Emerging Opportunities Birch Syrup Production in the Chapleau Crown Game Preserve … ·...

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Emerging Opportunities

Birch Syrup Production in the Chapleau Crown Game Preserve

A Feasibility Study

Prepared for the Northeast Superior Regional Chiefs’ Forum

By: Ecotrust Canada

April 2015

Feasibility Study – Birch Syrup Production in the Chapleau Crown Game Preserve

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This report has been developed to guide the ongoing work of the Northeast Superior Regional Chiefs’

Forum (NSRCF) and the NSRCF Elders Council. The research is intended to deepen understanding of the

potential for creating new forestlands business opportunities, adjacent to forestry, in the Chapleau

Crown Game Preserve (CCGP). The assumptions and predictions made in this feasibility study will be

confirmed during the summer/fall of 2015 – serving as a focus for work done by the region’s emerging

Guardians program. It is Ecotrust Canada’s intention that this work contribute to the ongoing dialogue

and experimentation that will enable the region to build a more resilient economy into the future.

Ecotrust Canada would like to acknowledge and thank the individuals and organizations who provided

guidance, support, and resources that contributed to this project. Particularly, the members and staff

with the Northeast Superior Regional Chiefs’ Forum; NSRCF Elders Council; Tembec Inc. in Timmins, ON;

Ontario Ministry of Natural Resources and Forestry regional staff and Chapleau District; Land

Information Ontario; and Northern Information Technology and Geomatics Cooperative (NITGC). We

acknowledge the financial support of Natural Resources Canada in making this project possible.


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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ......................................................................................................... 3

2. DESCRIPTION OF THE OPPORTUNITY – NON TIMBER FOREST PRODUCTS ......................... 4

2.1 Overview - Non-Timber Forest Products (NTFPs) ......................................................................... 4

2.2 NTFPs in Rural Canada .................................................................................................................. 5

2.3 First Nations and the NTFP Sector ................................................................................................ 5

2.4 Birch Sap and Syrup ...................................................................................................................... 6

2.5 Birch in the Northeast Superior Region of Ontario ....................................................................... 7

2.6 Map of Birch Distribution CCGP .................................................................................................... 8

3. DESCRIPTION OF THE PRODUCT MARKETPLACE FOR BIRCH SAP AND SYRUP .................... 9

3.1 Market Overview .......................................................................................................................... 9

3.2 Potential Competition ................................................................................................................. 11

4. ORGANIZATION AND INFRASTRUCTURE REQUIREMENTS ................................................ 12

4.1 Harvesting ................................................................................................................................... 12

4.2 Production ................................................................................................................................... 12

4.3 Marketing .................................................................................................................................... 13

4.4 Personnel .................................................................................................................................... 13

4.5 Business Structure....................................................................................................................... 13

5. SPECIAL CONSIDERATIONS FOR BIRCH SYRUP PRODUCTION IN THE NORTHEAST

SUPERIOR REGION ........................................................................................................................ 14

6. STARTING POSITION........................................................................................................... 15

7. FINANCIAL PROJECTIONS ................................................................................................... 16

8. KEY FINDINGS AND RECOMMENDATIONS ......................................................................... 17

9. FINANCIAL ANALYSIS .......................................................................................................... 18


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1. EXECUTIVE SUMMARY

The harvesting, commercialization, and benefits derived from non-timber forest products (NTFPs) cross

many aspects of forestry, policy, economics, community, ecological management, history, culture, and

politics. Many studies have looked into the future of non-timber forestry, as it is likely to be a key

component in the future of forestry and agriculture.

Creating a viable and well recognized NTFP sector in Canada is challenging. It is only in the last ten years,

and inconsistently, that Canada has begun to grow a body of information and technical capacity related

to the harvesting and processing of various NTFP products. This fact was evidenced by the challenges we

experienced finding relevant and consistently accurate information for this feasibility study.

The many decades of sole focus on forestlands as a source of timber has meant very limited investment

in a comprehensive inventory of non-timber forest products, no good data on the rates of utilization,

and limited technical development in this field. This lack of good data then hampers business planning

and negatively impacts capital raising so the opportunities that do exist are hard pressed to realize and

grow.

Other concerns cited around the development of the NTFP sector include: socio-economic problems

associated with a largely unregulated, cash-based economic activity; a transient workforce; resource-use

conflicts over harvesting methods (e.g. raking for mushrooms); the need to protect culturally significant

plants for First Nations use; and the lack of designated responsibility for the industry among government

agencies.

For this study, the research confirmed that there IS an opportunity for a successful birch sap and syrup

enterprise in the Chapleau Crown Game Preserve in the Northeast Superior Region of Ontario. It will

create a few seasonal employment opportunities, pay back its start-up capital, and make a modest profit

year over year. It is not going to be a game-changer in the world of economic development, but it does

hold very interesting potential to: (a) re-engage some of this region’s Aboriginal peoples in activities on

the land – something they want; (b) bring the forest industry and communities together around an

opportunity that can demonstrate a collaborate approach to resource management; and (c) introduce

one NTFP industry to the region in the hopes of adding other complementary industries over time as

resources and capacity develop.

Using key assumptions from the research, including a retail value of $90/litre for the finished syrup

product, and sales split evenly between retail and wholesale pricing, a business operation with 1000-

2000 taps annually would see revenues of $18,000-$40,000 per year and a net profit of $2,500-$22,000

annually. An operation of this size would utilize about 11 hectares of land in the CCGP and would

seasonally employ 5-15 people.


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2. DESCRIPTION OF THE OPPORTUNITY – NON TIMBER FOREST PRODUCTS

2.1 Overview - Non-Timber Forest Products (NTFPs)

NTFPs are products of the forest other than timber, pulpwood, firewood or wood products. Most often

included in the NTFP category are game animals and fish, fresh water, fruits and nuts, vegetables, floral

greens, medicines, craft botanicals, resins and fibers.

NTFPs are increasingly being considered as an option for economic diversification in communities that

are impacted by downturns in other resource sector industries around the world. Much of what we

know about this sector comes from the developing world where over the past two decades, there has

been a growing body of research, business and markets development as a means to boosting income for

poor people and encouraging forest conservation.

Across Canada, our shrinking forestry economy coupled with increased consumer demand for

alternative, healthy, organic and environmentally sustainable products, and naturopathic medicines, is

beginning to shine more business and community light on the economic potential of NTFPs. Although

the sector remains largely unregulated and poorly understood in Canada, many of our NTFP products

are finding their way into international markets including the USA, Korea, Japan, the Netherlands and

China largely through the perseverance of small business entrepreneurs.

Because the sector has not been a significant economic driver to date in Canada, the available and

current data on the number, size and types of industries remains limited. The statistics below, many of

them no longer current, offer only a whiff of the potential size and scale of this sector, and highlight its

importance for more rural, forest-based economies.

Canada produces 85% of the world’s maple syrup.

Maple products represent a $354 million dollar industry in Canada. In 2009 (the last data

inventoried), the country produced over 41 million litres of maple products, including maple

syrup.

The Christmas tree industry is worth about $39 million annually.

Canada is the world’s largest producer of wild (low-bush) blueberries. It exported $207 million

of fresh and frozen berries in 2014. Most wild blueberries are planted commercially in Quebec

and the Atlantic provinces as field crops.

In 2005, the Canadian Forest Service published statistics estimating the total value of NTFP trade in

Canada at $241 million1. In 2006, a national research report estimated the commercial value of NTFPs at

1.33 billion2. The truth likely lies somewhere in between. A 1999 estimate of NTFPs in British Columbia3

1 Canadian Forest Service, 2005 2 Wetzel, Duchesne, & Laporte, 2006 3 Wills & Lipsey, 1999


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showed the value at $275 million, but with the inclusion of forest services (i.e. ecotourism), that

estimate jumped to a value of $680 million.

The lack of current and accurate data hampers business planning in this sector and negatively impacts

capital raising. Other concerns cited around the development of the NTFP sector include: socio-

economic problems associated with a largely unregulated, cash-based economic activity; a transient

workforce; resource-use conflicts over harvesting methods (e.g. raking for mushrooms); the need to

protect culturally significant plants for First Nations use; and the lack of designated responsibility for the

industry among government agencies.

2.2 NTFPs in Rural Canada

Most NTFP activity is centered in rural communities which have traditionally been economically

dependent on natural resource extraction industries including forestry and mining. Business transactions

in the sector are through individuals and/or small to medium sized enterprises. Though a relatively

minor player in Canada’s overall economy in comparison to the traditional forestry sector, the

importance of NTFP activity to rural livelihoods, cultural survival, and economic diversification,

particularly where traditional natural resource industries are shrinking or leaving, should not be ignored.

2.3 First Nations and the NTFP Sector

NTFPs have important cultural, spiritual and sustenance values for First Nations, who have

demonstrated the use of these products for food, medicine, ceremony, tools, clothing and other uses

since time immemorial and, although today to a lesser extent, continue to do so.

Sustainable development of NTFPs potentially offers a wide variety of immediate benefits to First

Nations, including:

valuing and protecting traditional, subsistence, spiritual and cultural plant uses;

business and employment opportunities in a wide range of occupations, many linked with

traditional First Nations interests, knowledge and occupations;

opportunities to assume leadership in the development of a “new” industry; and

the ability to make informed decisions about the utilization of NTFPs in their territories,

emphasizing and protecting intellectual and territorial rights.

Although strategically situated to benefit from commercial developments within the NTFP industry, First

Nations seem to be participating largely in only entry-level positions such as seasonal harvesting, where

these opportunities provide an important cash contribution to limited incomes, and can be managed

intermittently with other part time employment. Limited experience with business development; a lack

of available information for business planning; too few people with the skills and experience to develop

and implement management plans for NTFPs on traditional territories; and capital raising challenges

have been cited as some of the entry barriers.

Nevertheless NTFPs hold increasing economic importance and as one of the only resource sectors for

which management and licensing/tenure arrangements (and therefore access restrictions) have not


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already been established. For this reason, many First Nations across Canada are showing keen interest in

having a business presence in the sector. Over the next 10-15 years, as a largely new economic frontier,

it is expected that Aboriginal peoples will be actively managing NTFPs within their traditional territories

under one or more of a variety of possible mechanisms, including interim measures agreements,

treaties, or arrangements with government agencies and/or other forestry interests.

Some current examples of Nations active in this sector include:

the Gitxsan Wilp Sa Maa’y Harvesting Cooperative, manufacturing huckleberry jam and other

products;

the Ktunaxa Nation’s successful native plant nursery;

Northern Delight teas from Nunavik; and

the Siska Traditional Products company, producing jellies, natural soaps, teas and herbal oils.

2.4 Birch Sap and Syrup

Birch syrup is a savory syrup made from the sap of birch trees, and produced in much the same way as

maple syrup. With a distinctive and mineral-rich caramel-like taste, the syrup is used as an ingredient

paired with pork or salmon dishes in sauces, glazes, and dressings, and as a flavoring in ice cream, beer,

wine, and soft drinks. Birch syrup is condensed from sap, which has about 0.5-2% percent sugar content,

depending on the species of birch, location, weather, and season. The finished product must be 66%

sugar or more to be classified as a syrup. As with all terroir products, different types of birch will

produce slightly different flavour profiles; some more copper, others with hints of wildflower honey.

Rather than being processed into syrup, the majority of birch sap collected in the world is used as a

beverage. It can be used as an ingredient in beer or wine; as a tea; and as a medicinal product. The sap is

rich in minerals, nutrients, enzymes, antioxidants and has only 2% sugar content. In addition to Canada,

purveyors of birch sap can be found in Europe, Russia and Asia.

The global production of birch sap and syrup appears to be relatively small. In 2004, one Alaskan

producer reported global production to be only at 1500 gallons (6000 quarts)4 and the Northeastern

States Research Cooperative5 estimates <5000 gallons (20,000 quarts) per year. Neither estimate could

be confirmed by available data. We do know that the bulk of product is produced in Alaska and Canada.

The economic value of birch sap and syrup is high, at $78.00 US/quart.

Because birch sap begins to flow just as the maple syrup season slows, many producers move their

existing equipment from maple to birch stands in order to maximize their seasonal production.

4 Kahiltna Birchworks, Alaska Wild Harvest 5 www.nsrcforest.org


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2.5 Birch in the Northeast Superior Region of Ontario6

Different species of birch can be tapped for birch sap and syrup production. White or paper birch (Betula

papyrifera) – a good source of sap – is the dominant birch species in the Northeast Superior region.

Experts in forest ecology contacted for the report describe white birch as ‘common’ or ‘very common’ in

the area. It behaves as both an early and late successional species, and is especially common close to

Lake Superior. In the Big Pic forest, there are birch dominated stands in southern areas adjacent to Lake

Superior, then mixed with aspen on sites with loamier soils further inland. According to the Forest

Resources of Ontario 2006 report, the NSFC region has some of the highest concentrations of white

birch in the province.

Yellow birch (Betula alleghaniensis) has much more limited distribution in the region, restricted largely

to Wawa and south. Paper birch is classed as a shade-intolerant tree and does not grow well when

overtopped by other trees or shrubs when young; it does respond well and quickly once individuals are

released by removal or thinning of competing vegetation.

Birch grows well on burned over or logged sites where it can form almost pure stands. Well-stocked

stands created by fire may have over 1,000 stems per hectare at year 10. In the natural succession of

species, paper birch usually lasts only one generation and then is replaced by more shade tolerant

species.

White birch is considered a relatively short-lived tree, reaching maturity by 60-70 years of age, and

rarely living beyond 140-200 years. In most cases, sap production is most successful on trees 20 years or

older.

Using a modeling methodology, the map (next page), produced by the Ecotrust Canada Knowledge

Systems team with data provided by Tembec and the Ontario Ministry of Natural Resources and

Forestry (ONMRF), demonstrates the potential abundance and distribution of birch stands of adequate

age class in the Chapleau Crown Game Preserve.

