Food and beverage processing
The Food & Beverage Processing (FBP) sector consists of establishments that transform raw agricultural commodities or semi-processed food products into a broad range of semi-prepared or consumer-ready food and beverage products.
The FBP sector consists of several sub-sectors that produce a broad range of foods and beverages. By shipments, the largest FBP sub-sectors in Canada are meat product manufacturing, dairy product manufacturing, beverage manufacturing (including soft drinks and alcoholic beverages), grain and oilseed milling, and bakeries and tortilla manufacturing. Other sub-sectors include fruit and vegetable preserving and specialty food manufacturing, animal food manufacturing, sugar and confectionary product manufacturing and seafood product preparation and packaging.
The North American Industry Classification System (NAICS) codes for this industry are as follows:
- 311—Food Manufacturing
- 3121—Beverage Manufacturing
|Economic Indicators||2016||2017||2018||2019||2020||% Change
Notes de bas de page
|Gross Domestic Product||30,519||31,916||32,668||33,007||32,760||-0.7%||1.4%|
|Apparent Domestic Market||107,087||109,926||112,674||114,914||118,819||3.4%||2.1%|
|Domestic Market Share||69.5%||69.9%||70.0%||69.5%||69.1%||-0.5%||-0.1%|
|Manufacturing Intensity Ratio||28.3%||28.5%||28.3%||27.8%||26.7%||-4.1%||-1.2%|
Economic overview and analysis
Canada’s food and beverage processing industry has exhibited consistent growth in shipments and exports since 2016. In 2020, total shipments amounted to $123 billion, with a five-year growth rate of 3%. Between 2016 and 2020, export growth continued to outpace import growth, increasing Canada’s trade surplus to $4 million in 2020. The apparent domestic market for products and goods increased moderately during the period from $107 billion to $119 billion, while the domestic market share held by Canadian food and beverage processers decreased slightly by an average annual rate of 0.1%. In 2020, Canada’s food and beverage processing industry accounted for 69.1% of the domestic market. Employment in the sector decreased by 3.1% from 2019 to 2020 due to the COVID-19 pandemic. The pandemic also contributed to an 8.8% year-over-year decline in capital expenditure investment in the sector and a 0.7% decline in GDP.
Trends in the industry
The food and beverage processing industry is Canada’s largest manufacturing industry, both in terms of GDP and by total employment. The sector is also the largest buyer of Canada’s raw agricultural products, purchasing over 70% of Canada’s agricultural output. Canada’s food processing sector is export oriented, with a positive and growing trade surplus, and is the world’s 11th largest exporter of value-added food products. The sector benefits from Canada’s trade agreements, including the ratification of new free trade agreements like Canada-United States-Mexico Agreement (CUSMA) and the United Kingdom-Canada agreement, which offer greater export and market access possibilities.
The food and beverage processing sector is composed of several sub-sectors, the largest being beverage manufacturing and meat product manufacturing, which accounts for 17 and 18% of total sector GDP, respectively. There are 7,923 establishments with employees in the sector and 99% of businesses are small and medium sized enterprises (SMEs), with less than 500 employees. Despite a large presence of SMEs, many of the sub-sectors are highly consolidated, like beef packaging, snack foods and bakery, where large domestic and foreign-owned firms account for the majority of sales. The 20 largest food processing firms in Canada account for 40% of revenues and employment in the sector, but sector consolidation has remained relatively constant.
Canadian food and beverage processors have demonstrated resilience throughout the COVID-19 pandemic. In the early days of the pandemic, the sector faced significant challenges such as outbreaks at processing plants that led to temporary closures, notably at meat processing facilities. Like many other sectors of the economy, food and beverage supply chains were placed under strain due to volatility in demand and shifts in consumer consumption patterns. The closure of food service businesses and downturn in the hospitality sector caused processors to explore alternate retail channels. Companies adapted their facilities and procedures, and they invested in personal protective equipment to prevent the spread of COVID-19 in the workplace. Compared to other industries, economic indicators for food processing, such as sales, remained strong during 2020.
Industry and government continue to collaborate to capitalize on opportunities to grow the sector, including increasing access to skills and talent, supporting technology adoption, and strengthening the relationship between processors and retailers. The sector has also collaborated with government to develop a number of innovation clusters that bring together companies, academic institutions and not-for-profits to accelerate the development of innovative products and processes. These clusters include the Protein Industries Canada Supercluster and the Canadian Food Innovators Network.
- Date modified: