It’s harder for Canadian food processors to break into the market because too few supermarket chains dominate, said a report issued by the Agri-Food Analytics Lab at Dalhousie University in Nova Scotia.
This will hurt Canadian consumers if a trade war erupts with the United States, the authors said.
Three retailers hold 65 per cent of Canada’s grocery market share, said the report commissioned by MNP accounting firm.
In the United States the top three hold about a third of the market.
It means food processors there have more choices to test the market. In Canada, they need enough volume to fully supply at least one of the top three.
It also means farmers and others in food production have less ability to negotiate prices, the report said.
The challenge for testing new products makes it hard to scale up from production to manufacturing products ready for grocery-store shelves, the report said.
Canadian producers currently are largely focused on exporting raw commodities that are not ready for retail.
A shortage of manufacturing will be felt in the event of a trade war with the U.S., said Janet Music, a PhD student at the Dalhousie lab who worked on the report.