6 Excerpt from Opportunities for Non Timber Forest Product Development in the Northeast Superior Forest Community

Region, Royal Roads University, 2010


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2.6 Map of Birch Distribution CCGP


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The geographic modeling exercise completed for this report indicates that there are a number of

potentially suitable sites for birch sap in the Chapleau Crown Game Preserve. The potential suitable area

for birch sap extraction covers 1343 ha distributed throughout the Preserve. The majority of sites are

located within the Martel forest tenure (900 ha), followed by the Magpie tenure (270 ha) and Nagagami

tenure (145 ha).

All of the identified sites are crown land sites that contain 70-100 percent mature white birch stands (25

years or older) and are available for timber production. These sites are accessible by road, have a

density rate 0.6-1.8, above the 0.7 average rate throughout CCGP, (density rate is a qualitative

indicator), and high productivity potential (SC= 0-2. Site Class is a qualitative indicator).

With the exception of one site, all sites are productive forest areas which were regenerated

predominantly by seeding and which have been assessed as free-to-grow. Omitted from the final site

selection were areas eligible for harvesting within the next 12-20 years in the Martel and Gordon Cosens

forests; areas treated with aerial or ground spraying; and areas with Aboriginal cultural value.

3. DESCRIPTION OF THE PRODUCT MARKETPLACE

FOR BIRCH SAP AND SYRUP

3.1 Market Overview

Creating a viable and well recognized NTFP sector in Canada, and therefore for birch sap and syrup, is

challenging. It is only in the last ten years, and inconsistently, that Canada has begun to grow a body of

information and technical capacity related to the harvesting and processing of various NTFP products.

The many decades of sole focus on forestlands as a source of timber has meant very limited investment

in a comprehensive inventory of non-timber forest products, no good data on the rates of utilization,

and limited skill development in this alternative economic development field.

At this time we know only that the bulk of this product, between 1500 and 5000 gallons/year being

produced, is coming from Alaska, followed by Canada, Finland (primarily for home consumption), and

the Northwest USA. Spruce/birch forests – or ‘boreal’ forests, are ideal for sap production. Canada’s

production is estimated by some to be 2,000-3,000 litres/year, coming primarily from small producers in

Quebec; BC; Ontario, Manitoba and New Brunswick.

The conversion rate from sap to syrup is approximately 100 gallons of sap for 1 gallon of syrup. Maple

syrup, by comparison, averages 40:1. The birch sap, containing only 1-1.5% sugar, requires

concentrating the sugar to 67% through cooking/evaporation, to give the syrup its colour and distinctive

flavor.

Birch sap is most commonly seen in the market as a nutritional or medicinal drink, or as an ingredient in

beer, wine or tea. It finds its way primarily to markets in central Europe, Russia and Asia. There are many


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claims that birch sap drunk regularly helps reduce rheumatic joint problems and combats pollen

allergies and headaches. There are also reports about the general rejuvenating effect of the sap and that

it reduces hunger pangs caused by stress. Some farmers in the Netherlands give their cows birch sap in

spring to build them up quickly after the long winter. Birch syrup, on the other hand, is most commonly

used as a flavoring for meat or fish and is becoming a favorite niche product for professional chefs. It

should not be mistaken for its sweet and much more successfully marketed cousin, maple syrup, though

many producers of birch syrup are also engaged in maple syrup production.

On the business side, the birch sap and syrup industry is comprised primarily of individual producers

involved from harvest to market, including export – generally producing from trees on private tenures or

farms. Though much less common, there are a few mid-sized aggregator businesses buying raw sap from

tappers and managing the production to sales aspects of business. This research was unable to identify

any instances of tappers in Canada licensed to access and tap birch stands on Crown Land, which

suggests a potentially important new area of development for this industry.


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3.2 Potential Competition

An internet search and review of available literature and data suggests that market saturation is not the

primary obstacle to be overcome in the birch sap and syrup industry. A more significant challenge is to

be able to preserve birch sap for year-round consumption while still maintaining the flavour and health

benefits of fresh sap. Another other challenge is trying to supply a market for 52 weeks when the sap is

only running for less than a month each spring. This requires warehousing and strategic planning to

ensure a steady supply at an affordable price. There is also the need to build public awareness of these

products through marketing and outreach. Most people are originally skeptical of drinking tree sap and

must be convinced that this ‘forest drink’, in the case of sap, or this new birch syrup condiment, is a

sound choice. And finally, there are currently no health guidelines in Canada for producers. Though most

now producing on a small industrial scale are using the Alaska Birch Syrup Makers Association guidelines

to ensure product safety, this is not required.

The following limited list of producers was identified (and should be revisited during any subsequent

business planning exercise). Remembering that less than 5,000 gallons are produced annually, one can

assume that each of these production facilities is operating at a very moderate scale on land bases, it

seems, ranging from 5-25 hectares.

Oy Aurinkolehto Ltd, Susanna and Arto Maaranen, Tohmajarvi, Finland

Rocky Lake Birch Syrup, Johanna and Alan McLauchlan, Manitoba (producing ~ 140 gallons/year)

Sweet Tree Ventures, Laura Entzminger, Quesnel, BC

Moose Meadows Farm, Ted Traer, Quesnel, BC (producing Boreal Amber Pure Birch Syrup)

The Canadian Birch Company, Grand Marias, Manitoba

True North Community Coop, Thunder Bay, Ontario, (including 12 small local producers each carrying their own labels)

Kahiltna Birchworks, Talkeetna, Alaska

Forbes Wild Foods, Jonathan Forbes, Shelbourne, Ontario

Birch Boy Products, Haines, Alaska (the Chilkat Valley region in Southeast Alaska is estimated to

produce about a quarter of the world supply)

Tage Ronne, Denmark

Various, Russia: Although this research was unable to identify individual producers, Russia seems to be the only country where birch sap is being produced at an industrial scale, and hence where most of the production technology research and sap properties research is being conducted. Its transformation for various cosmetic, medicinal and edible uses is relevant to the soviet economic system.

http://sweettreeventures.com/

http://moosemeadowsfarm.ca/?doing_wp_cron=1398557813.9894480705261230468750


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4. ORGANIZATION AND INFRASTRUCTURE REQUIREMENTS (INCLUDING MARKETING)

4.1 Harvesting

The harvesting side of the birch sap and syrup business is not capital intensive year over year – requiring

only basic shelter, small equipment/tools, weigh scales and heating mechanisms. Some statistics

estimate that the average harvesting operation employs from 1 to 10 people and that the average

aggregating business employs 5-15 people, after buying raw product from multiple brokers.

Sap runs in the spring for a short period of 2-3 weeks and the timing and quantity of sap flow annually is

very weather dependent. Equipment requirements are minimal, including one spile per tree which is

inserted into a hole in the tree and directs the sap into a bucket for collection, clear plastic tubing, a

drill, hammer, and (optionally) a bucket with a lid.

Trees selected are to be at least 8” in diameter at breast height, and free of scars, lichen and fungi.

