CANADIAN MARKET OVERVIEW
2012 canada market overview presentation
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November 15, 2012 presentation by Food Export Northeast
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CANADIAN MARKET
OVERVIEW
Opportunities
Consider Canada
#1 bilateral trading partners$1.6 billion trade crosses Canada - U.S. border dailyWindsor/Detroit border – most trade flow in world
U.S. Top 5 Trading Partners
Country2010$B
2011$B
Growth
Canada $249.1 $280.9 12.8%China $163.5 $198.4 21.4%
Mexico $91.9 $103.9 13.1%Japan $60.5 $65.7 8.6%Germany $48.2 $49.2 15.4%
Opportunities
Consider Canada
U.S. Exports of “Agricultural Products”Top 5 Countries ($US)
Country2010$B
2011$B
Growth
Canada $16.9 $19.0 12.7%China $17.5 $18.9 7.7%Mexico $14.6 $18.3 25.7%Japan $11.8 $14.1 31.4%Korea, South $5.3 $7.0 13.3%
Opportunities
2011 Total Agri-Food Imports from U.S. - $19.5 Billion
Consider Canada
Province Imports (Million)
% Increase2010
Ontario 18,068 8.5
Quebec 5,823 22.8
British Columbia 5,257 6.2
Alberta 2,131 11.0
Manitoba 1,095 18.7
Atlantic Canada 983 10.1
Saskatchewan 399 13.1
5,000 mile shared border with over 120 border crossings
Close shipping corridors
Similar time zones
Increasing shipping costs
80% of imports bytruck
Consider CanadaOpportunities
Common culture & language
300,000 cross shared border every day
Snow birds
Positive perception of U.S. products among Canadians
Strong Canadian $
Benefits of NAFTA – duty free (excl. poultry, dairy)
Consider CanadaOpportunities
Consider CanadaDemographics – July ‘11
Canadian population: 34.5 million
Ontario population = 39%
Quebec population = 23%
Prairie population = 18%
British Columbia = 13%
Atlantic Canada = 7%
62% of Canadians live in Ontario and Quebec
majority of Canadians live within 140 miles of border
Consider CanadaDemographics – July ‘11
Metropolitan area Population (000’s)
Toronto, ON 5,838.8
Montreal, QC 3,908.7
Vancouver, BC 2,419.7
Calgary, AB 1,265.1
Ottawa–Gatineau, ON-QC 1,258.9
Edmonton, AB 1,196.3
Winnipeg, MB 762.8
Quebec City, QC 761.7
Hamilton, ON 750.2
Kitchener-Cambridge-Waterloo ON 498.5
London, ON 496.9
Halifax, NS 408.2
Median age is 40 years
People over 50 make up 36% of population / control over half of the nation’s discretionary spending
66% of Canada’s growth from immigration
35% of population &73% of new immigrants - Toronto/Vancouver/Montreal
+100 languages in major cities
Demographic Trends
Consider Canada
Group Current Worth Annual Growth + / -
Total Non-Ethnic $200 billion $125 million Decelerating rate
Total Ethnic $50 billion $1 billion Accelerating Rate
GroupTotal Present
ValueProjected
Annual GrowthApprox 1/3 of
total ethnic growth
Chinese $200 billion $125 million
South Asian $50 billion $1 billion
Opportunities
Consider Canada
Immigrants represent 20% of total Canadian population
Demographic Trends
Consider Canada
Consider CanadaRegional Diversity
Region Traits
British Columbia
Healthier lifestyle, slower pace, higher disposable income, higher frequency visits to upscale restaurants, specialty foods, Asian influence
PrairiesAlberta fastest growing area, baked goods, comfort foods influence from German / Ukrainian / Polish / Scandinavian backgrounds
OntarioMulti-cultural, fast-paced, convenience, ready-to-go, international cuisine
QuebecEuropean heritage, family centric, less spicy, sweet-tooth, specialty foods
Atlantic CanadaBritish / Irish / Scottish influence in foods, seafood, working class
Health & wellness
Convenience
Variety
Ethnic
Regional
Sustainability
Consumer Trends
Consider Canada
Retail Market
Consider Canada
Consider CanadaWhat’s Hot - Retail
Healthy foods – snacks, whole grains, functional, gluten-free, sugar-free, trans fat free, low sodium
Meat, fish & seafood – marinated, pre-seasoned
Fresh categories – perimeter of store
Ethnic foods
Natural/organic - value-added, artisanal
Uncommon spins on common foods
Gourmet comfort foods
Environmentally friendly
Raw Food
Portable Foods
Consolidation of market
Blurring of boundaries - food and non-food retailers
One-stop-shopping gaining popularity
Importance of private label
18% of market
Environmentally conscious
Retail Trends
Consider Canada
Consider CanadaRetail Differences: Canada vs U.S.
