assessing an alternative solution to labour shortages in the food

Assessing an Alternative Solution to Labour Shortages in the Food and Beverage Processing Industry in the Prairie Provinces December 19, 2008

Prepared for:

Special thanks to the Agriculture and Food Council of Alberta and to the Agriculture Council of Saskatchewan for supporting and funding this project.

Prepared by: Meyers Norris Penny LLP Suite 400, Bell Tower 10104 – 103 Avenue Edmonton, Alberta T5J 0H8

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Assessing an Alternative Solution to Labour Shortages in the Food and Beverage Processing Industry in the Prairie Provinces

MNP CONTACT Andrew Raphael Director Agri-Food Meyers Norris Penny LLP Suite 1385, 200 Granville Street Vancouver, British Colombia V6C 1S4 Office 604-637-1567 Fax: 780-685-8594 Email: [email protected]

AFPA CONTACT Janet Henderson VP Training & Development Project Manager: Assessing an Alternative Solution to Labour Shortages in the Food and Beverage Processing Industry in the Prairie Provinces Alberta Food Processors Association Suite 100W 4760-72 Ave. SE Calgary, Alberta T2C 3Z2 Office 403-201-3657 Ext. 22 Fax: 403-201-2513 Email: [email protected]

Please contact Janet Henderson with any questions or comments.

AUTHORS: Andrew Raphael Andrea Mondor Scott Kennedy Deidre Louw

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TABLE OF CONTENTS

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

INTRODUCTION ..............................................................................................................................6 Project Focus ................................................................................................................................6 Project Overview ...........................................................................................................................6 Project Objectives .........................................................................................................................7 Project Approach...........................................................................................................................7 Project Qualifications ....................................................................................................................8 Confidentiality and Notation ..........................................................................................................8

FOOD AND BEVERAGE PROCESSING IN ALBERTA AND SASKATCHEWAN.........................9 Industry Profile – Alberta...............................................................................................................9 Industry Challenges and Opportunities – Alberta..........................................................................9 Industry Profile – Saskatchewan...................................................................................................9 Industry Challenges and Opportunities – Saskatchewan............................................................10 Consumer Trends Affecting the Food Processing Industry.........................................................10 Opportunities for Collaboration between Processors and Colonies............................................10

HUTTERITES .................................................................................................................................11 Population and Location..............................................................................................................11 Colony Membership ....................................................................................................................11 Agricultural Activity......................................................................................................................11 Other Business Activity ...............................................................................................................12

ALBERTA FINDINGS ....................................................................................................................13 Alberta Food Processors – Summary of Survey Findings ..........................................................13 Alberta Food Processors – Detailed Survey Findings.................................................................14 Alberta Processors – Focus Group Findings ..............................................................................26 Alberta Hutterite Colonies – Description of Colony Processing Activities ...................................28 Alberta Hutterite Colonies – Summary of Survey Findings .........................................................31 Alberta Hutterite Colonies – Detailed Survey Findings ...............................................................32 Alberta Hutterite Colonies – Focus Groups.................................................................................37

ALBERTA – INTERESTED PROCESSORS AND COLONIES.....................................................40

ALBERTA – MATRIX OF POTENTIAL MATCHES.......................................................................41

SASKATCHEWAN FINDINGS.......................................................................................................43 Saskatchewan Food Processors – Summary of Survey Findings ..............................................43 Saskatchewan Food Processors – Detailed Survey Findings.....................................................44 Saskatchewan Food Processors – Focus Groups ......................................................................55 Saskatchewan Hutterite Colonies – Summary of Survey Findings .............................................57 Saskatchewan Hutterite Colonies – Detailed Survey Findings ...................................................58 Saskatchewan Hutterite Colonies – Interviews ...........................................................................62

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SASKATCHEWAN – INTERESTED PROCESSORS AND COLONIES .......................................63

SASKATCHEWAN – MATRIX OF POTENTIAL MATCHES.........................................................64

ALBERTA AND SASKATCHEWAN – COMPARISON OF FINDINGS.........................................65 Processors ..................................................................................................................................65 Colonies ......................................................................................................................................65 Next Steps...................................................................................................................................65

STATUS OF MATCHES.................................................................................................................66

CONCLUSIONS AND RECOMMENDATIONS..............................................................................67 Conclusions.................................................................................................................................67 Recommendations ......................................................................................................................67

APPENDIX A: PROCESSOR SURVEY.........................................................................................69

APPENDIX B: HUTTERITE SURVEY............................................................................................79

APPENDIX C: PROFILES OF ALBERTA PROCESSORS INTERESTED IN PURSUING OPPORTUNITIES WITH HUTTERITE COLONIES .......................................................................86

APPENDIX D: PROFILE AND CONTACT INFORMATION FOR ALBERTA HUTTERITE COLONIES INTERESTED IN PURSUING OPPORTUNITIES WITH PROCESSORS................106

APPENDIX E: PROFILES OF SASKATCHEWAN PROCESSORS INTERESTED IN PURSUING OPPORTUNITIES WITH HUTTERITE COLONIES .....................................................................116

APPENDIX F: PROFILE AND CONTACT INFORMATION FOR SASKATCHEWAN HUTTERITE COLONIES INTERESTED IN PURSUING OPPORTUNITIES WITH PROCESSORS................129

ENDNOTES..................................................................................................................................133


EXECUTIVE SUMMARY

PROJECT OVERVIEW Until recently, Western Canada’s economy – particularly in Alberta and Saskatchewan – has experienced a period of exceptional economic growth. This rapid growth has presented challenges to achieving stable labour market equilibrium. The data collected for this report was collected before the global economic downturn which is impacting Canadian growth and resources. The full impact of this situation on the Alberta and Saskatchewan food processing sector remains to be seen. However, in these tough economic times, it is more important than ever to identify new, innovative approaches that can enhance the competitiveness of the food processing sector. This project helps to meet this challenge by providing the foundation for collaborations between food and beverage processors and the Hutterite Brethren, a relatively untapped resource that may be able to help processors reduce costs and improve access to labour and raw materials.

This project was initiated in 2007 by the Alberta Food Processors Association (AFPA) to address the need for labour and other resources that can enhance the food and beverage sector’s sustained competitiveness. The project assesses the capacity and interests of Alberta and Saskatchewan Hutterite colonies in establishing and/or expanding their food processing activities and, in turn, the level of interest among processors in pursuing business arrangements with Hutterite colonies. The Agriculture & Food Council’s “Advancing Canadian Agriculture and Agri-Food (ACAAF) Program” provided funding to AFPA, while the Agriculture Council of Saskatchewan provided funding to the Saskatchewan Food Processors Association (SFPA) with Meyers Norris Penny LLP (MNP) contributing in-kind resources as well as direct funding towards this project.

ALBERTA – SUMMARY OF FINDINGS A survey of 423 food processors along with interviews and focus groups with industry representatives was conducted to gather information about the sub-contracting, partnering or other business interests of Alberta processors. In particular, we assessed the interest among these organizations in exploring potential opportunities with Hutterite colonies. MNP received a total of 77 responses from processors for an 18% response rate.

• Responding processors indicated they were 47% “Somewhat Interested” and 18% “Very Interested” in entering into discussions about co-packing and other opportunities with Hutterite colonies.

• Some respondents commented that they are currently involved in business operations with Hutterite colonies. Others stated a general interest in exploring new opportunities overall. Still others stated a number of conditions that would be required in order to generate actionable interest in discussions with Hutterite colonies.

• For those who were disinterested in pursuing discussions (30%), a perceived lack of fit between the scale of their processing operation, and/or need for food security with the capacities and/or capabilities of the colonies was expressed.

• Of the 77 responding organizations and 2 organizations that became aware of the project that did not complete a survey, 19 Alberta processors authorized the publication of their contact information in this report as an indication of their interest in pursuing opportunities with Hutterite colonies.