Because birch sap follows maple sap, the weather is generally warmer and therefore the sap more likely

to spoil so it needs to be collected and processed carefully and quickly. In some instances, sap buckets

are used at the point of collection and must be emptied every 24 hours to keep sap fresh and avoid

microbial activity. If it left for a longer period it will start to ferment from the yeast naturally present. At

other sites, each tap is connected to tubing that leads the sap to the production facility.

Harvesting sap does not damage the tree so long as the tapping is done well and scars are closed at the

end of each season. Tapping only takes 10-15% of the total sap production of a tree and each tree is

given a two year rest between tapping. On the human resources side, harvesters require only a short

period of training. Ideally training is done through mentoring to avoid damage to the trees.

4.2 Production

As previously noted, birch sap can be used as an additive to other products or converted to syrup. When

blended into a drink or medicinal product, birch sap is usually stabilized with sugar and citric acid and/or

treated with heat to protect it for year round consumption. The recipes are as varied as the producers.

Birch syrup is expensive to produce and truly a labour of love that uses a similar method as maple syrup

production – essentially evaporation designed to reduce the water and retain the sugar content of the

sap. The conversion rate of sap to syrup (~100-140 gallons of sap makes 1 gallon of syrup), and the heat

costs associated with this transformation are not insignificant. To reduce energy consumption, some

producers put their sap through a reverse osmosis machine to remove up to 70% of the water before

evaporation begins. The sap is then boiled in an evaporator until the sugar content reaches 32% and

then it is transferred to a finishing pan until the syrup has a sugar content of 67%. It is then immediately

bottled.

While the equipment used at this stage varies considerably by size and location of operations, the

minimum requirement is a small commercial kitchen complete with stainless steel pans and ventilation.


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4.3 Marketing

The majority of birch syrup is marketed online or through niche and specialty stores close to the sites of

production. While some amount of product does reach export markets, this is by far a smaller piece of

the Canadian birch syrup production.

The general trend is to market the product as a local specialty product – often associated with a family

or small group of local businesses.

Since Canada does not yet have health and safety standards for birch syrup production, many but not all

of the producers follow the Alaskan standards.

The price of product varies according to grade, ranging in Canada from $30-$95/litre. Due to the price

and general use as a condiment or seasoning, birch syrup is frequently sold in 125ml bottles.

4.4 Personnel

Mentoring and job specific training is the best way to develop a professional crew for this business.

Because the season is short and the field work very physical, it is not the job for everyone but is well

suited to younger people with an interest in working in the forest. It may prove to be an excellent role

for First Nations youth who wish to reconnect with their lands and culture.

Obviously people choosing to work in birch syrup production must also have another line of business to

accommodate for seasonal income fluctuations. Personnel working in the field as tappers can expect to

earn minimum wage. People working in the production facility or in the marketing end of a birch syrup

business, can expect to earn $16-$22/hour.

4.5 Business Structure

Most of the businesses reporting in this sector are family owned and operated, and are working on

privately owned land. They are most often structured as operations that include tasks from harvest to

market, some producing only their own product and others buying from independent tappers to create

an amalgamated supply. To provide more income stability, birch syrup is generally produced alongside

maple syrup to extend the season, diversify income and ensure a steady supply of product available for

the market.


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5. SPECIAL CONSIDERATIONS FOR BIRCH SYRUP PRODUCTION IN

THE NORTHEAST SUPERIOR REGION

1. Building a business proposition for birch sap and/or syrup that uses birch trees on crown land or

on forest tenures in the Chapleau Crown Game preserve will require special permissions and the

development of a business plan, including harvest schedules and transport, negotiated alongside forest

harvest planning. The fact that forest units containing significant amounts of birch are quantified for

most forest management plans provides a solid source of information for confirming the best sites for

this activity.

2. The commercial kitchen required for syrup production will likely have to be in a different

location than where the trees are tapped. This is an unusual arrangement in this sector and one that will

require careful logistics planning since sap must be processed within 24 hours. It will also result in higher

production costs due to transportation requirements.

3. The data available in Canada for supporting business planning and capital raising is limited since

this has not been a sector of economic importance to date.

4. Birch production businesses are relatively small in terms of employment numbers and very

seasonal. Consideration will have to be given to who benefits from this initiative, and how a business is

governed and managed. Whether this is an opportunity for individual entrepreneurs or a

cooperative/shared arrangement will need to be determined in consultation with the NSRCF and

communities.

5. Other concerns often cited around the development of the NTFP sector include: socio-economic

problems associated with a largely unregulated, cash-based economic activity; a transient workforce;

resource-use conflicts over harvesting methods; and the need to protect culturally significant plants for

First Nations use. In the context of alternative economic development in the NES region, each of these

issues raises flags that require further discussion as part of charting a successful forward course.

6. It is clearly recognized that the identification of potential sites is only the first step in negotiating

business activity in the CCGP, especially since this geography over time has been overlaid with forest

tenures. The absence of clear authority for the management of an emerging NTFP business opportunity

in this context (crown land, land use designation as a preserve, and tenured for forestry) is a limiting

factor for business planning.

7. The modeling exercise completed by Ecotrust Canada suggests a number of potential sites on

the CCGP where birch stands of a suitable age class and distribution exist alongside road access and

cutting plans as available. This information needs to be ground truthed as a key part of developing a

viable business plan.


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6. STARTING POSITION

The Chiefs in Assembly through the NSRCF have expressed an interest in gaining increased access to the

CCGP for alternative economic development activities. They have clearly stated that their intention is

NOT to disrupt the forest industry in the process, but rather to determine how best to create new

economic opportunities that can sit alongside timber harvesting.

The municipalities in 2013 agreed with this direction – voting unanimously for the development of a

conservation economy (benefiting communities first) across their region, using the CCGP as a starting

point.

The Ecotrust Canada report in 2014, Building a Forest Based Economy in the NES Region, demonstrated

the potential for NTFP business activity on 1% of the forested land base to both de-risk the local

economy through diversification, and to increase the opportunities for First Nations to be direct

beneficiaries of economic activity.

The North East Superior Forest Communities Program, funded by NRCan for seven years and concluded

in 2013, invested considerable funds in exploring NTFPs as an economic generator for the region. Their

2010 report ‘Opportunities for Non Timber Forest Product Development in the Northeast Superior

Forest Community Region, by Royal Roads University, suggested birch syrup as a high potential area

worthy of development. This assessment was further backed up by research done by the Faculty of

Forestry at the University of Toronto in 2013.

So it seems that the ecological and political case is made to explore this alternative economic

development option for the CCGP. It must be noted again however that the NTFP sector overall in

Canada remains under-documented and (therefore) under-capitalized. It also has no regulatory or

legislative conditions in Ontario and hence a lack of clarity around how it might be operationalized on

the land base.

This combination makes it necessary to do further work to negotiate access, establish regional operating

standards and rules, determine the best governance structure to ensure benefits accrue locally, and

build a shared commitment to exploration followed by development.

The proposed eSFL table could provide the necessary foundation for this work.


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7. FINANCIAL PROJECTIONS

The attached spreadsheet, based on interviews with current producers, attests to the fact that a

modestly successful birch sap and syrup business is achievable, in terms of capital requirements, and

revenue/expense ratios. It is not a business that is going to make a lot of people very rich.

