Nutrition And Health As Drivers Of Food Supply And Consumer Demand

In order to identify suitable lever points for intervention, it is essential to understand current and emerging trends in the types of food that consumers purchase, the types of food they are interested in purchasing, and where they make these purchases. Furthermore, consumer demand for new products drives business decisions about where R&D resources should be invested. Therefore, in order to motivate businesses to invest in the R&D of healthier agriculture and agri-food products, it is also necessary to drive consumer demand for these products. The following section reviews some of the key trends in food supply and consumer demand. For more detailed information, see Appendix 2.

	Figure 5. Where Canadians eat their meals, 2007. Source: Canadian Restaurant and Foodservices Association, from National Eating Trends Canada, NPD Group Canada Inc.

Canadian consumers eat the majority of their meals at home. Almost 70% of all Canadian meals are purchased from retail stores and prepared and eaten at home (Figure 5).²⁸ While commercial food services account for around 10% of all meals, the average Canadian family visits a restaurant for a meal or snack approximately 520 times per year and spends about one-fifth of its total household food expenditures on these meals and snacks.²⁹

Consumers are highly aware of the connection between food and good health. Whether the consumer is purchasing food in retail stores or away from home, both nutrition and quality (including taste) are the two top criteria, with price being far less important. As a result, consumer demand for, and industry supply of, foods with “real” or “perceived” healthfulness continues to be a strong area of growth for the agriculture and agri-food sector. A particular growth area is the increase in new processed food products that make functional claims. This rising trend is reflected in the increasing market value of functional foods in Canada, the U.S. and other industrialized countries. This market is projected to experience strong growth in future years.

Companies are also reformulating products to respond to consumer interest in and demand for healthier nutrient profiles, such as foods claiming to be “trans fat free” or “low sodium.” A report by ACNielsen³⁰ that annually tracks nearly 500 agriculture and agri-food product categories reported that approximately one in five active manufacturers’ listings in retail grocery stores in 2003 were considered “better for you products.”

The number of “better for you” product listings had more than doubled in three years, while the market share of these foods increased by 1% annually. In fact, on a global scale, ACNielsen reported that six of the seven retail grocery categories that experienced double digit growth in 2003 were “better for you” products.

Canadians also continue to show a strong interest in organic food. Canada’s organic fruit and vegetable industry is slowly expanding, with sales still representing a niche market in most parts of Canada. In 2006, 3,555 farms reported growing certified organic products, an increase of nearly 60% from 2,230 in 2001.³¹

In spite of these advances, Canada has experienced limited growth in the consumption of fruits and vegetables (Figure 6),³² even though the link between fruits and vegetables consumption and the risk of obesity and chronic diseases is well-established. It is estimated that reducing the rate of diseases through the consumption of 5 to 10 servings of fruits and vegetables per day would save the health care system significant amounts in direct and indirect costs.³³

In summary, Canadian consumers still eat the majority of their meals at home or away from home, using food brought from home, with only about 10%³⁴ of meals consumed in restaurants. Consumers have shown a strong interest in foods that are considered “better for you” and the market for niche products, such as organic and functional foods, has continued to grow. The opportunity clearly exists to continue to drive consumer demand toward healthier foods through education and industry supply.

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