Canada operates on lower margins
Most food is less expensive than in the U.S.
25% of Canadians shop at discount supermarkets
Supermarkets are well-braced against Wal-Mart
Franchised independents buy from one of the major chains
Specialty retail not as developed
Channel % Share
Grocery 63.5%
Mass
Merchandisers11.7%
Warehouse Club 7.8%
Drug Stores 7.2%
Convenience 6.0%
Specialty Stores 2.0%
Gas Stations 1.8%
Consider CanadaFood Store Sales – 2011
Food Store Sales - 2011
Consider Canada
Province % Market Share
% Chain’s Share of
Units
Independent Share of Units
Ontario 37.3% 39.3% 60.7%
Quebec 25.6% 28.7% 71.3%
British Columbia 14.7% 31.3% 68.7%
Alberta 10.9% 42.4% 57.6%
Sask/Man 5.2% 40.6% 61.0%
Atlantic 6.1% 38.6% 61.4%
Consider CanadaTrips Per Household
Retail Format Trips Per Shopper
2010
Trips Per Shopper
2009
% Change of Trips
Grocery Supermarkets 82.5 83.8 -1.6
Drugstores 16.5 17.0 -2.9
Mass Merchandiser 17.2 16.9 1.8
Warehouse Clubs 11.4 11.0 3.6
Convenience/Gas Bars 9.4 9.7 -3.1
Total Channels 137.0 128.4 6.7
Consider CanadaPrivate Label in Canada
National Grocery Banner and Mass MerchandiserPrivate Label Share
Total
CPG
Deli
Produ
ce
Baker
y
Mea
t/Sea
food
Groce
ry
NonGro
cery
HABA0
5
10
15
20
25
30
35
40
18.2
34.430.8
27.4 26.1
19.7
1511.3
Consider Canada
2011 food sales: $85.5 billion (+1.2%)top 3 control +69% retail market
Retail Landscape
Retailer 2011 Sales(Billions)
% Market Share
Loblaw $31.5 38.7
Sobeys $16.3 20.0
Metro Inc. $11.5 14.1
Costco $7.0 8.6
Canada Safeway
$6.8 8.3
Wal-Mart $5.2 6.4
Co-ops $3.4 4.2
Consider Canada
39% market share
Development of “market” stores to provide one-stop-shopping
1,027 corporate and franchised stores
376 affiliated independents
1,564 independent accounts
Retail Profile: Loblaw Cos. Ltd.
Consider CanadaRetail Profile: Loblaw Cos. Ltd.
No Frills (discount) 136 Your Independent Grocer 53
Loblaws 131 Super Valu 2
Axep 128 Zehrs Markets 50
Maxi & Co. 106 Real Canadian Superstore 32
Provigo 70 Fortinos 20
L’Intermarche 63 Dominion 15
Valu-Mart 58 IGA 3
Fresh Mart (Atlantic Wholesalers)
58 Real Canadian Wholesale Club
3
Save Easy 42 Atlantic Superstore 53
T&T Supermarket 7
LOBLAW BANNERS – EASTERN CANADA
Consider CanadaRetail Profile: Loblaw Cos. Ltd.
Lucky Dollar 113
Extra Foods 67
Real Canadian Superstore 71
Shop Easy 63
Super Valu 20
T&T Supermarket 20
Real Canadian Wholesale Club 29
LOBLAW BANNERS – WESTERN CANADA
Consider CanadaRetail Profile: Loblaw Cos. Ltd. – Private Label
Stores offer more than 5,000 private-label products
45% coverage
No Name
President’s Choice
PC Organic
President’s Choice Blue Menu
President’s Choice Black Label
Additional names by category
Consider CanadaRetail Profile: Loblaw Cos. Ltd. – Private Label
2nd largest player
National coverage
Thrifty Foods purchase
Smaller communities
Banner consolidation ON to BC
Sobeys, Foodland, Price Chopper
IGA – Quebec
1,337 corporate & franchise
Consider CanadaRetail Profile: Sobeys Inc.
Consider CanadaRetail Profile: Sobeys Inc.
