Organic Packaged Food in Canada

PROSPECTS

The organic trend continues apace in Canada

Organic packaged food continued to record solid value growth in Canada in 2019, with little sign of a slowdown. Organic lifestyles are increasingly adopted by Canadian consumers and range from purchasing single organic offerings from particular packaged food categories to adopting a completely organic lifestyle, including entirely organic meals.

Grocery retailers continue to expand their distribution of organic packaged food

Retailers in Canada continue to increase their focus on organic products to meet the growing consumer demand. Most retailers have significantly expanded the shelf space they allocate to organic ranges and/or have enhanced the organic offerings within their private label lines.

Organic products continue to penetrate packaged food categories

Organic products continue to make inroads in a variety of packaged food categories in Canada. In stagnating or declining categories such as sugar confectionery, processed meat and baked goods, organic has been among the niche growth areas, aligning with the consumer desire for healthy indulgence and less guilt.

COMPETITIVE LANDSCAPE

Organic packaged food manufacturers continue to expand their ranges with organic variants

While Loblaw Cos Ltd remained the top player in fairly fragmented organic packaged food in 2019 due to its leadership of several categories, including organic edible oil and organic rice, Agropur Cooperative Ltd maintained its strong position due to its leadership of organic dairy, the biggest category in value terms. The company is noted for being one of the few early adopters of organic standards in packaged food.

Exclusively organic packaged food producers grow rapidly

Brands and manufacturers that focus exclusively on organic packaged food are growing. Organic continues to present valuable opportunity for smaller, niche players as their concentration on offering healthy, local food and small batch production appeals directly to consumers.

Price inflation set to slow down due to retailers’ greater focus on organic products within private label lines

While organic packaged food products are typically priced higher, the growing scale of production and distribution as well as the increasing focus that retailers place on organic products within their private label ranges will result in a slowdown in price inflation. In a number of categories, these factors may even contribute to price decline.

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