The size of the Canadian foodservice market was calculated to be USD 103.40 billion in 2024 and is anticipated to be worth USD 286.74 billion by 2033, from USD 115.81 billion in 2025, growing at a CAGR of 12% during the forecast period.
The Canadian food service market is steadily growing. Previously, in 2023, the actual industry revenue (i.e. sales adjusted for inflation) has been stable compared to 2022. All areas have registered an increase, excluding Manitoba. Also, the cloud kitchen service is witnessing a significant rise, propelled by an increase in online food delivery, surging interest in world cuisine and the adoption of modern ordering systems. In the post-pandemic period, nearly 50 per cent of customers are ordering food via online platforms each week, with AI technology improving kitchen activities and enabling customised suggestions to consumers. Moreover, Canadian people aged 40 or less are progressively selecting to eat out or order food online. However, these customers are more budget-conscious than elderly people and are intended to decrease costs and alcohol consumption.
Moreover, the rising popularity of plant-based protein substitutes also propels market growth as more customers are adopting healthy consumption habits. Sandwiches and burgers have become the favoured alternatives for instant foods or snacks.
Apart from this, sustainable development and organic ingredients are witnessing rapid adoption in the Canadian food service industry. And, more customers want meals that align with their values and diet plan. Hence, restaurants are offering organic items, domestically sourced raw materials and vegetarian substitutes.
In addition, demographic changes, as well as the rise in the number of health-conscious millennials and baby boomers, have resulted in higher demand for food services. Both quick-service and full-service restaurants feature prominently in all food services in the country. Millennial populations across the country are key contributors to the expansion of Canada food service market. Like, McDonald’s and Starbucks Corporation are among the major brands that are progressing with innovative menus and improving their portfolios to establish themselves in this lucrative market.
The majority of restaurants and other industry players are bearly making any profits despite increased prices than ever coupled with overall spending on course i.e. 110 billion in 2023. This is a 10 per cent surge in comparison to 2022’s level. However, costs rose considerably which is taking several to insolvency. As per industry experts, the market growth rate decreased substantially because all the things required for functioning a restaurant have risen double digits. Also, in 2023, the first five months saw bankruptcies in the industry went up by 50 per cent against the same period the previous year and there are expectations of further rise in the future.
With an increased focus on sustainability, there's a growing need for environmentally friendly practices, domestically procured ingredients and a transparent supply network, giving openings for companies to differentiate themselves. In addition, the rising application of technology, like online ordering platforms with AI and more customized options, fast delivery apps and mobile services, presents avenues to improve consumer experience and gain a wider audience.
The market encounters obstacles in hiring and retaining skilled employees. With demographic shifts, labour shortages have become a pressing challenge, especially in kitchens and hospitality jobs. Factors like low salaries, high sales rates, and tough work environment add to this constraint. Further, COVID-19 worsened these issues, causing workforce interruptions and affecting activities and service quality throughout several establishments.
The quick-service restaurant segment is leading under this category of the Canadian foodservice market. This can be attributed to the fast-moving lifestyle in urban cities, customer preferences for comfort and speedy eating choices and cheaper meal options. As per the April 2023 study, it was found that these have finally risen from a post-pandemic cloud. In addition, the extensive presence of QSR chains, effective business models, and the ease of drive-thru and takeaway facilities further strengthen their market share. Besides this, customers progressively prefer this segment because of its emphasis on healthier raw materials, personalised menu offerings, and generally a more calm eating atmosphere against those of traditional fast-food joints.
On the other hand, the full-service restaurants generated revenue of 3.4 billion dollars in April 2023 and slightly more in the case of limited-service restaurants with 3.5 billion dollars. Consumers shifted to limited service during economic downturns or times of instability to save money. Also, the other factor was approachability, considering that limited-service food places were in an advantageous position to satisfy people during the lockdowns than full-service restaurants. Additionally, Canada’s wish for full-service eating is coming back. Segment’s revenues at these restaurants surpassed limited-service dining turnover each month last summer and majorly in December 2022.
The commercial and office premises segment gained the first position and is expected to drive at a steady pace during the forecast period for the Canadian food service market. In addition, under the commercial segment, the quick-service restaurants earned the maximum revenue of 40838.3 million dollars in 2023, full-service at second place with 39715.1 million dollars, caterers at third with 6717.5 million dollars and drinking places at fourth with 2516 million dollars.
Also, the standalone restaurants in the in-transit food services segment grew notably in 2023. This progress is credited to the revival of travel and tourism operations as limitations were removed post-COVID-19. With a surging number of consumers travelling for relaxation, business, or other reasons, there's a succeeding growth in demand for dining choices in the conveyance hubs, railway stations, roads, highways and airports.
Additionally, the real sales rise in 2023 was highest in retail food service at 4 per cent against inflation-adjusted sales in the pre-pandemic period followed by institutional food services at 1 per cent. Moreover, the industry of retail food service non-commercial restaurants is propelling with an emphasis on convenience and delivering high-quality food in a non-traditional dining atmosphere.
The Canadian food service market is moderately moving upwards due to the dire effects of COVID-19 then escalating costs, labour shortages and high interest rates in the post-pandemic which remain the key challenges in 2024. However, the country’s market share increased because of the growing quick-service restaurants and online food platforms. Moreover, with the transition to off-premise eating, higher menu costs, distant work and persistent problems regarding going out on public transport, there continues to be a long way ahead for recovery for several food service segments. Apart from this, the prominent category in the Candia food service market includes flavour extracts, cocktail mixes, syrups, simple fruit juices, baking, pizza, and dough mixes. Another area in which the industry depends on imported products is red meat from the United States, which represents 71 per cent of imports in the category. Also, 87 per cent of Canadian imports are controlled by the United States in terms of poultry meat. Although Brazilian producers can supply frozen products at lower prices than the United States, some Canadian factories are reluctant to source poultry from Brazil, as the mix of products of American and Brazilian origin could prohibit the sale of processed products.
Major players in the Canadianfoodservicee market are KFC, Tim Hortons Inc., Pizza Hut, McDonald's Corp, Burger King Corporation, and Starbucks Corporation.
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