The productivity of the operation depends on two key factors: sap production/tree and the sap to syrup

ratio. Assumptions for these figures were taken from two distinct studies for these projections, and the

results present a range of production and profitability potential.

Using key assumptions from the research, including a retail value of $90/litre for the finished syrup

product, sales split evenly between retail and wholesale pricing, a business operation with 1000-2000

taps annually would have revenues of $18,000-$40,000 per year respectively, and a net profit/loss of

$2500-$22,000 annually. To achieve this level of income, the tapping operation would need to use only

approximately 11 hectares, a small portion of the 878 hectares previously identified as potential birch

syrup production area.

A business of this size/scale would require modest set up costs at between $17,000 and $45,000 to

achieve taps of 600 to 2000 trees respectively. Variable costs for a bucket operation involving 600

taps/year would be $5700 in year one and $1400 in subsequent years. For a conventional tap and tube

operation of 1000 taps/year, the variable costs in year one are estimated at $5700 and $700 annually

thereafter. For an operation involving 2000 taps/year (large by conventional standards), the startup year

would see variable costs of $11,000 and subsequent year costs of $800.

Employment numbers are in the range of 8 people for set up; 4 people for 18-25 days during production;

and 2 people for 7 days to bottle, each earning $15-$20/hour.

The anticipated capitalization required for an operation of 1000-2000 taps is $50,000 ($45K equipment

and $5K working capital). The simple payback period would be 17 years for the lower productivity

assumptions, and two years for the higher assumptions. This reflects a very wide range of return on

investment, and further research would be necessary to clarify the actual production potential of the

birch stands in question.

The accompanying financial analysis, based on interviews with current producers, attests to the fact that

a modestly successful birch sap and syrup business is achievable, in terms of capital requirements, and

revenue/expense ratios. It is not a business that is going to make a lot of people very rich.


17

8. KEY FINDINGS AND RECOMMENDATIONS

Much of the NTFP literature overstates the potential for this industry as a key economic driver for rural

communities. This research concludes that to consider establishing a modest birch sap and syrup

operation in the Chapleau Crown Game Preserve has to include consideration of factors beyond profit-

making/taking.

The political and ecological rationale for starting a birch syrup enterprise in the CCGP has been

established. This region has expressed interest in seeking alternative economic development adjacent to

forestry, with an eye to opportunities that will be inclusive of the region’s Aboriginal populations. NTFP

development in the CCGP, even at a modest scale, seems an important starting point to realize this

intention.

The size and scale of an operation given the combined effect of current levels of forest activity in the

CCGP; the commitment of the NSRCF to not displace forestry; and the availability of suitable sites for

birch syrup production lead us to conclude that the region could establish an operation involving 1000

taps/year, producing 200-500 litres of syrup/year @ a sale price of $75-$90/litre, for a gross revenue of

$18,000 - $45,000/year.

The capital costs required to establish a business of this size are not onerous and can be repaid out of

cash flows although it may be necessary to consider non-conventional sources of capital since the

estimated payback period is closer to 15 years than the usually expected 7 years and the anticipated

return on investment is 5% not 7%. Coupled with the fact that this would be a start-up business, in a

sector that is not well understood, the identification of working capital may prove challenging.

The next important steps include ground truth potential sites for birch syrup production using the

emerging capacity of the NSRCF Guardians Program; and then negotiating with OMNRF and forest

tenure holders for permission and access to use those sites deemed suitable for production.


18

9. FINANCIAL ANALYSIS

Attached spreadsheets detail:

Key assumptions

Startup expenses

Production estimate

Production supplies

Production labour

Projected income and cashflow


KEY ASSUMPTIONS

General Assumptions value unit Source

Retail Value of Birch Syrup 90 $/L

Ecotrust Report: "Critical Resources Inventory Mapping in the Chapleau Crown Game

Preserve: Identifying Areas of Potential Opportunity" March 2015

Retail Markup 50 %

Matched assumption with University of Vermont Proctor Maple Research Center

report "Birch Syrup Production to increase the economic sustainability of maple syrup

production in the Northern Forest"

Wholseale Value of Birch Syrup 60 $/L Calculated using retail markup assumption

Potential production area 878 hectares

Ecotrust Report: "Critical Resources Inventory Mapping in the Chapleau Crown Game

Preserve: Identifying Areas of Potential Opportunity" March 2015

Tap density 90 taps/ha

Forêt modèle du Lac-Saint-Jean, "La transformation de la sève

du bouleau blanc en sirop"

Maximum tap potential 79020 taps Calculated using tap density assumption

Maximum productivity 1 18850.55 L syrup Applying Lac-Saint-Jean Model Forest Assumptions

Maximum productivity 2 42828.84 L syrup Applying commercial producer 2012 assumptions

Land required for 1000 taps 11.11111 hectares Calculated using tap density assumption

Yield Assumptions Lac-Saint-Jean Model Forest

Sugar content of the sap 0.7 oBrix

Sap:syrup ratio 124.5

Yield per tap sap 29.7 L/tap

Yield per tap syrup 0.238554 L/tap Calculated using sap:syrup ratio assumption

University of Vermont Proctor Study

Sugar content of the sap

0.74 oBrix

University of Vermont Proctor Maple Research Center report "Birch Syrup Production

to increase the economic sustainability of maple syrup production in the Northern

Forest"

Sap:syrup ratio 116.6421 Calculated using syrup & sap yield figures provided

Sap yield per tap 63.22 L/tap

Syrup yield per tap 0.542 L/tap





Forest"

Prepared by Ecotrust Canada April 2015


Operating Cost Assumptions value unit Source

Evaporation rate of evaporator 340.69 L/hr

Price for a cord of wood 16 inches 75 $

Burn Rate 0.25 cords/hr

Water reverse osmosis rejection rate70 %

Glass container of 250 ml per Unit 1.91 $

Labels per Unit 0.05 $

Overhead- includes retail costs,

website costs, packaging & shipping,

transportation, storage, credit card

charges, & utility use 1 $/tap annually

Collector Pipe Replacement Period 10 Years

Marketing Expenses3%

% of Gross

Sales

Equipment Lifetime 20 Years Personal Communication with CDL Eastern Ontario Agent

Loan Payback Period 20 Years Equivalent to Lifetime of Equipment

Limitations

Marketing & Overhead costs are based on broad '% of sales' assumptions that need to be further refined. Actual costs may be higher, especially for

scenarios with a higher % of retail sales. In the model, retail sales are assumed to be made online and no retail store costs are considered

Additional equipment, such as ATV, Snowmobiles, and other vehicles, may be necessary to operate the birch facility depending on location and

geographic circumstances.

Wildlife may cause some issues for vacuum tubing systems. A number of producers mentioned squirrels chewing the lines or larger animials causing a

disruption.

Debt Financing is assumed at 5% annual interest with payback over the 20 year equipment life. Actual financing terms may vary.

Assumed labour rates may need to be adjusted for local labour market conditions at time of business launch.





