Canadian Occupational Projection System (COPS)

Industrial Summary

Food and Beverage Products

NAICS 3111-3119; 3121; 3122

This industry comprises establishments primarily engaged in manufacturing food as well as beverage and tobacco products. Food manufacturing is by far the most important segment, accounting for 80% of production in 2016, followed by beverage products (17%) and tobacco products (3%). The industry is largely domestic-oriented as more than two thirds of its production is sold within the country. With a total of 286,700 workers in 2016, it is the largest employer of the manufacturing sector (16.9% of all manufacturing workers). Most workers are operating in food manufacturing (87%) and employment in the industry is largely concentrated in Ontario (38%) and Quebec (28%), with men accounting for 60% of the workforce. Key occupations (4-digit NOC) include:

  • Process control and machine operators, food and beverage processing (9461)
  • Labourers in food and beverage processing (9617)
  • Supervisors, food and beverage processing (9213)
  • Industrial butchers and meat cutters, poultry preparers and related workers (9462)
  • Bakers (6332)
  • Testers and graders, food and beverage processing (9465)
  • Fish and seafood plant workers (9463)
  • Labourers in fish and seafood processing (9618)

* Key occupations for manufacturing industries in general also include: Manufacturing managers (0911); Construction millwrights and industrial mechanics (7311); Material handlers (7452); Shippers and receivers (1521); Transport truck drivers (7511); Industrial engineering and manufacturing technologists and technicians (2233); Industrial electricians (7242); and Industrial and manufacturing engineers (2141).

The industry was among the three manufacturing industries to post positive, albeit modest, growth in output from 2007 to 2016 (along with plastics and rubber products and aerospace, rail, ship and other transportation equipment). This partly reflects the fact that the production of the food segment increased almost continuously over that period, even during the recession of 2008-2009, as food is a necessity, making it less sensitive to cyclical fluctuations in aggregate demand. On average, real GDP in the food and beverage industry grew at an annual rate of 0.7% from 2007 to 2016, with all the increase coming from the food segment which expanded by 1.5% annually. While steady increases in domestic consumption have been the backbone for the food segment over the past decade, output growth has been primarily fueled by rising foreign demand, particularly from the U.S. and Asian markets. In contrast, production in the beverage and tobacco segments contracted by an annual average of 1.7% in the past ten years, reflecting higher import penetration of brewery products and weaker consumption of cigarettes. A growing presence of foreign competitors in the food and beverage market over the past several years forced the Canadian industry to undertake a significant amount of restructuring and consolidation to remain competitive globally. The larger plants have allowed manufacturers to take greater advantage of economies of scale, as well as containing costs per unit of output. At the same time, capital spending for some food segments has also started to pick up, benefiting from strong inflows of foreign direct investment (FDI), led by a surge in European capital. The greater shift toward technology boosted productivity in the industry, while keeping employment relatively stable (0.0% average annual growth rate) over the period 2007-2016, with the exception of a one year dip in 2010 that was fully reversed in 2011. In 2016, the employment level was essentially the same as 2006.

Production growth is projected to accelerate significantly over the period 2017-2026, primarily driven by foreign demand and a relatively low Canadian dollar. The export-oriented segment of the industry is expected to benefit from a stronger U.S. economy and new market opportunities resulting from the gradual implementation of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). Exports of food products are also expected to benefit from rising incomes and the growing middle class in emerging markets. Developing countries generally have higher population growth rates than developed countries and a greater capacity to increase per-capita consumption of food. In addition to enhance the price-competitiveness of Canadian exports of food and beverage products, the low value of the Canadian dollar is expected to increase import prices and encourage a shift toward local sourcing and domestic production. However, companies using imported inputs (such as fruits and vegetables) into domestic production may have a hard time passing price increases to Canadian consumers who have become increasingly sensitive to food prices in recent years. While the outlook is positive for exports, domestic demand for food and beverage products is expected to soften in line with the slower pace of growth anticipated in consumer spending over the longer term, largely due to population aging. This factor is expected to counterbalance the positive impacts of higher import prices and healthy growth in the Canadian food services industry on domestic demand, making foreign demand the largest contributor of production growth in the food and beverage manufacturing industry. Better export conditions are expected to result in real GDP growth averaging 1.3% per year over the projection period (although the renegotiations of the North American Free Trade Agreement (NAFTA) represent a downside risk to the export outlook). This significant acceleration in output growth should lead to renewed growth in employment, with job creation projected to average 0.5% annually from 2017 to 2026. However, a large part of output growth will continue to come from productivity gains as technological innovations in the industry, particularly in advanced robotics, are expected to increase the automation of the production process. The amount of capital per worker is expected to keep rising, partly driven by foreign direct investment (FDI) brought by greater economic liberalization between Canada and the European Union. FDI tends to increase transfers of technology, improve resource allocation and provide better access to international markets. It has historically been shown to lead to higher product quality, stronger productivity and increased competitiveness.

Real GDP and Employment Growth Rates in Food and Beverage Products

Figure showing the annual growth of real GDP and employment over the periods 2007-2016 and 2017-2026 for the industry of Food and Beverage Products. The data is shown on the table following this figure

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

Text Version of Figure Real GDP and Employment Growth Rates in Food and Beverage Products, 2007-2016 and 2017-2026, in Percent
  Real GDP Employment
2007-2016 0.74 0.04
2017-2026 1.27 0.48

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

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