Kwik-Way 65 Lawtons Drugs 79
Sobeys 284 Sertard 37
Boni Soir 229 Tradition 29
Foodland 196 Rachelle-Bery 19
IGA 212 Cash & Carry 9
Needs 140 IGA Garden Market 49
Price Chopper 44 Foodtown 27
Le Dépanneur 99 Thrifty Foods 26
IGA Extra 106 Fast Fuel 9
Boni Choix 82 Freshco 57
SOBEYS – NATIONAL
Consider CanadaRetail Profile: Sobeys Inc. – Private Label
27% coverage
Compliments
Compliments Organic
Compliments Balance
Compliments Sensations
Compliments Greencare
Signal
Gourmet Minute
3rd largest player
2nd largest player Ontario/Quebec
Quebec – franchised
Ontario – corporate/franchise
+1,400 corporate & franchise
Consider CanadaRetail Profile: Metro Inc.
Consider CanadaRetail Profile: Metro Inc.
Metro 370 Clini Plus 46
Gem 259 Super C (discount) 78
Extra 206 Service 38
Brunet 124 SOS Depanneur 2
Food Basics 115 Les 5 Saisons 1
Marché Extra (Metro) 206 Marché Richelieu 86
Ami 84
METRO BANNERS – ONTARIO/QUEBEC
Consider CanadaRetail Profile: Metro Inc. – Private Label
15% coverage
Overhaul of private label
Selection
Irresistible
Irrestistible Life Smart
Costco WestBritish Columbia – 14
Alberta – 13
Saskatchewan – 2
Manitoba – 3
Ontario (Thunder Bay) – 1
Consider CanadaRetail Profile: Costco Canada Inc.
Costco EastOntario (Excl Thunder Bay) – 25
Quebec – 18
Nova Scotia – 2
New Brunswick – 3 bn
Newfoundland - 1
Consider CanadaRetail Profile: Wal-Mart
328 stores 146 Super Centres Pantry Departments Sam’s Clubs Closed
Consider CanadaRetail Profile: Target Canada
Purchased 189 Zellers stores
1st 25-35 stores Spring 2013
125 – 135 stores by 2014
Sobeys to supply dairy/frozen/perishables/chocolate
Consider CanadaSpecialty Retail Market
63,000 specialty stores), 72% independents
2011 – 47% of stores with increased sales
Gourmet food – 12% growth
34% of stores are stocking gourmet food, 30% gift baskets with 31% increasing presence
Average price for gourmet food in specialty stores is $6-10
British Columbia leader in specialty foods
Quebec second largest buyer of specialty foods
Consider CanadaFoodservice Market
Foodservice Profile - 2011
Consider Canada
What’s Hot - Foodservice
Consider Canada
What’s Growing What’s SlowingSmoothies Carbonated Soft Drinks
Bagels Hot Coffee
Deli Meat Sandwich Doughnuts
Iced/Frozen/Slush Coffee Juice
Tap Water All Other Sandwiches
All Other Entrees (ex pork/beef/seafood)
Has Browns
Muffins Pork Entrees
Breakfast Wrap/Burrito Cookies
Chinese/Cantonese/Szechwan Beef Entrees (ex burgers)
Hot Chicken Sandwich Seafood/Fish
Top 10 Foods Top 10 BeveragesFrench Fries – 15.7% Hot Coffee – 30.6%
Chicken/Poultry Entrees – 14.1% Carbonated Soft Drinks – 21.3%
Burgers – 10.7% Alcoholic Beverages – 6.4%
Salads – 9.3% Tap Water – 6.0%
Seafood/Fish – 6.6% Hot Tea – 5.7%
Donuts – 6.2% Juice – 5.5%
Pizza – 5.8% Bottled Water – 4.2%
Hot Chicken Sandwich – 5.3% Milk – 3.5%
Chinese/Cantonese – 5.2% Iced Tea – 3.1%
Breakfast Sandwiches – 5.2% Iced/Frozen/Slush Coffee – 2.2%
Top Trends – Menu Importance
Consider Canada
Foodservice Trends
Consider Canada
Sustainability
Artisanal Cheeses
Simplicity/Back to Basics
Nutritional/Healthy Cuisine
Bite Size / Mini Desserts
Food Trucks/Street Food
Ethnic Street Food Inspired Appetizers
Gluten-Free/Food Allergy conscious
Locally Sourced Food
Farm/Estate Branded Ingredients
Foodservice Trends – Up and Coming
Consider Canada
African Cuisine
Black Garlic
Gluten-Free Beer
Red Rice
Peruvian Cuisine
Vegetable Ceviche
Micro-Distilled/Artisan Liquor
Goat
Game Bird Appetizers (duck, quail)
Savoury Ice Creams
$65.5 Billion Sales
Foodservice Profile - 2011
Consider Canada
Sales ($B)
Quick service $22.1
Full service $21.9
Contract / social caterers
$4.2
Tavern, Bars, Pubs, Nightclubs
$2.4
Total non commercial
$12.7
Consider Canada
Type of Service Average Check/Person
Quick Service $4.95
Family/Midscale $11.29
Casual Dining $16.17
Fine Dining $41.51
Retail $4.21
68% of food is prepared and eaten in-homeApprox 8% meals/snacks sourced from restaurantAverage Check / person $7.16Average Household spent $1,857 at restaurants
Foodservice Profile
