Labour shortages and inflation among top challenges for F&B sector

A survey by Food and Beverage Canada (FBC) and Farm Credit Canada (FCC) reveals the challenges faced by the food and beverage manufacturing industry.

“The data we’ve gathered highlights both the challenges that weigh on day-to-day operations and the opportunities for innovation and growth. This survey also reflects the focus areas for our association, ensuring that we’re advocating for policies and programs that will make the biggest difference for our industry,” said Kristina Farrell, CEO of FBC.

Conducted between June and Sept. 2024, the survey gathered insights from businesses across the country, identifying labour shortages, rising costs, technological barriers, and regulatory complexity as the most pressing issues.

Labour shortages
The survey found that 59 per cent of businesses identified a shortage of skilled labour as their primary workforce challenge. Nearly a quarter (22 per cent) of respondents have already downsized their operations due to staffing difficulties. The industry is struggling to find workers with the necessary skills, which is undermining productivity and limiting the growth potential.

Rising costs
Inflation has taken a heavy toll on the sector, with 87 per cent of respondents reporting cost increases of up to 30 per cent. Transportation and distribution were cited as the main contributors. These rising costs are squeezing profit margins and reducing the ability of companies to invest in innovation or expansion.

Innovation and technology
Despite the need for modernization, many businesses are hesitant to embrace new technology. Only 42 per cent of respondents consider innovation and technology crucial to their operations, citing financial barriers, high costs, and implementation challenges as reasons for reluctance. The adoption of technology is seen as essential to addressing labour shortages and boosting efficiency.

Regulatory burdens
The survey also pointed to regulatory complexity as a significant challenge. Forty-five per cent of respondents identified labelling and packaging requirements as their most pressing regulatory concern. Businesses are finding it difficult to navigate the regulations, which are slowing operations and diverting resources.

“Focusing on increasing productivity is the single most important step to navigate the current economic landscape,” said Jean-Philippe Gervais, FCC executive VP of strategy and impact. “Two important drivers of productivity gains are introducing product innovations and finding process efficiencies within the business. They can lift competitiveness, resulting in sustainable growth in food and beverage production.”