Why 80% of Canadian Food Brands Get Rejected by Major Retailers

Breaking into major Canadian retailers—Loblaws, Sobeys, Metro, Costco, and Walmart—is the dream of most food and beverage brands. Yet, the reality is sobering: industry data shows that up to 80% of food brands that pitch to Canadian retailers are rejected. For small and medium producers, this rejection can feel like the end of the road. But in most cases, rejection has less to do with product quality and more to do with compliance, preparation, and retail readiness.

In this article, we’ll unpack the top reasons why Canadian food brands fail to secure shelf space and what you can do to avoid becoming part of the 80%.

1. Regulatory Non-Compliance

The number one reason retailers turn brands away is regulatory non-compliance. Canada’s food system is tightly regulated by the Canadian Food Inspection Agency (CFIA) and governed under the Safe Food for Canadians Regulations (SFCR). Retailers cannot take risks on products that may trigger recalls, fines, or reputational damage.

Common compliance failures include:

• Incomplete or incorrect Product Classification (e.g., misidentifying high-risk foods).

• Missing or inaccurate labels that don’t meet CFIA bilingual, allergen, or nutrition standards.

• Absence of a Preventive Control Plan (PCP) or Hazard Analysis and Critical Control Points (HACCP) documentation.

• Inability to provide traceability records for supply chain transparency.

If your compliance paperwork isn’t in order, retailers won’t even start the conversation.

2. Poor Labeling and Packaging

Retail buyers evaluate hundreds of products weekly. If your label has errors, is non-compliant, or simply doesn’t stand out on the shelf, you will be rejected.

Key pitfalls:

• Missing bilingual requirements (English and French).

• Improper or misleading health claims.

• Barcodes that don’t scan correctly.

• Packaging that isn’t retail-ready (e.g., weak seals, flimsy cartons, or designs that don’t meet shelf dimensions).

Retailers look for brands that show professionalism and attention to detail. A sloppy label signals operational weaknesses.

3. Weak Food Safety and Risk Management Systems

Retailers expect suppliers to prove they can prevent contamination, recall products quickly, and ensure consumer safety. Many small brands underestimate this.

Brands get rejected because they cannot provide:

• A recall plan demonstrating the ability to trace and remove products quickly.

• Proof of supplier verification and vetting of raw material sources.

• Clear documentation of food safety audits and risk assessments.

Without robust food safety systems, you represent risk—not revenue—to a retailer.

4. Pricing and Margin Misalignment

Even if your product is delicious and compliant, if the pricing model doesn’t align with retail expectations, buyers will walk away.

Mistakes include:

• Setting wholesale prices too high, leaving retailers no margin.

• Ignoring slotting fees and promotional costs.

• Failing to account for logistics, importer fees, or distributor markups.

Retail is a numbers game. Retailers expect partners who understand gross margins, landed costs, and promotional structures.

5. Lack of Retail Readiness and Scaling Capacity

Retailers won’t invest shelf space in brands that can’t meet demand. Many Canadian food startups are rejected because they:

• Lack the ability to scale production reliably.

• Cannot guarantee consistent fulfillment and delivery.

• Have no quality management system in place for growing volumes.

Retailers want to know you can grow with them. If you cannot supply 100 stores today and 500 tomorrow, you may not be ready.

6. Unclear Brand Story and Market Positioning

Retailers are bombarded with new pitches every week. A strong compliance foundation gets you in the door, but what closes the deal is a clear brand identity and differentiation.

Rejected brands often lack:

• A compelling value proposition for Canadian consumers.

• Evidence of market traction (local sales, farmers’ market performance, or online presence).

• Professional sales decks and product data sheets.

Retailers want confidence that your brand will drive sales once it hits the shelf.

The Bottom Line: Compliance is Your Golden Ticket

Retail rejection isn’t about whether your product tastes good—it’s about whether your brand is low risk and high reward. With CFIA compliance, robust food safety, proper labeling, and clear pricing strategies, Canadian food brands can flip the odds in their favor.

At AgriAssure, we help food brands avoid these pitfalls. From compliance assessments to label reviews, supplier verification, and PCP/HACCP documentation, our platform ensures you’re retail-ready and compliant with Canadian regulations.