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Canadian Lifestyles: Pride and Purse Strings - Canada - April 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Canada today
The people
The economy
The consumer
Perception of financial health shows slight improvement
Figure 1: Perception of financial health, January/February 2015-17
Debt reduction continues to be prioritized in 2017
Figure 2: How extra money is spent, January 2017
Financial and economic concerns loom large for about a quarter of the population
Figure 3: Current financial concerns, January 2017
Half of Canadians see themselves as ‘middle class’
Figure 4: Middle class values, January 2017
Canadians are proud to be living in Canada
Figure 5: Attitudes towards living in Canada, January 2017
What it means
CANADA TODAY – THE PEOPLE
What you need to know
Canada’s population is growing due to immigration, increasing diversity
Canada will become increasingly diverse
Increased diversity means greater opportunities and considerations
The population is geographically concentrated
Geographical concentration means resources will be strained
Figure 6: Share of population of Canada, by territory/province, 2016
Canada is a low-fertility society
Figure 7: Total fertility rate, 1963-2013
Women are having children later in life
Figure 8: Fertility rate, by age(per 1,000 women), 2001-11
The family structure is changing
Figure 9: Distribution and percentage change of census families, by family structure, 2001-11
Shift in family structure means families need more help
Canada’s population is aging
Figure 10: Population aged 0 -14 and 65+, as of July 1, 1995-2035*
Figure 11: Canadian population, by age, 2016
Opportunities and challenges come with an aging population
CANADA TODAY – THE ECONOMY
What you need to know
2016 was a year of ups and downs for the Canadian economy
Figure 12: Quarterly growth rates of real GDP, change over previous quarter, Q1 2011-Q4 2016
The job market sees some recovery in 2016
Figure 13: Canada’s unemployment rate, December 2011-December 2016
The Canadian Dollar remains under pressure
Figure 14: Historical Canadian/US currency rate comparisons, March 23, 2012- March 22-2017
Bank of Canada keeps interest rate at 0.5%
Figure 15: Canada bank rate, March 2012-March 2017
Household debt levels in Canada
EXPENDITURE OVERVIEW
What you need to know
Total Canadian consumer expenditures in 2016
Figure 16: Total Canadian consumer expenditure, at current prices, 2016
Outlook for the next five years
Figure 17: Total Canadian consumer expenditure and fan chart forecast, at current prices, 2011-21
CATEGORY REVIEW – IN-HOME FOOD
What you need to know
What it means
In-home food expenditure softens as food prices drop
Figure 18: Total Canadian consumer expenditure on food (at home), at current prices, 2011-16
Upward sales momentum forecast to continue
Figure 19: Best- and worst-case forecast value sales of the food (at home) market, at current prices, 2011-21
What’s working
Premium products can help shield margins
Figure 20: President's Choice Black Label Cranberry& Fennel Artisan Crisps, December 2015 (Canada)
Figure 21: President's Choice Black Label Crema di Burrata Soft Unripened Cheese, June 2016 (Canada)
Looking abroad for innovation inspiration
Snacking allows Canadians to eat what they want, when they want
Figure 22: Kellogg's Special K Nourish Cranberry & Almonds Chewy Bars (Canada, March 2016), Dark Chocolate Chunks & Almonds Chewy Bars (Canada, March 2016)
What’s not working
Challenges ahead for ‘conventional’ banners
Perception of centre-of-store needs rehabilitation
What’s next
“What’s for dinner?” is the most important question companies can help answer
Technology presents an opportunity for retailers to provide more customized consumer engagement
Figure 23: Introducing Amazon Go and the world’s most advanced shopping technology, December 2016
Changing consumer spending habits
Figure 24: Perceived change in spend on food (at home) compared to prior years, January/February 2015-17
Key consumer findings
CATEGORY REVIEW – ALCOHOLIC BEVERAGES (AT HOME AND ON-PREMISE)
What you need to know
What it means
Growth of alcoholic beverages at home outpaces in-home
Figure 25: Total Canadian consumer expenditure on alcoholic beverages (at home), at current prices, 2011-16
Figure 26: Total Canadian consumer expenditure on alcoholic beverages (out of home), at current prices, 2011-16
Mintel forecasts in-home alcoholic beverage sales to outpace on-premise
Figure 27: Best- and worst-case forecast value sales of the alcoholic beverages (at home) market, at current prices, 2011-21
Figure 28: Best- and worst-case forecast value sales of the alcoholic beverages (out of home) market, at current prices, 2011-21
What’s working
Craft beer brews success for the industry
Cider growth expands market among women
Wine growth supported by aging Boomer cohort
Whisky is the top seller in Canada
Figure 29: Jack Daniel’s Watermelon Punch Whiskey Beverage, August 2015 (US)
What’s not working
Beer growth susceptible to demographic pressures
What’s next
Beer’s premiumization offers pairing opportunities
