“Consumers are very cautious, just as in the United States,” Scott explains. “Even in specialty stores they’ll ask the price.” He notes that margins are narrowing, even on organic and natural produce. “There’s a much stronger trend toward organic and natural than we’ve seen before,” he says. “But the whole market has tightened up a fair bit.”
“The extreme retail competition trickles down to the wholesale level,” adds John Russell, president, J. E. Russell Produce, an Ontario Food Terminal-based distributor of brands including Fresh Express, Berry Bowl, and Earthbound Farm. “It leads to very competitive price levels that are razor sharp. And we still have to continue to provide quality produce and good service, so our customers can compete with the influx of mass retailers.”
Convenience is another trend, with consumers willing to pay somewhat more for triple washed and bagged produce, prepared salads and stir fry ingredients, or baked prewrapped potatoes. “We’re seeing the growth of anything that makes it very easy for consumers,” Scott reports. The same can also be said of private label products, as many Canadians—like their American counterparts—no longer believe these brands to be of inferior quality. Sales for private label goods reached over CAD$11 billion in 2011 and were expected to climb in both 2012 and 2013.
There has also been growing interest in healthier-for-you foods, driven by Canada’s aging population as well as younger generations seeking more eco-friendly or ‘natural’ lifestyles. As part of this trend, sales growth in several fruit and vegetable categories is outpacing that of food sales overall. According to the U.S. Department of Agriculture’s Foreign Agricultural Service, sales of artichokes in Canada grew 44 percent in 2011, while cherries, kale, ginger root, and yams all grew by more than 15 percent (versus 2.2 percent for foods as a whole).
Part of the picture is imports; shipments of fresh fruit from the United States continued to climb over the last several years, representing 6.5 percent of all U.S. exports to Canada for 2012, worth nearly $1.8 billion. Canada imports 48 percent of its fruit from the United States, with another 11 percent from Mexico. Included in the U.S. figure were tropical and exotic fruits, which comprised 4.2 percent of the total fresh fruit shipments.
In recent years, both Chile and Costa Rica have carved a bigger slice of Canada’s import pie, with grapes, berries, apples, and cherries competing with U.S. commodities. The lion’s share of Canada’s fresh vegetable imports, however, continue to come from the United States (66 percent) and Mexico (25 percent), while the top three suppliers of processed fruits and vegetables are from the United States, China, and Thailand.
Even with rising interest in premium, convenient, healthier, and natural and organic produce, price is always a concern for Canadian consumers. Lemaire sums it up nicely: “We’re a price-driven market in the end.”
