The Canadian food and beverage industry is outperforming the overall manufacturing sector, and continued to do so throughout the recession. That’s the finding of the Conference Board of Canada’s Canadian Industrial Outlook: Canada’s Food Manufacturing Industry – Summer 2010.
The biannual publication shows that food industry profits, production and employment all rose in 2009. Last year saw a three-per-cent jump in revenues, combined with lower energy and commodity costs, all of which boosted industry profits by 30 per cent to $4.2 billion.
“The Canadian food manufacturing industry is often taken for granted,” says Michael Burt, associate director of Industrial Economic Trends for the Conference Board. “The industry is one of the few components of Canada’s manufacturing sector that has recorded consistent growth in recent years. As a result, it is now the largest source of manufacturing employment in Canada, a total of 240,000, which is 14 per cent of the jobs in the sector.”
According to the Conference Board, domestic demand will rise slightly this year, while growth in export markets – particularly due to the emerging middle class is markets such as China, India and Brazil – will increase. Food industry profit levels should grow by 1.5 per cent this year, due to higher agricultural and energy costs, with moderate profit growth to continue through 2014.
The challenge for producers, says the Conference Board, will be to find “in-demand” products consumers are asking for. Trends driving this demand include “back to basics” consumer tastes, “interest in natural and clean-label foods,” as well as value-focused private-label products. In addition, the trend toward dining at home rather than in restaurants will continue to drive the interest in frozen foods with “real and simple” ingredients.