Canada slips on food affordability ranking

Economist says rising grocery prices and stagnating incomes have combined to increase pressure on consumers

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Published: January 28, 2022

The food bill for an average family of four in Canada is expected to increase by $900 this year.

Glacier FarmMedia – This year will be challenging for consumers as inflation is expected to push costs higher, according to food industry commentator Sylvain Charlebois, who spoke at Farming Smarter’s Global Crop Production virtual conference last month.

The Dalhousie University Agri-food Analytics Lab director said the inflation rate is driving food prices higher while income rates aren’t keeping up. But the popularity of plant-based proteins could see a significant shift in consumer choices in the future as the cost of those products goes down and quality goes up.

Why it matters: Food is costing Canadian consumers more, but this could have a positive effect on how they view food and those that produce it. 

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“For the average family of four, the food bill will actually increase by about $900,” said Charlebois.

That situation, in combination with stagnant wages, is driving down Canada’s international ranking when it comes to food affordability, he said.

“According to the (United Nations), Canada in 2020 — last year — was ranked 18th in the world when it came to food affordability,” he said. “We’re down to 24th now this year and we are expecting Canada to fall even further.”

Charlebois highlighted that the situation comes despite Canada being a global food supplier. He added that the situation is not all bad.

The increased costs have the potential to change the relationships North American consumers have with food.

Charlebois pointed out Europeans spend about 18 per cent of household budgets on food compared with the six per cent annually spent by Americans.

“Societies that tend to not spend as much on food will marginalize (it) a little more,” he said.

Canada is between the U.S. and Europe when it comes to how it values food, according to Charlebois, with rising prices during the past decade beginning to change that relationship.

The positive is more money going into not just production but higher quality, he said. And the pandemic has served to highlight the changes going on in food production with consumers far more aware of supply chains.

It has also raised consumers awareness of labour, ethical and environmental impacts occurring in production, Charlebois said.

That awareness is being particularly felt by the increasing popularity of plant-based protein products, said Charlebois, who believes those products will continue to become more popular.

More than 90 per cent of Canadians continue to have meat in their diet, according to Charlebois, but the amount they consume is being reduced.

That will have an impact on costs for plant-based proteins as scalability reduces prices.

“If you are out there and you are skeptical about this vegetable-protein movement — it’s real,” said Charlebois. “We see it in our numbers, especially in the younger generations. Anybody under the age of 40 will have a different approach to proteins.”

While there is a large proportion of Canadians who believe plant-based proteins are too expensive, prices are dropping as competition increases, according to Charlebois.

“Right now, in Canada, there are 25 brands selling more than $3 million wholesale,” he said. “And we are expecting by the end of 2023 that the vegetable protein market will exceed a billion dollars in Canada.”

While those numbers pale in comparison with meat production, the annual increases of plant-based protein products won’t be overlooked by grocers, said Charlebois.

“There is something going on here that we need to look into,” he said.

This article was originally published at The Western Producer.

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