About The Food Industry

Canada’s food processing sector is extremely diverse, consisting of more than 5, 545 firms representing various sizes, structures and sub-sectors that produce over $50 billion in annual sales.
The following is a list taken from a nationally conducted report in 2005 entitled Overview of the Food Processing Industry and the various sub-industries of the broader food processing sector.

• Animal Food Production
• Grain and Oilseed
• Sugar and Confectionary
• Fruit and Vegetable
• Dairy
• Meat and Poultry
• Fish and Seafood
• Bakery
• Other

To learn more about these different food commodity groups, view the full report by clicking here, and the executive summary by clicking here.

Food processing and manufacturing is the country’s third largest industry, employing more than 265, 600 people. Meat product manufacturing has the largest workforce (67, 909) compared to the other groups, while the grain and oilseed sector has the lowest (8, 158). The seafood industry accounts for 15% of the food processing industry workforce in Canada.

Industry Realities

The food processing sector faces important challenges including the use of technologies and competitiveness in existing and emerging Canadian and international markets. The landscape of the food processing sector is changing as a result of several new industry realities.

Consolidation-the Big are Getting Bigger

As retail and food service buyers become larger through consolidation, food processors that can accommodate larger volumes are sought, particularly those with pan-Canadian distribution. Larger orders generally result in reduced margins for food processors as well as facility constraints for small and medium sized businesses. It is not cost effective for large processors to produce smaller, niche product runs; this has led to an opportunity for small and medium sized processors.

Increased Technology and Automation

The number of technologies used by a plant is found to be highly correlated with expected gains in firm performance. Stringent controls and the use of technology have helped improve food processing production aspects such as shelf life; however this technology needs to be applied with precision. Firms that lack adequate training strategies are at a disadvantage and tend to adopt fewer advanced technologies.

Product Development

Changes in consumer preferences and demographics have put pressure on food processors to create products and categories through new product development. Industry statistics identify that 95% of new products fail; therefore, a considerable amount of development is needed for a very small percentage of products that will actually be launched. Many industry stakeholders identified a lack of qualified research and development personnel (in fact, there was a decrease in R&D personnel from 1998 to 2000)