Canadian Packaging Machinery Market Research Report - PMMI

3.0 THE FOOD INDUSTRY
3.1 INDUSTRY OVERVIEW
In 2001, the last year for which complete industry data are available, the Canadian
food processing industry shipped goods of its own manufacture valued at
approximately C$56 billion, a 7.4 percent increase over 2000. The value of the
industry’s shipments represented 10.2 percent of the total value of Canada’s
manufacturing shipments in 2001. Statistics Canada data for 2001 indicate that the
industry employed 222,000 people and that it was composed of 4,910
establishments.
Canada’s food processing sector is oriented primarily towards the domestic market,
as 72.5 per cent of sector shipments were sold domestically in 2001. Over one-half of
the sector’s shipments in 2001 were from two categories: meat (33.9%) and dairy
(17.7%). The share of production that Canada exports, however, has increased from
9 per cent to 27.5 per cent between 1988 and 2001. Imports have also increased
from 10 per cent of the apparent domestic market in 1988 to 21.4 percent in 2001. It
should be noted that the definition of the food processing sector, as used in this
report, excludes the beverage and the animal food producing sectors. It should be
further noted that tea and coffee manufacturing has been included in the beverage
industry section of the report instead of in the food manufacturing industry section.
Although the bulk of food processing activity occurs in Ontario and Quebec, the
economic significance in terms of the share of regional manufacturing activity is
greatest in the Atlantic and Prairie Provinces. Plant locations also vary - red meat
and fruit and vegetable processing plants tend to be located near sources of farm
production, while fluid milk and bakery product plants tend to be clustered near large
centers of population. Activity in the major sub-sectors occurs in every region. Meat
processing is generally the most important activity in each region, particularly in the
Prairie Provinces. Dairy and meat products are the major products in Quebec, with
the share of total shipments of dairy products being significantly higher than in most
other regions.
The food processing sector is fragmented, diverse, and is dominated by a relatively
small number of large and very large firms. The food processing sector is composed
of relatively large Canadian-owned multinational enterprises (MNEs), foreign-owned
MNEs, large and small co-operatives, and small and medium-sized enterprises
(SMEs), both Canadian and foreign-owned. Although some Canadian food sector
firms are relatively large, in general, Canadian firms are smaller and less diversified
than many of their major U.S. competitors.
A number of the large and medium-sized firms are publicly listed companies, while
the small enterprises tend to be privately owned. Most foreign-owned firms are
privately held by their parent corporations. Co-operatives, which account for about 20
percent of the value of shipments, play an important role in the Canadian food
SMG/Columbia Consulting Group Page 28