A total of 174 Alberta Hutterite colonies were surveyed via fax, and a smaller subset interviewed either in-person or by telephone to gather information about colonies’ interest in sub-contracting and partnering opportunities with Alberta food processors.

• A response rate of 52% (91 of 174 colonies) was achieved among Alberta’s Hutterite colonies.

• A variety of colonies responded - from colonies with little involvement in market-focused food processing to colonies with long-standing market-focused food processing operations.

• Approximately half of respondents (48%) expressed degrees of interest in pursuing co-packing or contracting arrangements with food processors.

• Of the 91 responding colonies, 16 colonies authorized the publication of their contact information in this report as an indication of their interest in pursuing opportunities with food processors.

SASKATCHEWAN – SUMMARY OF FINDINGS A survey of 158 food processors along with interviews and a focus group with industry representatives was conducted to gather information about the sub-contracting, partnering or other business interests of Saskatchewan processors and, in particular, the interest among these firms in exploring potential opportunities with Hutterite colonies. MNP received a total of 35 responses from processors for a 22% response rate.

• Interestingly, this same distribution of interest was found in both Saskatchewan and Alberta. Responding processors indicated they were 47% “Somewhat Interested” and 18% “Very Interested” in entering into discussions about co-packing and other opportunities with Hutterite colonies.

• Some respondents commented on the opportunity to source additional production capacity. Others stated the opportunity to access an additional labour supply. Still others commented on how it could assist in meeting growing consumer demand for “buying local.”

• For those who were disinterested in pursuing discussions (30%) a perceived lack of fit with specific business requirements was expressed.

• Of the 35 responding firms, 12 organizations authorized the publication of their contact information in this report as an indication of their interest in pursuing opportunities with Hutterite colonies.

A total of 65 Saskatchewan Hutterite colonies were surveyed via fax, and a smaller subset interviewed either in-person or by telephone to gather information about colonies’ interest in sub-contracting and partnering opportunities with Saskatchewan food processors.

• A response rate of 89% (58 of 65 colonies) was achieved among Saskatchewan’s Hutterite colonies surveyed.

• A variety of colonies responded - from colonies with little involvement in market-focused food processing to colonies with some market-focused food processing operations.

• Twenty-four percent (24%) of responding colonies (14 of 58) expressed degrees of interest in pursuing co-packing or contracting arrangements with food processors.


• Of the 58 responding colonies, 6 colonies authorized the publication of their contact information in this report as an indication of their interest in pursuing opportunities with food processors.

IDENTIFYING PROCESSORS AND COLONIES COLLABORATIONS A two-step process was undertaken to assess which processors and colonies would be interested in pursuing potential opportunities. Initial surveys asked respondents to express interest and provide contact information for publication. Those who responded and provided this information were contacted by phone to further assess their specific needs and interests in pursuing opportunities with Hutterite colonies (Appendix B).

• In Alberta, 40 processors expressed initial interest with 19 confirming their interest during the interviews and further clarifying their specific business interests for this report.

• In Saskatchewan, 20 processors expressed initial interest with 12 confirming their interest during the interviews and further clarifying their specific business interests for this report.

Alberta’s 40 interested processors and Saskatchewan’s 20 interested processors were provided with the contact information for colonies appearing the “best fit” with their business needs in September and October 2008. “Best fit” was determined based on processors’ and colonies’ stated processing interests, capabilities, labour capacity, and geographic proximity gathered from the surveys and interviews. As of November 20, 2008, the following activities between processors and colonies were introduced or otherwise supported through this project’s activities and communications:

• Sundalanda Farms / Iron Creek Colony (Alberta): Sundalanda Farms has toured Iron Creek Colony and commented that they were “impressed” with the operations. The two may perform a test kill of bison in late November 2008.

• Greens, Eggs and Ham / Hairy Hill Colony (Alberta): Greens, Eggs and Ham currently sub-contracts Hairy Hill Colony and has identified opportunities for development of processing activities.

• Waggers Pet Products / Suncrest Colony (Alberta): Preliminary discussions have occurred.

• Country Mom Foods / Multiple Colonies (Alberta): Country Mom Foods is drafting correspondence for interested colonies to assess potential interest.

• Organic Ranchers / Multiple Colonies (Alberta): Organic Ranchers will be contacting colonies to assess potential interest.

• Prairie Spicy Foods / Multiple Colonies (Saskatchewan): Prairie Spicy Foods will be contacting colonies to assess potential interest.

CONCLUSIONS In consideration of the survey and focus group findings, as well as in-depth discussions with processors and colonies throughout this study:

• Interest appears to exist within these two groups in both Alberta and Saskatchewan to pursue business opportunities on a case-by-case basis.


• A number of Alberta and Saskatchewan food processors have stated levels of interest in exploring discussions with Hutterite colonies and verified their interest by authorizing publication of their information in this report.

• Successful business arrangements between food processors and Hutterite colonies exist today, although perhaps more commonly in Alberta.

• As can be seen within the food processing industry, or any industry, a significant range of interests and capabilities exist within Alberta Hutterite colonies.

• Some Hutterite colonies have indicated a willingness to diversify business activity and “build to suit” to demonstrate capabilities and proficiency in food processing and meeting contracted expectations.

• It is noted that because of the Colonies’ relative self reliance which includes access to their own source of capital for investing in ventures, the Hutterites are in a relatively good position to spend funds on strategic food processing collaborations on their Colonies during the current economic downturn.

• In keeping with the Hutterites cultural and religious beliefs they are looking for food processing development on their Colonies which are located in rural areas. Therefore government should consider the Colonies’ endeavours in food processing as part of its commitment to encourage sustained rural economic development and should support these initiatives accordingly through funding food processor associations to help implement the recommendations indicated below.

RECOMMENDATIONS With a view toward supporting these interests, and achieving practical business arrangements between these two groups, it is recommended that:

• A practical manual for processors and Hutterite Colonies be developed and distributed outlining a step by step guide on how food processors and Colonies can follow a transparent due diligence process, training program, payment options and contractual agreements. This proposed manual would guide them towards successful outsourcing relationships that clarify responsibilities and resources at the start of the relationships in order to build trust.

• To build the trust and understanding required for successful collaboration between processors and Hutterite Colonies, the associations should:

o Provide cross-cultural training to processors so that they can better understand the Hutterite culture and how to achieve mutual objectives.

o Provide training to Hutterites so that they can fully appreciate the dynamics of the food processing industry and resulting expectations and business obligations they must meet.

• Contacts be maintained with interested parties by establishing a registry to facilitate interaction between colonies interested in exploring opportunities with food processors and processors interested in seeking information about Colonies.


• Information be collected and reported on an ongoing basis to both colonies and processors on the successful business arrangements that have been completed or are underway between processors and colonies.

• Where an appropriate business case exists, a Hutterite colony or colonies:

o Undertake a pilot project to demonstrate the standards of performance with respect to food security, compliance with delivery, specifications, etc. that is required by the industry.

o Complete third party evaluation / specialized training to demonstrate the capacity and willingness to undertake long-term development of food processing operations.

o Communicate these achievements effectively within the food processing industry.

• To build trust, strategic interaction including visits by food processors to the most advanced Hutterite facilities to better understand opportunities should be encouraged. Food processor associations have an important role to play in this regard and should coordinate these strategic, trust-building study trips that can build on the information gathered in the project.


INTRODUCTION

PROJECT FOCUS The Alberta Food Processors Association (AFPA) and the Saskatchewan Food Processors Association (SFPA) – as non-profit organizations representing all segments of the food and beverage industry: growers, processors, retailers and foodservice buyers and service suppliers in Alberta and Saskatchewan – endeavour to assist their respective members in meeting long-term business objectives. With gaps in labour supply being experienced throughout the industry, AFPA and SFPA have investigated alternative methods for addressing these gaps. Assessing one such alternative – the potential to access excess food processing capacity within Alberta’s and Saskatchewan’s Hutterite Colonies – is the focus of this study.

