Overview of the Food and Beverage Processing Industry
The food and beverage processing industry is the second largest manufacturing industry in Canada in terms of value of production with shipments worth $105.5 billion in 2014; it accounts for 17% of total manufacturing shipments and for 2% of the national Gross Domestic Product (GDP). It’s the largest manufacturing employer and provides employment for 246,000 Canadians.
It supplies approximately 75% of all processed food and beverage products available in Canada and is the largest buyer of agricultural production.
Exports of processed food and beverage products stood at $27.8 billion in 2014, an increase of 9.8% over 2013; accounting for 26% of production value.
Canadian processed food and beverage products are exported to some 190 countries with a significant proportion exported to a few countries. In 2014, 89% of the total went to six major markets:
United States (71%)
China and Japan (7% and 6% respectively)
Mexico, Russia and South Korea (2.1%, 1.6% and 1.3% respectively)
Between 1995 and 2009, the trade balance in processed food and beverage products was positive and peaked at $5 billion in 2004. With the rise in the Canadian dollar, it declined annually between 2004 and 2009, when the balance of trade reflected a record deficit of $1.9 billion. The trade balance returned to a positive value of $0.2 billion in 2011 and since then has dipped back down to a deficit of $1.2 billion in 2014.
Food manufacturing (excluding beverage) has maintained a positive trade balance since 1995 and stood at $2.6 billion in 2014. On the other hand, beverage manufacturing has had a declining trade balance since 1997, with a deficit of $3.8 billion in 2014.
The largest food and beverage processing industry is meat product manufacturing which accounted for 25% of all shipments and $26.3 billion in 2014. Dairy product manufacturing is the second largest industry with sales of $17.3 billion, followed by grain and oilseed milling with sales of $10.6 billion. Other industries include:
Beverage manufacturing ($10.4 billion)
Bakeries and tortilla manufacturing ($8.4 billion)
Animal food manufacturing ($7.5 billion)
Fruit and vegetable preserving, and specialty food manufacturing ($7.3 billion)
Seafood product preparation and packaging ($4.6 billion)
Sugar and confectionery product manufacturing ($4.1 billion)
Other food manufacturing ($9.1 billion)
The food processing industry is the largest manufacturing industry in most provinces. Although food processing is important to the economies of all provinces, Ontario and Quebec account for most of the production with approximately 65% of sales, British Columbia and Alberta account for 21% and the remaining provinces, 14%.
Meat is the most significant food industry in Quebec, Ontario, Alberta, and British Columbia; grain and oilseed milling is the largest food industry in Manitoba and Saskatchewan; while seafood is most significant in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland.
The food and beverage processing industry invests about $2 billion annually in capital expenditures, with about 80% of the total invested in machinery and equipment.
About 6,500 food and beverage processing establishments exist in Canada: 90% of establishments have less than 100 employees, 9% have between 100 and 500 employees, while only 1% of establishments have more than 500 employees.