Farmers Forum staff
OTTAWA — Farm Credit Canada foresees another strong year for dairy product manufacturing sales in 2025, in contrast with the broader food and beverage sector that faces uncertainty amid economic challenges, trade disruptions and shifting consumer habits. That’s according to the latest food and beverage report from Farm Credit Canada (FCC).
FCC forecasts a modest 0.6 % increase in food and beverage sales to $168.8 billion in 2025, but a 1.5 % decline in volume. While profit margins are expected to improve slightly, they will remain below pre-2019 levels.
“While sales growth is projected to increase slightly, manufacturers will need to carefully navigate rising costs and shifting consumer habits to maintain profitability,” FCC senior economist Amanda Norris said.
On the dairy-product side, FCC forecasts an 8.3 % increase in sales and a 6.0 % increase in volumes. Gross margins in the sector are expected to improve in 2025, to the highest level over the past two years, with support from higher sales and declining raw material costs.
While inflation has eased and labour market pressures have relaxed, consumer spending remains uncertain. Per capita consumption of food and non-alcoholic beverages declined for the fourth consecutive year in 2024, down 1 % from 2023 and 8 % since 2021, as household budgets remained tight, according to FCC. However, food and non-alcoholic beverages showed signs of recovery near the end of 2024, while alcohol consumption continued to weaken.