It is noted that the data collected for this report was collected before the global economic downturn which is impacting Canadian growth and resources. The full impact of this situation on the Alberta and Saskatchewan food processing sector is still unfolding. However in periods of economic uncertainty it is essential to identify innovative approaches that can enhance the food processing sectors competitiveness. This project helps to meet this challenge by providing the foundation for collaborations between food and beverage processors and the Hutterite Brethren who are a relatively untapped resource that may be able to help processors reduce costs and access labour and raw materials.

PROJECT OVERVIEW Until recently, Western Canada’s economy – particularly Alberta and Saskatchewan – has experienced a period of exceptional economic growth. This rapid growth has presented challenges to achieving stable labour market equilibrium. Whether adequate labour supply exists and is sufficient to sustain prosperity in the long-term has been under discussion throughout sectors of the economy. Although estimates have varied, and continue to vary given the recent significant downturn in economic activity in the United States and internationally and the ancillary effects expected for the Canadian economy, significant labour shortages are forecast for the near and medium terms. Alberta Employment Immigration’s Occupational Supply and Demand Outlook, 2007-2017 forecasts labour shortages at approximately 111,000 during the next ten years – across all sectors.i A recent study (Fall 2007) of labour shortages in four key agri-food processing positions (labourers, machine operators, bakers and industrial butchers and meat cutters) cited a 15% vacancy rate among processing plants, 67% of plants experiencing vacancies, 48% of plants with vacancies of four months or longer.ii

Western Canada’s economic expansion combined with emerging and evolving trends in labour force demographics as the baby boomers reduce their participation or exit the labour force are presenting a sizeable imbalance between current and projected labour force participation and labour force demand. Increasing attention is therefore being focused on how public and private sector organizations can uncover and utilize untapped resource capacity within Western Canadian communities. Options under consideration include the increased utilization and efficiency of the current labour force and/or the identification of local or regional organizations that may have excess capacity in terms of labour and resources. Any viable option would have to address matching the existing opportunities to supply and demand for resources, limitations to each, opportunities for growth, training, and investment, and models of delivery.

To address this need this project was initiated in 2007 by the Alberta Food Processors Association (AFPA) to assess the capacity and interests of Alberta and Saskatchewan Hutterite colonies in establishing and/or expanding their food processing activities, and in turn, the level of interest


among processors in pursuing business arrangements with Hutterite colonies. The Agriculture & Food Council’s Program “Advancing Canadian Agriculture and Agri-Food (ACAAF) Program” provided funding with AFPA, SFPA and Meyers Norris Penny LLP (MNP) contributing in-kind resources as well as direct project funding.

PROJECT OBJECTIVES The desired outcomes and specific objectives of this project, as funded by ACAAF, were to:

1. Identify existing Hutterite food and beverage processing capabilities in Alberta and Saskatchewan.

2. Identify Hutterite colonies interested in expanding their processing capabilities and what skills training may be required.

3. Identify Hutterite colony interest in investing in food and beverage processing facilities on their colonies in collaboration with processors who have established markets and will sell their products.

4. Identify processor companies in Alberta and Saskatchewan that have a labour and/or processing need that could be solved by a relationship with a Hutterite colony.

PROJECT APPROACH Consultation formed a key part of this analysis – including the participation of AFPA and SFPA management, AFPA and SFPA membership as well as representatives of Alberta and Saskatchewan Hutterite colonies. Given the diversity of the project’s primary stakeholders – Western Canadian food processors and Hutterite colonies – a number of approaches were taken to collect information about the groups’ respective interest in pursuing potential business opportunities. The consultation process included focused stakeholder interviews, web- and fax-based surveys, work-shop style sessions, data collection and analysis, reporting and presentation. The project was undertaken during the period of January to November 2008.

Key attributes of this project’s work plan included:

• Assessing the level of interest among the two stakeholder groups (i.e., Western Canadian food processors and Hutterite colonies) to participate in the project.

• Developing customized data collection protocols to engage food and beverage processors, Hutterite colony representatives, and other relevant stakeholders.

• Gathering data from interested parties.

• Compiling data from the Hutterite colony representatives, provincial processors association members, and other relevant stakeholders.

• Identifying high-level commonalities between the two stakeholder groups’ needs and capabilities.

• Creating a matrix to facilitate potential matches between a processors and colonies.

• Identifying preferred approaches to collaboration from processors and colonies.

• Writing a report of findings.

• Presenting overall project findings.


PROJECT QUALIFICATIONS While this study specifically addresses the need to gather data relating to existing needs and abilities of Alberta’s Processors and Hutterite colonies, this project’s scope did not include the exploration of specific business arrangements between the two stakeholder groups nor the development of targeted recommendations with respect to possible business arrangements.

CONFIDENTIALITY AND NOTATION Given the sensitivity of this project and the competitive nature of some of the discussion surrounding business needs, MNP conducted the focus groups and surveys with agreed-to terms of confidentially. Stakeholder surveys were carried out as a key component of MNP’s project approach. Where possible, verbatim participant comments are provided, placed within quotation marks and italicized. Comments placed in [brackets] are the interviewer’s completion of participant references to other points in conversation. Comments are cited without direct attribution to individuals to preserve the confidentiality of participating organizations.


FOOD AND BEVERAGE PROCESSING IN ALBERTA AND SASKATCHEWAN

INDUSTRY PROFILE – ALBERTA Alberta’s food, feed and beverage industry constitutes the third largest component of the province’s manufacturing sector. Within Alberta this sector is comprised of meat/meat products; gains and oilseeds; beverage products; animal food manufacturing and other food products. In 2006 this sector accounted for more than $10.1 billion in value of shipments, which represented close to 15 percent of the province’s entire manufacturing shipments. Alberta’s processors employ over 27,000 individuals and account for nearly 20 percent of Alberta’s total manufacturing workforce. Food, feed and beverage exports were estimated to be valued at approximately $2.3 billion to international markets.iii

These international markets, with their complex competitive and regulatory environments, present both opportunity and challenge for Alberta’s processors. With pressures from a rapidly fluctuating Canadian dollar and oil prices that impacts Alberta’s economy, many processors have experienced market uncertainties and narrowing profit margins. Securing markets for high quality goods remains a focus. Alberta Agriculture and Rural Development has identified key strategic priorities needed to improve the long-term strength of the sector within Alberta’s economy: enhanced value-added activity, increased innovation and building a skilled workforce.iv

INDUSTRY CHALLENGES AND OPPORTUNITIES – ALBERTA While Alberta’s food, feed and beverage industry face unstable market conditions, factors relating to available labour and raw materials continue to present potential challenges to future economic growth. As found within other industry sectors in Alberta, processors are confronted with a significant challenge with respect to accessing and maintaining labour to sustain profitability. A recent study conducted on behalf of Alberta Agriculture and Food confirmed the critical impact of this situation by concluding that the median average estimated sales losses for an Alberta processor due to existing labour constraints was close to $200,000 annually. This same study concluded that while such initiatives relating to process improvements, automation and participation within the province’s foreign worker program have yielded positive gains, the existing and anticipated labour demand within this sector have yet to be successfully addressed.v Complementary solutions will therefore need to be identified to support the evolution and growth of Alberta’s processor sector and assist these organizations in reaching their full business potential.

