CPGmatters: Specialty Food Sales in Canada on Track for More Growth

Discussion
Jun 23, 2011
John Karolefski

Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.

Sales of food from specialty food stores in Canada have been increasing an average of two percent over food purchased from mainstream outlets. Future growth is expected due to an influx of ethnic consumers who are in the market for these foods.

“There is great potential for specialty foods,” said Claudia Schmidt, research associate at the George Morris Center, Canada’s independent agri-products think tank. She outlined the results of a study on specialty food trends in Canada in a presentation recently at SIAL Canada, an international food trade show in Toronto.

Ms. Schmidt said the specialty foods market is currently not well defined compared to the U.S. and lacks general market information. Respondents to the study defined “specialty food” in different ways:

  • Niche/non-mainstream (56 percent)
  • Food that is produced and bought based on ethnicity or faith (15 percent)
  • Non-industrial production/lower volume/fewer competitor/low general consumer awareness (nine percent)
  • Consumers are willing to pay more to have it (nine percent).

These products include foods that are natural/ organic, healthier, ethnic, ethical, and culinary/artisan, as well as foods that address food allergies and intolerance and are based on religious or environmental concerns.

The population in Canada is becoming more diverse, she explained, thus increasing the market for specialty food. Some 250,000 new immigrants per year include:

  • 50 percent from Asia and Pacific
  • 20 percent Africa and Middle East
  • 15 percent Europe and U.K.
  • 15 percent from other countries.

According to a previous study, 70 percent of retail sales growth for specialty foods over the next 10 years will come from minority groups. Canada’s visible minority population will increase from four million in 2001 to between 6.3 million and 8.5 million by 2017.

By 2031, nearly half of Canada’s visible minority groups will be Muslim. This will increase demand for Halal meat products such as lamb and goat that are now in short supply. Ms. Schmidt said demand for kosher products is increasing. A quarter of consumers believe that kosher is safer and better than mainstream food and consumers with food allergies look for specific types of kosher products that are safe to consume.

Meeting the demand for gluten-free and other products for specialty diets would also increase sales of specialty foods. But Ms. Schmidt said this potential is limited because of the lack of value-chain coordination, A number of government policies and legislation are not conducive to enabling market-focused innovation, she added, and there is a general lack of consumer awareness.

Ms. Schmidt said an enhanced food labeling program in Canada, set to debut in August 2012, “will increase interest and awareness of specialty food.” But Canada needs more coordination and support for the specialty foods sector, where the biggest need is for strategically gathered market information.

Discussion Questions: Are there any lessons Canada can learn from the U.S. experience in specialty foods? Which categories within specialty foods – i.e., natural/organic, ethnic, culinary/artisan – have largest growth potential in the U.S?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

3 Comments on "CPGmatters: Specialty Food Sales in Canada on Track for More Growth"


Sort by:   newest | oldest | most voted
Ian Percy
Guest
9 years 10 months ago
As has been often said in this venue, there are significant differences between the two countries – yet of both I am a proud citizen. The word “visible” is key. In Canada other cultures are actually highlighted. In Toronto even street signs are in other languages. Exploration of foreign restaurants and food stores is just what you do. There was nothing like living downtown amid all that diversity. Cheese from here. Bread from there. Handmade sausage from Adolfo’s place on the corner. It seems to me that in the US there is almost a preference to make other cultures “like us.” Maybe that’s because I live in uni-cultural Scottsdale where a Thai take-out place is about as diverse as it gets. That said, I ain’t moving! But it would sure be nice to have more cultural richness. The world is a fascinating place, maybe we should welcome it! In the incessant political debates the word “isolationism” is being used a lot lately. Let’s hope that doesn’t seep over and limit our food and cultural possibilities.
Ralph Jacobson
Guest
9 years 10 months ago

I think Canada sees the opportunity for the potential business these newer immigrants may provide. If I am to generalize a bit, I think Eastern Canada may be further along than Western Canada, however that shouldn’t be an obstacle. I also may be prejudiced in this perspective based upon my most recent visits there.

I’m not sure I’d recommend ANY lessons to be learned from the way the US has handled the influx of immigrants. I don’t think we’ve done a very good job. I believe Western Europe and the Westernized regions of the Middle East have done a far better job of capitalizing upon the opportunity.

Fabien Tiburce
Guest
Fabien Tiburce
9 years 10 months ago

As a Toronto resident, I find the term “specialty” itself somewhat dated and short-sighted. Toronto is, according to the UN, the most culturally diverse city in the world. We have 110 active communities in the city. There is no “specialty” food market to speak of. It’s all specialty to us (at least something is “specialty” to somebody else). Canada’s largest cities (Toronto, Montreal, Vancouver) also have large, vibrant downtown cores which encourages ethnic and “specialty” stores. In short, if you truly embrace multi-culturalism and downtown living, “specialty” is a label that pretty much applies to most, if not all, food stores. Do we have anything to learn from the US? Surely but perhaps not in this area. Toronto is a truly diverse city and a city that works.

wpDiscuz

Take Our Instant Poll

Is the market opportunity around specialty foods in the U.S. largely tapped or untapped?

View Results

Loading ... Loading ...