Spring 2024 outlook on grocery meals inflation for Canada

The outlook for meals and beverage producers this 12 months is extra optimistic than final 12 months, FCC mentioned, although some sectors nonetheless face headwinds amid elevated rates of interest and tighter family budgets. “Nevertheless, inhabitants progress and stabilizing—in some circumstances, falling—enter prices are offering optimism for margin enchancment for 2024.”

The group’s annual meals and beverage report presents up forecasts for client spending, in addition to particular meals gadgets reminiscent of sugar and flour.

What’s Canada’s inflation on meals?

Canada’s annual inflation price was 2.8% in February, and grocery costs have been one of many foremost elements pushing it decrease. Grocery inflation was 2.4% that month, down from 3.4% in January, as the price of many gadgets declined 12 months over 12 months. Nevertheless, slowing inflation doesn’t imply costs total are dropping. Statistics Canada famous in its newest inflation report that between February 2021 and February 2024, grocery costs rose 21.6%.

How are Canadians coping with rising meals costs?

As they grapple with increased costs, not simply on meals however on shelter and different each day prices, Canadians have been making an attempt to chop again their spending on meals and drinks, FCC mentioned. They’ve been shopping for extra gadgets on sale, gravitating towards inexpensive manufacturers, shopping for extra canned and frozen meals, purchasing extra at low cost retailers and easily shopping for much less meals.

“Many customers say the impression of excessive rates of interest are simply starting to have an effect on their spending,” FCC mentioned.

As customers have grow to be extra value delicate, FCC mentioned processors have been responding by modifying bundle sizing and substituting inexpensive inputs.

Canadians have additionally been chopping again on alcohol, the report mentioned. It forecasts a decline in alcohol gross sales and manufacturing volumes this 12 months.

Will meals costs go down?

The report mentioned some meals merchandise are anticipated to go down in value this 12 months, reminiscent of flour, after a pointy improve during the last couple of years. It will translate to decrease bakery and tortilla manufacturing promoting costs by the tip of the 12 months.