Forest"



STARTUP EXPENSES

Equipment & Materials- 600 taps

Unit Price #Units Total

Drill 150 2 $300

Drill Bits 16.5 6 $99

Tubing 63 3 $189

Transportation Tanks 460 1 $460

Storage Tank 650 1 $650

Plumbing Supplies 100 1 $100

Transfer Pump 150 1 $150

Insulation Board 57.5 4 $230

Firebrick 1.95 125 $244

Hightemp Mortar 79.95 2 $160

Diamond Blade 30 1 $30

Evaporator (2'*6') 4320 1 $4,320

Roof Jack 105 1 $105

Reverse Osmosis mini80 gal/hr 5995 1 $5,995

Finisher Stove 850 1 $850

Defoamer 8.7 1 $9

Pan Cleaner 16.85 1 $17

Skimmer 60 1 $60

Scoop 60 1 $60

Brush evaporator 8.4 1 $8

Brush inside of flues 16.5 1 $17

Brush under flues 43 1 $43

Hydrometer 10.75 1 $11

Hydrometer Cup 39.5 1 $40

Refractometer 239 1 $239

Refractometer 239 1 $239

Filters - Syrup 28 1 $28

Sugar Shack 3000 1 $3,000

Total $17,651

Source: The Birch Syrup Production Manual, Heloise Dixon-Warren



STARTUP EXPENSES

Equipment & Materials- 1000-2000 taps

Total

Evaporator (Wood 2.5 * 8) $15,320

Spare flat bottom pan $721

Slive valve 2 in $18

Pipe smoke 11 inches $303

Strain of the flue pipe $224

Hinged cap with spark arrestor $527

Evaporation pipe (12 inches) $362

Hat for evaporation fireplace $163

Reverse osmosis (600 gal/hr) & membrane $12,700

Vacuum pump (5HP) $3,480

Mechanical Transvideur (extractor) $1,450

Vacuum distributor $100

Three-way Valve PVC $76

Of sap storage tank (4*4*14ft) $2,122

Filtrate tank $991

Concentrating tank $893

Standard PVC Valve $9

Fittings & Pipes $100

Support for disc filter ring $29

Refractometer 0 to 32 oBrix $222

Refractometer 45 to 82 oBrix $222

Bimetallic thermometer (3*9 in) $50

Skimmer hole $61

Skimmer (not perforated) $58

Syrup cup (8 inches) $34

Brush radius (1/2*7 in) $22

Sleeveless brush (2*7 in) $19

3 wicks scoring $39

Pressure filter press (10 inches) $1,775

Multifunctional trolley $330

Subtotal excl. shack $42,421

Sugar Shack* $3,000

Total $45,421

Source: Translated from

Forêt modèle du Lac-Saint-Jean, "La transformaBon de la sèvedu bouleau blanc en sirop"

