Food producers find success in value-added

When facing marketing challenges, two Ontario companies revamped their businesses to provide consumers with new options

TORONTO — It took two crises for the owners of Canada’s largest duck producing operation to shift direction.

“We went from being a farm family to being a farm family business,” said Debbi Conzelmann,chief executive officer of King Cole Duck.

“We had to take another look at our business. Like many other farm businesses, it was like a roller-coaster and we decided we needed to get off that roller-coaster.”

Conzelmann, like Margaret Hudson of Burnbrae Farms Ltd. and Heather May Watson, executive director of Farm Management Canada, stressed the importance of having a sound business plan when they spoke here at the Canadian Food and Drink Summit late last year.

Conzelmann said her family’s first crisis arrived with the SARS outbreak in Toronto. Customers associated the respiratory illness with birds and so sales suffered, although the disease is not contracted by eating duck or any other fowl.

Then, three years later, the value of the Canadian dollar increased until it was at par with U.S. currency. At that point, 25 percent of the company’s business, primarily the sale of whole ducks, was in the United States.

“We were going head to head with U.S. competitors and we just didn’t have the efficiencies to play in that market,” Conzelmann said.

“We had to be smarter about the number of ducks we produced and what to do with those ducks.… We needed to be in retail as well.”

Family members decided diversification was the answer. Rather than selling whole, uncooked ducks, on which the business was founded 65 years ago, value-added products like roast duck, smoked duck, prepared breasts and legs and even kebobs were in-troduced.

The family also looked at sales from a geographic perspective and made some difficult decisions.

“We actually fired some of our customers. We decided where we wanted to go in selling our ducks.”

Communication was emphasized as well. There are regular family and employee meetings, including the regular monthly sisters’ meeting, at which issues are resolved and business plan adjustments are made.

King Cole Duck has its headquarters and a farm-direct retail store near Newmarket, north of Toronto. There are 14 production locations, 160 employees and domestic and international sales.

Traceability, food safety, husbandry and environmental stewardship are emphasized.

“We do everything from the egg to what you eat on your plate,” Conzelmann said.

Hudson said Burnbrae Farms, one of Canada’s largest producers of eggs, has had a similar experience to that of King Cole Duck but it was a different challenge that prompted its owners to rethink their business — the dramatic decline in Canadian egg consumption.

“We launched omega 3 eggs in 1996,” Hudson said.

“If you can change the conversation about your food, add value, you can have an impact on your gross margin.”

Other egg options were soon added. Today, Burnbrae offers everything from conventionally produced eggs to free-run eggs and several value-added products.

The challenge that began in the 1990s was about the perceived healthfulness of eggs, which Hudson said are one of the most affordable and complete sources of protein.

Now another challenge has since emerged: food activism.

“It’s never been trickier to navigate this system,” Hudson said.

“As a country, we cannot allow activists to drive the food system.”

Burnbrae has taken a proactive approach to the challenge.

Hudson said eggs have the lowest carbon footprint as a protein source and pointed to the five principles of sustainable food and farming her company embraces: food safety, animal welfare, economic viability, human health and well being, and environmental stewardship.

At the same time, Burnbrae has adjusted to consumer demand. While most of its eggs are produced conventionally, the company has also introduced free-run production.

As at King Cole, communications, internal and external, are an important part of the mix, Hudson said. There are three generations involved in the family operation and Hudson works with several siblings.

Watson said Burnbrae and King Cole Duck employ many of the strategies Canada Farm Management recommends.

While farmers are generally proficient when it comes to production, she said there are often opportunities to improve business management.

Toward that end, the organization conducted its “Dollars and Sense” study, which involved a survey of 604 Canadian farms and, among other things, identified seven top practices for success.

There are other practices, just as important or more so, Watson explained.

Seven practices tend to be em-braced by the most fiscally successful farm operators:

  • maintaining a willingness to learn
  • basing business decisions on accurate financial data
  • seeking help from business advisers and consultants
  • having a written business plan, following and reviewing it annually
  • knowing and monitoring cost of production
  • assessing risks and having a plan to mitigate those risks
  • using a budgetary and financial plan to monitor your position

Spurred by comments from her audience, Watson said it’s important to include the question of succession in a business plan when farmers are looking to pass their operations on to another generation.

Burnbrae Farms was founded in 1893 at the Village of Lyn in eastern Ontario. Today, the business employs 190 and operates processing facilities in Quebec, Ontario and Manitoba and grading stations from British Columbia to Quebec. It markets eggs and egg products to retail, food service and industrial customers across Canada.

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