{"id":1548,"date":"2020-09-18T16:38:10","date_gmt":"2020-09-18T16:38:10","guid":{"rendered":"https:\/\/opentextbc.ca\/introtourism2e\/chapter\/food-and-beverage-sector-performance\/"},"modified":"2025-02-26T17:49:04","modified_gmt":"2025-02-26T17:49:04","slug":"food-and-beverage-sector-performance","status":"publish","type":"chapter","link":"https:\/\/opentextbc.ca\/introtourism2e\/chapter\/food-and-beverage-sector-performance\/","title":{"raw":"4.1 Food and Beverage Sector Performance","rendered":"4.1 Food and Beverage Sector Performance"},"content":{"raw":"According to Statistics Canada, the [pb_glossary id=\"2661\"]food and beverage[\/pb_glossary] sector comprises \"establishments primarily engaged in preparing meals, snacks and beverages, to customer order, for immediate consumption on and off the premises\" (Government of Canada, 2012). This sector is commonly known to tourism professionals by its initials as [pb_glossary id=\"2661\"]F&B[\/pb_glossary].\r\n\r\nThe food and beverage sector grew out of simple origins: as people travelled from their homes, going about their business, they often had a need or desire to eat or drink. Others were encouraged to meet this demand\u00a0by\u00a0supplying food and drink. As the interests\u00a0of the public became\u00a0more diverse, so too did the offerings of the food and beverage sector.\r\n\r\nIn 2014, Canadian food and beverage businesses accounted for 1.1 million employees and more than 88,000 locations across the country with an estimated $71 billion in sales, representing around 4% of the country's overall economic activity. Many students are familiar with the sector through their workplace, because Canada's restaurants provide one in every five youth jobs in the country \u2014 with 22% of Canadians starting their career in a restaurant or foodservice business. Furthermore, going out to a restaurant is the number one preferred activity for spending time with family and friends (Restaurants Canada, 2014a).\r\n\r\nFor a perspective on how sales are distributed across the country by province, and how different foodservice operations perform in terms of [pb_glossary id=\"1040\"]revenue[\/pb_glossary] (sales dollars collected from guests), look at Tables 4.1 and 4.2. A\u00a0 key factor in the below results is the higher population base in Ontario and Quebec. Economic growth or decline also impacts results and vary from province to province year over year.\r\n

In terms of sales (Table 4.2), Ontario is the leader with almost $28 billion. Quebec, BC, and Alberta occupy the next three spots with revenues ranging from $9 billion to $13 billion, and the other provinces had sales of $2 billion apiece or less. Over the last five years, BC has shown greater growth in revenues along with third more units (restaurants) than neighbouring Alberta, leading to identical average sales per unit.<\/p>\r\nFoodservice sales in British Columbia rose by a solid 7.9% in 2018 over 2017. Alberta boasts the highest average unit volume at $838,666 per year, more than $100,000 over the national average due to greater disposable income and no provincial sales tax on meals. In BC, improved economic growth lifted total foodservice sales by a healthy 7.9% for the strongest annual growth since 2006 (Restaurants Canada, 2019). Since 2018 Alberta has seen a significant decline in its economy due to the energy sector collapse tied to the price of crude oil.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Table 4.1 Performance by province for commercial foodservice \u2014 units<\/caption>\r\n
