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Canadian food and beverage manufacturers navigate challenges and opportunities in 2024: FCC report

Amid shifting consumer behaviours and economic patterns, Canadian food and beverage manufacturers are gearing up to navigate challenges and opportunities in 2024, according to the latest Farm Credit Canada Food and Beverage Report.

The report says 2024 will see a moderation in sales growth due to a slowdown in inflation and tighter household budgets, following a record-breaking $165 billion in food and beverage manufacturing sales in the previous year.

“High inflation and interest rate increases over the past two years have put pressure on household budgets, leading to changes in consumer spending habits,” said J.P. Gervais, FCC’s chief economist, in a statement.

The report projects a slight decrease of 1.4 per cent in food and beverage manufacturing sales for 2024 but indicates an average improvement of 1.7 per cent in gross margins.

Gervais said the potential impact of what’s happening in the U.S. economy could spur growth in exports.

With many commodity prices experiencing declines that are expected to filter through the supply chain, margins are forecasted to receive a boost in 2024. Additionally, the report predicts a decrease in the inflation rate for food purchased at grocery stores, dipping below 2.0 per cent in the spring and stabilizing around pre-pandemic levels thereafter.

“While challenges persist, 2024 holds promise for Canadian food and beverage manufacturers,” said Gervais. “By adapting to changing consumer preferences and leveraging opportunities presented by population growth, the industry can navigate the year ahead with cautious optimism.”

The FCC Food and Beverage Report offers insights and analysis across various sectors, including grain and oilseed milling, dairy, meat, sugar, confectionery, bakery, tortilla products, seafood preparation, fruit, vegetable, specialty foods, soft drinks and alcoholic beverages.

Read the full report here.

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