Productivity gains in food and beverage manufacturing sector could unlock $40B: report

Productivity in the food and beverage manufacturing sector has slowed over the past decade, Farm Credit Canada (FCC) says in a new report.

The organization said labour productivity declined in the sector by an average of 0.5% annually from 2015 to 2022.

In its “Prospects for future productivity growth in Canadian food and beverage manufacturing” report, Farm Credit Canada said 3% annual GDP growth in the food and beverage manufacturing sector over the next decade could add up to $40 billion to the national economy.

It could also create 217,000 new jobs and generate $1.3 billion in tax revenue and $16 billion in wages and benefits for Canadians, the report said. 

"Productivity growth is essential to ensuring that the Canadian food and beverage manufacturing sector remains competitive globally," said Craig Klemmer, manager of thought leadership at FCC, in a release. "But it doesn't operate in isolation. Success depends on a broader ecosystem of investment, skilled labour and strong global market access."

FCC identified four pathways to boost productivity growth, including: capital investment to support upgrades and expansion of plants and equipment; skills training; streamlined regulations; and trade openness and global integration.

The organization convened a coalition of more than 20 investment organizations earlier this year, collectively committed to deploy up to $7 billion into Canadian agriculture and food innovation by 2030. 

Canada's food and beverage manufacturing sector includes more than 8,800 businesses and employs roughly 318,000 people, FCC said.