Figure 30: Alcoholic beverage global launches with the word “cheese” in the description, 2012-16
Consumers looking beyond beer
Figure 31: Small Town Brewery Not Your Father’s variety Pack, November 2016 (US)
Investing in artisan distilleries a way for larger brands to capitalize on thinking small with minimal investment
Changing consumer spending habits
Figure 32: Perceived change in spend on alcoholic beverages (at home) compared to prior years, January/February 2015-17
Figure 33: Perceived change in spend on alcoholic beverages (out of home) compared to prior years, January/February 2015-17
Key consumer findings
CATEGORY REVIEW – NON-ALCOHOLIC BEVERAGES (AT HOME)
What you need to know
What it means
Overall beverage market grows at a moderate pace
Figure 34: Total Canadian consumer expenditure on non-alcoholic beverages (at home), at current prices, 2011-16
Mintel forecasts incremental growth in non-alcoholic drinks
Figure 35: Best- and worst-case forecast value sales of the non-alcoholic beverages (at home) market, at current prices, 2011-21
What’s working
Coffee’s growth reflective of category innovation
All-natural positioning resonates with Canadian juice consumers
Figure 36: Ceres 100% Guava and Litchi Juice (Canada), September 2016
What’s not working
Juice category challenged by concern around sugar
Non-dairy ‘alternatives’ capitalize on shifting demand, representing a challenge for dairy milk
Figure 37: Share of launches of white milk, flavoured milk and plant-based drinks (dairy alternatives) in Canada and US, 2016 vs 2011
What’s next
Nitro coffee at the forefront of the “third wave”
Cold-pressed juice represents an opportunity to meet demand for natural and healthful offerings
Opportunity to leverage superfoods to boost functionality
Figure 38: Green Panda Superfood Chia Drink with Apple & Elder (Austria), November 2016
Figure 39: Sambazon Acai Berry, Kale + Ginger Superfood Smoothie (US), July 2016
Figure 40: Raw Pressery Lean Cold-pressed Spirulina, Kiwi, Kale, Cucumber, Green Apple and Mint Juice (India), January 2016
Building milk brands at foodservice can add excitement to the category
Changing consumer spending habits
More Canadians are spending less than more on non-alcoholic beverages
Figure 41: Perceived change in spend on non-alcoholic beverages (at home) compared to prior years, January/February 2015-17
Key consumer findings
CATEGORY REVIEW – LEISURE SPENDING CATEGORIES 
What you need to know
What it means
Growth in spending on non-essentials will slow
Non-essential spending has shown relatively stable growth since 2011
Consumer expenditure forecast to slow moving towards 2021
Financial concerns weigh on consumers, though occasional breaks will be sought
What’s working
Inclusivity in marketing speaks to more consumers
Figure 42: Tim Hortons True Stores TV Commercial, “Dad’s Place”, March 2016
Figure 43: Tim Hortons #TimsPerfectPairingsTV Commercial, February 2017
Broadening the appeal of entertainment options is working to attract families
What’s facing challenges
Financial concerns and time constraints are no fun
Dollar concerns and political climate may be impacting travel to the US
What’s next
Food halls appeal to consumers on multiple levels
More off-priced retailers to come
Bringing wellness to the forefront of leisure
Changing consumer spending habits
Dining out
Figure 44: Perceived change in spend on food – dining out compared to prior years, January/February 2015-17
Clothing, footwear and accessories
Figure 45: Perceived change in spend on clothing, footwear and accessories compared to prior years, January/February 2015-17
Vacations and tourism
Figure 46: Perceived change in spend on vacations and tourism compared to prior years, January/February 2015-17
Leisure and entertainment
Figure 47: Perceived change in spend on leisure and entertainment compared to prior years, January/February 2015-17
Key consumer findings
CATEGORY REVIEW – HEALTH AND WELLNESS CATEGORIES
What you need to know
What it means
Consumer expenditure on wellness should remain steady
Canadian spending on health and wellness has been moderate since 2011
The forecasts for the sectors are predicted to slow
What’s working
Prevention is a key interest for both the young and the old
The broad scope of mass merchandisers has wide appeal
Beauty and personal care isn’t just for women
Figure 48: Dove Men+Care Elements Minerals+ Sage Scent (Canada, March 2017)
Figure 49: Dove Men+Care Extra Fresh (Canada, March 2017)
Figure 50: Dove Men+Care Thickening (Canada, March 2017)
What’s facing challenges
Pharmacies may be losing ground to mass merchandisers
What’s next
Grooming products for men become less niche
Figure 51: The Art of Shaving Peppermint Essential Oil (Canada, January 2017)
Figure 52: Proraso Beard Balm (Canada, October 2016)
Holistic approach includes interest in minding moods
Figure 53: Meet Jamieson Digestive Care Daily Fibre, April 2016
Skincare with food ingredients will appeal as consumers gravitate towards ‘natural’
Figure 54: Kayo (US, November 2016)
Figure 55: Andalou Naturals 1000 Roses Velvety Soft Body Butter (Canada, March 2016)
