invest almost $15 billion in capital every year. And, although farming is often viewed as a small stakeholder enterprise in relationship to its value added, it is actually the most heavily capitalized subsector.

Funding Food: Food and Capital Markets in Canada explores the different capitalization challenges faced by the primary, processing, and retailing sectors of the industry based on their existing organization, markets, and competitive threats.

The report reveals that the way that food industry assets are funded is of key strategic importance to the sector’s performance, and that capital is part of the solution to addressing the range of competitiveness issues in food. Efficient management attracts capital and the new capital helps to ensure that operations are modern and efficient, and the business model is optimal. This enables the firm to generate better returns and be less risky, thereby attracting more capital.

Based on the premise that one way that Canada’s food companies can improve their capitalization is through better management, conclusions are offered for the Canadian Food Strategy.

Table of Contents

Executive Summary

Résumé

Chapter 1—Introduction

  • Methodology

Chapter 2—Why Capital Matters

  • Understanding Capital Formation
  • Capital Intensity
  • Organization of Enterprises
  • Capital Structure
  • Governance
  • Business Models and Strategy
  • Conclusion

Chapter 3—Funding Food

  • What Are the Needs?
  • How Are Capital Needs Funded?
  • Conclusion

Chapter 4—Emerging Issues in Funding Food

  • Is the Futures Market Leading to Higher Food Prices?
  • Will Finance Change the Face of Farming?
  • Is Food Manufacturing Being Decapitalized?
  • Can We Finance Our Way Out of Supply Management?
  • Will Canada’s Grocers Rise to the Challenge?
  • Are We Innovative Enough?
  • Conclusion

Chapter 5—Implications

Appendix A—Bibliography

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