Let’s raise another glass: 2021 Canadian beverage outlook is improving

Jul 01, 2021

Beverage manufacturing companies are an important part of Canada’s food and beverage manufacturing sector and will play a critical role in Canadian economic growth in 2021. The sector employs over 42,000, 15% of all food and beverage manufacturing jobs, and contributes $7.0B in GDP to the economy.

Beverage manufacturing is a low-margin, high-volume business. Major shifts in demand or production costs like we experienced in 2020-21 have significant financial implications. The COVID pandemic shifted consumer purchases to retail away from food service, removing a core revenue stream. It forced businesses away from bulk packaging and increased costs. Overall, sales grew 4.0% in 2021, while GDP (defined as value-added output) declined 0.4% as higher production costs took hold.

Leading the sales growth in 2020 were wineries (21.3%), breweries (5.0%) and distilleries (3.1%). Conversely, non-alcoholic beverage sales declined 2.9%, based on Statistics Canada data. Beer remains the top-selling alcoholic beverage, but its market share has been declining to other drinks. Higher total sales are attributed to people drinking more when confined at home and a slight increase in selling prices (up 0.2% in 2020 YoY).

Producer prices have declined 1.3% through the first four months of 2021, although we have seen strong volume growth as food service establishments have increased inventory in anticipation of a re-opening. As a result, 2021 sales are up 14.6% YoY thru April.

Approximately 57.5% of all alcohol consumed in Canada is produced domestically, led by beer with many craft breweries and large manufacturers. For the remainder of 2021 and into 2022, we see strong demand for Canadian-made beverages.

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Video: Fendt Testimonial | Fendt 726 Vario Gen7 | Peter Watson Jones Ltd.

What happens when a farm buys its first Fendt? For Peter Watson Jones Ltd, the Fendt 726 Vario Gen7 has exceeded expectations from day one. For Jack, Farm Manager at Peter Watson Jones Ltd in North Shropshire, UK, the Fendt 726 Vario Gen7 wasn't just another tractor purchase. It was the farm's first experience with the Fendt brand.

Operating across a 1,200-acre arable farm alongside a 250,000-head broiler enterprise, the business has evolved significantly over the last decade, moving to a straight arable system with fewer staff and machines. Since arriving on the farm, the Fendt 726 Vario has established itself as the main drilling and cultivations tractor, earning its place through performance, versatility and efficiency. Whether it's handling large-scale cultivations or working with a new 4.5m strip-till drill, the tractor continues to impress.

Jack highlights its excellent manoeuvrability, operator comfort and ability to deliver strong pulling power at low engine speeds. The result? Outstanding fuel efficiency without compromising performance. Reliability has also been a key factor, with dependable backup from the team at TR Machinery helping to keep the tractor working when it matters most.

?? Watch as Jack shares why the Fendt 726 Vario Gen7, the farm's first Fendt, has made such a strong impression and become an integral part of their operation.