Innovation in the food processing industry, 2023
Released: 2024-12-09
Data from the Survey on Innovation in the Food Processing Industry indicate that nearly three in five businesses (58.2%) in the food manufacturing subsector spent on average up to 5% of their total expenditures on innovation activities in the last three fiscal years (2021, 2022 and 2023). Such activities comprise four types: product, process, organizational and marketing innovation.
Slightly more than two in three food manufacturing businesses (67.7%) introduced at least one innovation from 2021 to 2023, down from 72.1% 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%) reporting introducing it in fiscal years 2021 to 2023 compared with nearly half (48.4%) doing so in fiscal years 2016 to 2018.
Chart 1
Innovating businesses in the food processing industry, by innovation type, fiscal years 2016 to 2018 and 2021 to 2023
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%) 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%) 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%) were the most likely to have introduced at least one innovation from 2021 to 2023. Conversely, businesses in hog slaughtering (35.9%) were the least likely to report having introduced at least one type of innovation, and their proportion was significantly lower than the overall average (67.7%).
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%) reporting having introduced at least one innovation. These businesses were the most likely to have introduced organizational (46.3%) and process (43.3%) innovations. Conversely, businesses in Ontario were the most likely to have introduced product innovations (39.8%), and businesses in British Columbia and the territories were more likely to have introduced marketing innovations (50.0%).
In the 2023 iteration of the survey, three in five businesses (60.5%) in the food manufacturing subsector reported having plans to innovate over the next three years, citing improving efficiencies (69.8%), cost reduction (69.2%) and addressing labour challenges (40.1%) as their main motivations for doing so.
When asked if they tracked quantities of unusable food parts and unmarketable food products, nearly one in three food manufacturing businesses (31.7%) reported doing so from 2021 to 2023 (this data point excludes animal food manufacturing businesses and those where the majority of sales comes from rendering and other industrial processing for non-food products). These businesses reported sending on average 34.9% of their unusable food parts and unmarketable food products to be used for animal feed or pet food, while they sent 15.1% to landfills.
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Note to readers
The 2023 iteration of the Survey on Innovation in the Food Processing Industry was conducted on behalf of Agriculture and Agri-Food Canada. This is the third iteration of the survey (2003, 2018, 2023). The survey sampled 3,660 businesses. The target population consisted of businesses classified to North American Industry Classification System code 311 (food manufacturing) with at least $1 million in revenue. Data pertaining to the type of innovation, number of products and processes, methods, objectives, obstacles, environmental benefits, government support programs, research and development, and capital related to food processing innovation were collected, as well as measures for unusable food parts and unmarketable food products and private certification systems.
Definitions
Product innovation is the market introduction of a new or significantly improved food product with respect to its:
- capabilities (e.g., enhanced healthfulness by incorporating bioactive ingredients such as fibre or omega-3 fatty acids);
- user-friendliness (e.g., drinkable yogurt, ready to use smoothie mixtures, microwavable frozen products);
- components or subsystems (e.g., organic, kosher or gluten-free ingredients).
Please note for the purpose of this survey, product is only referring to a good and not a service.
Excludes minor modifications to this business' existing products (e.g., new flavours or adding nuts or raisins) or other minor changes (e.g., packaging changes for aesthetics, size or shape).
Process innovation is the implementation of new or significantly improved production processes, logistics, delivery or distribution methods, and support activities for this business' products.
Marketing innovation is the implementation of a new marketing concept or strategy that differs significantly from this business' existing marketing methods, and which has not been used before by this business.
Organizational innovation is the implementation of a new organizational method in business practices (including knowledge management), workplace organization or external relations that has not been previously used by this business. It must be the result of strategic decisions taken by management.
Unusable food parts include ingredients that were unfit for processing and ingredients or finished products that were spoiled or spilled during production, distribution, handling and storage (excludes feed).
Examples include bruised fruits; spoiled meat; partly processed food ingredients discarded due to machinery breakdown; maintenance or cleaning; formula changes for multiple products such as dough mixes and soups; and ingredients or products that do not meet food safety requirements.
Unmarketable food products are perfectly edible food products that your business was not able to sell for human consumption for various reasons, including:
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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