Despite some setbacks caused by the pandemic, Canada’s food and beverage sector may emerge even stronger in 2021, according to a new report by Farm Credit Canada (FCC).
“The pandemic has brought losses that can never be recouped, but it has also opened a floodgate of opportunities for Canada’s food and beverage sector to become an even stronger part of the national economy,” said J.P. Gervais, FCC’s chief economist. “In many ways, the pandemic did not create these opportunities, but accelerated the tide of underlying trends that promote them.”
Despite the challenges posed by the pandemic, the report shows most economic indicators for the food and beverage processing sector are strong compared to other sectors of the Canadian economy. Capital expenditures and employment in food and beverage processing, for example, fell less as a percentage than all industries combined.
The report also notes that higher disposable income and savings in 2020 will likely spur growth in food and beverage consumption once it is safe to fully reopen food services.
Success in containing the virus abroad also carries significant implications for Canada’s food and beverage processors, since more than 30 per cent of sales have gone to export markets over the past five years, according to the report.
Consumer trends and export markets offer a variety of opportunities for different parts of the food and beverage sector, which together represents the largest manufacturing employer in Canada with almost 300,000 workers. It’s also the second largest manufacturing sector in terms of value of production with sales of goods manufactured worth $122.9 billion in 2020. That year, the sector represented 1.8 per cent of the national Gross Domestic Product (GDP).
Fruit, vegetables and specialty foods sales are expected to remain steady in 2021.
“The food and beverage processing sector showcased its resilience by adapting to the evolving trends and challenges posed by the pandemic,” Gervais said. “Government investments in food security and safety, along with low interest rates, a weak dollar and strong demand for healthy and high-quality Canadian food, could be the catalyst the sector needs to lead Canada’s economic recovery.”
For the full report, link here: https://bit.ly/3rva4lq
Source: Farm Credit Canada March 30, 2021 news release