Key industry sector: Food & beverage
Toronto's food and beverage cluster is of great importance to the region, and along with Los Angeles and Chicago is one of the largest food and beverage clusters on the continent. Toronto's food cluster has annual sales in excess of $18 billion. In the Toronto CMA, there are over 1,500 food and beverage manufacturing establishments (2008).
Within Ontario, Toronto dominates the provincial food industry with more than half of all the food processing in the province taking place within the Greater Toronto region.
Services
Food and Beverage Cluster Specialist
The Food and Beverage Cluster Specialist deals with the various issues and needs facing this industry. The cluster specialist develops partnerships with local businesses, governments and other stakeholders. Activities include:
- Expediting municipal issues relating to the expansion or retention of food and beverage processors. Working on your behalf in the City of Toronto will ensure that your business gets the attention it deserves
- Consulting, education and intelligence services to companies and business associations in the food industry
- Building the capacity of business networks and associations such as the Toronto Food Industry Advisory Committee in order to support its members and develop innovative programs
- Developing, implementing and/or supporting significant cluster-specific economic development projects such as the How to Start a Food Business Workshop series
- Providing access to international industry contacts.
Programs
The successful How to Start a Food Business Seminar series provides the information that individuals require before venturing into the food and beverage processing industry. Attendees build useful networks and access information that will help them as they navigate this exciting industry. The workshop is hosted quarterly by the City of Toronto's Economic Development and Culture Division. Schedules and locations for the workshops can be found at www.enterprisetoronto.com.
The City of Toronto, Economic Development & Culture Division launched the Toronto Food Business Incubator (TFBI) in 2007 to support new entrepreneurs by teaching them the best practices of food production and ensure that new and innovative products are continually being introduced to local consumers. Support for labour force education and training will ensure that Toronto processors are producing safe, secure and affordable food products with the assistance of government funding.
TFBI is a non-profit organization run by an independent food industry board of directors that supports entrepreneurs interested in starting a new food company.
The City of Toronto's Food and Beverage Sector runs Incoming Buyer's Missions for Toronto food processors. A number of times during the year food retailers and food service buyers from the U.S. and abroad are hosted in Toronto and one-on-one meetings are arranged for Toronto-based companies to show their products to potential clients.
In partnership with Toronto Water, a series of Energy Efficiency Workshops for the food and beverage sector have been created, resulting in the Toronto Water Industrial Water Rate Program that gives reduced water rates to companies that put in place a water conservation program with Toronto Water.
The support and establishment of an International Food Processing and Innovation Centre (IFPIC) (PDF) in Toronto is the answer to a need for available food-grade industrial space in the city. It responds to the constant call for a focus on commercialization, especially for small and medium sized companies. It will help strengthen the link between rural and urban areas by providing more opportunities for sales of area farm products into the local processing industry. Once fully realized, IFPIC will prove to be an institution that attracts new, innovative companies who follow best practices. Since the facility will be built to LEED Green standards, it will incorporate energy-efficient and environmentally friendly practices. This project is being pursued with both public and private sector partners.
Resources
Co-packing Directory
This comprehensive directory of Toronto food processors that are currently engaged in co-packing can be obtained by contacting the Food and Beverage Cluster Specialist.
Toronto Food Industry Advisory Committee
This committee has been created to address the needs of the food industry within Toronto and includes representatives from the city's food sector and the three levels of government. For more information, contact Economic Development's Food and Beverage Sector Specialist.
Destination Excellence - creating best practices in the Food & Beverage Industry
The information gathered from the Labour Force Readiness Plan (PDF 3.3 MB, 89 pages) will be used to provide training to the Ontario food processing industry on the emerging issue of labour and workforce shortages. It is expected that the tools and resources developed will increase the capacity of companies and the industry to recruit and retain workers. Destination Excellence, a best practices in human resources training program, is now being developed and once completed, will be offered to the food processing industry as a means of training staff for increased productivity.
Ontario Food Terminal
The Ontario Food Terminal is a unique asset, not just in the Toronto region, but in Canada. It is the largest wholesale fruit, vegetable and flower market in Canada, and one of the five largest produce markets in North America. It plays a central role in the food industry and supports grocery stores, restaurants, caterers, and florists in eastern Canada and in some American states.
