Posts Tagged “USDA report”
The Canadian retail industry reviews market share numbers for major supermarket operators and examines the growth potential for U.S. fresh produce exports, according to a new report.
Published by the USDA’s Foreign Agricultural Service, Canada is the largest overseas market for U.S. high-value, consumer-oriented products, with exports reaching nearly $17 billion in 2020. This represents 25% of the total value of U.S. consumer-oriented exports worldwide.
The report said:
- Canada’s retail market is mature and largely consolidated, with five retailers comprising more than 75% of the total retail grocery market;
- The remainder of the market is represented by smaller regional retail chains that include 6,800 independents and 27,000 small and independent convenience stores;
- Approximately 90% of Canada’s nearly 38 million consumers live within 100 miles of the U.S. border;
- The top three consumer-oriented agricultural product categories were bakery goods, cereals, & pasta ($2.2 billion), fresh vegetables ($1.9 billion), and fresh fruits ($1.6 billion);
- U.S. products dominate in imported goods in the Canadian market, but recently implemented Canadian trade agreements with 3rd country trading blocs – CETA (Canada-European Union Comprehensive Economic and Trade Agreement) and the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) – have contributed to increased agricultural export competition in the Canadian market;
- By surface area, Canada is the second-largest country, but over 80% of Canadians live in the country’s 15 largest cities;
- In 2020, Canada’s food and beverage retail sales surged by a record 10% from the previous year – reaching $109 billion, including alcohol sales of $20 billion – as COVID-19 response measures drove double digit losses in food service;
- Consumer demand and established distribution channels with U.S. suppliers continue to fuel produce sales growth, with Canadians spending 21% more on fruits and vegetables than U.S. consumers;
- Online sales in 2020 were up 105% over 2019;
- Investment in e-commerce will be vital to keeping up with consumer demand, and several of Canada’s largest retailers announced new supplier fees in 2020 to offset the cost of fulfillment center investments;
- Unable to develop online fulfillment capabilities independently, many smaller grocery retailers also partnered with delivery platforms (e.g., Instacart) or offered in-store pick-up services;
- The rise in e-commerce has also led to an increase in data and loyalty memberships;
- The success of loyalty programs has been attributed to the customization of promotional outreach (e.g., newsletters, coupons) to targeted customer demographics. KPMG’s 2019 Customer Loyalty Report underscored this fact before the pandemic, noting how Canadian consumer loyalty programs like Air Miles, Triangle Rewards, and P.C. Optimum are enmeshed in Canadian consumer culture.
- Canada’s leading grocery retailers continue to consolidate ownership of the segment and increase their bargaining power relative to suppliers, enabling retailers to set more favorable terms, fees, and requirements.
- The consolidating nature has left multiple suppliers feeling pressured and powerless in their relationships and contract negotiations with grocers. Following new fees suppliers’ associations and politicians began calling for a legislated retail grocery code of conduct to restore greater balance to negotiations with retailers. Some retailers have been advocating for a voluntary code rather than have one imposed upon them.
Top 10 Canadian Food Retailers (by retail sales)
- Loblaws/Shoppers Drug Mart (27%)
- Sobeys/Safeway (22%)
- Metro/Jean Coutu (11%)
- Costco (9%)
- Walmart (8%)
- Overwaitea Food Group (4%)
- Co-ops (3%)
- Couch-Tard (2%)
- North West Company Inc. (1%)
- Dollarama (1%)
Source: Canadian Grocer
A record volume of 3.4 million metric tons (MT) of table grapes was traded in the 2020-21 season despite “multiple hurdles”, according to a USDA report.
At the world level, the pandemic doesn’t appear to have limited output as losses by some producer countries are being offset by gains in others, keeping production at 24.7 million MT, just below the record level set in 2017-18, the report said.
In addition, if forecasts are realized, this year could also mark the first time Peru surpasses Chile in production.
“Global trade has faced many challenges this past year due to COVID‐19 and its many effects. Agriculture as a whole has had to overcome, and continues to be confronted with, significant transportation challenges as part of the fallout from COVID‐19,” the USDA Foreign Agricultural Service (FAS) report on World Markets and Trade said.
“Included in these are worldwide shipping delays and container shortages, with resultant high shipping costs, while countries also face labor shortages to varying degrees due to COVID‐19 measures.
“Table grapes experienced further obstacles the latter half of the season that made the year even more trying.”
The report noted that in Peru, striking workers blocked roads and shipments in Ica in December, hitting growers in the top producing region during the Andrean country’s second-largest export month.
Additionally, in the midst of Chile’s harvest in January, unseasonal and torrential rain caused severe damage in three of the main growing regions, it said. Producer associations in O’Higgins, the largest producing region, reported losses of up to 80 percent.
And in March, the cargo ship Ever Given ran aground and blocked the Suez Canal, impacting India’s exports destined for Europe at the peak of its shipping season.
But the report noted that there is also “no relief expected from lower volumes”, with production levels remaining high.
“Adequate supplies are often being met with logistical challenges in getting fruit to import markets, but most major exporters have been able to reach markets, with some even expanding their reach to new destinations. Chile, the United States, and Mexico are the only top producer‐exporters anticipated to see reduced shipments, but mostly due to lower supplies,” it said.
“Despite the litany of challenges, the table grape industry has shown great resilience. With steady high volumes, imports and exports are each projected to reach a record of more than 3.4 million tons.”