Innovation declines in the food processing industry: StatsCanada

Statistics Canada’s latest Survey on Innovation in the Food Processing Industry found that nearly three in five businesses (58.2 per cent) in the food manufacturing sub-sector spent on average up to 5 per cent of their total expenditures on innovation activities, such as, product, process, organizational and/or marketing innovation, in the last three fiscal years (2021, 2022 and 2023).

Slightly more than two in three food manufacturing businesses (67.7 per cent) introduced at least one innovation from 2021 to 2023, down from 72.1 per cent from 2016 to 2018. The proportion of innovating businesses declined across all four types of innovation. However, process innovation declined the most, with fewer than two in five businesses (38.5 per cent) reporting introducing it in 2021 to 2023 compared with nearly half (48.4 per cent) in 2016 to 2018.

The study found that from 2021 to 2023, the likelihood of businesses introducing at least one innovation generally increased with their food production sales. Nearly three in five businesses (59.2 per cent) with less than $1 million in food production sales in 2023 introduced at least one innovation from 2021 to 2023. Meanwhile, over three in four businesses (76.5 per cent) with more than $100 million in sales introduced at least one innovation over the same period.

Businesses in sugar and confectionery product manufacturing (78.6 per cent) were the most likely to have introduced at least one innovation from 2021 to 2023. Conversely, businesses in hog slaughtering (35.9 per cent) were the least likely to introduce at least one type of innovation.

Regional differences

The survey also found that food manufacturing businesses in Quebec were more likely to have innovated from 2021 to 2023 compared with other regions, with nearly three in four (72.7 per cent) reporting introducing at least one innovation, largely organizational (46.3 per cent) and process (43.3 per cent). Businesses in Ontario were the most likely to have introduced product innovations (39.8 per cent), and businesses in British Columbia and the territories were more likely to have introduced marketing innovations (50 per cent).

In the 2023 iteration of the survey, three in five businesses (60.5 per cent) in the food manufacturing sub-sector said they were planning plans to innovate over the next three years, mainly to improve efficiencies (69.8 per cent), reduce cost (69.2 per cent) and address labour market challenges (40.1 per cent).

The survey sampled 3,660 businesses with at least $1 million in revenue.