Changing consumer spending habits
Beauty and personal care
Figure 56: Perceived change in spend on beauty and personal care compared to prior years, January/February 2015-17
OTC healthcare remedies
Figure 57: Perceived change in spend on OTC healthcare remedies compared to prior years, January/February 2015-17
Key consumer findings
CATEGORY REVIEW – TECHNOLOGY AND COMMUNICATIONS
What you need to know
What it means
Growth to continue after stagnation in 2015
Figure 58: Total Canadian consumer expenditure on technology and communications, at current prices, 2011-16
Moderate growth predicted to continue
Figure 59: Best- and worst-case forecast value sales of the technology and communications market, at current prices, 2011-21
What’s working
Interest in a number of television technologies is apparent
Canadian consumers are using more data across more devices
What’s not working
Internet and smartphone data plans are viewed as too pricey
Younger cohorts are cutting the cord
What’s next
Efficiency and practicality eclipse the importance of size
Figure 60: Sonos commercial 2016: You're Better Than This, August 2016
Changing consumer spending habits
Figure 61: Perceived change in spend on technology and communications compared to prior years, January/February 2015-17
Key consumer findings
CATEGORY REVIEW – TRANSPORTATION
What you need to know
What it means
Expenditures on this sector have seen healthy growth
Figure 62: Total Canadian consumer expenditure on transportation, at current prices, 2011-16
Positive future for the transportation sector
Figure 63: Best- and worst-case forecast value sales of the transportation market, at current prices, 2011-21
What’s working
Strong sales for the Canadian auto industry
What’s not working
Vehicle recalls and scandals
Changing consumer spending habits
Figure 64: Perceived change in spend on transportation compared to prior years, January/February 2015-17
Key consumer findings
CATEGORY REVIEW – PERSONAL FINANCE
What you need to know
What it means
Personal finance expenditure forecast to grow strongly
Figure 65: Total Canadian consumer expenditure on financial services, at current prices, 2011-16
Figure 66: Best- and worst-case forecast value sales of personal financial services, at current prices, 2011-21
What’s working
Canadian banks react to the Fintech challenge
What’s next
Chatbots and banking customer service
Robo-investment advisors
Digital disruption in lending
Key consumer findings
Consumer confidence is middling at best
Albertans are more optimistic about the local economy, while Quebecers are less so
Inflation is a concern for many older Canadians
Around a quarter of Canadians currently living from pay cheque to pay cheque
On the positive front, a third of young Canadians have at least $1,000 saved for emergencies
Young women are most stressed about their finances
But among older women, this worry may be due to a lack of confidence
Younger Canadians more likely to believe their generation is financially worse off
Buying investments is a much higher priority for Chinese Canadians
CATEGORY REVIEW – HOUSING
What you need to know
What it means
Housing expenditures have shown positive lift
Figure 67: Total Canadian consumer expenditures on housing, at current prices, 2011-16
Housing sector to experience continued growth
Rental vacancy rate slightly higher
Figure 68: Best- and worst-case forecast value sales of housing, at current prices, 2011-21
What’s working
BC government’s foreign home buyers tax: impact on Vancouver home prices
What’s facing challenges
Changes to Canada’s housing rules
Ontario reconsidering foreign buyer tax to cool Toronto’s hot housing market
Ontario increases tax refund for first-time home buyers
What’s next
Real estate sales activity in 2017 to mainly decline, according to the CREA
Impact of new guidelines on the real estate market
Key consumer findings
Around half believe it is becoming difficult for younger adults to save to buy a home
18-24s most concerned about the housing market
But real estate and housing market values are not national concerns
THE CONSUMER – CHANGES IN PERCEIVED FINANCIAL HEALTH AND SPENDING
What you need to know
Perceived financial health improves moving into 2017
Figure 69: Perception of financial health, January/February 2015-17
Spending across categories remains relatively stable
Figure 70: Perceived changes in spending in 2016 compared to prior years, January 2017
Shifts in groceries costs are noticed by consumers
Figure 71: Perceived changes in spending on in-home food in 2016 compared to prior years, January/February 2015-17
Consumers remain conservative with extra funds, though there is a little wiggle room
Figure 72: How extra money is spent, January 2017
Millennial women less likely to put extra dollars towards debt in 2017
Chinese Canadians are prioritizing investments, eating out and long vacations
An improved perception of financial wellbeing bodes well for retailers
Multipurpose leisure/entertainment activities will be of interest
Some will want their extra money to go further, particularly fathers
THE CONSUMER – FINANCIAL CONCERNS AND OUTLOOK