INDUSTRY PROFILE – SASKATCHEWAN Saskatchewan’s food and beverage industry is the largest processing and manufacturing sector in the province, accounting for about one third of all manufacturing shipments. The value of food and beverage shipments from Saskatchewan manufacturers is currently estimated at about $2 billion annually. The sector employs approximately 7,000 people with annual wages of estimated at $227 million.vi

Approximately 300 food and beverage processors operate in Saskatchewan and the majority is small-to-medium size, with approximately 75 per cent having fewer than 20 employees. The largest food companies in Saskatchewan are primarily engaged in meat processing, dairy, flour milling/bakery products and beverage manufacturing. These companies are not located in any one geographic area but rather located in various cities and towns across the province with 60 per cent located just outside of the two major centers of Regina and Saskatoon.


INDUSTRY CHALLENGES AND OPPORTUNITIES – SASKATCHEWAN For Saskatchewan’s food processing sector, the Government of Saskatchewan has identified a number of key priorities.vii Investment in research and development, improved innovation and focus on value-added operations, enhanced risk management, additional programs and other supports to maintain a well-qualified workforce within the industry are included in these priorities. Saskatchewan processors highlight compliance with new labelling requirements and building market presence as key challenges to growth and sustainability in the sector.viii

CONSUMER TRENDS AFFECTING THE FOOD PROCESSING INDUSTRY In studies performed by the Canadian Federation Agriculture (CFA 2002) and Ipsos-Reid (2001),ix Canadians have indicated that “they pay a great deal of attention to the origin of their food and when asked, have expressed support for products from Canada.” Some of the findings include:

⇒ “90% of Canadian consumers felt Canadian grown product should be easily identifiable in stores.

⇒ 95% of consumers would prefer to buy Canadian grown product that is competitively priced.

⇒ 80% of those surveyed felt a “Canadian Label” concept was a good/very good idea, and the most appealing aspects were its quality attributes and ease of identification.

⇒ 46-50% of Canadian consumers were willing to pay premiums for “labelled” fruits, vegetables, poultry, beef, pork and grain products.”

Survey participants indicated that they have purchased Canadian goods to support the local economy and for better freshness and quality. CFA cites this study as evidence that Canadians, in general, seek safe, quality foods and environmental stewardship and have indicated a “willingness to change their purchasing patterns for a home-grown product”.

OPPORTUNITIES FOR COLLABORATION BETWEEN PROCESSORS AND COLONIES Consumer trends indicating preferences for locally sourced ingredients and fresher preparation provide support for the industry in seeking out local vendor and partner relationships – such as may be found with Hutterite colonies in Alberta and Saskatchewan. In addition, Hutterite colonies indicated in surveys for this study an available labour supply, on a seasonal, part-time and full-time basis. In Alberta, seven (7) colonies indicated seasonal availability, while ten (10) colonies indicated availability year round. In Saskatchewan, four (4) colonies indicated seasonal availability, while six (6) colonies indicated availability year-round.


HUTTERITES

POPULATION AND LOCATION Canada is home to approximately 320 Hutterite colonies. Approximately 60 to 160 people reside on a colony – for a total Canadian Hutterite population residing on colonies of approximately 25,000 to 30,000 individuals. Colonies are located in Alberta (160), Saskatchewan (50) and Manitoba (110) and comprise a significant component of the Canadian agricultural economy. MNP has estimated that colonies represent $1.5 billion of direct investment and $7 to $10 billion of economic activity in Canada per year.x

EXHIBIT 1-1: Geographical Distribution of Hutterite Colonies within Western Canada

COLONY MEMBERSHIP The Hutterite religion is a Christian institution and is open to all individuals to join. Members of the congregation have no legal rights to any property of the congregation and devote their working lives to the church as well as taking a vow of perpetual poverty.

Once a colony is established, assets are built up so that the colony can split and establish a new ‘daughter’ colony. When the split is complete, the cycle of growing and building assets will begin again in order to generate another new colony. The minister is the head of the colony with a number of other men forming the executive committee, or “witness brothers.” A second minister is often appointed at some stage so that when the colony splits a minister is at hand for each colony.xi

AGRICULTURAL ACTIVITY Members work on the colony, which is a mixed farming operation consisting of grain, hogs, dairy, chickens, etc. Generally, the typical farm is a 7,500 – 15,000 acre grain farm, with a 500 sow hog operation, 125 cow dairy operation, 7,500 bird layer operation as well as beef cattle, turkey and geese operations. These operations typically generate anywhere from $3 – $5 million in gross


revenue per year and approximately the same in operating expenses. Expenditures include commercial feed, fertilizer, chemical, fuel, seed, livestock such as hogs, cattle and poultry, building materials and supplies, equipment parts and supplies, groceries, dry goods, medical services, accounting, legal and other professional fees, property taxes, and income taxes, etc.

In addition, colonies have significant investment in capital each and every year. These capital purchases include trucks, farming equipment, barns and related feeding and livestock equipment, quota, land, homes, churches, schools, and kitchens etc. An average colony will spend anywhere from $100,000 per year to as much as $3 million per year depending upon the state of their operations. Each colony will “split” to create a new colony every 20 to 30 years at a current cost of $20 million (an average of $1 million per year for 20 years).

While colonies have diversified yet integrated operations, most of the expenses described above are a direct investment back into the communities in which the colonies reside. Colonies are not self-sufficient. They purchase all of the required raw materials, allowing them to do much of their own construction, fabrication, processing, etc. Colonies are agricultural producers. They need and purchase the same materials and inputs as the typical family farm.

In 1973, the 7,200 Hutterites in Alberta owned 580,000 acres — 1.2% of the total arable land. By 1997, Alberta's 151 colonies owned 1.5 million acres of land (1% of the total farmland) and produced one third of the dairy products, eggs, and hogs in Alberta and a significant percentage of the market’s down feathers. Ten percent (10%) of the country's milk supply came from Hutterite farms.xii

OTHER BUSINESS ACTIVITY Colonies seek profit from business activity to reinvest in their operations and cultural activities. Generally, each member of the colony is willing to carry out various responsibilities as a service to the colony. Income-producing work, such as farming and colony industries and the many services needed for the daily life of the community, are not differentiated.

Each person on a colony is assigned a job. Some assignments may be described as: carpenter, chicken man, farm boss, etc. Each person is in charge of a team with usually one or two helpers. Colony children leave school at age 15 and become full members of the colony workforce. Provincial Education Agreements set out terms for these individuals to apprentice in the colony operations.

Hutterites have pursued diversification and new technologies in their operations — they were among the first to use computers to manage cattle identification and feeding patterns and have set up wind-powered turbines where this was economically feasible.xiii Today, with poor returns in traditionally held agricultural pursuits (e.g., hog markets), many colonies are becoming increasingly interested in diversifying business activities on the colony. The range of market-focused activity includes metal fabrication, carpentry and furniture production, door and trailer manufacturing, as well as vegetable processing and flour milling.

It is noted that because of the colonies’ virtual self reliance, which includes access to their own source of capital for investing in ventures, the Hutterites are in a relatively good position to spend funds on strategic food processing collaborations on their Colonies during the current economic downturn.


ALBERTA FINDINGS

ALBERTA FOOD PROCESSORS – SUMMARY OF SURVEY FINDINGS A detailed discussion of responses to the survey is provided following this section. The survey instrument can be found in Appendix C. A high-level summary of the findings from the survey of Alberta food processors to assess their interest and needs with respect to pursuing co-packing and other business arrangements with other organizations and Hutterite colonies includes:

Survey Representativeness • A response rate of 18% (77 of 423 organizations) was achieved among Alberta’s food

processors. • A variety of organizations responded: from start-ups to major employers in the industry. • Responding organizations offer a wide range of products and services. • Responding organizations’ markets are predominantly within Alberta and Canada.

Processors’ General Interest in Pursuing Contracting Opportunities • Approximately half of respondents expressed degrees of interest in pursuing co-packing or

contracting arrangements with other organizations. • A greater degree of interest was indicated for pursuing co-packing or contracting

arrangements “to access labour” and “to access raw materials” than “to access additional production capacity,” “for co-packing,” or “to access capital”.

