Syrup and Flavoring Production in the US Industry Market Research Report Now Available from IBISWorld

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Syrup and flavoring manufacturers are facing declining demand from the nation's soft drink producers. Health concerns over soda's sugar content and artificial sweeteners are causing consumers to move away from carbonated beverages, hurting demand for the syrups and flavorings used in their production. On the other hand, the influx of new drink products in response to changing consumer preferences will present an opportunity for growth to this industry, as will the rise of regional and niche drink markets. For these reasons, industry research firm IBISWorld has added a report on the Syrup and Flavoring Production industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Niche markets will provide opportunities, but rising health concerns will weigh on industry

The Syrup and Flavoring Production industry's prospects are inextricably tied to the downstream activities of soda and juice producers (IBISWorld reports 31211a and 31211c). However, according to IBISWorld industry analyst Agata Kaczanowska, “revenue from these downstream producers is declining as health-conscious Americans limit their consumption of such sugary beverages.” Because of the shift away from soda and juice consumption and significant mergers, IBISWorld expects industry revenue to decrease at an annualized rate of 8.5%, including a 1.7% drop in 2012 to $6.4 billion.

Through 2009, The Coca-Cola Company (TCCC) and PepsiCo dominated the Syrup and Flavoring Production industry. As the owners of well-recognized, highly valuable brands, these manufacturers exerted significant influence over downstream soft drink producers, like Coca-Cola Enterprises, eventually purchasing them in 2010. These mergers shifted TCCC and PepsiCo operations to the Soda Production industry, however, so syrup and flavoring producers' revenue plummeted 30.4% in 2010. “Additional mergers are expected to further dent revenue as these two former players integrate with other flavoring producers,” says Kaczanowska. “Yet the mergers benefited industry profitability because these operators had sold syrup and flavoring to the beverage behemoths in large quantities with lower margins.” With the two companies’ departure, The Carbery Group and M&F Worldwide Corporation lead the industry. Regional influences are very significant in the Mid-Atlantic and Great Lakes regions, but also in California and the West region, where establishments have continued to spread during the past five years. However, the Southeast region has experienced a proliferation of regional dominance since investment by syrup and flavoring manufacturers has increased markedly in order to balance supply with strong demand from soft drink makers in that region.

Demand for soda, dampened during the five years to 2012 due to increasing health awareness among consumers as programs like Michelle Obama's "Let's Move" campaign advertise the dangers of high sugar and sweetener consumption. Soda producers have also faced rising competition from energy drinks and ready-to-drink (RTD) tea. Price growth passed on to consumers has propped up industry revenue to some extent, but the change in consumer tastes away from soda and juice has offset this effect. Because revenue relies heavily on downstream demand, the fate of the Syrup and Flavoring Production industry lies in the hands of beverage producers. Syrup and flavoring producers will continue to be challenged by health trends, which are resulting in lower demand for sugary beverages. Evolving technology will likely increase operators' productivity, however; the key opportunities for industry players lie in newer niche areas, such as relaxation drink production. For more information, visit IBISWorld’s Syrup and Flavoring Production in the US industry report page.

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IBISWorld industry Report Key Topics

This industry primarily manufactures flavoring syrup drink concentrates and related products for soda fountains or beverage manufacturers. It excludes companies that generate a majority of revenue from other products such as drink production, powdered concentrates, table syrup, maple syrup, fruit juice and chocolate-, coffee- and dairy-based products.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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