What you need to know
The state of the economy weighs on the minds of Canadians
Figure 73: Current financial concerns, January 2017
Current financial situation limits ability to save – in their words
Young women most likely to show concerns
Figure 74: Current financial concerns (very concerned), women 25-34 vs overall, January 2017
For women 25-34, spending priorities will be informed by more immediate constraints
Few Canadians are concerned about the impact of the US elections on the Canadian economy
Figure 75: Attitudes towards economic impact of 2016 US elections, January 2017
THE CONSUMER – MIDDLE CLASS VALUES
What you need to know
Half of Canadians consider themselves to be middle class
Figure 76: Middle class values, January 2017
What being ‘middle class’ means – in their words
Younger consumers and lower-income Canadians are less likely to see themselves as middle class
Figure 77: Seeing self as ‘middle class’ and embodying ‘middle class’ values, by household income, January 2017
Brands can tailor offerings to help decrease the perceived gap
Giving back to the community a luxury not all can afford
Figure 78: Agreement with ‘I actively give back to my community’, by age and household income, January 2017
Brands can help consumers increase contribution through purchases
THE CONSUMER – CANADIAN PRIDE AND VALUES 
What you need to know
Oh Canada! We are a proud nation
Figure 79: Attitudes towards living in Canada, January 2017
Characteristics that make Canadians proud – in their words
Marketers should benefit from aligning with Canadian values
Figure 80: The Views Are Different Here, March 2017
Figure 81: Global Beer Fridge (Extended), June 2015
Canadian pride increases with age
Figure 82: Attitudes towards living in Canada, by age, January 2017
‘Made in Canada’ less of a draw for 18-34s
Chinese Canadians are the least loyal to Canadian products
Figure 83: Attitudes towards living in Canada, Chinese Canadians vs overall population, January 2017
Quebecers are also less proud
Figure 84: Bell Fibe TV commercial – Switch to Fibe TV, February 2017
Figure 85: Publicité Bell Télé Fibe – Passez à Télé Fibe, February 2017
THE CONSUMER – PERCEIVING INFORMATION BUBBLES
What you need to know
Canadians don’t feel trapped in information bubbles
Figure 86: Attitudes towards information bubbles, January 2017
Reliability of news stories on social media is questionable – in their words
Young Canadians feel they are influential on social media
Despite lack of feeling trapped, disruption will matter for brands
THE CONSUMER – CANADIANS VS AMERICANS: HOW EXTRA MONEY IS SPENT
What you need to know
Canadians are more inclined to prioritize debt reduction
Figure 87: How extra money is spent, Canada vs US, January 2017
Dining out is an area of opportunity to connect with older Canadian consumers
Figure 88: Putting extra money towards ‘paying off debt’ and ‘dining out’, by age, Canada vs US, January 2017
Horizons may be expanded by broadening occasions for Canadian Boomers
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Fan chart forecast
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
APPENDIX – MARKET 
Figure 89: Total Canada sales and forecast of overall expenditures, at inflation-adjusted prices, 2011-21
Figure 90: Total Canada sales and forecast of food (at home), at inflation-adjusted prices, 2011-21
Figure 91: Total Canada sales and forecast of food – Dining out market, at inflation-adjusted prices, 2011-21
Figure 92: Total Canada sales and forecast of alcoholic beverages (at home) market, at inflation-adjusted prices, 2011-21
Figure 93: Total Canada sales and forecast of alcoholic beverages (out of home) market, at inflation-adjusted prices, 2011-21
Figure 94: Total Canada sales and forecast of non-alcoholic beverages (at home) market, at inflation-adjusted prices, 2011-21
Figure 95: Total Canada sales and forecast of beauty and personal care market, at inflation-adjusted prices, 2011-21
Figure 96: Total Canada sales and forecast of OTC healthcare remedies market, at inflation-adjusted prices, 2011-21
Figure 97: Total Canada sales and forecast of household care market, at inflation-adjusted prices, 2011-21
Figure 98: Total Canada sales and forecast of clothing, footwear and accessories market, at inflation-adjusted prices, 2011-21
Figure 99: Total Canada sales and forecast of technology and communications market, at inflation-adjusted prices, 2011-21
Figure 100: Total Canada sales and forecast of vacations and tourism market, at inflation-adjusted prices, 2011-21
Figure 101: Total Canada sales and forecast of leisure and entertainment market, at inflation-adjusted prices, 2011-21
Figure 102: Total Canada sales and forecast of home and garden market, at inflation-adjusted prices, 2011-21
Figure 103: Total Canada sales and forecast of transportation market, at inflation-adjusted prices, 2011-21
Figure 104: Total Canada sales and forecast of financial services market, at inflation-adjusted prices, 2011-21
Figure 105: Total Canada sales and forecast of housing market, at inflation-adjusted prices, 2011-21

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