Foodservice Profile - 2011
Consider Canada
Foodservice Profile - 2011
Consider Canada
Top 6 Chains in Canada
#1
#2
#3
#4
#5
#6
Foodservice Profile
Consider Canada
Province Foodservice Units
Sales 2011(Millions)
Sales Growth in ’11
Ontario 30,412 $18,381.6 3.2%
Quebec 20,847 $9,876.1 3.0%
British Columbia 11,984 $7,893.5 1.9%
Alberta 8,843 $6,741.6 3.0%
Atlantic Canada 4,981 $3,046.6 1.2%
Man/Sask 4,230 $2,818.5 3.4%
Navigating Canada - Retail
Consider Canda
Navigating Canada - Retail
Consider Canda
Navigating Canada - Foodservice
Consider Canada
Consider CanadaNavigating Canada
Distributors and Brokers
More than 800 brokers & distributors
Regional or national focus
Cover retail and/or foodservice
Many require exclusivity
Pioneering/retainer fees
Consider CanadaNavigating Canada
Distributors Take ownership of product Warehouse products Important for products with
limited shelf life (DSD) Distribution channel for
smaller retailers Catalogue / online sales Fees: 25 to 35%
Consider CanadaNavigating Canada
Brokers/Brand Managers
Your dedicated Canadian sales representative
Represent fewer principles
Exclusivity
Expertise – regions/stores/ relationship marketing
Brokerage fees: 5% average
Start-up / retainer fees: Usually first 6 months
Consider CanadaMarket Builder
Market Scan Rep finder Competitive product shopping Category Review Distribution analysis Importation analysis &
regulations Packaging/labelling
regulations Distributor referrals Importer evaluations
Market visit One-on-one meetings Retail tour
Education is the key to success
Consider Canada2013 Activities
Activity Date
CRFA Show – Food Show Plus! Toronto
March 2011
SIAL Canada – Food Show Plus!Toronto
May 2011
Specialty/Natural/Organic Focused Trade Mission Toronto
September 2011
Market Builder Year-round
2011 Food Export Marketing Forum
CANADIAN PACKAGING / LABELLING REQUIREMENTS
An Overview of Canadian Packaging
and Labeling Requirements
CANADIAN FOOD INSPECTION AGENCY
Investigating consumer and industry complaints
Taking appropriate compliance and enforcement actions related to food safety, labelling and deceptive practices
Recall of unsafe products
Undertaking preventative measures using a risk based approach
CANADIAN FOOD INSPECTION AGENCY
Food and Drugs Act*Agriculture & Agri-Food Administrative Monetary Penalties Act
Consumer Packaging & Labelling Act* Seeds Act
Canada Agricultural Products Act Feeds Act
Fish Inspection Act Fertilizers Act
Meat Inspection ActCanadian Food Inspection Agency Act
Health of Animals Act Plant Breeders’ Rights Act
Plant Protection Act
* as it relates to food
LABEL REQUIREMENTS
BASIC
LABELLING
REQUIREMENTS
LABEL REQUIREMENTS
Common name
Net quantity – metric units
List of ingredients
Best before date with a durable life span of less than 90 days
Nutrition information
Company name & address
BILINGUAL PACKAGING
English & French Canadian
Everything on a label must be bilingual and of equal size
BILINGUAL PACKAGING
64
Name prescribed by a regulation - examples: orange juice, sausage, chocolate, fish sticks, canned peas
If the name is not prescribed by a regulation, then the name by which the product is commonly known – examples: orange drink, chocolate cake
COMMON NAME
65
The net quantity declaration must appear in metric units:
By volume for liquids; e.g., millilitres, or litres (for amounts more than 1000 ml)
By weight for solids; e.g., grams, or kilograms (for amounts more than 1000 g)
By count for certain foods, such as hotdog buns.
NET QUANTITY DECLARATION
66
Must appear on foods with a durable life of 90 days or less
Must be accompanied by the storage instructions, if different than the ambient conditions
Prescribed format
Best Before / Meilleur Avant: 2012 Fe 21
BEST BEFORE DATE
Must appear in decreasing order by weight, except :
spices, seasonings, fine herbs flavourings flavour enhancers food additives vitamins and minerals
LIST OF INGREDIENTS
The components of the ingredients must be shown, with certain exceptions (such as flour, butter, etc.)
