Sales for Canada’s food and beverage sector are expected to exceed $164 billion, outperforming initial forecasts by 3.2 per cent. This impressive growth is led notably by grain and oilseed milling and bakery and tortilla products. According to the 2023 Food and Beverage Report: Mid-year update from Farm Credit Canada.

While this paints a positive picture, several factors remain a concern for the sector. Both food and beverage manufacturers witnessed substantial growth in nominal sales in the first half of 2023. These numbers boasted an 8.4 per cent rise for food manufacturing and a 7.3 per cent uptick for beverage manufacturing.Notably, growth leaders such as grain and oilseed milling, and bakery and tortilla products, are credited with over 15 per cent year-over-year growth. Yet, when adjusted for inflation, the sector's growth appears more modest.

J.P. Gervais, FCC’s chief economist, provided clarity on the mid-year report. He stated, “Many of our food and beverage sectors experienced robust sales growth. However, a significant part of this surge is attributed to inflation-induced selling prices.” He later added, “Our projections hint at more measured growth as the year progresses, given the expected consumer caution over grocery budgets.”

One cannot overlook the pressure on food and beverage margins due to a decline in consumer spending, influenced heavily by inflation. Since 2019, margins have remained squeezed. In the beverage domain, margins have plummeted nearly 50 per cent. The food sector doesn't fare much better, showcasing margins 11 per cent below pre-pandemic benchmarks.

Adding to these challenges, food and beverage manufacturers grapple with labour shortages and rising wages. Gervais elaborated, “In the past two years, we've observed a 4.6 per cent annual wage growth for food manufacturers, a stark contrast to the 0.8 per cent yearly growth between 2015 and 2019.” He believes this wage surge will decelerate as job vacancies in food-related sectors decrease in the short term. Nonetheless, the long-term labour availability remains a concern.

For the first time since the pandemic, adjusted spending on food services reclaimed its pre-pandemic level, registering sales exceeding $17 billion in 2023’s second quarter. However, in comparison to the pre-pandemic trend, these numbers remain underwhelming. Gervais commented on this, explaining that global economic deceleration, softening labour markets, and food service demands are significant trends to monitor moving forward.

The FCC Food and Beverage Report: Mid-year update offers detailed analyses on diverse sectors, including grain and oilseed milling; dairy, meat, sugar, confectionery, bakery and tortilla products; seafood preparations; fruit, vegetable and specialty foods; and beverages.

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Bakery China, organized by China Association of Bakery and Confectionery Industry (CABCI) and Bakery China Exhibitions Co., Ltd. was launched since 1997. Bakery China is the Asia Pacific‘s leading event serving the entire value chain for the bakery and confectionery market. The event presents all range of ingredient, equipment, packaging and services, and enables global leading professionals and buyer delegates to meet and share the latest innovations and thinking on manufacturing & distribution, R&D, applications and related services for bakery industry.

The 26th Bakery China will be held on May 21-24,2024 at National Exhibition and Convention Center (NECC), Shanghai, covering 320,000 sqm show space. Over 2,200 exhibitors and 300,000 visits are expected.（source:commercial baking）