The Province of Ontario in Canada is home to more than 50,000 farms on which more than 200 products are grown. Much of this produce transits through the Ontario Food Terminal in Toronto, which distributes more than 1 million tons of produce annually.
Canadian food industry: largest sub-sectors are meat production and bakeries
The food and beverage processing industry is the second-largest manufacturing sector in Ontario after transportation. More than 3,000 food and beverage processing firms in Ontario earn revenues of almost $40B annually and employ 97,000 workers. The two largest sub-sectors are meat production and bakeries with the specialty food sector showing the greatest growth largely as a result of the large and growing percentage of foreign-born Canadians who have immigrated to Canada. Although most of the industry is domestically owned including multinationals such as Maple Leaf, Dare and Weston Foods, the province has long been home to many of the world’s largest food processing companies including Nestle, Kelloggs, Coca Cola and many mid-sized international companies such as Lindt, Dr. Oetker, and Ferrero.
Ontario benefits from large workforce and a sizable market
Ontario has a well-developed supply chain of producers, processors, ingredients manufacturers, and specialty importers. Furthermore, logistics firms and distributors ensure rapid delivery to major markets throughout the United States and Canada from Ontario’s central location in North America. This network is particularly strong in the Toronto region where approximately 75% of the processing takes place and where there is a large workforce and a sizeable market of some 10 million people in the region.
Large investments expected in the machine industry
Capital investment, which is important to maintain the sector’s competitiveness, is supported by a wide variety of government programs and incentives. The latest estimate from the Ontario Ministry of Agriculture was that $1.4B was spent on equipment and machinery over a five-year period. It can be expected that a large portion of this would have been imported as the machinery industry is not very robust in Canada. For example, according to Statistics Canada, $4B of machinery was imported into the province of Ontario alone in 2017. Most recently the Canadian government announced a change in write-off rules for machinery and equipment. Manufacturing and processing machinery can now be written off in the first year of purchase, which will certainly help accelerate investments in the food processing sector.
Despite a significant food processing sector, $20B of processed food and drink products were imported into Ontario in 2017. A vibrant co-packing industry exists in the province, which offers an option for exporters of foreign food to Canada.
Opportunities for Swiss firms in the food processing industry
There are therefore excellent opportunities in Canada for Swiss firms that produce machinery used in the food processing industry or Swiss firms that export processed food. The ideal time to undertake due diligence of the market and meet potential partners and distributors would be during SIAL, which will take place in Toronto from April 30 to May 2, 2019. It is the largest food industry trade show in North America. In addition to the more than 1,000 exhibitors that are expected from all sectors of the food and food processing industry, there are education sessions to learn about the North American market and the ability to meet one-on-one with importers who cover the Canadian market, as well as US buyers.
Our North America Consultant, Annina Bosshard and the Swiss Business Hub Canada would be pleased to work with you to help advance your interests at SIAL and before or after the show to ensure that you have the meetings you need to build your business in North America. Get in touch now!