Do you have a sweet tooth? If your answer is yes, you are far from alone. Canadians love their sugar, be it chocolate, baked goods, ice cream, or candy. In Canada, establishments primarily engaged in manufacturing sugar and confectionary products compose 80% of sales in the industry, with chewing gum comprising the remainder of this amount.
Despite the small size of most of these delicacies, they come up big when it comes to total revenue. The Sugar and Confectionary Product Manufacturing industry recorded $4.1 billion in total revenues in 2004, increasing to $4.6 billion in 2012. That represents a 1.4% increase every year, although that number is not increasingly as rapidly in recent years. These days, the average consumer is prone to worrying about cavities. Sugar-free confectionery is the country’s largest growing segment within the industry as a result.
Canadian and American Sugar Relations
Antiquated legislation keeps US prices high for consumers and businesses alike. American sugar producers work hard to keep this legislation intact, which keeps prices high and forces businesses to turn to Mexico or Canada to expand their production. Canadian sugar costs much less, and Canadian sugar users have the significant advantage of competitive pricing. According to the Canadian Sugar Institute, the average price for refined sugar is 30-40% lower in Canada than it is in the United States.
In the twentieth century, members of the Canadian chocolate industry found themselves faced with similar problems experienced by their American counterparts. Before the negotiation of competitive dairy prices with the Canadian Dairy Commission (CDC) in the late 1990s, Canadian chocolatiers paid exorbitant prices for dairy products. Since 1966, the CDC remains a pivotal voice in facilitation between stakeholders and key players in the dairy industry, coordinating policy at the federal and provincial levels.
Lower prices for sugar means passing on the savings to the consumer as well. Given the high prices of American sugar, it is no surprise that 94% of overall Canadian exports go to the United States. Since the year 2000, exports have represented 26-45% of total sales.
Industry Profiles
Rogers Sugar & Lantic Sugar represents an impressive force in the history of sugar production within Canada. Started in 1888 with proud Canadian roots, they evolved in 1930 from sugar cane to sugar beet processing. Their facility in Taber, Alberta, which has been open since 1950, produces 35,000 acres of sugar beets each year for a processing capacity of 150,000 tonnes per year. In 1999, this plant witnessed a $50 million dollar expansion. They also doubled capacity at their Montreal facility with a $120 million expansion, helping keep Canadians employed at a well-established Canadian institution.
A Ferrero confectionary processing plant opened in Brantford, Ontario in 2006. Ferrero, the world’s fourth largest confectionary plant, benefits from locally home-grown Ontario hazelnuts in their production processes. Ferrero representatives determined that Brantford was suited for introducing their brand and product. In 2004, the Canadian government agreed, initiated an investment regiment of $5.5 million into the construction of the plant. They also supplied $1.7 million for employee recruitment.
The Canadian government has a history of providing government funding for food processors that support Canada’s vibrant agri-business industry. While Canada’s sugar and confectionary industry might not rank high in the average individual’s mind when it comes to Canadian food processing sectors, it is certainly prominent. The success of Rogers Sugar and the new Ferrero plant speak to this reality.