• When qualifying contracting opportunities, on average, respondents rated “Food safety and quality controls,” “Food security,” “Quality of raw materials,” and “Contractual guarantees” as the most important qualities for consideration. Ethics / management history of contractors as well as the contractor’s ability to comply with specifications were also noted as important in comments from respondents.

Processor Interest in Pursuing Contracting Discussions with Hutterite Colonies • Respondents indicated they were 47% “Somewhat Interested” and 18% “Very Interested” in

entering into discussions about co-packing and other opportunities with Hutterite colonies. • Some respondents commented that they are currently involved in business operations with

Hutterite colonies. Others stated a general interest in exploring new opportunities overall. Still others stated a number of conditions that would be required in order to generate actionable interest in discussions with Hutterite colonies.

• For those who were disinterested in pursuing discussions (30%), a perceived lack of fit between the scale of their processing operation / and or need for food security with the capacities and/or capabilities of the colonies was expressed.

• Almost half of responding organizations (49%) are willing to provide training to colony members. While some (38%) are willing to sell equipment to Hutterite colonies that is no longer required.

Processors Interested in Pursuing Opportunities with Hutterite Colonies • Of the 77 responding firms and 2 organizations that became aware of the project that did

not complete a survey, 19 organizations authorized the publication of their contact information in this report as an indication of their interest in pursuing opportunities with Hutterite colonies.


ALBERTA FOOD PROCESSORS – DETAILED SURVEY FINDINGS

Survey Recipients A web- and fax- based survey of 423 food and beverage processors was administered during April and May 2008 to gather information concerning the sub-contracting and partnering interests of processors and in particular, the interest among these firms in exploring potential opportunities for co-packing or other business arrangements with Hutterite colonies. (Survey provided in Appendix A.)

Food and beverage processors that were selected to receive the survey were identified from the AFPA membership list as well as other industry lists. Personally addressed survey requests were delivered via e-mail or fax to senior decision-makers within each organization. Telephone, fax, and e-mail reminders were issued over the course of the survey period. MNP received a total of 77 responses for an 18% response rate.

Survey Respondents Alberta’s food processing industry includes an array of product and service offerings. Of the 77 responses received the primary product and service offerings provided by participating processors were Meat; Specialty foods; Ethnic foods; Bakery; Frozen entrees; and Snack foods (Exhibit 2-1). Other products and service descriptions highlighted by respondents include coffee roasting, spa products, wine processing, fruit grower, ingredient manufacturer and others.

EXHIBIT 2-1: Respondents by Product and Service Offerings What categories are your primary products and service offerings?

0

2

4

6

8

10

12

14

16

18

Animal

feeds

/ prod

ucts

Meat

Fish

Poultry

Specia

lty fo

ods

Ethnic

foods

Organic

food

s

Fruits

/ veg

etable

s

Grains

/ cere

als

Pulse c

ropsPas

ta

Bakery Dair

y

Frozen

entre

es

Meal re

place

mentsHerb

s

Sauce

s

Condim

ents Oils

Bevera

ges

Alcoho

lic be

verag

es

Snack

food

sHala

l

Koshe

rOthe

r

Product Categories

Num

ber o

f Com

pani

es

n = 77

* Respondents checked multiple categories


Responses were received from smaller and larger firms. Forty-eight percent (48%) of respondents had annual revenues in their prior fiscal year of $2,000,000 or less (Exhibit 2-2), 25% had annual revenues exceeding $2,000,000; while the remaining 27% of survey respondents selected “I prefer not to answer”.

EXHIBIT 2-2: Respondents by Size of Firm In the last fiscal year, what were your company’s annual revenues?

0

5

10

15

20

25

Under $500,000 $500,000 to $2,000,000 Greater than $2,000,000 I prefer not to answer

Revenue

# of

Res

pond

ents

n = 77


The majority of respondents firms (68%) employed 25 or fewer full- and part-time employees (Exhibit 2-3). Nearly all respondents (76 of 77) reported a year-over-year increase in revenues in the most recent fiscal period. One firm was headquartered in a Canadian province other than Alberta; while all others citied an Alberta city of town as the location of their headquarters.

EXHIBIT 2-3: Respondents by Number of Employees How many full-time employees do you have? How many part-time employees do you have?

0

5

10

15

20

25

30

5 or fewer 6 to 15 16 to 25 26 to 50 51 to 100 101 to 350 More than 350 No answer

Total Number of Employees

# of

Res

pond

ents

n = 77


The vast majority of responding firms generate revenue from the Alberta marketplace (60 of 77 respondents generate 40% of their revenues or more from sales of their products in the province of Alberta). Revenues are also generated from other Canadian, North American and international jurisdictions, although to a lesser degree (Exhibit 2-4).

EXHIBIT 2-4: Respondents by Market To what degree are the following jurisdictions current markets for your organization’s products?

3

3

6

8

8

5

8

5

3

4

7

16

4 6

60

29

-80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80

Alberta

Elsewhere in Canada

U.S.

Taiwan/Hong Kong/China

Japan

Europe

Middle East

Other International

Opp

ortu

nitie

s

0% 1 to 9% 10 to 19% 20 to 39% 40% or greater

No Revenue Generated Revenue Generated

n = 77

70 60 50 40 30 20 10 0 10 20 30 40 50 60 70

68

69

56

72

73

7

23

80 70 60 50 40 30 20 10 0 10 20 30 40 50 60

2


General Interest in Co-packing and Contracting When asked about general interests in contracting, many responding processors expressed interest in entering into co-packing or contracting arrangements with other organizations. Accessing labour and raw materials were of particular interest, while access to additional production capacity and capital generated slightly less interest in average (Exhibit 2-5). For each category, however, 10 processors or more selected “extremely interested” when asked “[t]o what degree would your organization be interested in entering into co-packing or contracting arrangements with other organizations”.

EXHIBIT 2-5: General Interest in Co-packing and Contracting To what degree would your organization be interested in entering into co-packing or contracting arrangements with other organizations?

4

5

5

6

23

21

10

4

9

9

7

6

8

5

11

20

10

10

18

13

3

13

15

9

4

-60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70

To access raw materials

To access additionalproduction capacity

For co-packing

To access labour

To access capital

Opp

ortu

nitie

s

Slightly interested Interested Somewhat interestedVery interested Extremely interested Not interested/No opinion

Not Interested or No Opinion Interested

n = 77

60 50 40 30 20 10 0 10 20 30 40 50 60

33

15

35

35

19

In general, comments provided about each firm’s particular needs with respect to co-packing or contracting arrangements focused primarily on five specific themes:

• Access to federally inspected meat processing facilities; • Filling of specialty sized co-packing orders (large and/or small volumes); • Acquiring shipping boxes or other specific packaging requirements; • Co-packing of produce; and • Provision of transportation and distribution services.


Areas of Priority when Qualifying a Contracting Agreement When evaluating contracting opportunities, processors’ emphasis, when averaged, shows that the quality of raw materials, food security, food safety and quality controls and contractual agreements rate as “very important” when pursuing a co-packing or contracting arrangement (Exhibit 2-6). A host of other qualities – from processing capacity to training requirements to third party audit status – also factor into contracting decisions for many respondents.

