Overall, the Canadian packaged food and non-alcoholic beverage manufacturing sectors consisted of both oligopolistic and more competitive product markets with significant foreign multinational company presence, in contrast with the grocery retailing sector which was highly concentrated and dominated by national companies. There was considerable evidence of common ownership within and across all sectors.

Market concentration

The Canadian packaged food sector was comprised of product markets of various sizes, and with varying levels of concentration. Analyses within specific product markets revealed some moderately concentrated markets (CR4 > 40 and HHI > 1000) (i.e., ‘dairy’, ‘savory snacks’, and ‘rice, pasta and noodles’), and some highly concentrated (CR4 > 60 and HHI > 1800) markets (i.e., ‘soups’, ‘ice cream and frozen desserts’ and ‘breakfast cereals’), consistent with a recent analysis of the European single market, where ‘soups’, ‘ice cream and frozen desserts’, and ‘breakfast cereals’ were found to be the most concentrated packaged food product markets [18]. Within the non-alcoholic beverage sector, many product markets (i.e., ‘carbonates’, ‘concentrates’, ‘energy drinks’, ‘RTD tea’ and ‘sports drinks’) were highly concentrated which was similarly seen in Europe within the ‘carbonates’, ‘energy drinks’, ‘sports drinks’ and ‘RTD tea’ product markets, and distinctively within the ‘RTD coffee’ product market [18]. Overall, these findings suggest important (although perhaps unsurprising) similarities in the structure of Western food and beverage manufacturing markets.

Minor variations and fluctuations in market concentration metrics were noted over the past ten years within the packaged food sector. Certain changes can be explained by horizontal mergers and acquisitions. For instance, in 2015, an increase in the HHI value (from 595 to 938) for the ‘sauces, dressings and condiments’ product market was seen, likely as a result of the merger between the Heinz Company of Canada Ltd, and Kraft Canada. In the non-alcoholic beverage sector, a steep decrease was seen in the HHI values for the ‘RTD coffee’ product market over time. Distinctively, this drop in concentration may be explained by the emergence of companies offering products within this market; as of 2012, a single company held over 80% of the shares in the market, which decreased substantially over the following 2 years, in tandem with rapid market growth [24].

In contrast with the packaged food and non-alcoholic beverage sectors, the grocery retailing sector was dominated by national companies (with the exception of Wal-Mart). Four competing firms (i.e., Sobeys Inc, Metro Inc, Loblaw Co Ltd, and Wal-Mart Canada Inc) largely dominated the sector (median CR4 = 84%). Although not amongst the top 4 companies within the grocery retailing sector, Alimentation Couche Tard Inc was a leading company within the ‘Convenience’ and ‘Forecourt retail’ markets, and the geographic access to its outlets was greatest among all leading grocery retailers in 2021 [46]. While providing a substantially smaller volume of sales, the convenience and forecourt retailing sectors are of relevance to public health given they may have a product selection of poorer nutritional quality, compared to that of larger retailers such as supermarkets [47].

Taken together, these data suggest high market concentration and a lack of competition in the grocery retailing sector in Canada, as has been identified in other countries [18, 48]. These structural characteristics of the Canadian retail sector likely indicates that a small set of companies have extensive market power in this sector. For example, due to the oligopolistic nature of the markets in which they operate, retailers may have substantial buyer power over suppliers (e.g., manufacturers), and seller power over consumers [49]. This market power is likely exacerbated because many of the retailers are also highly vertically integrated and produce and sell their own brands. Excessive retailer market power may have important public health implications as retailers are gatekeepers of modern food systems [48]. In line with this finding, the Canadian Competition Bureau has recently launched an investigation into competition within the grocery retailing sector in light of rising food prices within the country [50].

Strong nutrition-related policies and action amongst the small number of leading Canadian grocery retail companies, including, to a lesser extent, convenience and forecourt retailers, would likely have an impact on a large number of consumers given that 73% of Canadian food expenditures are spent in retail settings [51]. Opportunities to improve healthfulness within retailers could include policies that address the promotion of ‘less healthy’ foods, the availability of and access to ‘healthier’ and ‘less healthy’ foods (e.g., at check-out points), as well as the nutrition information provided in stores (e.g., for ready-to-eat foods and own-brand products) and online [52]. Implementation of such policies could be conducive to making healthier choices easier for consumers in environments where they make the majority of their food purchases. Similarly, strong nutrition-related action, such as addressing nutrients of concern in leading products, by both retailers that produce and/or distribute own-brand products and leading manufacturers in product markets that are concentrated and/or generate important sales revenues, could potentially have significant public health implications.

Company ownership

Ownership of packaged food and non-alcoholic beverage manufacturing and grocery retailing sectors was found to be highly complex and integrated. Most national brand owners, particularly within manufacturing sectors, were affiliated to a parent company, most often a foreign multinational.

