Author: Jamohl Rutherford, MBA, is leader of BDC’s small business team in GTA West (Mississauga, Halton Region and Etobicoke)
Rising incomes and growing populations to help sector grow 15.6% by 2025
The pandemic has caused enormous disruption for Canadians and the business community. Much of the hospitality industry, such as restaurants, has been especially hard hit.
One bright spot is food and beverage manufacturing. This sector rebounded faster than other manufacturers and benefitted from Canadians buying more groceries and eating at home.
What’s more, the coming years present tremendous opportunities for producers to expand in Canada and abroad as the economy recovers, according to a new BDC report on the sector’s outlook.
One billion people to join global middle class
Food and beverage manufacturing is expected to grow 2.4% in 2021, a further 4.5% next year and a cumulative 15.6% by 2025.
Fuelling the growth are increasing incomes and populations in Canada and worldwide. Canadians’ disposable income is expected to climb 14.5% by 2025, while the global population is projected to reach 10 billion by 2050, including one billion people joining the middle class.
Thanks to the industry’s favourable outlook, investment by food processors is forecast to return to pre-crisis levels ahead of overall business investment.
Taking advantage of opportunities
At BDC, we are having exciting conversations with companies about how to take advantage of the coming opportunities. We have the privilege every day of supporting entrepreneurs with flexible financing, our expert advisory service and free tools and resources at bdc.ca.
Many businesses are planning investments in equipment, new product lines and expanded facilities. Entrepreneurs are also seeking out expertise to help them with strategic planning, operational efficiency and food safety certification.
Strategies to seize opportunities
Here are three of the top strategies we recommend:
• Adapt products to changing preferences: Consumers are increasingly demanding higher-quality, locally sourced and ethical products. Businesses that adapt can sell to this quickly growing market.
• Adopt new technology: Canada’s food processors lag other countries in tech adoption. Labour shortages and competitive pressures will require us to invest more in order to increase productivity and remain competitive. This includes investing in automation, smart manufacturing and digital marketing.
• Consider your exporting strategy: Investing in market research is essential to exporting success. Also look at how to diversify exported products and trade partners.
Canadian food and beverage manufacturers are in an excellent position to grow and export. Companies that take the right steps now have fantastic opportunities in coming years.