EXHIBIT 2-6: Processors’ Contracting Priorities Qualities of Contracting Arrangements Average*Purchasing 1 = Not at all important

Supply of raw materials 5.1 2 = Not that importantQuality of raw materials 6.1 3 = Slightly importantCost of raw materials 5.9 4 = ImportantAccess to organic raw materials 3.1 5 = Somewhat important

Raw Materials Production 6 = Very importantCapacity to produce materials 4.4 7 = Extremely importantQuality of raw materials produced 5.9 0 = No opinionCost to produce raw materials 5.4

Finished Production / Processing * Average of all responses excluding "No opinion"Production / processing capacity 5.4 Production / processing methods 5.9 Specif ic production / processing protocols 5.7

LabourLabour attraction 5.1 Labour retention 5.4 Quantity of labour supply 5.2 Quality of labour supply 5.8 Cost of labour supply 5.7 Training and development 5.3

Regulations and LegislationHACCP certif ied 5.8 Federally inspected operations 5.1 Provincially inspected operations 5.2 FDA registration 4.6 Food security 6.2 Kosher certif ied production lines 2.8 Certif ied Organic 3.1 Halal certif ied production lines 2.6 Food safety and quality controls 6.6 Third party audit 5.4

Co-packingSource and supply ow n raw materials 4.4 Co-packing capacity 4.9 Co-packing methods 5.2 Shipping and labelling capacity 5.4 Waste management and by-product handling 4.5 Equipment and operator safety 5.6 Transportation and handling 5.9 Environmental 5.4

Business Management and Finance Access to additional sources of f inance 4.0 Proximity to your plant 4.7 Proximity to your market 4.5

OtherInsurance 5.9 Contractual guarantees 6.0 - please specify


In addition to rating the qualities provided in the survey, respondents offered comments on other qualities not stated in the list that they viewed as necessary for the consideration of potential contracting or co-packing arrangements. Comments typically focused on two themes:

1. Ethics and the contractor’s management history; and the 2. Contractor’s ability to comply with specifications.

Several respondents commented on the need to have a “good fit” with their partners. Professionalism, ethics in business practices, trust, management commitment, communication style and observation of confidentiality were highlighted.

• “An ethical workplace, in terms of how business relations are handled” • “Ethics. Won’t deal with someone who is not ethical. Need to be honest business. When

they say something they mean it.” • “Honest, trust and good faith.” • “Integrity of market protection…and transfer of intellectual property, including product and

market information.” • “Timeliness. Honesty.” • “Commitment.” • “We try to establish long-term ethical relationships based on honesty. Open

communications.” For some respondents, the need for compliance and the processes and procedures to support assurance of compliance with particular requirements and specifications were highlighted.

• “Labelling must be consistent.” • “Audit process for quality.” • “Need to have a well defined and robust quality system.” • “Produce to spec; use production method; no raw material substitutes.” • Production line must be the same as ours and freezer capacity.” • “Recipe control, quality control, following the contract exactly.” • “Chilling of product and ensuring what is shipped is nitrogen packed, ensuring stability of

product they are shipping.” • “Continuation of operations and ability to supply items contracted for and at agreed pricing.”

Interest in Exploring Opportunities with Hutterite Colonies Respondents were asked to rate their levels of interest in pursuing co-packing or other contracting opportunities with Hutterite colonies. Sixty-five (65%) of responding processors indicated that they would have some degree of interest in entering into discussions about co-packing and other opportunities with Hutterite colonies (18% were very interested and 47% were somewhat interested). Of the remaining respondents 30% indicated that they had no interest in discussing opportunities with Hutterite Colonies; while 5% had no opinion.


Somewhat Interested47%

Very Interested18%

Disinterested30%

No Opinion5%

EXHIBIT 2-7: Interest in Exploring Opportunities with Colonies To what degree would your organization be interested in entering into discussions about co-packing and other opportunities with Hutterite colonies?

Processors that indicated an interest in reviewing potential opportunities with Hutterite colonies were asked to explain why their organization would be interested in such opportunities.

A few respondents indicated that they have had or are currently engaged in business arrangements with Hutterite colonies.

• “We are currently using some resources from Hutterite colonies (Mechanics, Plumbers, Welders…). There is potential in expanding that to meat processing.”

• “We are presently using Hutterite labour at our location but should you be able to contract a better price, we would be interested in participating. As well, if we process new products in the future, we may be interested in wider opportunities.”

• “Both my businesses are based in the niche market area and Hutterite colonists could fit into that type of marketing situation in my opinion and are already producing at least one of my products.”

Many expressed general interest with respect to how the colonies might address capacity issues within the processor organizations.

• “We are looking to expand and would need a company to look after the packaging is possible.”

• “We do not have our own plant and will need co-packing in the future.” • “We have an opportunity to supply a large volume item to a retailer; however our production

capabilities are limited.” • “I am a small business and growing. Would be interested in pursuing.”


• “We do not have a packaging line in-house. We are about to launch a new line of products. Right now we send out all of our filling to an outside source. We’re always open to looking at partnering and coming together on a packing line.”

• “Currently doing business outside of Canada. Would be interested in doing business in Canada. Want a Canadian co-packer, especially a Canadian co-packer that has organic certification with access to their own raw materials.”

• “Don’t pass up opportunities – I want to expand – we want to expand production and markets with existing facility not capable – if have to move offsite I would be interested – more economical while building a new plant.”

• “Our industry requires innovation and new products. To have a co-pack partner allows you to pursue new products without having to invest in the infrastructure right of the start.”

• “This is an excellent opportunity to have our product brought into production.” • “To find other means of marketing. Any time there is an opportunity to do business in a

unique way we are open to that. Find a space for other opportunities.” For others, processor comments expressed conditions for interest; the colonies would require particular capabilities in order for further discussion to be of interest.

• “Depends on how we want to grow and if we want to develop own place to make our product or if they have federal facilities to do what we want – we could come with some arrangements that way we could keep our market and they could manufacture.”

• “If federally inspected and with a HACCP Plan, reviewed by a third party that conforms to federal requirements, offers a potential to purchase raw materials which we would be able to utilize within our organization’s processes.”

• “Interesting possibility, there are a few areas exceptionally well suited to – specialty butchery, European market non-stress demands, way hogs are butchered, facilities from EMU and Ostrich, travelling butchering facility and kill facility.”

• “Need is for labour and capital to take over current buying, washing, grading and packing Alberta produce.”

Disinterest in Exploring Opportunities with Hutterite Colonies Processors that indicated that they were not interested in reviewing potential opportunities with Hutterite colonies were asked to explain why their organization would not seek out such opportunities. Most comments provided expressed a perceived lack of fit between the scale of their processing operation / and or need for food security with the capacities and/or capabilities of the colonies:

• “Federal inspection is required.” • “We supply differentiated products requiring specialized equipment and processes.” • “The amounts we do our facilities are massive, giant concrete structures, specially trained

people and equipment, very automated, one operator to run the whole facility. We only have labourers for cleaning and maintenance. Not feasible.”

• “They would have to fit all regulatory before we even enter into it. Size of runs, locations and ability to get to market. Would have to have a lot of information provided before we even enter into discussions.”

• “We are taking about a huge company; a decision like this will be at a really high level.” • “We would sooner keep production in house at this time.” • “We’re too specialized; don’t think they have what we need. We are raw processors. I don’t

think they have much in the way of fruit production.”


• “Unfair taxation and labour availability afforded to colonies. No compliance by many colonies with regards to food safety regarding the continuing sale of un-inspected meats and products.”

Three processors’ comments indicated that additional capacity – or capacity in Alberta – was not required at this time.

• “We source all of our won raw good and our packing in-house – no needs right now, we are in a new facility.”

• “Have capacity at other facilities.” • “Right now we are only interested in co-packers outside of Alberta.”

Willingness to Train Hutterite Colonies Alberta processors were asked if they were able and willing to train a colony on their respective processing and/or co-packing protocols. Forty-nine percent (49%) of respondents indicated that they would be willing to train a colony; while 47% indicated that they would not be willing to conduct such training. Four percent (4%) of respondents did not supply an answer. For those respondents that did communicate that they were willing to provide training, the following three training areas were identified:

1. Specific Processing Activities

• “All aspects, from kill floor to end product as well as general protocols regarding hygiene & appropriate procedures.”

