Syrup & Flavouring Production in Canada Industry Market Research Report Now Available from IBISWorld

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Over the next five years, revenue will continue to decline, though at a slower rate, due to undercutting imports and healthy-eating trends that discourage high sugar consumption. For these reasons, industry research firm IBISWorld has added a report on the Syrup & Flavouring Production industry to its growing industry report collection.

The Syrup and Flavouring Production industry's prospects are inextricably tied to the downstream activities of food and beverage producers. However, according to IBISWorld industry analyst Agata Kaczanowska, “revenue from these downstream producers is declining as they consolidate and produce a higher share of syrups and flavourings in-house.” Downstream manufacturers are also increasingly likely to source from abroad as the Canadian dollar strengthens, making domestic products relatively more expensive. Because of the shift away from domestic sourcing and significant downstream mergers, IBISWorld expects industry revenue to decrease at an annualized rate of 1.2% to $129.0 million since 2008. An increase in demand from downstream beverage and food manufacturers is expected in 2013, boosting revenue 1.0% during the year.

Exports are estimated to generate 65.0% of revenue in 2013, up from 59.5% in 2008. “During the past five years, export growth was stimulated by operator expansion into growing markets for syrup and flavouring, including the United Kingdom and Australia,” says Kaczanowska. This helped support the industry despite unsteady domestic demand, which declined at a 7.2% annualized pace during the past five years despite a 109.3% spike in 2011. Evolving technology has heightened operators' productivity, enabling companies to consolidate operations and cut production costs. As a result, profit has expanded to 7.8% of 2013 revenue, from about 4.9% in 2008. Lowered costs included less production waste, which helped keep purchase costs low despite input price inflation. Operators were also able to cut wage costs by employing fewer production workers. Consequently industry employment is estimated to decline at a 5.5% annualized rate to 315 people in 2013.

The top four companies in the industry generate about 80.0% of revenue. The largest companies, Kerry Group PLC and Sensient Flavors Canada, are multinational corporations with diversified and globalized syrup and flavouring production operations. Meanwhile, the remaining industry players tend to have a niche product focus and sell exclusively in North America. The industry is expected to gradually consolidate as downstream food and beverage manufacturers also consolidate in order to maximize production efficiencies.

Because revenue relies heavily on downstream demand, the fate of the Syrup and Flavouring Production industry lies in the hands of food beverage producers. Syrup and flavouring producers will be challenged by healthy-eating trends, decreasing demand for sugary foods and beverages. Key opportunities for industry players lie in newer niche areas where innovative new flavours will help drive demand for products. Nonetheless, the loonie is forecast to strengthen and continue to result in cheaper exports from abroad cutting into revenue growth. Consequently, IBISWorld forecasts revenue will decline more slowly during the five years to 2018.

For more information, visit IBISWorld’s Syrup & Flavouring Production in Canada industry report page.

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IBISWorld industry Report Key Topics

This industry primarily manufactures soft drink concentrates, syrup and related products for soft drink production or soda fountain use. Establishments primarily producing maple syrup, chocolate syrup, flavouring extracts, powdered drink mixes or soft drinks are excluded from the industry.

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 and Canadian 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 http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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