OTTAWA, Sept. 11 /CNW Telbec/ - Despite the rising cost of agricultural
products and a slowdown in production growth, profits in Canada's food
manufacturing industry are expected to grow steadily over the next four years,
according to the Conference Board's Canadian Industrial Outlook: Canada's Food
Manufacturing Industry - Summer 2008.
"Higher prices for wheat, corn and rice are increasing material costs for
food manufacturers," said Michael Burt, Associate Director, Industrial
Outlook. "But manufacturers have been able to pass some of their costs on to
consumers, which is maintaining the industry's profit growth."
Although the industry is passing some cost increases onto consumers, its
pricing power is being limited by the growing influence of large food
retailers. Wal-Mart's expansion into food retailing has prompted Canadian
retailers to place additional pressure on manufacturers to contain costs.
The slowdown in the Canadian economy is expected to limit growth in
consumer demand over the short-term, as some consumers respond by shifting to
lower-priced food products. Changing diets is a longer-term trend shaping the
industry, one which is helping certain industry segments. Fruit and vegetable
processors and seafood processors, in particular, are benefitting from this
trend that sees some consumers prepared to pay a premium for foods that are
healthier and taste better.
The recent listeria outbreak is not expected to affect the forecast.
Although consumers may respond by altering their spending habits, any changes
will result in a shift in market shares within the industry.
Following two years of significant profit increases, profit growth will
moderate starting in 2008. Profits will surpass $3.1 billion in 2008 and
steadily increase over the next four years.
For further information:
For further information: Brent Dowdall, Media Relations, (613) 526-3090
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