*assume same cost as for 600 taps



PRODUCTION ESTIMATES

600 Taps Lac-St Jean Avg Vermont Proctor Avg Unit

# of Taps 600 600 taps

Sap production/tree 29.7 63.22 L

Total sap production 17820 37932 L

Total syrup production 143.13 325.20 L

Amount produced 573 1300.8 250 ml jars

RO Efficiency 70% 70%

RO Throughput 300 300 L/hr

RO Time 59.4 116.6 hours

Amount Remaining 5,346 11379.6 L

Evaporation Rate 120 120 L/hr

Evaporation Time 44.55 94.83 hours

Total Processing Time* 103.95 211.5 hours

*Assumes 600 tap system described in the Birch Syrup Production Manual

Labour Cost of Processing Time 1,559.25$ 3,172.08$

1000 Taps Lac-St Jean Avg Vermont Proctor Avg Unit





Amount produced 954.22 2168.00 250 ml jars


RO Throughput 2271.75 2271.75 L/hr

1st run RO Time 13 27.83 hours

Amount Remaining 8910 18966 L

2nd run RO Time 4 8.35 hours

Amount Remaining 2673 5689.8


Evaporation Time 8 16.7 hours

Total Processing Time 12 25 hours

Comparative Processing Time without RO (hrs) 87.35 185.9 hours

Time Saved with RO 76 161 hours

Labour Savings with RO 1,133.54$ 2,412.87$ $

RO Payback Period (years) 11.2 5.3 Years



PRODUCTION ESTIMATES

2000 Taps Lac-St Jean Avg Vermont Proctor Avg





Amount produced 1908.43 4336.00 250 ml jars


RO Throughput 2271.75 2271.75 L/hr

1st run RO Time 26 55.66 hours

Amount Remaining 17820 37932 L

2nd run RO Time 8 16.70 hours

Amount Remaining 5346 11379.6


Evaporation Time 16 33.5 hours

Total Processing Time 24 50 hours

Comparative Processing Time without RO (hrs) 174.71 371.9 hours

Time Saved with RO 151 322 hours

Labour Savings with RO 2,267.07$ 4,825.74$ $

RO Payback Period 5.6 2.6 Years



PRODUCTION SUPPLIES

Variable Costs for bucket operation

# of Taps 600

Supplies Price ($) Startup Year Subsequent Years

Cleaning & Maintenance Supplies 25.00$ 25.00$ 25.00$

Prefilter Cartridge 4.50$ 4.50$ 4.50$

Filter Ring 6.95$ 6.95$ 6.95$

Kosher antifoam (200 grams) 7.25$ 7.25$

Prefilter cap 13.95$ 20.93$ 20.93$

Wood $75/cord 1,412.26$ 1,412.26$

Plastic Boilers (buckets) 4.75$ 2,850.00$

Lid 0.75$ 450.00$

Torches (Taps) 5/16 in 1.60$ 960.00$

Annual Total 5,736.89$ 1,469.64$

Containters & Bottling Price

250 ml containers 1.91 1,146.00$ 1,146.00$

Labels 0.05 30.00$ 30.00$

Annual Total 1176 $1,176

Other Costs Price

Liability Insurance 175 175 175

Maintenance & Repair of Equipment 2% of sales 357.83$ 357.83$

Profesional Fees, contributions, and training 750 750 750

Website & Marketing $2,500



PRODUCTION SUPPLIES

Variable Costs For Conventional Operation

# of Taps 1000

Supplies Unit Price ($) Startup Year Subsequent Years


Prefilter Cartridge (5 microns) 4.50$ 4.50$ 4.50$

Prefilter Cartridge (10 units) 12.75$ 12.75$ 12.75$

Filter Ring 6.95$ 6.95$ 6.95$


Filter paper 83.15$ 83.15$ 83.15$

Filter powder 41.95$ 41.95$ 41.95$

Wood 16' (with reverse osmosis) $75/cord 490.37$ 490.37$

Tube Collector Pipes, lateral tubes, torches, etc. 5.00$ 5,000.00$

Variable Total

Annual Total 5,746.92$ 739.67$


250 ml containers 1.91 1,910.00$ 1,910.00$

Labels 0.05 50.00$ 50.00$

Annual Total 1,176.00$ 1,176.00$

Other Costs

Liability Insurance 175.00$ 175.00$ 175.00$


Profesional Fees, contributions, and training 750.00$ 750.00$ 750.00$

Website $2,500



PRODUCTION SUPPLIES

Variable Costs For Conventional Operation

# of Taps 2000

Supplies Unit Price ($) Startup Year Subsequent Years


Prefilter Cartridge (5 microns) 4.50$ 4.50$ 4.50$

Prefilter Cartridge (10 units) 12.75$ 12.75$ 12.75$

Filter Ring 6.95$ 6.95$ 6.95$


Filter paper 83.15$ 83.15$ 83.15$

Filter powder 41.95$ 41.95$ 41.95$

Wood 16' (with reverse osmosis) $75/cord 490.37$ 490.37$

Tube Collector Pipes, lateral tubes, torches, etc. 5.00$ 10,000.00$

Variable Total

Annual Total 10,846.92$ 839.67$


250 ml containers 1.91 3,820.00$ 3,820.00$

Labels 0.05 100.00$ 100.00$

Annual Total 3,920.00$ 3,920.00$

Other Costs

Liability Insurance 175.00$ 175.00$ 175.00$


Profesional Fees, contributions, and training 750.00$ 750.00$ 750.00$

Website $2,500



PRODUCTION LABOUR

Labour Cost Assumptions Value Unit

Production Manager Contract Rate 20 $/h

Production Assistant Contract Rate 15 $/hr

Cleaning, Tapping, Production Preparation Foret St Jean Vermont Proctor

Days 2 2

Production Staff Required 8 8

Total Hours 128 128

Hours Per Tap* 0.08 0.08

Production Period

Days 18 25


Total Hours 576 800

Hours Per Tap 0.288 0.4

Filtering & Bottling

Days 7 7


Total Hours 112 112

Hours Per Tap 0.056 0.056

Total Hours Per Tap 0.424 0.54

Producton Assistance Labour Cost Per Tap 6.36$ 8.04

Production Manager Additional Cost 1,080.00$ 1,360.00$

Source for Production Labour Information:

Personal Communication with Glenda Hart, Co-Owner of Canadian Birch Company

Numbers provided were based on experience with their 2000 tap conventional operation with

modern Reverse Osmosis and vacuum tubing system



PROJECTED INCOME & CASHFLOW

Conventional Production with Tubing & Reverse Osmosis

# of Taps* 1000 (Equipment Range: 1000-2000 taps)

% Retail Sales 50%

Scenario 1) Margin Calculation Initial Cash Estimate

Lac-Saint-Jean Production Assumptions Marginal Cost/Tap 10.99$ Startup Equipment Cost* $45,421

Revenue/Tap 17.89$ Year 1 Working Capital 20,490.27$

Sap production/tree (L) 29.70 Gross Margin Per Tap 6.90$ Total 65,910.88$

Sap:syrup Ratio 124.5 Gross Margin % 39% Simple Payback Period (Years) 17.85

Production Revenues Startup Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15

Syrup Produced (L) 238.55 238.55 238.55 238.55 238.55 238.55 238.55 238.55 238.55 238.55 238.55 238.55 238.55 238.55 238.55

Retail Sales (L) 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28

Retail Price/Unit 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$

Retail Revenue 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$

Wholesale Sales (L) 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28 119.28

Wholesale Price/Unit 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$

Wholesale Revenue 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$

Total Revenue 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$

Variable Costs

Collector Pipes 5,000.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 5,000.00$ -$ 1.00$ 2.00$ 3.00$

Containers & Labels 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$

Wood Fuel for Evaporator 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$

Maintenance & Cleaning Supply 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$

Production Labour Costs 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$

Overhead- packaging & shipping,

storage, transportation 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$

Total Variable Costs 15,990.37$ 10,990.37$ 10,990.37$ 10,990.37$ 10,990.37$ 10,990.37$ 10,990.37$ 10,990.37$ 10,990.37$ 10,990.37$ 15,990.37$ 10,990.37$ 10,991.37$ 10,992.37$ 10,993.37$

Gross Income 1,901.20$ 6,901.20$ 6,901.20$ 6,901.20$ 6,901.20$ 6,901.20$ 6,901.20$ 6,901.20$ 6,901.20$ 6,901.20$ 1,901.20$ 6,901.20$ 6,900.20$ 6,899.20$ 6,898.20$

Fixed Costs

Fixed Production Expenses 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$

Liability Insurance 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$

Equipment Maintenance & Repair 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$

Professional Fees & Training 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$

Website & Marketing 3,036.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$ 536.75$

Total Fixed Costs 4,499.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$

Financing Expenses

Interest- 5% 3,295.54$ 3,130.77$ 2,965.99$ 2,801.21$ 2,636.44$ 2,471.66$ 2,306.88$ 2,142.10$ 1,977.33$ 1,812.55$ 1,647.77$ 1,482.99$ 1,318.22$ 1,153.44$ 988.66$

Net Operating Profit/Loss (5,894.24)$ 1,770.53$ 1,935.31$ 2,100.09$ 2,264.86$ 2,429.64$ 2,594.42$ 2,759.20$ 2,923.97$ 3,088.75$ (1,746.47)$ 3,418.30$ 3,582.08$ 3,745.86$ 3,909.64$

Loan Principal Payment 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$

Net Cashflow (9,189.79)$ (1,525.01)$ (1,360.23)$ (1,195.46)$ (1,030.68)$ (865.90)$ (701.13)$ (536.35)$ (371.57)$ (206.79)$ (5,042.02)$ 122.76$ 286.54$ 450.32$ 614.09$

Cumulative Cashflow (9,189.79)$ (10,714.80)$ (12,075.03)$ (13,270.49)$ (14,301.17)$ (15,167.07)$ (15,868.20)$ (16,404.55)$ (16,776.12)$ (16,982.91)$ (22,024.93)$ (21,902.17)$ (21,615.63)$ (21,165.31)$ (20,551.22)$





# of Taps* 1000

% Retail Sales 50%

Scenario 1) Margin Calculation Initial Cash Estimate

Lac-Saint-Jean Production Assumptions Marginal Cost/Tap 10.99$ Startup Equipment Cost* $45,421



Sap:syrup Ratio 124.5 Gross Margin % 39% Simple Payback Period (Years) 17.85

Production Revenues Year 16 Year 17 Year 18 Year 19 Year 20

Syrup Produced (L) 238.55 238.55 238.55 238.55 238.55

Retail Sales (L) 119.28 119.28 119.28 119.28 119.28

Retail Price/Unit 90.00$ 90.00$ 90.00$ 90.00$ 90.00$

Retail Revenue 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$ 10,734.94$

Wholesale Sales (L) 119.28 119.28 119.28 119.28 119.28

Wholesale Price/Unit 60.00$ 60.00$ 60.00$ 60.00$ 60.00$

Wholesale Revenue 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$ 7,156.63$

Total Revenue 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$ 17,891.57$

Variable Costs

Collector Pipes 4.00$ 5.00$ 6.00$ 7.00$ 8.00$

Containers & Labels 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$

Wood Fuel for Evaporator 490.37$ 490.37$ 490.37$ 490.37$ 490.37$

Maintenance & Cleaning Supply 100.00$ 100.00$ 100.00$ 100.00$ 100.00$

Production Labour Costs 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$ 7,440.00$

