Business and Operations
FCC reports on bakery and sugar/confectionery product trends
March 31, 2022 By Bakers Journal
FCC has released its latest food report highlighting opportunities and risks for Canadian food manufacturers to help navigate economic recovery. The report looks at the challenges and opportunities by industry, including bakery and tortilla products, sugar and confectionery products, grain and oilseed milling, dairy products and more.
Bakery and tortilla products
The food-service industry is an important market for baked goods. In Q3 and Q4, sales increased over 16 per cent as COVID restrictions eased and people ate out more. Cookies, crackers and pasta recorded sales growth of 20 per cent in November, picking up where it left off pre-pandemic when it grew over 20 per cent in 2019 and over 30 per cent in Q1 2020.
Among FCC’s findings:
- Gross margin as a percentage of revenue decreased to a decade low in 2020.
- FCC projects sales to increase 8.2 per cent in 2022.
- Bakery grocery sales fell 0.3 per cent in 2021 year over year, slightly below the total grocery increase of 0.3 per cent.
Bottom line: A food-service rebound and the convenience and staple products that bakers provide set the stage for solid performance. Opportunity to provide healthy and locally produced goods allows for differentiation. Finding ways to alleviate labour challenge strains will boost productivity and drive growth.
Sugar and confectionery products
After a difficult 2020, the sugar and confectionery industry had one of its strongest years for revenue growth on record. At the onset of the pandemic, volumes of confectionery products and refined sugar heading to food-service establishments declined as consumers stocked up on essentials. 2021 saw a shift back towards purchasing candy, chocolate, and other feel-good foods. Healthy choices remain a key trend in Canada, but indulgence isn’t going away.
Among FCC’s findings:
- Gross margins increased for the third consecutive year in 2021, driven by strong growth in Q1 and Q2.
- FCC Economics projects sales to increase 14.3 per cent in 2022.
- Grocery sales of sugar and confectionery products increased 3.3 per cent in 2021.
Bottom line: As the consumer becomes mobile again, opportunity abounds. For this industry, convenience and indulgence are differentiators for candy, chocolate, and other sugary pleasures.
A beverage report is expected in June 2022.
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