The City of Toronto recognizes the importance of its Food and
Beverage industry. The food cluster has annual sales in excess
of $17 billion. In the Toronto CMA, there are over 2,000 food
and beverage manufacturing establishments (2004).
Within Ontario, Toronto dominates the provincial food industry
with more than half of all the food processing in the province
taking place within the Greater Toronto region.
Food processing is a vital part of Toronto's economy:
-- In 2004, the food processing industry in Ontario
had sales of $32.1 billion
-- In 2000, the food processing industry in Ontario had sales
of $29 billion
-- Over the last five years, this industry experienced a growth
rate of 4% to 5% annually
The food and beverage processing sector is Ontario and Canada's
third largest manufacturing sector. Toronto is also a major decision
making centre for the food industry in Canada, with half of Canada's
top ranked food and beverage manufacturers being headquartered
in the city.
Toronto's food cluster is the largest in Canada and one of
the leading Food & Beverage Clusters in North America. With
44,000 employees, in 1999, the city was in a virtual tie with
Los Angeles for second place. In 2002, there were 50,000 people
employed in Toronto's food processing industry. Employment in
this sector has increased at a rate of 5% per year. Within the
next 10 years, employment growth rates are expected to double.
Extremely diverse cluster
Core food industry activities include food processing, warehousing
and distribution, retailing and food services. The Toronto food
industry has a multiplier effect that generates growth in related
industries servicing the cluster. These include packaging, design,
the production of food industry equipment, biotechnology and
specialized storage and transportation (i.e. refrigerated).
Bakeries are the largest single type of food processing plant,
and this has resulted in diverse, high quality products in this
sub-sector. Meat processing is the next largest sub-sector, followed
One sub-sector of the food processing cluster that is growing
in importance is specialty foods. Specialty processors reflect
Toronto's vibrant multi-ethnic community and its export connections
abroad. About 25% of all food processing plants within Toronto
are considered to be making specialty products. Specialty foods
have grown about twice as fast as the average for the cluster
and are expected to grow at 12% a year in the coming five years
compared to 5% for the rest of the cluster.
Two-thirds of the total food processing companies in Toronto
have annual sales of less than $5 million. These smaller firms
are nearly all owner-operated businesses producing 'fresh product'
or serving specialty markets within the city. Slightly more than
a quarter of the food processing companies are in the $5 million
to $50 million range. The small and medium-sized food establishments
are experiencing the fastest growth and highest export potential
of all companies in this cluster. The largest operations, with
annual sales in excess of $50 million, are mainly multi-national
subsidiaries, serving the markets well beyond the boundaries
of Toronto and often outside the province.
Toronto's significant advantages
According to the 2006 KPMG Competitive Alternatives Study,
Toronto has lower overall business costs in food processing than
in any large US city. The average Toronto cost advantage is 5.5%
in food processing. Real estate in Toronto is 68% cheaper than
in some U.S. cities and the province's commitment to lower corporate
taxes will further distinguish Toronto from our major U.S. competitors.
Toronto is also a major North American hub for trucking, rail
and air. Toronto has access to a very large regional market of
over 6 million people, which is matched in size and concentration
by only three other urban centres in North America. This is an
affluent and cosmopolitan market that is open to innovation.
Its myriad of ethnic groups means that there is a ready market
for specialty products made locally.
Since Toronto is well served by road and rail, the city has
excellent links across Canada and into the U.S. According to
KPMG, Toronto is the most cost-effective location for road freight
of the nine major metropolitan markets in North America. Only
Chicago is within 25% of Toronto's costs.