2022 FCC Food Industry Report: Growth amid inflationary pressures

Mar 30, 2022

The annual FCC Food Report reviews last year’s economic environment and highlights opportunities and risks for Canadian food manufacturers for 2022. This includes an annual sales forecast, grocery sales performance, and a new gross margin index.

Industries featured in the report are:

Grain and oilseed milling
Sugar and confectionery products
Fruit, vegetable and specialty food
Dairy products
Meat products
Seafood preparation
Bakery and tortilla products

Beverage manufacturers, we didn’t forget about you. We will be releasing a separate beverage report later this year.

Takeaways

Several external factors impacted Canadian food industries in 2021, which have resulted in higher input costs, amplified labour shortages and upended food consumption patterns. In early 2021, there was hope that the pandemic could soon be behind us; however, new variants provoked more disruptions, restrictions and uncertainty. Despite these challenges, food manufacturers’ performance proved to be strong.

Here are three key observations from this year’s report:

1. Industry gross margins bounced back in 2021 but remain below historical levels
Gross margins as a percent of sales in food manufacturing increased in 2021 YoY but remain below historical levels and below 2019 (Figure 1). Manufacturers have struggled to fully pass on higher labour and material costs for almost a decade. But margins improved slightly in 2021. At the individual industry level, results widely differ, which we dive into in the report.

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Video: Alberta Honey: A Day at Molenkamp Honey Farms

When was the last time you read the label on your honey?

We spent a day at Molenkamp Honey Farms with Michael Molenkamp, who has been keeping bees for 17 seasons and runs three to four thousand hives. In mid-September, he was finishing treatments and getting his bees ready for winter, and he walked us through how Alberta honey gets made.

Alberta has just 150 commercial beekeepers running 300,000 colonies, and together they produce 40% of Canada’s honey. Long summer days and golden canola fields give Alberta honey a light flavour that’s hard to match anywhere else.

Molenkamp calls Alberta beekeepers some of the most resilient farmers he knows. There’s plenty of Alberta honey to go around, but a lot on our shelves isn’t from here, so his ask is simple. Give the label a second look and choose honey made by Alberta beekeepers, or buy straight from a beekeeper near you.