Farm Credit Canada says manufacturers need to take advantage of changing consumer trends to boost sales volumes after four consecutive years of seeing them fall.
According to FCC’s 2026 food and beverage recent report, manufacturing sales are expected to increase modestly by 0.8 per cent in 2026, but sales volumes are expected to decline by 0.7 per cent. FCC’s Chief Economist Craig Johnston says this just means that food and beverage prices are higher, not that people are buying more.
“Food prices that have increased over the last several years have really changed how consumers shop. Many households are looking to adjust their spending, becoming a bit more cost conscious, looking for lower-cost options, or even just trying to buy less.”
He says slowing population growth poses another concern: the removal of a base of consumption.
“The population of Canada is actually declining for the first time in over eight years…growth in population has fallen into negative territory.”
As consumers become more cost-conscious, Johnston says manufacturers need to take advantage of changing trends and think outside the box to get sales volumes back up.
“Look at those signals. What are consumers doing? They’re becoming more cost conscious.” Johnston suggests manufacturers need to think outside the box and offer cheaper, alternative products.
Alongside geopolitical turmoil, other stressors on food and beverage sales volumes and consumer purchasing power in 2026 will include trade tensions, a declining population, and possibly a renegotiation of the CUSMA agreement this summer.
On the bright side, Johnston says 2026 and 2027 will see gross margins improve. He attributes this to a moderation in wage pressures and lower input costs.
“Coming off the heels of the robust harvest that occurred in 2025, that’s putting downward pressure on some inputs, for example grains, we’re seeing that filter through to supporting margins into 2026 and possibly 2027 as well.”
As a disclaimer, Johnston says the data in this report was collected pre-Middle Eastern war, meaning the mid-year report could show significant changes to these figures.
