Institutional Channels in Canada

Residential care for the elderly grows fastest as the population ages

The structure of the Canadian population is changing; not only is the 65-year-old-and-over population increasing, but life expectancy is also rising year-on-year. Thus the demand for residential care products and services grew fastest in 2016, as the number of establishments and employees increased. This trend is expected to continue as the population ages and the number of senior citizens increases. Many larger players are actively expanding as a result, both through facility modernisation and the acquisition of competitors.

Growth in enrolment and investment in higher education despite population change

While the 18-25-year-old population has decreased slowly, enrolment in higher education continued to increase. There was a growing demand for higher educated and better skilled employees, resulting in a larger student population in higher education. Public and private investments to expand and modernise establishments in this channel continued to support the growth in enrolment numbers. Consequently, the size and number of establishments and the number of employees increased. This resulted in opportunities for channels such as construction, and services like contract cleaning, among others.

Aramark, Compass Group Canada and Sysco Canada dominate contract foodservice

In most institutional channels in Canada, contract foodservice was dominated by Aramark, Compass Group Canada, and Sysco Canada. These big three players dominate healthcare and education, in particular, but also other channels. A nationwide reach, vast resources, years of experience and negotiating power allowed these companies to maintain their leading positions. Aramark and Sysco Canada, in particular, frequently work together, with Sysco Canada distributing the majority of products sold by Aramark. While smaller competitors exist, their market presence is significantly smaller, resulting in far less power in the value chain. However, group purchasing organisations and new strategies, such as food hubs, are aimed at placing smaller players on a more equal footing.

Ongoing cost-cutting measures spur growth in outsourced facility management

In difficult economic times, institutions across channels continued to look for ways to reduce operating costs while increasing efficiency. Many institutions are turning to outsourcing facility management, which has shown its potential to help them achieve these two goals. This is the case for healthcare and education facilities, in particular. This strategy provides institutions with many benefits, particularly as facility managers expand their service offerings. Indeed, many institutions are expanding through acquisitions of smaller specialised competitors, allowing them to offer a wider range of services from one service provider, further simplifying operations and reducing operating costs for customers.

Institutional market to expand by 2021 as number of free trade agreements increases

Canadian institutional channels will benefit greatly as the government increases its participation in free trade agreements across continents. The reduction, and in some cases elimination, of tariffs will increase trade and strongly benefit exporters and importers, the agricultural industry, in particular, and others. Competition will increase in the B2B (business-to-business) market as a result, as will the number and availability of various products and services. The institutional market, overall, will expand and present opportunities for companies across channels.

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