• “Butchering.” • “Berry processing.” • “Jam making, batch process.” • “Bottling and labelling fruit wines. We already using Hutterite labour for this.” • “Sausage maker, meat-cutting.” • “Providing they have the necessary equipment or an arrangement can be made to get the

necessary equipment we would provide training in all aspects of the production of the product.”

2. Protocols and Regulations

• “Certified organic standards and regulations.” • “Company that supplies equipment would train.” • “Complete in-house, formal 4-level training processes. Could be basic safety, basic

handling of chemicals, lock-out procedures, level-II equipment operation, sanitation, level-III operator of equipment.”

• “Entire production process and food safety issues.” • “Food safety, federal standards, workers compensation and personnel side (they should

have), technical training.” • “Food safety, HACCP, baking, supply chain, tracking and operating a small business. • “Food safety, handling, packaging and storage.” • “HACCP review and specifications of raw material needs.” • “Procedure and quality assurance.” • “Production methods.” • “Quality and food safety on a cost plus basis.” • “Packaging yes, not processing the herbs and growing the herbs.” • “Training on production methods and requirements.”


• “Training would include sending individuals to Europe to work in the established plants for 4-6 weeks.”

3. General or On-the-Job Training

• “Don’t really know. Whatever is required I guess.” • “Job Shadowing - current the method used to train employees, develop manuals etc.” • “On the job production training.” • “On-hand training in production methods.” • “Our internal programs and protocols.” • “To provide expected quality.” • “Whatever is necessary – packaging, health standards, quality.” • “Wiling to train individuals but not the colony.”

Willingness to Sell Equipment to Hutterite Colonies Processors were also asked to provide their input on their level of interest in selling equipment that they no longer required to Hutterite colonies. Thirty-eight percent (38%) of responding processors indicated that they would be willing to sell equipment that they no longer needed to a Hutterite colony, while 59% respondents indicated that they would not be interested in selling equipment that they no longer required to a colony. 3% of respondents did not supply an answer. For those respondents that did communicate that they were willing to sell equipment that they no longer required, the following items of equipment were identified:

• “Hog Scalder / Dehairing.” • “Heat tunnel shrink wrap packaging machine approx. 8' X 2' – Cheap!” • “20 LB floor mixer.” • “Any of our older prices of equipment that we’ve replaces. Possibly equipment used in

processing, homogenizers, pasteurizers, fillers. Depends on what is in inventory. Anyone that sells equipment into our market who may become a competitor.”

• “Automatic L-bar sealer / packaging line.” • “Baking equipment tunnel freezer.” • “Dairy and processing equipment – stainless steel.” • “Delivery truck, couple of 1,000 litre vat pasteurizers, 175 ml filling machine and yogurt

drink filler.” • “Don’t know. In general have processing equipment and laboratory equipment.” • “Farming equipment, stainless steel equipment.” • “Grinders, Skinners, Saws, Val Pack Machines.” • “Ham Massager, Silent cutter, Stand-up showcases (coder & freezer).” • “Honey processing.” • “Mixer/ grinder.” • “Cutter.” • “Mixers.” • “Mostly bakery kitchen type of equipment.” • “Not sure, please check later. One thing coming up would be grain cleaners, sizers.” • “Packaging.” • “Portion divider. Cookie depositor.” • “Processing equipment.” • “Production equipment, baking, dough, mixers.” • “Production line.”


• “Stuffer, cutter.” • “Packaging machine.” • “Other smaller meat processing equipment.” • “The equipment in our plant that currently does this work would be part of the cost to the

contract packer.” • “The whole business.” • “Triangle scales, carts and trays, mixers, grinders, cooling equipment, sealers and others

as they become available.” • Used sausage and smoke house equipment.” • “Working on producing a Saskatoon sorter and a presser for Saskatchewan farmers.”

Alberta Processors Interested in Pursuing Opportunities with Hutterite Colonies As a part of survey conducted with Alberta Processors survey recipients were asked if they would be willing to be listed as an organization interested in entering into further discussions with the Colonies. The following 19 companies authorized their profile information for publication in this report.

Interested Processors

Sunfresh Farms Ltd. Edmonton

Blue Kettle Specialty Food Ltd. St. Albert

Country Mom Foods Ltd. Edmonton

Sunrise Bakery Edmonton

YB Quality Meat Red Deer

Vermilion Packers Vermilion

Calgary Italian Bakery Ltd. Calgary

Foothills Creamery Ltd. Calgary

[email protected] Rocky View

Longview Meat & Mdse. Ltd. Longview

Organic Ranchers Edmonton & Lacombe

Sundalanda Farm St. Paul

Waggers Pet Products Calgary

Sepallo Food Ingredients Barrhead

Bles-Wold Farm Yogurt Lacombe Delizia's Pasta Ltd. Calgary

Parkland Packers (1976) Ltd. Stony Plain

Prime Cuts Meat & Deli Ltd. Vegreville

Something Special Deli-Foods Sherwood Park


ALBERTA PROCESSORS – FOCUS GROUP FINDINGS

Focus Group Approach A focus group and an advisory meeting were conducted in May 2008 with representatives from AFPA, MNP and Alberta food processors. These meetings were held to gather processor perspectives on matters relating to sub-contracting and partnering and in particular, the interest among these organizations in exploring potential opportunities for co-packing or other business arrangements with Hutterite colonies. The following is a synopsis of feedback gathered from the focus group and advisory group participants.

Focus Group Findings In general, participants acknowledged that the current business environment is presenting the industry with a number of challenges and opportunities. Generally, participants supported the exploration of possible business opportunities between Hutterite colonies and food processors. In addition, most participants indicated that they could enhance current operations with better access to additional raw materials and/or labour.

Processor comments about the potential for these opportunities with Hutterite colonies generally centred around four themes: the importance of maintaining food safety in any subcontractor arrangements; the importance of achieving stable business terms; the escalation of costs in current operations; and the importance of establishing trust among business partners.

⇒ Importance of maintaining food safety in subcontracted arrangements Colonies would be required to demonstrate a willingness to:

• Consistently meet necessary product quality standards and/or specifications; • Obtain appropriate levels of insurance and accept liability for role in production; • Package products in the same manner and format stipulated by the processor; and • Achieve levels of assurance through the acceptance of and compliance with random

audits. ⇒ Importance of achieving stable business terms Some processors were concerned about pursuing opportunities with colonies due to: • The commercial risk associated with entering into agreements with any very small

business; • Uncertainty about the levels of reliability that can be achieved with the colonies in business

arrangements; and • The treatment of proprietary information and potential for competition with colonies. ⇒ Escalation of costs in current operations Many processors expressed concern over increasing costs and the ability to partner with colonies in a manner that would be cost effective. Cost concerns primarily involved: • Plant service costs and shipping costs due to rising fuel prices; • Non-performance costs if processors fail to deliver production levels on time due to vendor

issues;


• Labour costs, including a scarcity of drivers for delivery of products and administrative costs to source and orient temporary foreign workers;

• Raw product costs, increasing due to costs to ship to Alberta; and • Price sensitivity of consumers and the associated inability to pass these rising costs onto

the end user. ⇒ Importance of trust amongst business partners A key theme discussed at the outset of the focus group by most participating processors was the importance of trust within any business relationship. Processors shared their views on allowing business participants the required time to establish trust amongst individual parties and that business relationships must not be forced to adhere to an external timeline or conditions. Within the context of business opportunities with Hutterite colonies, participants commented that trust could possibly be achieved through an initial process that would start with sourcing a particular item from the Hutterites (e.g. corn), monitoring the reliability of quality and delivery, and then as the relationship matures contract for additional value-added processing products. Most participants agreed that proprietary information relating to recipes would not be shared with any business partner without going through a similar type of process as mentioned above.


