Canada is a potential market in the food and beverage industry as it possesses a wide consumer base with a multicultural population of 35 million. CAD152 billion market of material inputs and retail-ready products make up a large portion of the Canadian F&B landscape.
Canadian consumers tend to spend a substantial amount of their earnings on food and drink owing to the four important factors of value, convenience, health and sustainability that drive their choices.
Canadian consumption trends
Here is an overview of the Canadian F&B industry with notable consumer tendencies related to consumption:
- Canada is geographically vast and demographically diverse. This results in a complex market that makes it imperative for exporters to understand their target group thoroughly and devise the appropriate market specific strategy.
- The food and drink consumer base in Canada will see consistent growth due to salary hikes.
- A huge demand exists in the Canadian food and drink market for material inputs and retail products that are ready for consumption.
- Consumption trends are influenced by the diversity in consumer profiles in Canada.
- Canadian consumers are price conscious, tend to opt for cheaper alternatives and favor private labels.
- Convenience and ease of availability majorly impact the Canadian consumer’s food choices, making the country a potential market for products that save time.
- The organic food industry in Canada has tripled since 2006 and consumers are willing to spend more for food that is environment-friendly.
Trends in F&B retail and distribution
With grocery conglomerates taking over small stores and with the expansion of hypermarkets, a major chunk of the F&B sales have got attributed to larger stores. Supermarket giants like Metro and Loblaws are acquiring ethnic food chains besides expanding their own product lines.
Sales and distribution of alcoholic beverages are controlled by Provincial Liquor Boards of each area. Depending on the province, alcoholic beverages are sold via regulated retail outlets, unregulated retail outlets or private retail (mainly for non-regular assortment products). The alcohol regulations differ from province to province.
An exporter who wishes to enter Ontario - the largest alcohol market in Canada, should focus on establishing a good relationship with the Liquor Control Board of Ontario (LCBO).
If we talk about F&B distribution in Canada, the usual practice for most exporters is to enter the market through an established distributor or importer. One also has the choice to skip the channel partner and make a direct sale.
Tying up with an existing trade partner could be a wise choice if an exporter is keen on getting into the local network and grabbing market opportunities. Working with product champions and key partners also ensures greater success.
Regulations in the industry
The Food & Drugs Act, The Consumer Packaging and Labeling Act and The Provincial Regulations need to be adhered to. Monetary Penalties are levied in case of noncompliance to any of the above.
Finally, for a complex market like that of Canada, a strategic market research is crucial to success.