Product basket | Good food, crabs and lobsters


PHOTO BY HUGO-SEBASTIEN AUBERT, LA PRESSE ARCHIVE

The meal kit market has collapsed, worth just over $700 million in Canada, less than half of what it was in 2021.

Sylvain Charlebois

Sylvain Charlebois
Senior Director, Laboratory of Analytical Food Sciences, Dalhousie University, Special Collaboration

The start of the pandemic has seriously affected the agri-food industry, but the post-Covid market will bring many of our companies difficult times.

Posted at 6:30 am.

Today, many companies are suffering from sudden changes in consumer trends. After the “psychological end” of the pandemic, the market was completely domesticated. We are slowly adapting to new customs and a new balance between our professional responsibilities and personal life. At the center of it all is food, or, so to speak, our relationship with food.

Take the example of the Quebec company Marché Goodfood. In 2021, the company was making very good profits, reaching its peak, while its shares were worth more than $13 and the number of subscribers was growing rapidly. The meal kit market in Canada was worth approximately $1.5 billion.

People were looking for a solution for eating at home, in full. The virtual food market was still underdeveloped, as the basic business model of the agri-food sector for decades was based on the desire to invite consumers to have a unique experience, whether in a store or in a restaurant. Restaurants and meal kit providers had a monopoly on the Internet.

Now, just 12 months later, Goodfood shares are trading around $0.60, and the meal kit market has collapsed, worth just over $700 million in Canada, less than half of what it was in 2021.

With food inflation and less money in consumers’ pockets, every food dollar counts. Meal kits, that “IKEA” formula in food that allows you to “gather ingredients” at home, must be reinvented or adapted to a new market.

The options available online are increasing almost every month. In most markets across Canada, someone can deliver your groceries within 60 minutes, and in some cases as little as 15 minutes. Expectations have changed tremendously, and so have our habits. In the United States, 16% of food products are now sold online. Before the pandemic, this share barely approached 7%. In Canada, according to our estimates, this share increased from 1.7% to 8% in two years. A spectacular jump.

Customer service is changing, and so are the products they consume. Snow crab and lobster are good examples. Prices for two of Canada’s most coveted seafood products have fallen sharply this year as consumers shrug off the effects of rising inflation and spend more time at home.


PHOTO BY MARCO CAMPANOZZI, PRESS ARCHIVES

The price of lobster has fallen by about 35%.

The price of snow crab fell in 2022 by a little more than 60%, and the price of lobster fell by about 35%, while in 2021 it was a windfall.

Crab and lobster sales then reached $2.5 billion, a record. Consumers have been clamoring to recreate the restaurant experience at home during quarantine. This is a real change that is happening everywhere, not just in Canada.

Global financial uncertainty caused by Russia’s invasion of Ukraine, the end of economic stimulus packages in the West linked to COVID-19 and rising interest rates are prompting consumers to cross expensive seafood off their shopping lists. There was too much money in the economy for too long, and borrowing money was almost free for a decade. Younger generations will have to deal with the value of money and credit, perhaps for the first time in their lives.

Many foods that used to be eaten in restaurants, such as snow crab, are now shunned by a market that treats restaurants differently, either because of inflation or because customers are adopting a new, more domestic lifestyle.

We expect other companies to feel the effects of the transition market. Post-COVID will be as brutal as the start of the pandemic, but the changes will have ramifications for several years.

Few people know what form the food industry will take in a few years. But expect other casualties such as Goodfood, crabs and lobsters… the perils of the post-Covid market.

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