Some ingredients may have class names (flavour, herbs, milk ingredients)
LIST OF INGREDIENTS
LIST OF INGREDIENTS
70
Ensure your ingredients are allowable in Canada.
Some additives or colours may not be allowed.
The enrichment of food with vitamins, minerals and amino acids is only permitted in some foods such as:
Vitamin C in apple juice Fluoride in bottled water Vitamin D in milk Folic acid in flour
LIST OF INGREDIENTS
An allergen statement must be made on packaging that contain any of the following products or may contain traces of:
ALLERGENS
Peanuts Sesame seeds
Tree nuts (specify) Shellfish
Eggs Fish
Wheat or gluten source Crustaceans
Soya Milk & milk ingredients
Mustard seed Sulphites (more than 10 ppm)
NUTRITION FACTS TABLE
Mandatory on pre-packaged foods with the following exemptions:
Products with nutrient & energy values expressed as “0”
Beverages with more than 0.5% alcohol
Fresh vegetables or fruits or combinations
Raw, single-ingredient meat, poultry, fish & by-products (except ground meat and poultry)
NUTRITION FACTS TABLE
Exempted products must provide a Nutrition Fact Table if:
Product has added vitamins, minerals etc.
Product has health claims, nutrient claims
Artificial sweeteners are added
73
NUTRITION FACTS TABLE
May have one bilingual table or two tables: one English / one French
Nutrient information based onSpecified quantity of food as soldList of calories & mandatory specified nutrients
Amounts listed as % daily value
NUTRITION FACTS TABLE
Size of Nutrition Facts Table is determined by package face
NUTRITION FACTS TABLE
Foodservice packages and products for industrial use do not require Nutrition Facts Table on packaging.
A Nutrition Facts Table must be available on paper and sent to customer to have on hand. May be faxed or shipped with product.
76
NUTRITION FACTS TABLE – U.S. VS CANADA
Differences in mandatory elements Rounding rules Recommended daily intake for
calcium, iron & vitamin A
Mandatory in U.S. / Optional in Canada Number of servings per container Calories from fat % daily value for cholesterol % daily value foot note
NUTRITION FACTS TABLE – U.S. VS CANADA
79
47 allowable claims (i.e. source of omega-3, trans fat free, low in sodium)
Specified wording for a claim
Qualification of claims can be different from U.S. (i.e. trans fats claim)
Cannot use the word healthy or imply a claim with a disease
Carb free claims are not allowed
NUTRIENT CONTENT CLAIMS
7 permitted health claims only with prescribed wording
Sodium and hypertension
Calcium and osteoporosis
Saturated and trans fat and heart disease
Vegetables and fruit and cancer
Fermentable carbohydrate and tooth decay
Replacement of saturated fat with mono- and polyunsaturated fat and blood cholesterol lowering
Beta glucan oat fibre and heart disease
HEALTH CLAIMS
Prescribed wording for health claim of vegetables and fruit and cancer
“A healthy diet rich in a variety of vegetables and fruit may help reduce the risk of some types of cancer”
HEALTH CLAIMS
Fruits, vegetables, sauces, condiments, juices:
Have standards of identity
Have standardized containers that must be adhered to
Examples:
Jams/jellies – 250, 375, 500, 750 mL, 1, 1.5, 2, 3, 4 L
Peanut butter – 250, 375, 500, 750 g, 1, 1.5, 2 kg
PROCESSED PRODUCTS REGULATIONS
Product must have at least 95% organic content
Mandatory certification, by a CFIA accredited certification body – Canada recognizes U.S. accreditors such as QAI
Product must bear the name of the certification body that has certified the product as organic
Canadian organic logo is permitted
ORGANIC PRODUCTS
Meat & poultry products must have labels approved by Canadian Food Inspection Agency
Natural health products must go through the Natural Health Product Directorate to be licensed and a number is issued that must be on an approved label (i.e. energy drinks, natural supplements)
Other products do not require approval
LABEL APPROVALS
Canadian Food Inspection Agency (CFIA)www.inspection.gc.ca
Guide to Food Labelling and Advertising Chapter 5 – Nutrition Labelling Chapter 6 – The Elements Within the Nutrition Facts Table
Nutrition Labelling Tool Kit www.inspection.gc.ca/english/fssa/labeti/nutrikit/
nutrikite.shtml
Questions about Packaging & Labeling [email protected]
RESOURCES
KATHY BOYCEFOOD EXPORT - CANADIAN REPRESENTATIVEMARKETING / TRADE SPECIALIST
731 Laurier Ave. Milton, ON L9T 4R1T 416.523.1470 | F [email protected]
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