Overhead- packaging & shipping,

storage, transportation 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$

Total Variable Costs 10,994.37$ 10,995.37$ 10,996.37$ 10,997.37$ 10,998.37$

Gross Income 6,897.20$ 6,896.20$ 6,895.20$ 6,894.20$ 6,893.20$

Fixed Costs

Fixed Production Expenses 156.55$ 156.55$ 156.55$ 156.55$ 156.55$

Liability Insurance 175.00$ 175.00$ 175.00$ 175.00$ 175.00$

Equipment Maintenance & Repair 381.60$ 381.60$ 381.60$ 381.60$ 381.60$

Professional Fees & Training 750.00$ 750.00$ 750.00$ 750.00$ 750.00$

Website & Marketing 536.75$ 536.75$ 536.75$ 536.75$ 536.75$

Total Fixed Costs 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$ 1,999.90$

Financing Expenses

Interest- 5% 823.89$ 659.11$ 494.33$ 329.55$ 164.78$

Net Operating Profit/Loss 4,073.41$ 4,237.19$ 4,400.97$ 4,564.74$ 4,728.52$

Loan Principal Payment 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$

Net Cashflow 777.87$ 941.65$ 1,105.42$ 1,269.20$ 1,432.98$

Cumulative Cashflow (19,773.35)$ (18,831.70)$ (17,726.28)$ (16,457.08)$ (15,024.10)$





# of Taps* 1000 (Equipment Range: 1000-2000 taps)

% Retail Sales 50%

Scenario 2)

Vermont Proctor Study Production Assumptions Margin Calculation Initial Cash Estimate

Marginal Cost/Tap 12.95$ Startup Equipment Cost* $45,421



Sap:syrup Ratio 116.6420664 Gross Margin % 68% Payback Period (Years) 2.12

Production Revenues Startup Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15

Syrup Produced (L)* 542.00 542.00 542.00 542.00 542.00 542.00 542.00 542.00 542.00 542.00 542.00 542.00 542.00 542.00 542.00

Retail Sales (L) 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00

Retail Price/Unit 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$ 90.00$

Retail Revenue 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$

Wholesale Sales (L) 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00 271.00

Wholesale Price/Unit 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$ 60.00$

Wholesale Revenue 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$

Total Revenue 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$

Variable Costs

Collector Pipes 5,000.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 5,000.00$ -$ -$ -$ -$

Containers & Labels 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$

Wood Fuel for Evaporator 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$ 490.37$

Maintenance & Cleaning Supply 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$

Production Labour Costs 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$

Overhead- packaging & shipping, storage, transportation1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$

Total Variable Costs 17,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 17,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$

Gross Income 22,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 22,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$

Fixed Costs

Fixed Production Expenses 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$ 156.55$

Liability Insurance 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$ 175.00$

Equipment Maintenance & Repair 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$ 381.60$

Professional Fees & Training 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$ 750.00$

Website & Marketing 3,719.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$

Total Fixed Costs 5,182.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$

Financing Expenses

Interest- 5% 3,427.68$ 3,262.90$ 3,098.13$ 2,933.35$ 2,768.57$ 2,603.80$ 2,439.02$ 2,274.24$ 2,109.46$ 1,944.69$ 1,779.91$ 1,615.13$ 1,450.36$ 1,285.58$ 1,120.80$

Net Operating Profit/Loss 14,089.30$ 21,754.08$ 21,918.85$ 22,083.63$ 22,248.41$ 22,413.18$ 22,577.96$ 22,742.74$ 22,907.52$ 23,072.29$ 18,237.07$ 23,401.85$ 23,566.62$ 23,731.40$ 23,896.18$

Loan Principal Payment 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$

Net Cashflow 10,793.75$ 18,458.53$ 18,623.31$ 18,788.09$ 18,952.86$ 19,117.64$ 19,282.42$ 19,447.19$ 19,611.97$ 19,776.75$ 14,941.53$ 20,106.30$ 20,271.08$ 20,435.86$ 20,600.64$

Cumulative Cashflow 10,793.75$ 29,252.29$ 47,875.60$ 66,663.68$ 85,616.55$ 104,734.19$ 124,016.60$ 143,463.80$ 163,075.77$ 182,852.52$ 197,794.05$ 217,900.35$ 238,171.43$ 258,607.29$ 279,207.92$





# of Taps* 1000

% Retail Sales 50%

Scenario 2)

Vermont Proctor Study Production Assumptions Margin Calculation Initial Cash Estimate

Marginal Cost/Tap 12.95$ Startup Equipment Cost* $45,421



Sap:syrup Ratio 116.6420664 Gross Margin % 68% Payback Period (Years) 2.12

Production Revenues Year 16 Year 17 Year 18 Year 19 Year 20

Syrup Produced (L)* 542.00 542.00 542.00 542.00 542.00

Retail Sales (L) 271.00 271.00 271.00 271.00 271.00

Retail Price/Unit 90.00$ 90.00$ 90.00$ 90.00$ 90.00$

Retail Revenue 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$ 24,390.00$

Wholesale Sales (L) 271.00 271.00 271.00 271.00 271.00

Wholesale Price/Unit 60.00$ 60.00$ 60.00$ 60.00$ 60.00$

Wholesale Revenue 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$ 16,260.00$

Total Revenue 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$ 40,650.00$

Variable Costs

Collector Pipes -$ -$ -$ -$ -$

Containers & Labels 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$ 1,960.00$

Wood Fuel for Evaporator 490.37$ 490.37$ 490.37$ 490.37$ 490.37$

Maintenance & Cleaning Supply 100.00$ 100.00$ 100.00$ 100.00$ 100.00$

Production Labour Costs 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$ 9,400.00$

Overhead- packaging & shipping, storage, transportation1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00$

Total Variable Costs 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$ 12,950.37$

Gross Income 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$ 27,699.63$

Fixed Costs

Fixed Production Expenses 156.55$ 156.55$ 156.55$ 156.55$ 156.55$

Liability Insurance 175.00$ 175.00$ 175.00$ 175.00$ 175.00$

Equipment Maintenance & Repair 381.60$ 381.60$ 381.60$ 381.60$ 381.60$

Professional Fees & Training 750.00$ 750.00$ 750.00$ 750.00$ 750.00$

Website & Marketing 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$ 1,219.50$

Total Fixed Costs 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$ 2,682.65$

Financing Expenses

Interest- 5% 956.02$ 791.25$ 626.47$ 461.69$ 296.91$

Net Operating Profit/Loss 24,060.96$ 24,225.73$ 24,390.51$ 24,555.29$ 24,720.07$

Loan Principal Payment 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$ 3,295.54$

Net Cashflow 20,765.41$ 20,930.19$ 21,094.97$ 21,259.74$ 21,424.52$

Cumulative Cashflow 299,973.34$ 320,903.53$ 341,998.49$ 363,258.24$ 384,682.76$


Emerging Opportunities Birch Syrup Production in the Chapleau Crown Game Preserve … ·...

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