Food sector weathered economic storm and improved profitability: report
TORONTO — The Canadian food and beverage industry needs to aggressively manage costs, invest in their businesses and look for opportunities abroad, a report by consulting and audit firm Deloitte Canada says.
“The consumer remains just as price conscious as ever, with little to no evidence that this will change,” a report by the firm said.
“Though margins are on the rise for both Canadian and U.S. processors, managing costs remains a top priority for processors to remain successful.”
The Deloitte report also noted the strong Canadian dollar gives companies the opportunity to establish themselves in new markets abroad that will give them opportunities for growth and increased scale and efficiencies.
“Given the smaller size of Canadian companies and the limited acquisition opportunities in Canada, new markets afford Canadian processors the opportunity to ramp up production to gain scale efficiencies,” the report said.
The Deloitte report noted the industry successfully weathered the economic storm and was on the path to improved profitability in 2010 compared with a previous review.
“Whether the measure is return on investment, return on equity or earnings as a per cent of sales, the trend is on the rise,” the report said.
“This performance has occurred over a tumultuous period that saw fragile consumer confidence, unprecedented government economic stimulus, near zero interest rates and the withdrawal of private equity from the mergers and acquisitions scene.”
The report was based on 70 companies including 18 Canadian private and public companies.