According to Euromonitor, retail sales in the packaged food market reached US$56.3 billion in 2022. That makes Canada the 11th largest packaged food market in the world, representing a growth rate of nearly 17.5%, or US$8.9 billion from 2017. High growth categories in the forecast include ready meals, pasta, secondary baking products, cheese, pet food, edible oils, dairy (i.e., cheese), sweet spreads, ice cream, and frozen desserts.
Post reports Canada’s retail market is mature and largely consolidated, with five retailers comprising more than 76% of the total retail grocery market. The remainder of the market is represented by smaller regional retail chains that include 6,800 independents and 27,000 small and independent convenience stores. Ontario, Quebec, and British Columbia represent 75% of Canada’s retail market and are the provinces in which most of the convenience, drug, grocery, and mass merchandise stores are located.
As consumers moved back to pre-COVID-19 norms, growth in monthly retail sales stabilized over the 2022 calendar year. Adaptation and flexibility will continue to be of the essence as the industry continues to manage supply chain, labor, and inflation challenges.
Canadian consumers are expected to remain cautious in the near term, driving sales of private label products and tempering the pace of “premiumization” (i.e., consumers upgrading to more premium products).
Top product prospects include bakery goods, cereals, and pasta (US$2.6 billion), fresh vegetables (US$2.1 billion), fresh fruits (US$1.7 billion), food preparations (US$1.3 billion), and non-alcoholic beverages excluding juice (US$1.3 billion). The pet foods category grew 14.6% in the past year (US$1.1 billion) and is expected to continue to grow by 13.9%, making this category one of the most opportunistic categories for U.S. suppliers.