Mapped: North America’s top food and beverages clusters

This article is part of a series that looks at the highest-density clusters in North America. This series includes entries on technology, advanced manufacturing, business services, life sciences, creative industries and finance and insurance.

In food and beverage production you add entirely new, highly specialized components – access to food producers, the specialized talent required for food and beverage production and, of course, close proximity to large-scale consumer markets.

One important yet oft-overlooked factor to consider is whether the regional business ecosystem has formed a true “cluster.” According to the Harvard Business Review, clusters drive innovation, productivity and new business growth and help businesses within the cluster scale.

How do you find a strong food and beverages cluster?

Site selectors use something called location quotient (LQ). In really simple terms, LQ compares an industry’s share of employment in an individual community with the national average. We’ve taken LQ measurements of North America’s top food and beverages communities to figure out a) whether there are any surprises and b) which ecosystems have the strongest clusters.

Here are North America’s top established and emerging food and beverages clusters:

What are you seeing?

If the circle is green, it’s a “true” cluster. If it’s red, then a cluster effect isn’t evident (also known as a “false cluster”). The circle size is representative of total cluster employment – the bigger the circle, the more employees. As you can see, a community can have high employment in a particular industry but NOT be a cluster.

Who sticks out for food and beverages concentration?

Notably, there aren’t a lot of true clusters. In Canada, Toronto and Montreal both stand out, and that’s about it in terms of bigger clusters. The few others that do exist are mostly concentrated around the Toronto-Waterloo Corridor in southern Ontario.

Let’s zoom in on the Toronto-Waterloo region:

That’s four communities that qualify as legitimate “true” clusters, all within ~100km/65mi of each other. These communities constitute the largest food manufacturing area in Ontario and the third-largest in North America. Toronto is also one of the largest metropolitan areas, and it doesn’t hurt Waterloo is within a one day’s drive of 150 million consumers – a particular concern in food and beverage.

Here are the top 5 large food and beverages clusters in North America – defined as high LQ communities with total cluster employment over 15,000:

1. Montreal – LQ = 1.298 – Total cluster employment: 31,255
2. Toronto – LQ = 1.216 – Total cluster employment: 42,890
3. Vancouver – LQ = 1.148 – Total cluster employment: 16,960
4. Chicago – LQ = 0.404 – Total cluster employment: 45,411
5. Seattle – LQ = 0.351 – Total cluster employment: 17,082

Here are the top 5 emerging food and beverages clusters in North America – defined as high LQ communities with total cluster employment under 15,000:

1. Guelph – LQ = 1.762 – Total cluster employment: 1,750
2. Waterloo – LQ = 1.692 – Total cluster employment: 5,590
3. Hamilton – LQ = 1.551 – Total cluster employment: 6,885
4. Quebec City – LQ = 1.005 – Total cluster employment: 5,035
5. Calgary – LQ = 0.723 – Total cluster employment: 6,580

The majority of the cities on both lists are in Canada.

Guelph stands out with an LQ of over 1.7. Generally speaking, an LQ score greater than 1 is good and less than 1 is bad. At the University of Guelph, the Ontario Agricultural College (OAC) – Canada’s largest and most renowned agricultural college – produces highly skilled graduates in food science, food and agricultural business and food industry management.

Waterloo’s food and beverages expertise is also impressive. The region’s processing sector features nearly 1,400 farms and more than 130 regional food manufacturers. We’re also home to leading research institutions and innovation hubs, including Conestoga College’s Institute of Food Processing Technology and the University of Waterloo’s RoboHub.

Furthermore, Waterloo has a central location along Canada’s 401 superhighway, with easy access to both domestic and international communities. This strategic location places us within a day’s drive of over 150 million consumers.