Surviving difficult times requires facing facts about future

A notice on a bulletin board at the University of Guelph caught the eye of Francis Lo 15 years ago.


It was for a competition called Project SOY (Soybean Opportunities for Youth) and launched Lo and his brother, Erik, on a roller-coaster ride that tested their resourcefulness and tenacity.


“In a way, I suppose what we faced is not too different than what a farmer does,” says Lo. 


“You plant your crop and if the weather or whatever doesn’t go your way, you have to get up the next day and make the most out of what you’ve got.”


The brothers, who came to Canada from Hong Kong in their teens, have accomplished a lot. Starting with a soy version of cream cheese that they concocted for Project SOY in 1998, Flamaglo Foods now produces spreads, dips and yogurts made from identity-preserved soybeans grown in Ontario in their plant in Cambridge, Ont. 


Their brand, Yoso, is carried by health and specialty stores as well as major grocery chains in Ontario, Quebec and Manitoba. Annual sales are more than $1 million.


They continue to develop new products — the latest is a cultured coconut yogurt — and they’re considering opportunities to expand to the United States and Asia.


However, there have been challenges every step of the way, beginning with the first batches of soy cream cheese, which they concocted out of tofu and vegetable shortening.


“It was a very rough prototype,” says Lo. “It wasn’t good at all and I ended up withdrawing it from the competition.”


It took nearly a year of work in their home kitchen before Lo, then 24, and his older brother, a food technologist with training in dairy technology and food science, had a recipe they were happy with. 


When Lo took samples to health food stores in Toronto, the response was enthusiastic.


“There was nothing like it on the market then, and everybody just loved the idea of a product like this being offered in a convenient format,” says Lo, who was finishing his agri-business MBA at the time.


That was just the kind of feedback the brothers were hoping for, and it seemed they were destined to follow in the footsteps of their grandfather, a legendary figure in the soy food business. 


K.S. Lo created a soy milk product in Hong Kong in 1940 and went on to make Vitasoy a major international corporation.


Success seemed just around the corner, so the brothers obtained financing, much of it from family members, and built a 9,000 sq. foot facility.


“To say we were optimistic is being kind,” says Lo. 


“It was not a very smart idea to have such a big plant. We gave ourselves a big cash flow challenge.”


There were many trying days. Erik had invented a unique manufacturing process, which was why they needed their own facility, and was always tweaking his recipe. 


He made many improvements, but there were also days when Lo would come back from sales calls to find the latest change hadn’t worked and the day’s batch ruined.


Meanwhile, Lo was learning how tough the food business is. Chains wouldn’t deal directly with him, distributors wanted his customer lists before taking him on and winning new customers was only half the battle.


“You might get a small chain of five stores, only to realize it was going to take six or 12 months just to earn back the merchandizing allowance,” he says.


“Then you’d get back to the plant and find out a batch was heated a bit too long and the colour was off, so we had no choice but to ditch the whole batch. Those days would be awful for us.”


So what got them through those difficult times?


“Identifying the problem and the challenge you face is the most important thing,” says Lo. 


“It’s not easy, but at least you know what you have to do.”


And that’s the real lesson here. If you lose a crop to drought or hail, it’s a one-off event. 


Lo and his brother realized early on it was going to take years to gain market share and pay for that big, expensive plant. So they put aside their dreams of overnight success and committed themselves to the long haul.


Given the cyclical nature of agriculture, many farmers will find themselves in the same boat at some point. If you do, says Lo, be honest in recognizing what you’re up against.


“It’s not easy, but it’s worth it,” he says. “At the end of the day, you will find out a lot about yourself and what you’re capable of.”

Archived columns from this series can be found at www.fcc-fac.ca/learning. Farm Credit Canada enables business management skill development through resources such as this column, and information and learning events available across Canada. 


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