Industry Snapshot: Sales, prices, employment trend upward in food manufacturing sector
Toronto – November 1, 2019 – The latest statistics on Canada’s food manufacturing sector show that sales, food prices, and employment are all on the rise – continuing a trend seen throughout 2019 – while industry profit margins have increased only slightly. Below is an industry snapshot of the food manufacturing sector as of late September 2019:
- Sales of Consumer Packaged Goods (CPG) from Canadian food manufacturers – which include processed and packaged foods and beverages – are up 4 percent on a 12-month year over year basis. CPG manufacturers have been outperforming the rest of the food manufacturing sector for the past year.
- Among CPG products, processed fruit and vegetables, meat, and bakery products have seen strong sales growth over the last 12 months, while cereals have declined 3 percent and sugar and confectionery sales have stagnated.
- As of July 2019, total average monthly employment in the food manufacturing sector amounted to 244,000 people, compared to 225,000 people in 2015. This represents an increase in employment of 8.5 percent.
- At 244,000 employees, the food manufacturing sector dwarfs the automobile and parts manufacturing industry – which has 136,000 employees – and represents the largest subsector of Canada’s overall manufacturing industry.
- Food prices at the manufacturer level increased by 4 percent during August, but CPG pricing rose by only 1 percent. Increased manufactured food costs for grocers is occurring on non-CPG products such as meat, which rose by 7.5 percent in August.
- On the retail side of things, food prices increased by 1.9 percent in August, according to Statistics Canada’s Consumer Price Index (CPI), compared to average food price inflation of 2 percent over the last 12 months.
- Despite strong sales, price growth, and employment in the food manufacturing sector, industry profit margins remain modest, as food manufacturers saw a 3 percent, year-over-year increase in gross margins in July.
Snapshot courtesy of Kevin Grier Market Analysis and Consulting (www.kevingrier.com).