Canada Food and Drink Report Q1 2009
Business Monitor International, February 2009, Pages: 51
The Canadian Food and Drink Report provides independent forecasts and competitive intelligence on Canada's food and drink industry.
The Canadian retail sector could be due for a shake up in 2009 after food and retail conglomerate George Weston agreed to sell its US bread-making division to Mexico-based Bimbo for US$2.38bn. George Weston owns a number of dairy and bakery brands in the US and Canada and also owns around 61% of Loblaw, which is Canada’s largest grocery retailer. George Weston is believed to have done the deal to focus on the struggling Loblaw chain and the firm could use this cash windfall to finance expansion or take the business private to better orchestrate a turnaround.
The deal comes at a time when the Canadian economy is showing signs of weakness. Although Canada may not yet have fallen into a technical recession, as defined by two consecutive quarters of negative economic expansion, there has been a marked slowdown, and a recession appears to be a near certainty in 2009. As an export-led economy, Canada has been hit by falling global demand due to the worldwide economic slowdown. The industrial heartland of Quebec and Ontario is likely to continue to be hit hard by the massive drops in US manufacturing activity seen in Q3-Q408, while oil-rich Alberta's economic growth is going to be hit by falling energy prices. The unemployment rate is expected to rise nationally, from 6.0% at the end of 2007 to 7.3% at least by 2011.
However, as has been shown by Wal-Mart’s resurgence in the US, the economic downturn is not necessarily bad news for the organised retail sector. Financially-stretched consumers often see supermarkets and hypermarkets as offering the best value for money and firms who get their offering right can actually see an upturn in their sales and market share.
However, it is certainly questionable whether Loblaw is well positioned to gain from the economic downturn and this fact could be behind George Weston’s decision to divest other assets and raise cash to invest in the business. George Weston must fear that the real beneficiary of a downturn could in fact Wal-Mart, which has been aggressively expanding its hypermarket network throughout the country since 2006, and has successfully been stealing market share on the back of marketing campaign based on low prices.
The expansion of Wal-Mart raises the real possibility of Loblaw’s market leading position coming under threat and could even lead to a sustained period of financial decline for the business. Recognising that Loblaw is its most important asset, George Weston looks like it has taken the decision to sell its US bread business to finance a fight back. This could take the form of an aggressive focus on price, expansion of existing stores or even investment in a new chain of hypermarkets that rival those offered by Wal-Mart.
Business Environment
- SWOT Analysis
- Food
- Canada Food Industry SWOT
- Drink
- Canada Drink Industry SWOT
- Mass Grocery Retail
- Canada Mass Grocery Retail Industry SWOT
- Macroeconomic Outlook
Food
- Industry Forecast Scenario
- Food Consumption
- Canada Food Consumption Indicators - Historical Data & Forecasts
- Confectionery
- Confectionery Value/Volume Sales - Historical Data & Forecasts
- Canned Food
- Canned Food Value/Volume Sales - Historical Data & Forecasts
- Trade
- Food & Drink Trade Balance (food, drink & tobacco) - Historical Data & Forecasts
- Industry Developments
- Market Overview
- Food Processing
- Food Consumption
- Organics
- Confectionery
- Canned Food
- Trade
- Dairy
Drink
- Industry Forecast Scenario
- Alcoholic Drinks
- Alcoholic Drink Value/Volume Sales - Historical Data & Forecasts
- Hot Drinks
- Hot Drink Value Sales - Historical Data & Forecasts
- Soft Drinks
- Soft Drink Value Sales - Historical Data & Forecasts
- Industry Developments
- Market Overview
- Alcoholic Drinks
- Beer
- Wine
- Hot Drinks
- Soft Drinks
Mass Grocery Retail
- Industry Forecast Scenario
- Canada Mass Grocery Retail - Value Sales by Format - Historical Data & Forecasts
- Industry Developments
- Market Overview
- Main Players
- Table: Structure of Canada's Mass Grocery Retail Sector by Number of Outlets
- Structure of Canada's Mass Grocery Retail Sector - Sales by Format (US$bn)
- Sales Breakdown by Retail Format Type
Competitive Landscape
- Key Players
- Food And Drink
- Table - Key Players in Canada's Food & Beverage Sectors
- Mass Grocery Retail
- Table: Key Players in Canada's Mass Grocery Retail Industry
- Company Analysis
- Food
- Saputo
- George Weston Ltd
- Maple Leaf Foods
- Drink
- Corby Distilleries Ltd
- Mass Grocery Retail
- Loblaw Companies Ltd
- Metro Inc
- Sobeys
- Wal-Mart
Appendix
Agricultural Commodity Prices
Country Snapshot: Canada Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2000-2003
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Manufacturing Wages, 2000-2012
BMI Food & Drink Industry Glossary
- Food & Drink
- Mass Grocery Retail
BMI Food & Drink Forecasting & Sourcing
- How We Generate Our Industry Forecasts
- Sourcing
- Saputo
- George Weston Ltd
- Maple Leaf Foods
- Corby Distilleries Ltd
- Loblaw Companies Ltd
- Metro Inc
- Sobeys
- Wal-Mart
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