Top CPG Industry Trends in Canada

Growth of Responsible Consumerism

•  Modern consumers are seeking brands that help them make more responsible and better choices that have a positive impact.
• Increasing demand from higher-income consumers for organic and fresh products is driving the growth of specialty food retail.
• Canadian CPG brands need to focus on a more heterogeneous and diverse set of consumers with broader needs.
• Products with health and wellness claims will score better in gaining consumer attention. Further, about 33% of Canadian customers are willing to pay a premium for more sustainable or ethically produced products.
• The trend is cross-referenced with reports and publications from Grocery Business Magazine, USDA, Infiniti Research, PwC, CTV News, and Canadian Grocer,

•  Specialty and organic products have become a ‘center aisle’ feature in products in large grocery outlets.
•  Independent retailers are currently outperforming standard food retailers. Further, a number of ethnic stores are opening up to cater demands of increasing immigrant communities in Canada.
• CPG companies are testing alternative crops to offer clean-label and organic products.

•  Healthy Crunch is available across tens of thousands of stores across North America. The snack brand focused on products that are healthy, hand-crafted in small batches, and allergen-free.
•  TruLocal is a Toronto-based startup that enables consumers to order the delivery for clean, healthy, and locally-sourced meat products at doorstep.

• Canada's ethnic customers are projected to reach over 15 million by 2025. The preference of ethnic customers is inclined towards buying better-for-you products.
• A new survey by PwC reports that among young consumers (18–24-year-old), about 74% prefer locally produced, 70% prefer organic, and 49% prefer sustainably packaged products.
•  Gen-Z consumers are poised to grow over millenials in terms of buying power and will pay higher prices for more sustainable and eco-friendly products.

Preference for Small and Private-Label Brand

• Growth is projected for small and private-label brands as consumers demand better ingredients and high-quality products.
• According to Nielsen, smaller brands accounted for 25.8% of the Canadian FMCG market and comprised over 33.8% of the total industry growth.
• The trend is cross-referenced with reports and publications from Grocery Business Magazine, USDA, Nielsen, and Canadian Grocer.

• Many retailers have started creating private-label brands focusing on either higher-quality or better value.
•  Larger companies are partnering with incubators and startups for contract manufacturing of trending products outside their categories.

•  Eataly is a Toronto-based company that exemplifies the celebration of food products and experiences with 'social shopping.'
•  Coppa’s Fresh Market and Organic Garage are launching small urban stores of 20,000 sq. ft to cater to millennials in the downtown core who are seeking different experiences.

• Price-conscious consumers from lower and middle-income households demand promotionally-priced products, leading to increased reliance on private label brands.

Personalized Shopping Experience

•  Personalized consumer experience is one of the significant trends that is driving modern customers in Canada.
• Retailers need to continuously reinvent offerings to grab consumer attention by providing a better experience to retain their brand loyalty.
• According to PwC's Consumer Insights Survey, consumer product companies should focus on offering personalized services like click and collect, repeat purchase incentives, contactless payments, among others,
• The trend is cross-referenced with reports and publications from Infiniti Research, PwC, CTV News, and Retail Council.

• Increasing the use of customer data for analyzing consumer behavior to offer better-personalized shopping experience.
• Increasing consumer demands have led many brick-and-mortar stores to create a sense of community and belonging for customers.
• To attract more customers, stores are adding amenities like chef-prepared ready-to-eat meals, ATMs, juice bars, dietitian services, gourmet bakery items, cooking classes, and beauty products.

•  Sobeys is a Nova Scotia-based supermarket chain that is investing in building a $95-million e-commerce program called Voilà.
•  Metro Stores plan to install electronic shelf displays to allow faster updates for notifying product price change.

• Personalized services like same-day delivery are one of the most popular trends among young shoppers in Canada.

On-demand and Microshopping

• According to the 2019 Canadian Consumer Insights Survey by PwC, about 52% of Canadian consumers want to go through the store more quickly and conveniently. Followed by, nearly 32% of consumers seeking efficient and simple payments like contactless and mobile payments.
•  Retail Council of Canada reports that convenience and good value are cited as a top reason for retailer selection by 27% and 44% of respondents, respectively.
• It is noted that nearly 26% of Canadians make 2-3 microshopping trips (taking five minutes or fewer) per week. It is followed by 23% of consumers making microshopping trips every week, and 10% of consumers making a microshopping trip daily.

• The trend is cross-referenced with reports and publications from Grocery Business Magazine,  USDA, PWC, and CTV News.

•  E-commerce, club stores, and dollar stores will make about 25% of Canada's FMCG sales in 2020.
• Several Canadian retailers are focusing on offering integrated shopping experiences to consumers.

•  Amazon is providing vast catalogs to consumers for ordering small items like soap, cleaning (supplies), toothpaste, and others that can be quickly delivered at the doorstep.
•  Loblaws has launched a new PC Express app that will feature “automated-picking technology” at their Dufferin and Steeles superstores in Toronto.

• Millennials prefer fewer shopping trips, as about 43% of fewer trips were made by millennials than average Canadian households in 2019.
• The increasing number of Canadians living alone (over four million) is driving the sales of quick meal options such as single-serve and ready-to-eat offerings.