Inflation has impacted Canadians’ grocery and restaurant spending over the past year, and is not expected to abate soon. A recent report predicts a 5 to 7 percent increase in overall food prices in 2023.
In Canada's Food Price Report 2023, experts from Dalhousie University, the University of Guelph, the University of Saskatchewan, and the University of British Columbia predict Canadian families will spend up to CAD 1,065 (USD 779, EUR 739) more on groceries in 2023. An average family of four will spend up to CAD 16,288 (USD 11,914, EUR 11,302) per year on food.
"We haven't seen food price increases this high in Canada for over 40 years and based on our findings, the increases we have predicted are still quite high but not as high as the increases for 2022," University of Guelph Campus Lead Simon Somogyi said in a press release. "That may be cold comfort for Canadians, as food prices are already high, but if inflation can come down, it's possible that we could see price increases for 2023 at or below 5 percent."
Canadians are not only facing higher prices at the grocery store, prices of seafood items at restaurants have soared an average of 9.2 percent over the past year – likely due to inflation, which is expected to continue, Technomic Associate Editor Katie Belflower told SeafoodSource.
As a result of inflation, there has been a 4.2 percent drop in seafood items on restaurant menus over the past year.
“Operator penetration of seafood has also slightly gone down, suggesting that it may be featured less frequently on restaurant menus over the next year,” Belflower said.
The fastest-growing seafoods on Canadian menus include caviar – rising nearly 29 percent on menus over the pst year – followed by pollock, which is up 21.2 percent, and soft-shell crab, which increased 12.5 percent, according to Technomic.
The inflation and supply chain problems that plagued Canada’s seafood industry are expected to continue into 2023, Fisheries Council of Canada President Paul Lansbergen predicted.
“Without a doubt, 2023 is going to be a challenging year, probably more so than 2022 because of inflation,” Lansbergen said. “The markets for seafood have gone soft.”
Plus, input costs – including fuel, freight, and labor – are up across the board, Lansbergen said.
In Canada, retail sales of all proteins have declined, according to Lansbergen. While prices on lobster and crab dropped in recent months, inflation is still softening consumer demand.
Crab suppliers had a “very strong” 2022 with record prices, but companies are holding onto high cost inventory that they don’t want to sell at a loss, Lansbergen said.
“How are they going to handle that? You would think that, with the collapse of the Alaskan crab fishery, it would reduce [overall] supply," he said.
Another factor that could impact Canada’s seafood sales this year is the U.S. economy.
“We export CAD 8 billion [USD 5.9 billion, EUR 5.6 billion] or more annually, and the U.S. is the largest market at 60 to 70 percent of that. If the U.S. is going to have a recession, it is going to affect us," Lansbergen said.
A weaker Canadian dollar compared to the U.S. dollar – Canada's currency has recently ranged five to seven cents lower than normal – is driving up the cost of all imported American products, added University of Saskatchewan Campus Lead Stuart Smyth.
In addition to inflation, uncertainty from Russia's invasion of Ukraine shows no signs of ceasing, which will also impact overall food inflation, Smyth added.
In positive news for the Canadian seafood suppliers, the Asia Pacific region is a “particular area of growth,” according to Lansbergen. The FAO projects a 7 percent growth in global demand for seafood, and the Asia-Pacific region is the key growth area, due to its large population, strong seafood culture, and growing affluence, he noted.
“Despite inflation, growing affluence will mean continued growth in demand for premium foods and seafood,” Lansbergen said.
In terms of demand for Canadian seafood, China dominates the Asia-Pacific region, while Japan and South Korea are the next-largest export markets in the area.
“Consumers/importers from that region have confidence in our food safety system and like our high-quality products and the species we have to offer,” Lansbergen said.
Lansbergen said he expects the FCC’s Smarter Meals out of the Blue national marketing campaign to continue to heighten awareness and sales of domestic seafood in Canada. The campaign, which has funding from the federal government through 2024, encourages Canadians to eat more seafood – with emphasis on Canadian seafood.
The campaign has already produced significant results since it began last May. There have been more than 18 milion social media impressions and 109,000 clicks to the campaign’s website, as well as more than 13 million impressions from digital ads. Influencer campaigns have produced nearly four million impressions and video views across three campaigns – Summer, Back to School, and National Seafood Month – and 2.6 million reach on influencer content.
Positive sentiment media coverage on Canadian seafood surged 54 percent, while negative mentions – such as sustainability of fish stocks and overfishing – decreased by 8 percent.
“There has been great engagement throughout the campaign; It only makes sense we are having success,” Lansbergen said.
Photo courtesy of Fisheries Council of Canada
