The health food industry in Canada continues to demonstrate strong growth despite ongoing economic headwinds, says Aaron Skelton, President and CEO of the Canadian Health Food Association (CHFA).
Based in Toronto, Skelton leads the CHFA, the country’s largest trade association dedicated to natural, organic, and wellness products.
“We’ve got a mission of getting more healthy living products into the hands of more Canadians,” he said.
Representing the full ecosystem—from retailers to distributors, suppliers, manufacturers, and brokers—the CHFA boasts a membership that spans the entire value chain. “We’ve been around for 61 years now,” he added, “so well steeped in the changes that have happened in the health food industry.”
Recently, the Association hosted CHFA NOW Vancouver, its bi-annual trade show spotlighting hundreds of natural, organic, and wellness (NOW) brands to a key retail audience. While enthusiasm for the “Buy Canadian” movement is strong, early-stage startups are facing significant hurdles, including a decline in seed funding in 2024 and Canada’s lagging behind other developed countries in innovation and productivity.
CHFA is working hard to improve the landscape for NOW brands. A highlight of the trade show was CHFA Launch Pad, where eight passionate entrepreneurs pitched live on stage in a Dragons’ Den-style competition for the coveted Most Innovative Product award. The winner, Vancouver’s Magic Scoop, secured a prize valued at over $60,000 and face time with decision-makers who can help fast-track their success.
Skelton noted the CHFA focuses on three major areas: hosting industry events, federal advocacy, and arming members with data-driven insights.
“We focus on getting the industry together, and we do that through a multitude of events throughout the year,” he said. “We do a lot on advocacy and lobbying work… and then we’ve established quite a large directive on research and insights.”
When asked how the industry is faring in today’s economic climate, Skelton emphasized its durability.
“It’s been quite resilient over the last couple decades and has seen—even through some tough economic challenges—some really positive growth,” he said. “Health Canada-approved natural health products… continue to see quite strong growth into the double digits year over year.”
However, he acknowledged the challenges that persist. “This sector has not been immune from some of the economic challenges—some of our own creation and some that have been brought to us,” he noted.
Because the industry largely comprises small- and medium-sized businesses, Skelton said anything that stifles innovation and entrepreneurship can be particularly damaging. “Whether that be just the cost of doing business, access to capital, or a general environment that is benefiting innovation—this sector has seen growth for sure, but there are definitely sub-stories in it of challenges imparted on it by the current economic conditions.”
Looking forward, CHFA’s focus includes continuing to increase awareness, advocate for regulatory improvements, and guide members through a complex retail environment.
“One [priority] is ensuring that we create awareness, both through our supplier networks but also with our retail partners on what Canadians are looking for,” Skelton explained. “We’re quite proud on the natural health product side that over 82% of Canadians are now using a natural health product on a regular basis.”
Reducing regulatory burdens is another core part of CHFA’s strategy.
“Working directly with Health Canada and government officials to ensure that we’ve got the right environment for these really inspiring and necessary small business stories is really important,” he said.
Another challenge for CHFA members is navigating the increasingly costly Canadian retail landscape. “Canadian grocery is quite consolidated, as you would know very well,” Skelton said. “The increase of cost of doing business with most of these larger retailers are notably high… trade spend, promotional spends, distribution expenses have really been going up faster than sales have.”
To support its members, the CHFA prioritizes delivering insights that help brands allocate resources effectively. “We try to work with our supplier partners to give them better research and insights so that they can make better choices, be more efficient and effective with where they’re putting their dollars,” said Skelton. “And sharing that back with our retail partners so they know what Canadian consumers are looking for.”
“I think we’ve been really proud of the work we’ve been able to do to connect the right businesses together,” he said. “Regulatory and lobbying work can get a bit of an echo chamber… so ensuring that we can play an important role in translating that for the audience to ensure our members can make the best decisions is something that we’re quite proud of doing.”
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