Chocolate Production in Canada Industry Market Research Report Now Available from IBISWorld

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Persistently sluggish incomes will combine with weaker export growth to limit industry revenue growth. For these reasons, industry research firm IBISWorld has added a report on the Chocolate Production industry to its growing industry report collection.

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Persistently sluggish incomes will combine with weaker export growth to limit industry revenue growth.

The Chocolate Production industry transforms raw material such as cocoa beans, sugar and milk into a variety of products including chocolate bars, stuffed chocolates and premium chocolate boxes. In the five years to 2015, sluggish disposable income growth has kept revenue growth moderate, at 2.8% per year on average. Still, this includes higher projected growth of 3.3% in 2015 due to ongoing depreciation of the Canadian dollar and a subsequent boost of export revenue, bringing total revenue to $3.3 billion.

Traditionally, this industry has recorded high double-digit profit margins due to the high value added involved in the manufacturing process. “Still, profit over the past five years has been perturbed by volatile raw material prices, especially the price of cocoa,” according to IBISWorld Industry Analyst Amal Ahmad. The majority of cocoa beans come from West Africa, causing events in that region to greatly impact global supply and subsequent purchase prices. Falling cocoa prices through 2013 had relaxed industry costs and boosted profit to 17.5% of revenue. However, this trend has since reversed, with global demand for cocoa outstripping global supply and causing cocoa prices to soar. This is raising purchase costs for operators and limiting profit to an estimated 10.0% of revenue by 2015.

One bright spot over the past five years has been the industry's export markets. Since 2010, exports' share of revenue has increased substantially, aided by a stagnant Canadian dollar vis-a-vis the US dollar. “The United States is the primary destination for Canadian chocolate exports, with the premium boxed chocolate variety being the most popular export,” says Ahmad. This also buoys profit margins since premium chocolates can sell for consistently high prices.

Going forward, persistently sluggish incomes will combine with weaker export growth to limit industry revenue growth. Meanwhile, rising cocoa prices are anticipated to keep profit margins at bay. Operators are likely to respond to these twin challenges by focusing on products in favour with the market including artisan chocolates and healthy organic and dark chocolates.

For more information, visit IBISWorld’s Chocolate Production in Canada industry report page.

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IBISWorld industry Report Key Topics

This industry produces cocoa-based confectionery such as chocolate bars, boxed chocolates and filled and unfilled chocolate blocks. The production of chocolate-covered confectionery, such as chocolate-covered nuts, is also included within industry operations.

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
IBISWorld Inc.
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