Canada’s food and beverage industry is navigating a mixed outlook for 2025, with modest growth in sales forecasted alongside ongoing economic and trade-related challenges.
According to the latest annual Food and Beverage Report from Farm Credit Canada (FCC), released earlier this month, total sector sales are projected to increase by just 0.6 per cent to $168.8 billion. However, overall volumes are expected to decline by 1.5 per cent, driven largely by reductions in beverage manufacturing.
“The food and beverage industry faces ongoing pressures from economic challenges and trade disruptions,” said Amanda Norris, senior economist with FCC. “While sales growth is projected to increase slightly, manufacturers will need to carefully navigate rising costs and shifting consumer habits to maintain profitability.”
Consumer spending remains uncertain despite easing inflation and a cooling labour market. Per capita consumption of food and non-alcoholic beverages declined for the fourth straight year in 2024, down one per cent from the year before.
Bright spots include dairy, with expected sales growth of 8.3 per cent in 2025 and improved gross margins, and the sugar and confectionery sector, which could see a 10 per cent increase in sales despite high cocoa prices and trade risks.
Meanwhile, beverage sales are forecast to decline by 2.5 per cent due to continued weakness in alcohol consumption, especially beer.
Norris says food manufacturers that respond to shifting consumer priorities – such as value and personal preference – will be better positioned to grow. FCC also emphasises innovation, market diversification and cost management as key strategies.
FCC’s report covers a wide range of subsectors, offering insights to help Canada’s food and beverage industry adapt and thrive.
More details are available at fcc.ca/Economics.
(Written by: Joseph Goden)
