Good news out of Canada via the USDA recently, adding to the excitement generated by the best-attended PMA Fresh Summit and traditional optimism around the holidays.
In a comprehensive report compiled by our own Department of Agriculture and the Global Agricultural Information Network posted at https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Food%20Service%20-%20Hotel%20Restaurant%20Institutional_Ottawa_Canada_09-30-2019, figures showing a nice 5 percent gain was seen in Canadian foodservice sales for 2018. The report said, “The Canadian foodservice sector grew by five percent to nearly $68 billion USD in 2018. FAS/Canada expects growth to continue in 2019, as innovation and changing consumer behaviors drive the foodservice landscape.” It continued, “Canada continues to be an attractive export destination for U.S. companies focusing on the hotel, restaurant, and institutional (HRI) segments of the foodservice sector.”
That 5 percent bump is in keeping with the annual rate of growth Canada’s seen since 2014, and the report noted, “Canadian foodservice industry association Restaurants Canada has estimated that the industry grew (in nominal dollar terms) by five percent in 2018.” The trajectory could slacken somewhat, it noted: “However, after taking into consideration menu inflation and increased operational costs for restaurant operators, the foodservice sector posted real growth of just one percent. Between 2019 to 2021, foodservice sales are forecast to grow each year at a modest three to four percent.”
Canada’s foodservice market segment is divided between commercial – which consists of restaurants, caterers and drinking places – and the non-commercial “hotels, institutional, retail and other foodservice.”
The report explained, “The commercial segment accounts for 80 percent of total foodservice sales, with quick-service and full- service restaurants constituting the majority of sales. Foodservice sales through hotel and other accommodation locations leads the non-commercial segment, generating more than 40 percent of sales in 2018.” Additional information on this point is available by emailing the Office of Agricultural Affairs in Ottawa at email@example.com.
As the Canadian foodservice industry pertains to U.S. onions, stats show that this country’s annual onion exports are between 11 and 14 million 50-pound bags, with Canada, Mexico, Taiwan and Japan the biggest receivers.
Canada’s total imports of consumer-oriented products in 2018 totaled $26 billion, the report noted, and of that amount U.S. products totaled $16.2 billion, making the United States’ goods the most imported.
The top 10 Canadian restaurant chains and market share were Restaurant Brands International, Inc. at 18.7 percent; McDonalds Corporation at 11.1 percent; Recipe Unlimited Corporation at 7.1 percent; Doctor’s Associates Inc./Subways at 4.2 percent; A & W Food Services of Canada Inc. at 3.5 percent; Yum! Brands at 3.4 percent; Starbucks Corporations at 3.2 percent; Boston Pizza International Inc. at 3 percent; MTY Food Group Inc. at 2.2 percent; and Pizza Pizza Ltd. at 1.8 percent.
“U.S. exports of consumer-oriented products to Canada exceeded $16 billion in 2018, nearly double the value of the next largest market, Mexico. The top U.S. export categories of value-added products included prepared foods, fresh vegetables, red meats, fresh fruits, snack foods and processed fruits and vegetables,” the report said.
Who’s driving the foodservice bus in Canada? According to the report, younger consumers are increasingly spending. But it continued, “Millennials and Gen Z: Canadians under the age of 40 are seeking more eating-away-from- home or food delivery options. However, as these generations of Canadians do not yet have the same amount of disposable income of their boomer and Gen X parents, their spending decisions are heavily concentrated at lower price points and include less alcohol than older generations.”
Additionally, Canada’s multicultural population is “contributing to a more diverse food environment. The number of ethnic restaurants is on the rise in order to keep pace with the immigrant population. Immigrants currently represent 22 percent of Canada’s total population.”
Retail outlets for foodservice comprise the fastest-growing sector of the market segment, the report said, adding that sales have doubled since 2013. “Retail stores are expanding the selection and quality of prepared meals and snacks to meet consumer needs and grow their sales,” the report said.
There is also a consolidation among chain restaurants. “This trend continued in 2018 as it is an effective way to generate growth in the large, chain restaurant market,” the report said. And there has been continuous growth for independent operators as well, with “the growth of independent foodservice sales… in line with chain restaurant foodservice sales in 2018. The freedom to adapt to local tastes delivering more innovation helped them maintain steady growth and compete with chain restaurants.”
And, as is the case in the U.S., Canadians are increasingly seeking out healthy food choices. “Many foodservice operators are responding to consumer demand for alternative proteins by expanding menu offerings in this growing segment.”
That said, the top food trends in foodservice orders in Canada, as reported in Restaurant Canada Foodservice Facts 2019, are “French fries, potatoes, sweet potatoes and onion rings” at 15 percent of the take.
The full report is available in PDF format for download and is replete with charts and graphs – all good stuff.