Blame it on the Canadian Wheat Board – that’s Tom Droog’s excuse for starting his Spitz International sunflower seed business.
Droog grew up on a farm in Holland that produced sugar beets, potatoes, grain and flax.
“For Dutch standards we had a sizable farm – 125 acres,” he said.
Emigration must have been in the Droog family’s blood because one brother went to Brazil and another to Australia.
“I wanted to find the wild west, with big air and space,” so he settled in Alberta in 1972.
Droog met his wife and business partner, Emmy, in Ontario. She was also from Holland and grew up 10 kilometres from where Droog was born.
Droog worked for a while on a farm near Bow Island, Alta., and then in the oil patch. In 1975 he and Emmy were married and bought a farm near Bow Island. They planted their first Canadian crop in 1976.
The Droogs grew grain, sugar beets and flax in the early years.
“After a couple of years, we said there has to be a better way of doing things. Instead of bitching about the wheat board, I said let’s do something about it. So it’s all the wheat board’s fault that I got into this,” Droog said.
“In 1979 I grew my first crop of sunflower seeds. A little old lady phoned me and said, ‘can I buy some bird seed?’ I said, ‘what are you paying per pound?’ and she said ’38 cents.’ We were getting 10 cents at the time, so a light went on.”
The original sunflower seed business started in 1982. Droog’s initial plan was to build a bin, cleaning facility and storage for $150,000. An Alberta Agriculture bureaucrat got involved, encouraging the Droogs to start larger and offering grants and government loans.
“That was the first bureaucrat I listened to and it should have been the last one,” he said.”We came in at $450,000, then the BS started because interest rates went from 14 to 22 percent. But we persevered. Now we’re debt free, but I don’t want to go back to anything like that.”
In the early 1980s, Droog was selling sunflower seeds for bird feed, exporting the largest seeds to Spain, Taiwan and England. The business looked grim by 1986 but the Droogs held on, bought their first roaster in 1989 and sold their first package of Spitz sunflower seeds in 1990.
“That changed everything, because we did a few things right. We had a resealable bag and we were the first one to come up with flavours. In 1993 we bought Sid’s Sunflower Seeds, which was the biggest in Canada, brought up production and increased consumption 10 fold,” he said.
“We’re No.1 in Canada now. Five years ago we started in the States at No. 55 and we’re No. 3 right now.”
Spitz International has a distribution centre in Medicine Hat, Alta., with production and roasting facilities on the farm south of Bow Island. It also has a production facility in China that started a couple of years ago.
Spitz used a fleet of independent distributors until 2004. Then it signed an agreement with Old Dutch in Western Canada and Humpty Dumpty in Eastern Canada. Last year, Old Dutch bought Humpty Dumpty and now there are 600 trucks operating across Canada.
Droog contracted 210 acres of production when the business started.
“Now we’re up to 10,000 acres contracted. I’d say 70 percent are in Manitoba, with the other 30 percent in Alberta and Saskatchewan,” he said.
Droog said he sticks to a simple principle when running his business.
“I pay the highest price in the industry, but I demand the most. I have no fieldmen on the road. Don’t tell a farmer what to do. Just pay them well and tell them to produce the best product possible,” he said.
Droog said about 80 percent of the seeds he buys goes into the Spitz side of the business, with the remaining 20 percent sold in the bird seed market.
“Now we’re adding vitamins and minerals. We’re doing all kinds of things that’s good for people’s health. We’re really going after the health and wellness. And for part of the birdseed market I want to go into dehulling,” he said.
“We’ve got a packaging division in Calgary where we make packaging machines we designed ourselves. We’re fooling around with ozonated water systems. … And we’re going to try and double the size of Spitz in the next couple of years.”
At a 25th anniversary celebration in the summer of 2007, Droog had 85 employees on the payroll.
“It was a tremendous opportunity and we’re really glad that we’re in Canada. I couldn’t have pulled it off anywhere else in the world except Canada.”