[Skip Table]<\/a><\/td>\r\n<\/tr>\r\n
Province<\/th>\r\nFoodservice Units Totals<\/th>\r\nAverage Volume\/Unit ($)<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Newfoundland and Labrador<\/td>\r\n1,168<\/td>\r\n737,301<\/td>\r\n<\/tr>\r\n
Prince Edward Island<\/td>\r\n413<\/td>\r\n663,259<\/td>\r\n<\/tr>\r\n
Nova Scotia<\/td>\r\n2,260<\/td>\r\n750,458<\/td>\r\n<\/tr>\r\n
New Brunswick<\/td>\r\n1,708<\/td>\r\n714,521<\/td>\r\n<\/tr>\r\n
Quebec<\/td>\r\n22,736<\/td>\r\n594,147<\/td>\r\n<\/tr>\r\n
Ontario<\/td>\r\n38,317<\/td>\r\n747,468<\/td>\r\n<\/tr>\r\n
Manitoba<\/td>\r\n2,621<\/td>\r\n794,425<\/td>\r\n<\/tr>\r\n
Saskatchewan<\/td>\r\n2,673<\/td>\r\n717,449<\/td>\r\n<\/tr>\r\n
Alberta<\/td>\r\n11,277<\/td>\r\n838,666<\/td>\r\n<\/tr>\r\n
British Columbia<\/td>\r\n14,550<\/td>\r\n838,444<\/td>\r\n<\/tr>\r\n
Canada<\/td>\r\n97,939<\/td>\r\n735,915<\/td>\r\n<\/tr>\r\n
Data source: Statistics Canada, Restaurants Canada 2019<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nTable 4.2 below indicates the profit margins per province. [pb_glossary id=\"2853\"]Profit[\/pb_glossary] is the amount left when expenses (including corporate income tax) are subtracted from sales revenue. A higher profit margin means that a greater percentage of sales are retained by the business owner, and a lower percentage is lost to operating and other costs.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Table 4.2 Performance by province for commercial foodservice \u2014 sales<\/caption>\r\n
[Skip Table]<\/a><\/td>\r\n<\/tr>\r\n
Province<\/th>\r\nSales Growth<\/th>\r\nSales<\/th>\r\nPre-tax Profit Margin (% of operating revenue)<\/th>\r\n<\/tr>\r\n
2018-19 Forecast (%)<\/th>\r\n2018-17\u00a0 Actual (%)<\/th>\r\n2018 ($ millions)<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Newfoundland and Labrador<\/td>\r\n1.6%<\/td>\r\n.2%<\/td>\r\n$861.2<\/td>\r\n4.1%<\/td>\r\n<\/tr>\r\n
Prince Edward Island<\/td>\r\n4.3%<\/td>\r\n6.3%<\/td>\r\n$273.9<\/td>\r\n6.9%<\/td>\r\n<\/tr>\r\n
Nova Scotia<\/td>\r\n3.9%<\/td>\r\n5.6%<\/td>\r\n$1,696.0<\/td>\r\n5.0%<\/td>\r\n<\/tr>\r\n
New Brunswick<\/td>\r\n3.1%<\/td>\r\n3.0%<\/td>\r\n$1,220.4<\/td>\r\n6.0%<\/td>\r\n<\/tr>\r\n
Quebec<\/td>\r\n4.2%<\/td>\r\n5.2%<\/td>\r\n$13,508.5<\/td>\r\n4.4%<\/td>\r\n<\/tr>\r\n
Ontario<\/td>\r\n4.6%<\/td>\r\n5.7%<\/td>\r\n$28,640.7<\/td>\r\n3.8%<\/td>\r\n<\/tr>\r\n
Manitoba<\/td>\r\n3.4%<\/td>\r\n2.4%<\/td>\r\n$2,082.2<\/td>\r\n4.8%<\/td>\r\n<\/tr>\r\n
Saskatchewan<\/td>\r\n3.8%<\/td>\r\n1.6%<\/td>\r\n$1,917.7<\/td>\r\n5.3%<\/td>\r\n<\/tr>\r\n
Alberta<\/td>\r\n3.0%<\/td>\r\n2.4%<\/td>\r\n$9,457.6<\/td>\r\n4.4%<\/td>\r\n<\/tr>\r\n
British Columbia<\/td>\r\n4.8%<\/td>\r\n7.9%<\/td>\r\n$12,199.4<\/td>\r\n4.7%<\/td>\r\n<\/tr>\r\n
Canada<\/td>\r\n4.2%<\/td>\r\n5.2%<\/td>\r\n$72,074.8<\/td>\r\n4.3%<\/td>\r\n<\/tr>\r\n
Data source: Statistics Canada, Restaurants Canada 2019<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nThe provincial variations in total sales and profit margins are due to several factors including:\r\n