Thursday, May 30, 2013

Alberta Venture: From the Farmer's Market to Supermarket- It's a Giant Leap

See Alberta Venture's April 2013 Issue for my piece titled: Secret Sauce.

Here's an excerpt:

While there may be an increase in consumer demand for local products, it still remains to be seen whether Alberta food processors can scale up to fully capitalize on it.

There are some notable success stories of Alberta food processers scaling up from the extremely local farmers’ market setting to retail shelves. CattleBoyZ BBQ Sauce, with its signature beer-style, latch-topped bottle, had its first retail sales in a small butcher shop in Calgary’s Eau Claire Market.
Now it’s sold in stores across Canada. Initially made and bottled in Joe Ternes’s kitchen, it was his family’s time-tested recipe. In 1994, Karen Hope was the Eau Claire Market manager, and she loved his sauce. Hope, a marketing specialist, and Ternes went on to form CattleBoyZ. Together they established the brand and found a manufacturer, and after a year of perseverance (and a bit of luck), the sauce was selling as a seasonal product in western Costco locations.

But the move from the farmers’ market to larger retailers’ shelves rarely happens so quickly. Another successful Alberta food processor, Kinnikinnick Foods, grew more organically, thanks mostly to the powers of the Internet. In the 1990s Kinnikinnick’s gluten-free baking products could be bought at Edmonton’s Old Strathcona Market, and at the time it was one of the few such products available. Jerry Bigam, the company’s current CEO, was a big fan and regular customer, and he decided to buy the company with the hope of expanding its operations. But after struggling to get shelf space at major retailers, he turned to online sales in order to grow the business. “We were the first company to supply perishable food on the Internet,” Bigam says. “For $10, we could deliver product anywhere in North America overnight.”

The online business helped them grow their sales by 60 to 70 per cent annually, and eventually major food distributors started calling them. They now supply product to 65 warehouses and 10,000 stores across North America. But for many local, small-scale processors interested in scaling up, there are significant and often systemic challenges. Ted Johnston, the president and CEO of the Alberta Food Processors Association, has some sobering advice for anyone looking to make the leap. “First,” he says, “they need to buy a giant bottle of Pepto-Bismol.”

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