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.

Overview
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 by beverages.

Specialty foods
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.

SOURCE: www.toronto.ca/invest-in-toronto/food.htm