OUTLOOK 2020 Welcoming in a New Decade
Welcoming in a New Decade
By Angela Altass
As another year draws to a close and a new year brings the dawn of a new decade, organizations are releasing reports with a vision to 2020 and beyond.
McCormick recently released its’ 19th annual Flavour Forecast and Chef David Burnett was on hand at the recent Grocery Innovations Canada conference in Toronto to talk about it. Burnett is part of a team that includes 30 chefs from around the world who share notes and compare trends that are overlapping in different areas, in foodservice and also in consumer packaged goods. The report identifies three trends: The need for seed; Mexicana vegana; and refresh, replenish, rehydrate.
“The first trend that we are identifying is the need for seed,” says Burnett. “Seeds are something that you’re seeing a lot more of. Seeds are nutrient-packed ingredients and the four that we are looking at are: sesame seeds, basil seeds, lotus seeds and ancient seeds.”
Black sesame seeds are being incorporated into more products and lotus seeds are gaining popularity in various areas of the world, noted Burnett. Basil seeds are finding their way into drinks and puddings.
“Basil seeds have an amazing gelatinous quality and as soon as liquid hits them the gelatinization happens,” says Burnett. “We are seeing different basil seed product releases across the world both in grocery and in foodservice. This is one trend that is going to be on the cusp for the next couple of years.”
Ancient seeds have been around for centuries and are coming into fashion now because the seeds category in general is picking up steam, notes Burnett.
Mexicana vegana, or vegan Mexican food, is a combination of two trends colliding into one, explains Burnett: “Mexican food is very trendy. The plant-based idea of products is probably one of the biggest releases in 2019 and will just continue to grow.”
The refresh, replenish, rehydrate trend refers to people using food to cool themselves as opposed to a drink and shows up in the form of frozen fruit and plant-based treats. Burnett uses beet and yogurt parfait or sweet and salty celery pops as examples.
Sugar alternatives could be something to keep an eye on in the future, notes Burnett.
“I think sugar alternatives will be massive in the next five to 10 years,” says Burnett. “What will aid or prevent it is going to be the supply and demand, based on the ability to make and harvest sources. The reason we use sugar so easily now is because of its abundance. To be able to replace that abundance, we need to be able to come up with something that is going to allow us to do it very easily. I do think we are going to see more of it as a budding, emerging part of the industry.”
When it comes to the Canadian economy, Deloitte’s October 2019 Economic Outlook report tells a cautionary tale and indicates that a global economic slowdown is threatening to weaken Canada’s growth prospects.
“The modest rate of expansion projected in the Deloitte base case scenario increases the possibility that a negative shock could trigger a turn in the business cycle,” states the report. “Start thinking now about potential action to execute if economic conditions deteriorate. Understand that inaction of drastic, non-strategic belt-tightening in anticipation of a downtown will only make things worse.”
Global financial markets have been on a roller-coaster ride since Deloitte released its July economic outlook and the October report mentions “recurrent recession chatter accompanied by the escalation of geographical uncertainty.” However, it isn’t all negative news as far as Canada is concerned.
“Amid the rocky global environment, the Canadian economy managed to post a stellar quarter of growth, expanding by 3.7 per cent in the second quarter,” notes the report, “however, most of the strength is related to a rebound from two prior quarters of virtually no growth. Looking ahead, we expect the Canadian economy to grow by around 1.5 per cent in the second half of this year, yielding an annual figure of 1.6 per cent for 2019. Growth is expected to improve slightly over the subsequent two years, fluctuating around our estimated long-term potential pace of 1.7 per cent in 2020 and 2021. Overall, we expect the loonie to average around 75 US cents through this end of next year, helping support Canadian export competitiveness.”
The Canadian economy has experienced a jobs boom in 2018 and 2019, says Craig Alexander, partner and chief economist, economic advisory, Deloitte.
“The unemployment rate is below six per cent and is fluctuating at near a four-decade low,” says Alexander. “The tightness of the labour market, with many employers experiencing labour shortages, has had the impact of raising wage growth. The extent of the wage gains has been in excess of the rate of inflation, meaning that workers have more purchasing power. Plentiful jobs have kept consumer confidence at a relatively high level. All of this augurs for wallets to be open in the months ahead.”
Alexander cautions, however, that a few factors indicate that retail sales will be healthy but not booming.
“For example,” says Alexander, “although labour markets are generally strong, Alberta still has an elevated unemployment due to the fallout from lower oil prices. Second, households from coast-to-coast have accumulated a vast amount of debt, reflecting the impact of the sustained exceptionally low interest rate environment. The majority of debt is tied to real estate related borrowing, such as mortgages and home equity lines of credit.”
The debt situation is most acute in the Canadian cities or regions that have experienced great real estate growth, such as lower mainland British Columbia and southern Ontario.
“Consumers have tempered their willingness to take on more debt, so future spending will be constrained by income growth, which is solid but not rising rapidly,” notes Alexander. “Consumer purchases of big ticket items, like autos, furniture and appliances, have been dampened by the reduced inclination to borrow.”
A weak Canadian dollar is making foreign purchase more expensive, which could be favourable for domestic retailers, says Alexander.
“However, the trend towards more online shopping is still in place, which can be a challenge for domestic retailers competing with large global online retail firms,” notes Alexander.
E-commerce is becoming increasingly popular, states Alexandra Cutean, senior research director, research and policy, with the Information & Communications Technology Council (ICTC), which is set to release an outlook report that looks at how tech is impacting the economy.
“E-commerce is convenient and offers the opportunity for variety, choice and oftentimes is cost effective,” says Cutean. “While e-commerce and intelligent retail are not new, interesting trends in this space include the growing use of AR and VR in retail. For example, IKEA is a popular destination when buying furniture but, in my case, I would prefer to avoid unnecessary trips there as much as possible. With AR, I could go onto the IKEA website, check out a couch and even see what it will look like in my living room. I might still go to the store in person, but tech like this doesn’t make a trip there necessary. AR and VR, I think, will be game changers for retail.”
Technology is increasingly permeating all sectors of the Canadian economy, “some at a higher pace than others but, nonetheless, technology is becoming a staple of every sector,” says Cutean. “Ten years ago, in 2009, over 52 per cent of tech employees worked exclusively in the Canadian tech sector. Fast forward to 2019 and this figure is now less than 48 per cent. More and more digitally-skilled talent is seen in other sectors of the economy, bringing with them new digitally-enabled efficiencies and productivity.”
Tech is impacting the entire Canadian economy and digitization impacts small and large companies alike, says Cutean.
“The majority of businesses in Canada are small and the rate of digitization among Canadian small businesses is relatively low,” says Cutean. “However, this doesn’t mean that technology isn’t impacting these businesses. Consumers increasingly want quick, convenient and cost-effective retail experiences but, at the same time, digitization can be effective in highlighting efficiencies, new opportunities for increased productivity, or even new business offerings. Either way, technology is and will continue to impact businesses of all kinds. Staying competitive means being aware of, and capitalizing on, these changes.”
As many businesses and organizations attempt to peek into the future to see what trends might be awaiting around the corner, history has taught us that there will no doubt be some surprises along the way. Welcome to 2020, a new decade, and all that comes with it.