Confectionery Industry

Confectionery Industry

Confectionery Industry, a manufacturing sector made up of companies primarily involved in processing candies, chocolate and cocoa products and chewing gum. Confectionery manufacturing started to emerge as an important industry in the late 1800s. One of the earliest commercial operations, McCormick's Ltd, was established in London, Ont, in 1857. Robertson Brothers Ltd was in the candy business in Toronto by 1864, and Ganong Brothers opened in St Stephen, NB, in 1873. In 1873 Moirs Ltd, originally a bakery, commenced candy production in Halifax, NS. Robert Watson Co started in Toronto in 1874, and by 1879 Viau Ltée was in production in Montréal.

In Toronto, Patterson Candy Co was established in 1888, and the Cowan Co in 1890. Confectionery production greatly increased in Canada in the early 1900s with the establishment of several major producers, including William Neilson Ltd in Toronto in 1908, Willard's Chocolates Ltd, Toronto, 1914, and Fry-Cadbury Ltd, Montréal, 1920. Walter M. Lowney Co of Montréal and Walter Baker Co of Canada, Toronto, also became established during this period. In these formative years the industry was concentrated in Eastern Canada, a situation that prevails today, although in Western Canada a number of smaller manufacturers emerged during this period and new companies are still appearing.

During the past 2 decades, a considerable amount of plant consolidation has taken place. In 1961 the industry had 194 plants in production. By the end of the century Statistics Canada reported 94 plants in production: NS had 4; NB, 2; Qué, 29; Ont, 41; Man, 3; Sask, 0; Alta, 2; and BC, 13. As is the case in most other food sectors, the major cause of the reduction has been the steady phasing out of smaller, obsolete production facilities and their replacement with fewer, larger, highly efficient operations.

The confectionery industry is unique among segments of the Canadian FOOD AND BEVERAGE manufacturing system in that it is dependent on foreign supply for 2 of its primary ingredients: sugar and cocoa. Unfortunately, these commodities are subject to rapidly changing prices in spite of accords such as the International Sugar Agreement. This factor, in turn, can seriously affect the industry's sales volumes and profit margins. Any sharp increase in the international price of raw sugarcane or cocoa beans is quickly translated into increased production costs and higher consumer prices; a downturn in production volumes usually follows.

Steadily increasing provincial sales taxes are another indirect cost that can have a negative effect on industry sales. However, over the long term, production volumes in most categories have shown slow, steady growth. For example, in 1973 the industry produced 68 895 t of all types of chocolate products, including chocolate bars, boxed chocolates, seasonal novelties and chocolate products sold in bulk and other forms. By 1984 the production of chocolate confectionery had increased to 90 003 t. Similarly, in 1971, 16 772 t of chewing-gum products came off the industry's production lines; by 1984 this amount had increased to 19 565 t. Trends in sugar confectionery, which includes hard candy, pan goods (hard and soft) and similar products, fluctuate. In 1971 the industry produced 49 114 t of sugar confectionery; in 1984 the volume was 52 264 t.

Importation of hard-candy products affects the trend. The UK has always been a major Canadian supplier of high-quality candies, but imports are increasing from S American countries, notably Brazil and Argentina.

Statistics Canada reported that in 1997 the industry made shipments valued at $1.48 billion. The industry is represented by the Confectionery Manufacturers Association of Canada, Toronto.