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