MNP ranks Canada seventh among G20 agri-food nations, but tariff pressure and low private investment are stalling growth for small producers
Canada has the agricultural capacity, global reputation, and trade surplus to compete among the world's strongest food-producing nations. But the country's food and beverage sector, particularly its small and mid-sized businesses, is not capturing the full value of those advantages, according to a new report from national professional services firm MNP.
Released ahead of World Food Day, the MNP Food and Beverage Business Outlook: Momentum Built. Advantage Ahead. pairs global benchmarking of Canada's position among the G20 nations with on-the-ground perspectives from MNP's food and beverage advisory leaders.
The report finds that while Canada ranks seventh overall among those countries assessed, structural gaps in commercialisation, processing capacity, digital adoption, and market diversification are preventing producers from converting that standing into sustainable business performance.
"There's a lot that Canada does really well when it comes to food, but those advantages are not sustaining small- and mid-sized businesses," said Matt MacDonald, National Leader, Food & Beverage Processing at MNP, based in Calgary, Alberta. "Manufacturers are trying to stay nimble while costs are rising, trade is unpredictable and consumers are changing what they buy."
Tariff uncertainty is reshaping trade flows
Canada recorded a $24.3 billion agri-food trade surplus, according to the MNP report - a figure that underscores the sector's export importance but also its exposure.
With Canada's trade relationships under strain, the outlook found that 65 per cent of food and beverage exporters are planning market expansion, while exports to the United States declined 3.8 per cent and non-U.S. exports grew 11.2 per cent.
Those shifts carry direct implications for advisors working with clients in the food production, manufacturing, and agriculture supply chain. As Canadian businesses face mounting tariff pressure across sectors food and beverage operators are contending with rising costs across ingredients, labour, transportation, and packaging - pressures that ripple through margins and, ultimately, consumer prices.
The Canada Food Price Report - referenced in the MNP Outlook - predicted a four-to-six per cent increase in food prices in 2026. MacDonald noted that the impacts extend beyond the shelf price: product sizes, mix, and margins are all being adjusted as manufacturers absorb input cost increases.
The investment gap slowing innovation adoption
One of the report's sharper findings concerns research and development funding.
While nearly $515 million was invested in Canadian agri-food technology startups in the first half of 2025, approximately 75 per cent of agricultural research and development funding comes from public sources. Private investment accounts for less than 25 per cent, a ratio the report frames as a barrier to commercialisation.
"The opportunity is to look at where we can do things differently, adapt, and get more value out of what we already produce here in Canada," MacDonald said.
Digital adoption illustrates the gap clearly. Tools such as artificial intelligence, automation, and advanced forecasting are increasingly accessible, but uptake among small- and mid-sized food businesses remains uneven. The report points to targeted investments in inventory management, production forecasting, and process automation as practical entry points for businesses looking to build both productivity and longer-term capability.
This challenge is not unique to food and beverage. Private investment across Canada's business community is under strain with the Canadian Federation of Independent Business forecasting a 6.3 per cent drop in private investment in the second quarter of 2026, driven in part by tariff-related uncertainty and the rising cost of capital expenditure.
Where the growth opportunity lies
The MNP report is less a warning than a roadmap. Canada's food and beverage sector enters what MNP frames as its next stage of growth with significant structural advantages - agricultural scale, proximity to global markets, and a growing international reputation for food quality. The challenge is converting those fundamentals into stronger business outcomes.
Market diversification is one lever. Beyond shifting export destinations, the report identifies domestic business diversification - through private-label arrangements, new customer segments, strategic partnerships, and expanded revenue streams - as a complementary path.
Expanding domestic processing capacity is another: retaining more economic value within Canada before products are exported would allow producers to capture margin that currently flows elsewhere.
For financial advisors and wealth managers with clients in agriculture, food manufacturing, or the broader rural economy, the report offers a useful benchmark. Businesses that are actively investing in commercialisation, operational efficiency, and market access are better positioned to sustain growth through the current trade environment. Those that are not may face tightening margins and narrowing options as input costs and tariff uncertainty persist.
The full MNP Food and Beverage Business Outlook is available through MNP's food and beverage advisory practice.
