Grocery stores facing pressure as Nestle Canada winds down frozen meals: Sylvain Charlebois
Nestle is pulling a slate of frozen meals from Canadian grocery store shelves, and a food policy expert said high food prices and pressure on suppliers are likely contributing factors behind the decision.
Nestle Canada announced last week it would stop selling Delissio frozen pizza, Stouffer's, Lean Cuisine and Life Cuisine products in Canadian stores over the next six months.
The company said it is focusing on food categories that support long-term business growth like coffee, confectionary, premium water and pet food.
Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, said while food inflation is starting to slow in Canada, food suppliers are still under pressure from high costs and difficult supply chain logistics, and are adjusting prices as a result.
“My guess is that it may have pushed a company like Nestle to re-evaluate their economics in Canada, for example, and that's probably why they're pulling out,” Charlebois said in a television interview with BNN Bloomberg on Monday.
That phenomenon “may seem counterintuitive,” Charlebois said, because “one would think that the frozen aisle becomes more popular” in a time of high inflation and costly grocery bills.
He anticipates that Nestle’s exit from the frozen food aisle may leave a gap for other companies to fill, though the tight timeline poses a challenge for them to pivot.
“I actually think this is going to be a great opportunity for Canadian companies,” Charlesbois said. “The problem is the six months … that’s not a whole lot of time."
With files from The Canadian Press.