Canada’s food sector navigating tariffs far better than U.S.: study
The United States may have started the trade war hoping for economic gains, yet Canadian food businesses have fared far better under tariffs than their American counterparts, according to the 2025 North American Food Sector Study from Richter, Canada’s largest independent business advisory and family office firm.
Just over half of Canadian food executives (51%) report “positive momentum” this year—far ahead of the United States, where only 6% say the same. Canadian firms are also ahead on profitability: 45% report improvements, versus 11% in the United States.
The contrast between the two countries is striking, suggesting Canada’s food sector has found ways to stay resilient while U.S. operators continue to grapple with the challenges.
Looking ahead, the optimism gap only grows: nearly nine in 10 Canadian executives (87%) anticipate expansion over the next 12 to 18 months, versus less than half (47%) of their U.S. peers.
Michael Black, partner in the Toronto office of Richter (which also has offices in Montreal and Chicago), suggests Canadian companies are just doing a better job, identifying lanes for growth and expansion while still navigating political and economic uncertainty.
“Operators are focusing on stabilizing their businesses and protecting against future shocks,” says Black. “There’s no single solution. Businesses are identifying their biggest exposures — from margin preservation to operational efficiency and workforce optimization. Those who weather the storm are positioning themselves to emerge stronger.”
More than 150 owners and executives, across manufacturers, processors, wholesalers and distributors, were surveyed for the report.
Trade tensions are, of course, a major headwind for food businesses. Just over three-quarters of North American executives (76%) say tariffs and supply chain disruptions have hurt them this year, up sharply from 11% in 2024. As one respondent put it: “Tariffs are a huge issue related to cost, but the uncertainty is impossible to deal with.”
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On the topic of costs, “Raw materials” were most affected in both countries (U.S. 30%, Canada 28%), but Canada felt more impact on “Packaging” (25% vs. 10%) and “Consumer Pricing Strategies (17% vs. 13%). U.S. operators saw greater effects on “shipping/transportation Costs,” “Supplier selection/sourcing strategies” and “lead times/logistics delays.”
But the pain has clearly been more acutely felt south of the border.
Nearly one in four U.S. food businesses report being “extremely negatively” affected by tariffs, compared with just 2% of Canadian business.
In terms of sales volume, 53% of respondents indicated a “moderate decrease,” whereas 42% saw “no change.” Only a paltry 1% saw a moderate or significant increase.
By grocery category, produce was found to have the lowest tariff impact, with the report noting “responses focused on price increases, supplier and contract terms restructuring/renegotiation and inventory increases.”
“Baked goods and confectionery” showed a higher tariff impact than other categories “due to rising raw materials costs, with responses focused on new domestic and international sourcing, pricing adjustments and cost passthrough, and inventory strategies.”
When asked to select the top three threats from a list of 10 facing their company over the next 12 to 18 months, “tariffs” ranked fourth overall.
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“Consumer demand shift’ topped the threat list, with 20% of respondents citing it. As one noted, ‘We face risks from changing dietary trends.’” “Competition” followed (at 18%), then “supplier reliability and materials available” (13%). “Market conditions”—both “global economy” and “in my sector”—fell from the previous year as threats, while “regulatory,” “production capacity” and “global security” all also dropped, rounding out the least mentioned threats.
The study also asked about the labour market.
Nearly half of Canadian executives (46%) describe conditions as somewhat or extremely negative, while only 6% see them as positive. Attracting talent has become increasingly challenging, with 44% reporting it as very or somewhat difficult—up from 23% in 2024. Training staff is also a growing concern, cited as difficult by 42% of respondents in 2025, compared with just 10% last year. To address these challenges, most executives are “outsourcing/contracting work” (28%) followed by “re-skilling/retraining existing workforce” (22%), while 20% are exploring “automation/technology investment.”
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On the growth front, Canadians are pursuing different paths than south of the border. While 42% of U.S. companies are exploring mergers or acquisitions, just 7% of Canadian firms are considering deals — and only 8% expect to complete one.