Guelph Food Technology Centre
Agri-food companies looking for cutting-edge solutions in food technology are turning to the Guelph Food Technology Centre (GFTC), which has gained the reputation as one of North America's foremost research and consulting facilities. GFTC is an independent, industry-driven, not-for-profit organization, which is within a one-hour drive of Toronto. The centre assists food companies and food entrepreneurs improve their competitiveness and profitability by helping them develop new products, design new processes, train their staff, and implement safety and quality systems in their facilities.
Upcoming industry events
Canadian Food Summit 2012
February 7-8, 2012
Metro Toronto Convention Centre
The Canadian Food Summit 2012 is a major international summit on the future of food in Canada hosted by The Conference Board of Canada. Clients of the City of Toronto Food and Beverage Sector are eligible for a special rate to attend. Contact Tracie Jones at jones@conferenceboard.ca, or 613-526-3090 x 286 for more information. Provide the priority code "COT" when speaking with Tracie to ensure your access to the reduced rate.
How to Start a Food Business Workshop
2012 Workshop details coming soon.
North York Civic Centre, 5100 Yonge Street
If you are a chef or foodie, these workshops are for you! Hosted by the City of Toronto Economic Development & Culture division and delivered in partnership with Enterprise Toronto.
Learn:
- How to develop your products
- How to develop your business plan
- How to make sure your financing is in place
- How to brand your identity
- How to utilize the web to source information.
Admission is free but pre-registration is required.
Overview
Food processing is a vital part of Toronto's economy:
- In terms of employment, at 58,000 employees, Toronto's food cluster is the second largest in Canada and the United States, after Los Angeles
- For every $1 of additional output from the food and beverage sector a further $1.83 is added to the provincial economy beyond direct production. (Source: Statistics Canada, input-output analysis)
- In 2008, the food processing industry in Ontario had sales of $34 billion
- In 2004, the food processing industry in Ontario had sales of $32.1 billion
The food and beverage processing sector is one of the largest manufacturing sectors in Ontario and in Canada. Toronto is a major decision making centre for the food industry in Canada, with half of Canada's top ranked food and beverage manufacturers being headquartered in the city.
The food and beverage cluster has long been a major component of Toronto's economy. It is the second largest employment sector in the city. With over 700 businesses in Toronto and 1,500 in the Census Metropolitan Area (CMA), and nearly 60,000 employees in the CMA (see Figure 1), Toronto's cluster is also one of the largest in Canada and the U.S. rivalling Chicago and Los Angeles as a major continental centre for the industry. Employment in this sector has increased at a rate of 5 per cent per year. Within the next 10 years, employment growth rates are expected to double.
Figure 1: Food and Beverage Sector Employment in the Toronto CMA, 1994-2009
Source: (2009), Toronto CMA 2009 Industry Profiles: City of Toronto Economic Development & Culture, based on Statistics Canada Labour Force Survey data, City of Toronto
Extremely diverse cluster
Core food industry activities include food processing, warehousing and distribution, retailing and food services. The Toronto food industry has a multiplier effect that generates growth in related industries servicing the cluster. These include packaging, design, the production of food industry equipment, biotechnology and specialized storage and transportation (i.e. refrigerated).
Bakeries are the largest single type of food processing plant, and this has resulted in diverse, high quality products in this sub-sector. Meat processing is the next largest sub-sector, followed by beverages.
Figure 2: Composition of the Toronto food and beverage processing industry by sub-sector, 2008
Source: Statistics Canada, 2008
Specialty foods
One sub-sector of the food processing cluster that is growing in importance is specialty foods. Specialty processors reflect Toronto's vibrant multi-ethnic community and its export connections abroad. About 25% of all food processing plants within Toronto are considered to be making specialty products. Specialty foods have grown about twice as fast as the average for the cluster and are expected to grow at 12% a year in the coming five years - compared to 5% for the rest of the cluster.
