December 19, 2022 — The last three years have clearly shown that Canada’s resilience and self-reliance depend on strong domestic manufacturing and global supply chains for essential products. At Food, Health & Consumer Products of Canada (FHCP), 2022 held no shortage of obstacles for our industry to overcome. With every twist and turn, our team of experts continued to provide a unified voice for our sector, ensuring our members can operate in a fair business environment and Canadians can access the everyday products they rely on. Here are our top five stories in 2022:
5. Securing supply chain investments
Disruptions at any point in our integrated supply chains can cause ripple effects, as shown by the widespread impacts of the Omicron variant of COVID-19, the devastating B.C. floods, and the protest blockade of the Windsor-Detroit Ambassador Bridge. These unforeseen obstacles only exacerbate our industry’s long-standing supply chain fragilities, including structural issues and ongoing shortages and increased prices in labour, packaging, and ingredients.
At invitation-only sectoral Supply Chain Roundtables that took place over the first half of 2022 with the Minister of Transport and his Cabinet colleagues, we highlighted the need to protect critical infrastructure and the impact events like trucker blockades and rail strike threats have on Canada’s international reputation. Our input at these roundtables was key in forming the National Supply Chain Task Force, whose Final Report, released in October, included four of the five recommendations from our submission: digitizing the supply chain, establishing a federal governance structure to oversee, coordinate, and share information; and investments in both human and labour infrastructure, and physical infrastructure.
4. Recognized impact in sustainability
Protecting our planet and its valuable resources remains a key priority for FHCP-member companies and Canadians alike Beginning in June 2019 as the first Canadian trade association to endorse the Ellen MacArthur Foundation’s vision for a New Plastics Economy, FHCP continues to be at the forefront of efforts to move Canada towards a future of zero plastic waste. In 2021, we co-founded the Canada Plastics Pact, an organization driving collaboration in rethinking how businesses design, use, and reuse plastic packaging, and launched Circular Materials, a not-for-profit producer responsibility organization.
Our important role in facilitating industry alignment and influencing government proposals and policies that lead to a circular economy was formally recognized this year by Canadian Grocer with a 2022 Impact Award in the category of Sustainability, handed out annually to companies, big and small, making meaningful and positive progress in support of their employees, communities, and the planet.
3. The value of easy access to self-care products
The critical importance of access to self-care products has never been clearer than the recent shortage of children’s analgesics, caused in part by a wave of respiratory infections but made worse by media attention that led to consumer stockpiling. Canadians felt first-hand the repercussions of losing access to the over-the-counter products they rely on to keep their families healthy: over-crowded emergency rooms and an over-burdened healthcare system working beyond its capacity.
To assist our members with meeting unprecedented demand and ensure Canadians could once again access the products they need, we worked in partnership with Health Canada to develop both short- and long-term solutions, attending stakeholder meetings, participating in Ministerial Roundtables, and having FHCP Senior Advisor, Gerry Harrington, speak at the House of Commons Standing Committee on Health. Our insights and efforts contributed to the November approval of the sale of imported children’s acetaminophen in community pharmacies, and children’s analgesics to supply hospitals.
2. Fighting food inflation
With inflation at historic heights, we understand the growing concerns Canadians have about rising food prices. Canada’s inflationary environment tracks with skyrocketing costs of goods globally, driven by a complex set of factors, including COVID-induced demand spikes, labour shortages, crop damage from extreme weather, transportation disruptions, and sharp increases in the price of energy and fertilizer because of the war in Ukraine.
Commodity prices are under similar pressure: packaging costs are up 42 per cent for plastic and 36 per cent for paper and freight costs are up 32 per cent. In recent surveys, 80 per cent of FHCP members report they are impacted by labour shortages, and that ingredient and input costs have increased, on average, by 23 per cent this year, and are expected to continue increasing for at least another six months.
Thankfully, Canadian food leaders are taking steps to mitigate impacts on consumers in various ways, such as streamlining expenses by dropping advertising and reducing the variety of products they make. Due in part to these efforts, Canada’s food inflation rate is actually among the lowest in the world.
1. Paving the way for a Grocery Code of Conduct
Our government relations efforts have long included actively engaging political decision makers and working with industry stakeholders to build and expand support for a Grocery Code of Conduct in Canada, where consolidation in the grocery retail sector has resulted in five companies controlling more than 80 per cent of grocery and drug store sales.
In late 2020, FPT Agriculture Ministers announced the creation of Working Group to look at unfair grocery practices and propose concrete next steps, and in July 2021, they officially recognized the need for a Code of Conduct to stabilize the retailer-supplier relationship and called on industry to achieve a concrete solution.
An industry Steering Committee, Co-Chaired by FHCP CEO, Michael Graydon, recently made the largest step in our quest towards a Code in the last two years, working diligently to ensure that every last detail reflects the realities of the Canadian operating environment and represents the unique needs of all stakeholders, large and small. As we move into 2023, we look forward to transitioning from a development phase to hopefully one of broad implementation, with a formalized Grocery Code of Conduct that will change the face of grocery retail in Canada.
2022 may have introduced some of the most pressing challenges of our time, yet our members continue to ensure that the essential products Canadians rely on are available and accessible. We’re committed to helping our industry continue to reach its full potential in 2023 and for the years to come, whatever obstacles come our way.