Food manufacturing sales forecast for 2024 revised higher

It’s been nearly three months since our 2024 Food and Beverage report was published. We thought it would be valuable to check on the sales performance year-to-date since we made our initial forecasts.

Statistics Canada made major revisions to their reported sales data going all the way back to 2021. In fact, they revised 2023 sales up by a whopping $2.6 billion. This has implications for our sales growth forecasts for 2024.

Year-to-date (i.e., from January to April) sales growth is shown in the table below. Remember these are nominal sales so do not reflect changes in volume of products, and also include any impacts from inflation. While not outright quantifying it, we know higher sugar and cocoa prices are inflating sugar and confectionary sales and lower wheat and canola prices are deflating grain and oilseed milling sales. As discussed in the report, this was expected.

With the revised 2023 data and actual data available for the first four months of 2024, we also updated our sales projections for the remainder of the year. Overall, our original forecast of a slight decline in total sales (-1.4%) has been revised to a slight increase (+1.8%).

The only major revision is our forecast for seafood product preparation and packaging. Sales year-to-date have been disappointing with YoY growth of -8.7%. However, Statistics Canada also revised 2023 sales figures up from $5.6 billion to $6.0 billion, meaning our denominator in the revised forecast is much higher (and thus our growth rate forecast much lower). Fishing and seafood production are highly cyclical, and we are expecting a rebound in the remaining eight months of the year.

The external economic environment of food processors is still challenging, but sales in the domestic and export markets have performed slightly better than expected.