A new report from FCC shows that despite the pandemic, the food and beverage sector may get even stronger this year.
The study, released in late March, indicated that most economic indicators for food and beverage processing are strong compared to other sectors of the Canadian economy. Capital expenditures fell less as a percentage than all other industries combined.
The report also found that higher disposable income and savings in 2020 should spur growth in consumption once it is safe to fully repo[en food services.
“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.”
FCC said that success in containing COVID abroad is a good sign for the sector, as more than 30 per cent of sales have gone to export markets over the past five years.
The greatest increase in sales is expected to come from the grain and oilseed milling, which is projected to rise by 13.4 per cent. FCC says that’s due to a rising demand for edible oils, flour and other baking products domestically and abroad. Plant-based products are expected to capture a greater portion of food spending as a growing trend, GCC said.
Sugar and confectionary projects are also projected to see a 12 per cent growth in sales as consumers who went through various lockdown are expected to chow down. SFCC is also projecting sales increases for dairy products (5.6 per cent) beverages (4.9 per cent), processed seafood (4.7 per cent) meat products (4.6 per cent) and bakery and tortilla products (2.1 per cent) in 2021. Fruits, vegetables and specialty foods are expected to remain steady.
“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.”
Growth in food and food processing, especially in meat, dairy and grain applications, is good news for Saskatchewan.
During her budget address last week, Finance Minister Donna Harpauer touted the agriculture industry’s contributions during a challenging year.
“Agriculture truly has been the saving grace through this very difficult time,” she said, adding that the economic spinoff from agriculture is “enormous.”
Increasing agricultural exports is a key part of growth plans of both the provincial and federal governments.
The province aims to increase the value of exports by 50 per cent, grow agri-food exports to $20 billion and increase agriculture value-added revenue to $10 billion by 2030 as part of its Growth Plan.
The province also wants to increase the percentage of canola crushed in Saskatchewan to 75 per cent in the same time period.
On arch 22 they applauded an announcement by Richardson International to double processing capacity at its canola crush plant in Yorkton.
The investment will make the crush plant the largest in Canada, expanding its crush capacity to 2.2 million tonnes of canola seed.