Industry Analysis & Industry Trends
The strengthening loonie has made imported spirits relatively cheaper for Canadians, which has led to a decrease in revenue for the domestic Distilleries industry. Over the past five years, IBISWorld anticipates the value of the dollar to increase at a 1.2% annualized rate relative to the currencies of the country's major trading partners. Adding to industry woes, per capita alcohol consumption is on track to deflate about 0.8% per year on average over the same period. Thus, revenue is expected to fall at a 1.0% annualized five-year rate, including a 0.5% decline in 2013 to total an estimated $943.0 million.
Despite a contracting market for domestic brews, the Distilleries industry has seen an influx of new businesses... purchase to read more
Industry Report - Starting a New Business Chapter
The difficulty of entering this industry varies depending on the target market for new entrants. In general, production is highly capital intensive, and substantial volume is needed to spread out these costs. Additionally, the long interval between the start of production and the final product being available means that cash flows are not established for some time. While some products can be distilled over shorter periods of time, some whiskies can take over two years to age. Delayed revenue can deter players with smaller cash reserves from entering the market.
However, distilleries with low output can be formed with minimum initial expense. Due to the relationship between aging and quality, these players may still compete in the value-oriented segments of the market... purchase to read more