Two-thirds of the total food processing companies in Toronto have annual sales of less than $5 million. These smaller firms are nearly all owner-operated businesses producing 'fresh product' or serving specialty markets within the city. Slightly more than a quarter of the food processing companies are in the $5 million to $50 million range. The small and medium-sized food establishments are experiencing the fastest growth and highest export potential of all companies in this cluster. The largest operations, with annual sales in excess of $50 million, are mainly multi-national subsidiaries, serving the markets well beyond the boundaries of Toronto and often outside the province.
Figure 3: Food and Beverage employment by metropolitan area, 2008
Source: U.S. Census Bureau (2008). "2008 MSA Business Patterns (NAICS)", Accessed October 20, 2010, U.S. Census Bureau
Food cluster leaders
| Company name | Website address |
|---|---|
| Cadbury Schweppes | http://www.cadburyschweppes.com/ |
| Campbell Soup Company Limited | http://www.campbellsoup.ca |
| Cargill Limited | http://www.cargill.ca/ |
| Fiera Foods Company | http://www.fierafoods.com/ |
| Kraft Canada Inc. | http://www.kraft.com/ |
| Maple Leaf Foods | http://www.mapleleaf.com/ |
| Nestle Canada | http://www.nestle.ca/ |
| Unilever Canada Limited | http://www.unilever.ca/ |
| Weston Bakeries Limited | http://www.gwbakeries.com/ |
| Wrigley's Canada | http://www.wrigley.com/ |
Emerging Trends
Since the Food Industry Outlook was published, a developing "new food economy" has emerged - characterized by new consumer demands such as that for local food, and by an increased prevalence of small and medium sized companies focusing on responding to such demands, particularly in Ontario and more specifically Toronto.
A number of academic researchers have found that the continued importance of Toronto's food cluster - which includes businesses involved in food processing, service (e.g. catering companies), distribution and retail - and the need to consider urban trends, markets, and businesses as central to the regional food economy. Increasingly, consumers are driving Toronto's food market, indicating rising preferences for new kinds of products.
A 2008 report by the Canadian federal government discusses such national trends as: the Buy/Eat Local movement, the proliferation of ethnic foods as immigration rises, the burgeoning demand for kosher and especially Halal foods, and the push for organic food and sustainable practices. Other consumption trends include increased preference for ready-made or ready-to-cook foods by working families and aging adults, and foods that meet dietary restrictions (e.g. dairy-free, nut-free and gluten-free). Food safety standards have tightened in recent years, making food safety an increasingly significant issue. Toronto's food processing industry is at the leading edge of many new innovations with regards to these trends.
Toronto's significant advantages
According to the 2010 KPMG Competitive Alternatives Study, Toronto has lower overall business costs in food processing than in most large U.S. cities. The average Toronto cost advantage is 3.0% in food processing. The province's commitment to lower corporate taxes will further distinguish Toronto from our major U.S. competitors.
With the U.S. and Canadian dollars at par, Toronto is still a low cost leader in the food processing industry.
Average Total Taxes - Food Processing Industry ($000's US, 2010)
Source: KPMG Competitive Alternatives
Toronto is also a major North American hub for trucking, rail and air. Toronto has access to a very large regional market of over 6 million people, which is matched in size and concentration by only three other urban centres in North America. This is an affluent and cosmopolitan market that is open to innovation. Its myriad of ethnic groups means that there is a ready market for specialty products made locally
Since Toronto is well served by road and rail, the city has excellent links across Canada and into the U.S. According to KPMG, Toronto is the most cost-effective location for road freight of the nine major metropolitan markets in North America.
Average Total Business Costs - Food Processing Industry ($000's US, 2010)
Source: KPMG Competitive Alternatives
Related reports
- 2010 Toronto Food Sector Update (PDF 1 MB, 51 pages)
- Toronto's Proposed International Food Processing & Innovation Centre (IFPIC) (PDF 1.6 MB, 4 pages)
- Toronto Labour Force Readiness Plan: The Food-Processing Industry in the Toronto Region (PDF 3.3 MB, 89 pages)
- Food Industry Outlook: A Study of Food Industry Growth Trends in Toronto (PDF 1.7 MB, 65 pages)