E-commerce International Pathfinder for Canadian food and beverage companies

Introduction

This Pathfinder report aims to help Canadian businesses better understand the international e-commerce landscape in key markets, including opportunities, constraints, and strategies to adopt an e-commerce or digital approach to business expansion.

Project background

Industries included in this study

Packaged Food and Beverages are the aggregate of the four following industry sectors: Packaged Food, Non-Alcoholic Beverages, Alcoholic Beverages, and Pet Food.

Packaged Food is the aggregate of Cooking Ingredients and Meals, Dairy Products and Alternatives, Snacks, and Staple Foods. There are 16 subcategories that layer below these four main categories in Euromonitor International's Packaged Food system.

Packaged Food sub-category definitions:

Cooking Ingredients and Meals

Edible Oils

This is the aggregation of olive oil and packaged liquid/fluid cooking oils made of seeds/fruits other than olives. Includes olive, corn, palm, rapeseed, soy, sunflower, and combination oils.

Ready Meals

This is the aggregation of shelf stable, frozen, dried, chilled ready meals, dinner mixes, frozen pizza, chilled pizza and prepared salads.

Note: Ready meals are products that have had recipe "skills" added to them by the manufacturer, resulting in a high degree of readiness, completion and convenience. Ready meals are generally accepted to be complete meals that require few or no extra ingredients, however, in the case of canned/preserved ready meals, the term also encompasses meal "centres"; for dinner mixes, the term encompasses part meals.

Sauces, Dressings and Condiments

This is the aggregation of tomato pastes and purees, bouillon/stock cubes, herbs and spices, monosodium glutamate (MSG), table sauces, pasta sauces, cooking sauces, dry sauces, ketchup, mayonnaise, mustard, oyster sauces, salad dressings, dips, pickled products, and other sauces, dressings and condiments.

Soup

This is the aggregation of shelf stable, dehydrated, instant, chilled and frozen soup.

Sweet Spreads

This is the aggregation of jams and preserves, honey, chocolate spreads, nut-based spreads, and yeast -based spreads.

Dairy Products and Alternatives

Baby Food

This is the aggregation of milk formula, prepared, dried and other baby food. Prepared includes pureed food, yoghurts, chilled desserts, soup, desserts, ice cream marketed for babies

Dairy

This is the aggregation of butter and margarine, drinking milk products, cheese, yoghurt and sour milk drinks, and other dairy products. Drinking milk products also includes non-dairy milk alternatives (that is, almond, soy, coconut, oat, hemp, etc.)

Snacks

Confectionary

This is the aggregation of chocolate confectionery, sugar confectionery and gum.

Note: Retail sales measurements are confined to packaged sales. However, exceptions are made to seasonal chocolate, where unpackaged/artisanal sales are included. Pick 'n' mix sales are also included. Finally sales from chocolatiers, typically displayed loose and later packed (usually in boxes) are also included.

Ice Cream and Frozen Desserts

This is the aggregation of all sales of ice cream and frozen desserts. Ice cream is further broken down by impulse ice cream, take-home ice cream, frozen yoghurt and artisanal ice cream. Note: Soy, oat, bean, and rice-based ice creams are included in dairy ice cream.

Savoury Snacks

This is the aggregation of chips/crisps, extruded snacks, tortilla/corn chips, popcorn, pretzels, nuts and other sweet and savoury snacks

Sweet Biscuits, Snack Bars and Fruit Snacks

This is the aggregation of biscuits (chocolate coated biscuits, cookies, filled biscuits, plain biscuits, and wafers), snack bars (fruit and nut bars, protein/energy bars, cereal bars) and fruit snacks (dried and processed fruit snacks).

Staple Foods

Baked Goods

This is the aggregation of bread, pastries, dessert mixes, frozen baked goods and cakes.

Note: Baked goods from in-store bakeries are classified under unpackaged/artisanal, not packaged/industrial. While they may be finished on-site, they are often prepared, then frozen or par-baked, at other locations.

Breakfast Cereals

This is the aggregation of ready-to-eat (RTE) and hot cereals. RTE Cereals are the aggregation of children’s and family breakfast cereals, including flakes, muesli and granola. Hot Cereals includes porridge and instant hot cereals (for example, oat, wheat, rice, etc.) Instant hot cereals are defined by the fact that they can be made in a dish with added water or milk and can be microwaved.

Processed Fruit and Vegetables

This is the aggregation of shelf stable fruit and vegetables and frozen fruit and vegetables.

Processed Meat and Seafood

This is the aggregation of processed meat, processed seafood and meat substitutes.

Rice, Pasta and Noodles

This is the aggregation of rice, noodles and pasta. Includes: Pre-packaged noodles. Excludes: Any noodles, pasta or rice bought loose, bulk and/or unpackaged. Excludes: Any noodle-based ready meals, which would be tracked under ready meals

Non-Alcoholic Beverages (N/A Beverages) is the combination of:

1. Soft Drinks is the aggregate of Bottled Water, Carbonates, Concentrates, Juice, RTD (ready-to-drink) Coffee, RTD Tea, Energy Drinks, Sports Drinks, and Asian Specialty Drinks.
2. Hot Drinks are dried, bagged products and is the aggregate of Coffee (fresh, pods, and instant), Tea (black, fruit/herbal, green, instant), and Other Hot Drinks (flavored powder or plant-based powder).

