Food Manufacturing Profits Continue to Fall in Canada
(The Conference Board of Canada) — The Food Manufacturing and Food Services industries in Canada had disappointing financial results in 2013, but expectations are brighter for 2014, according to the Canadian Industrial Outlook: Winter 2014 forecasts for the two industries, produced by The Conference Board of Canada.
Profit levels in the food manufacturing sector dropped for the third consecutive year and totaled slightly more than $3.5 billion in 2013, down from just over $4 billion in 2010. Food services industry profits fell 33 per cent between 2012 and 2013, to less than $1 billion, due in large measure to high food prices in the early part of last year.
In the food manufacturing industry, consumer demand for healthy choices is driving the development of products such as gluten-free foods. Production is expected to rise by almost 3 per cent in 2014, the strongest increase in several years. Production is being driven by increased export demand. To meet production demand, industry employment is expected to rise by about 16,000 in 2014. Pre-tax profits are come in at almost $3.9 billion, growth of 9.5 per cent.
Food services operators will be benefit from a more moderate increase in food prices. As a result of lower cost growth, profit levels will grow to almost $1.4 billion in 2014, a gain of 46 per cent over 2013. However, the restaurant industry is marked by low profit margins, and that will not change over the next five years.
The Canadian Industrial Outlook publications are produced twice yearly. The Conference Board of Canada has also just published its Canadian Food Strategy, outlining a new vision for the food sector in Canada.