Industry Analysis & Industry Trends
Conflicting trends over the past five years hampered the Cereal Production industry. Wary of the economy, many consumers turned to cereal as an inexpensive breakfast option. However, demand has waned as consumers shifted to pricier breakfasts as disposable incomes recovered. Moreover, as people returned to work they had less time to prepare breakfast. Instead, Canadians opted to buy food at cafes or coffee shops, decreasing demand for cereal. Over the next five years, recovering disposable income will encourage consumers to purchase brand-name, high-end cereals, which is expected to improve industry returns. In addition, more Canadians will purchase organic and whole grain cereal options due to growing health trends... purchase to read more
Industry Report - Industry Investment Chapter
Cereal production requires substantial capital investment, which increases capital intensity. Modern manufacturing plants require high capital expenditure on sophisticated technology and equipment that aim to increase productivity without the need for additional labour. However, the level of capital intensity varies considerably with the size of the manufacturer. Small- to medium-size facilities have a low capital-to-labour ratio because they lack the resources to invest in expensive technology and equipment, and they have to employ additional labour to increase production volumes. Overall, the Cereal Production industry exhibits relatively high capital intensity.
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