Alcoholic Beverages is the aggregate of Spirits, Wine, Beer, Cider/Perry, and RTDs (premixed drinks with 5% to 10% alcohol content by volume).

Pet Food is the aggregate of Dog Food, Cat Food, and Other Pet Food (that is, birds, reptiles, etc.)

Scorecard and geographies covered

A customized scorecard was developed to analyze the relative attractiveness of the e-commerce opportunity for packaged food and beverages across ten geographies. It utilizes cross-country comparable indicators, which allow users to easily compare packaged food and beverage and e-commerce potential across the markets and within each market.

There were a total of 35 metrics included in the scorecard, which covered category metrics (market sizes and growth rates), channel metrics (e-commerce size, share, and growth rates), competition metrics (level of market concentration), socioeconomic metrics (GDP growth and consumer expenditure), and trade metrics (value and growth rate of Canadian imports).

Out of 700 possible points per market, the scorecard tool shows the following: 

Please note that this report only includes data for the ten selected geographies and is relative to only these markets over the period of analysis; 2015-20 in the case of related e-commerce data. Investment considerations for Canadian producers should not be strictly limited to these nine export markets.

Terminology/Definitions

Retail Value Sales

This project only considers retail sales, which is defined as sales through establishments primarily engaged in the sale of fresh, packaged and prepared foods for home preparation and consumption. This excludes hotels, restaurant, cafés, duty-free sales and institutional sales (canteens, prisons/jails, hospitals, army, etc.).

E-commerce

Sales of consumer goods to the general public via the internet. This includes sales through personal computers, laptops, mobile phones, and tablets. Internet retailing includes sales generated through pure play e-commerce web sites and through sites operated by store-based retailers. Sales data is attributed to the country where the consumer is based, rather than where the retailer is based.

• Pure play websites – Digital-only retailers with no physical consumer-facing storefront.
• Click-and-collect or Buy-online-pickup-in-store (BOPIS) – The definition of e-commerce is agnostic as to where the actual payment takes place: If an order is initiated online, it is considered to be an e-commerce transaction, even if the order is ultimately paid for in-store (or elsewhere). As a result, all 'click-and-collect' and 'buy-online-pickup-in-store' transactions are counted as e-commerce sales.

Marketplaces

Marketplaces are websites that allow multiple merchants to sell on the marketplace website, with the marketplace operator processing the transactions, but many marketplaces offer other services as to help with shipping, handling, payment, and product storage. Examples include Amazon, Alibaba, Rakuten, etc.

Compound Annual Growth Rate (CAGR)

Compound annual growth rate to express the rate of growth over a set period of time, typically five years, and is applied to both the historic review period and forecast period.

Canadian Imports

Data is based on the World Trade Organization's General Agreement on Trade in Services (GATS) collected through the United Nations Comtrade database.

E-commerce Channel Per Capita Size by Value

A custom calculation of the e-commerce market size divided by the population of 18-65 year-olds living in that particular geography.

All Other Companies Share

To gauge the level of market concentration, this considers the share of sales within an industry captured by all brand owners that fall outside the top 5 in Euromonitor International's industry company share estimates.

Via

A proprietary tool, developed by Euromonitor International, which continuously tracks online product pricing, assortment and features, organized by country, category, supplier (brand owner), brand, stock-keeping unit (SKU), and retailer. Via extracts online retailer data on a daily basis, providing continuous updates to product assortment and price changes. For this study, the number of SKUs by retailer by industry (alcoholic drinks, hot drinks, soft drinks, packaged food, pet food) were reviewed on a given day in March 2021 to provide a view of the e-commerce websites with the largest assortment by country.

Contact

If you have questions about e-commerce or exporting your agriculture and food products, please contact the Market Access Secretariat at aafc.mas-sam.aac@agr.gc.ca.

Copyright and disclaimer

Copyright

E-commerce International Pathfinder for Canadian Food and Beverage Companies.

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2021)

Government of Canada Catalogue Number: A22-276/2021E-PDF
International Standard Book Number (ISBN): 978-0-660-39294-3
Agriculture and Agri-Food Canada Number: 13077E

Disclaimer

Although every effort was made to ensure the accuracy and currency of the information in this document, the Government of Canada and AAFC do not guarantee, warrant, represent or undertake that the information provided is correct, accurate or current, and assume no liability for any loss, claim, or demand arising directly or indirectly from any use of or reliance upon the information. The Government of Canada and AAFC do not endorse or make any representations about any products, service or materials detailed in the document, which are used at your own risk.

Any authorized or permitted reproduction or redistribution of this document, in whole or in part, must include acknowledgement of Agriculture and Agri-Food Canada as the owner of the copyright in the document, through a reference citing the Government of Canada, the title of the document and the year. Where the reproduction or redistribution includes data from this document, it must also include an acknowledgement of the specific data source(s), as noted in this document.