By Mike OstermanPublished April 02, 2018 12:38:10Canada’s bag industry is growing, but supply chain managers are still struggling to keep up with demand.
Key points:Canadians are buying more than twice as many bags in the past year as they were in 2016Key points:”Bag makers are now producing about half of the total volume in Canada”Canadian bagmakers are now manufacturing about half the total amount of bags in CanadaThe country’s top bag makers are producing about three times as many items per day as they did in 2016, according to data from the Canadian Federation of Independent Business (CFIB).
This trend was partly driven by a rise in domestic demand, the data shows.
In the last year, Canadians have spent $1.4 billion on their bags, up from $800 million in 2015.
Bags made in Canada are being sold overseas, and overseas buyers are increasingly spending more on the products, according a report by the Canadian Association of Bag Manufacturers.
That trend is reflected in the overall price of bags, which jumped by more than 4% to $2,846 from $2.939 in 2016.
However, the CFIB report noted that Canadian buyers are spending more than $3 billion more per year than they were a year ago.
“This increase is due to the demand from international customers for bags, as well as higher retail prices, which have grown faster than the overall consumer price index,” the report states.
“We’re also seeing an increase in the demand for our products overseas, especially in the United States, Canada and Europe.”
The supply chain remains a problemDespite the increase in domestic consumption, the supply chain is still lagged behind, according the CFib report.
“Our findings are a good reminder that it is still a challenge to supply the demand we see in Canada,” said Mark Smith, the president and CEO of the CFIAB.
“As demand increases, so does the cost of manufacturing, and this means that Canadian producers are losing money, not just at the level of their retail products, but also through their overall costs to their suppliers and their end customers,” he said.
In response, Smith said the CFISB is reviewing its supply chain policy.
“The supply-chain management approach we are considering is an effort to help the Canadian industry succeed in the global marketplace,” Smith said.
“We want to help our businesses create a more sustainable supply chain and, by doing so, improve our overall economic competitiveness.”
The CFIB says it is exploring options to address this challenge, such as a national inventory management system and a uniform national bag standards system.