In addition, many publicly listed companies had common investors as demonstrated by shareholder ownership by three large asset managers. Although more research is needed to fully understand the effect of common ownership on the level of competition, concerns exist over the potential for common ownership to reduce competition, particularly in concentrated markets [53]. The issue of common ownership from a public health perspective requires additional consideration, particularly in the concentrated grocery retailing sector, and in highly concentrated food and beverage product markets.

Policy implications and areas for future investigation

These analyses underscore the globalized nature of modern Canadian food and beverage sectors, and the need for targeted and meaningful international efforts from the food industry to make positive changes that will support health, as called for by the World Health Organization and others [54, 55]. From a regulatory standpoint, while public health-related efforts from individual countries may help support changes within borders, cohesive and aligned policies across multiple countries are likely to have a greater impact, particularly when it comes to the packaged food and non-alcoholic beverage manufacturing sectors.

Research from various countries has shown different levels of commitments from food and beverage companies to support the transition towards healthier food environments [55,56,57,58]. However, research also suggests that voluntary company commitments to date have not necessarily translated into meaningful improvements or action in relation to marketing or the nutritional quality of the food supply (e.g., companies reporting stronger commitments regarding product (re)formulation have not further improved the healthfulness of their product portfolios compared to those with weaker commitments in Canada) [59,60,61,62]. Further investigation into the nutrition-related policies and actions of companies identified in this analysis is warranted, to increase the transparency and accountability of the private sector for their role in NCD prevention, identify areas for improvement, and/or draw attention to the need for further public sector policy action, as warranted [63].

Previous research has also identified that investors have significant potential to contribute to addressing nutrition-related challenges and increasing the accountability of food and beverage companies [3, 64,65,66]. For instance, following pressure from shareholders, Unilever recently committed to publicly reporting the healthfulness of its food sales using government-endorsed Nutrient Profile Models as well as internal metrics [67]. Although nutrition is only recently emerging as a potential focus area for responsible investment, it has been posited that investors would likely benefit from companies taking into account “nutrition-related risks and opportunities” such as the increasing demand for healthier products, the implementation of regulations pertaining to food composition, fiscal policies (e.g., taxes on sugary drinks) and the demand for product innovation, as these could influence their financial performance [64]. Nutrition-related considerations are garnering interest from institutional investors, however, targeted actions on these issues by institutional investors is still infrequent and inconsistent [3].

This study used a public health lens to better understand elements of market structure that may influence the healthfulness of food environments in Canada building on monitoring and accountability efforts as part of the International Network for Food and Obesity/non-communicable disease Research, Monitoring and Action Support (INFORMAS) [68]. Future market structure analyses may consider a multiple lens approach which incorporates health, environmental sustainability, equity and social justice, to further assess the suitability and effectiveness of current market regulations, and garner support for change where needed.

Strengths and limitations

This study is the first investigation of food and beverage market structure from a public health perspective in Canada. It used a wide variety of indicators to assess market structure, including market size, number of active brand owners with a market share of ≥ 1%, level of market concentration, and company ownership. Nonetheless, further analyses of market structure could account for additional metrics such as the degree of vertical integration, barriers to market entry [10] and market dynamicity (i.e., the entry of new products within markets). For instance, certain manufacturers have operations upstream or downstream along the food chain, such as the Kraft Heinz company that not only produces packaged foods, but provides almost a third of processing tomato seeds across the globe [69]. Other companies are cooperatives and inherently operate along multiple segments along the value chain. For example, Agropur Cooperative is owned by 2908 dairy producers whose milk is used to produce a variety of dairy products [70]. As such, the Canadian food system is even more integrated than this analysis would suggest. Moreover, company and brand ownership are dynamic, with companies frequently and strategically selling or acquiring brands or companies, and monitoring the structure of leading companies can help understand how they maintain or gain market power.

Several of the analytical variables used in this paper have limitations. HHI values likely present an underestimation of the level of concentration within the Canadian packaged food and non-alcoholic beverage manufacturing and grocery retailing markets, for several reasons. First, certain product markets which were assessed constituted of multiple smaller product markets (e.g., the ‘dairy’ product market included products such as butter, drinkable yogurt and cheese). Next, national geographical boundaries were used to assess market concentration, however, while not available via Passport, by Euromonitor International, smaller geographical boundaries may have been relevant to define grocery retailing markets; for instance, Metro Inc was identified as a leading grocery retailer in Canada, yet only operates in Eastern Canada (i.e., in the provinces of Québec and Ontario). Lastly, metrics were assessed for brand owners with ≥ 1% market share (as opposed to using data for those with even the smallest % market share), as information for all brand owners active within a market is not always available on Passport.

Finally, this analysis focused on market structure, however, structure, conduct and performance are inter-related concepts of corporate market power. Future work could examine the conduct of the identified companies (and investors) and their performance focusing on public health and sustainability outcomes, perhaps using or adapting INFORMAS protocols [68].