ALBERTA HUTTERITE COLONIES – DESCRIPTION OF COLONY PROCESSING ACTIVITIES

General Colony Food Production Colonies, for the most part, have generic skills and capabilities where farming with livestock and crops are involved. Colony livestock usually includes cattle, dairy cows, hogs, turkeys and chickens. Crops usually consist of wheat, barley, canola, lentils, peas, durum and corn. Almost all colonies have gardens that produce the following fruits and vegetables: Carrots, Lettuce, Peas, Radish, Cucumbers, Corn, Peppers, Potatoes, Zucchini, Pumpkins, Strawberries, Raspberries, Beets, Cabbage, Tomatoes, Beans, Rhubarb, and Sunflowers.

General Food Processing Skills and Capacities Processing food that is grown on the colony involves being able to perform a number of different activities that include, bottling, canning, bagging, dehydrating, vacuum packing, grading, mixing, baking, smoking, and slaughtering and cutting meat.

General Market Activity Most colonies are involved in some form of market activity, whether it’s selling produce at the local farmers market to selling processed, packaged goods to retailers in the Province. The following description outlines the four core market activities that colonies typically prescribe to. The order in which the information is presented by no means indicates the economic importance attributed to the activity by the colony, but it should be noted that the grain operation on the colony has the most economic impact.

The first type of market activity, and one that is common for most colonies, is selling their excess food products at local farmers markets or on the colony itself and includes:

• Fruit and vegetables from the garden; • Baked goods, such as bread and pastries; • Jerky; and • Preserves, pickles and other bottled and canned goods

The second type of typical market activity is selling based on quota. Domestic supply requirements are set by national agencies. Each province's share of the national supply is also determined at the national level. These national bodies include producers from every member province and various industry stakeholders such as processors, government, etc. Under provincial and federal legislation, the provincial marketing boards for the supply-managed commodities have been delegated extensive powers to control production and marketing of the regulated products. Producers must hold quota to be eligible to produce and/or market a supply-managed commodity. The main tools for controlling the amount of a regulated product that is produced and marketed are 'production quotas' and 'marketing quotas'. Production quota authority allows a board to prevent production of the regulated product without a quota. It also allows boards to prevent producers from producing in excess of their production quota and from producing on land and/or premises without attached production quota.


Marketing quota authority allows boards to prevent producers from marketing a regulated product without a quota, prohibit over-quota marketing, and prevent producers from marketing product produced on land and/or premises without attached quota. Marketing quotas can also be used to ensure sufficient product is brought to market, and can temporarily or permanently cancel a producer's quota if it is under-utilized. Each production period, the provincial boards inform quota holders of the exact amount that each can produce and/or market. In order to produce and market a regulated product, a producer must be licensed by the relevant marketing board. The license can be revoked if a producer does not comply with all regulations and board orders, including limits on the amount or type of regulated product produced or marketed. Licenses are often used to ensure that minimum quality standards are met.xiv

Quota Production Quota products that colonies are typically involved in selling are:

⇒ Milk The average colony will have a dairy where they milk 125 - 130 cows. Most colonies have a dairy but there are a few who do not.

⇒ Eggs

The average colony will have a layer operation of 7,500 - 10,000 laying hens that produce approximately 175,000 - 185,000 dozen eggs per year. Almost all colonies have layers.

⇒ Broiler Chickens

The average colony possesses 7,500 - 10,000 birds. There are a few colonies that have in excess of 25,000 birds.

There are special rules in Alberta for colonies regarding their broiler chicken production. Some colonies have quota while others produce under a specially negotiated Colony/Communal exemption. Colonies that own quota sell their production ‘live’ to major processors such as Lilydale or Sunrise Poultry who then slaughter and further process the birds. There are a handful of colonies that also have quota but slaughter and process their own birds in federally or provincially inspected and licensed slaughter houses. These colonies will typically slaughter and process the birds, and then tag and bag them for sale as whole birds to retailers or wholesalers (this requires that the colonies have quota).

Colonies that do not own broiler quota still play an active role in the chicken market. The Alberta board allows a colony to produce up to 6,000 birds per year for personal consumption or for sale at the farm gate or farmer's markets. Some colonies that produce under the communal exemption have licensed and approved slaughter houses, often selling processed birds (plucked, scalded, gutted and cleaned) to other packers who further process the chicken. It is not unusual to have colonies selling between 4,000 - 5,000 birds per year.

Colonies represent around one (1) million birds under quota and another 500,000 birds under the communal exemption per year. Unless each colony applies for, and is approved for an increase in quota, they are limited in terms of production and supply of these products.


⇒ Turkeys

A small number of colonies are amongst the largest producers in the province, but turkey production is not typical for most colonies.

The third type of market activity, also fairly common to the colonies is the supply of live livestock and crops to food processors where transportation is usually arranged by the processor/packer. The size of the herd, barn or crop varies between colonies, but can be summarized as follows:

⇒ Hogs

The average colony has a 400 - 450 sow barn that will produce approximately 10,000 market hogs per year. A market hog typically ranges between 225 - 275 lbs. Most of these hogs would be sold or marketed to major processors such as Maple Leaf or Olymel, others go to smaller niche packers or markets and/ or to the United States.

⇒ Cattle

While not all colonies have cattle, there are a variety of market activities for those colonies that invest in cattle. Some colonies have a breed herd that produces calves, with 150 - 200 head being typical. Other colonies have feedlot operations - they purchase calves or larger cattle and either feed them to slaughter weight (1,100 – 1,300 lbs) or they feed them to feeder weight (750 - 900 lbs) and then sell them to other feedlots that finish the cattle to slaughter weight.

Other livestock that colonies have are ducks, geese and sheep, but these operations are either rare or insignificant.

⇒ Wheat

A typical colony has 7,500 - 10,000 seeded or cultivated acres. Grain production is not a quota based industry, but is a delivery call system based on car allocation and movement to export positions. Under permit, producers take their crops to the grain elevators per the Canada Wheat Board (CWB) delivery calls, which is then shipped and sold by the CWB. The grain is then pooled together based on grade and quality. The price paid by the CWB to the producers is based on both these qualities and on location.

Producers are not allowed to sell milling quality wheat, barley or durum directly to the market, but can sell these grains if they are not for human consumption. All non board grains, such as canola, and pulse crops can be sold directly to the market.

The fourth and final type of market activity that a handful of colonies are involved in is food processing, whereby a product that is typically grown on the colony is further processed, packaged, labelled and transported to a retailer or distribution warehouse as a finished product. Many colonies are involved with supply contracts and arrangements that exhibit their ability to understand and abide by contractual arrangements, particularly on the agricultural side. There is significant management, production and quality regulations that must be adhered to in the marketing of milk and eggs and other supply managed products. Additionally, many colonies have production contracts with processors for their hogs where they have to abide by very specific details in terms of quality, size, amount of fat, back fat, amount of loin, etc. Hog production is a very scientific and refined process utilizing genetics and a variety of production processes to produce different animals for different markets.


ALBERTA HUTTERITE COLONIES – SUMMARY OF SURVEY FINDINGS A detailed discussion of responses to the survey is provided following this section. The survey instrument can be found in Appendix B. A high-level summary of the findings from the survey of Alberta Hutterite colonies to assess their interest and needs with respect to pursuing co-packing and other business arrangements with Alberta food processors includes:

Survey Representativeness • A response rate of 52% (91 of 174 colonies) was achieved among Alberta’s Hutterite colonies. • A variety of colonies responded: from colonies with little involvement in market-focused food

processing to colonies with long-standing market-focused food processing operations.

Colonies’ General Interest in Pursuing Contracting Opportunities • Approximately half of respondents (48%) expressed degrees of interest in pursuing co-packing

or contracting arrangements with food processors.

Colonies Interested in Pursuing Opportunities with Food Processors • Of the 91 responding firms, 16 colonies authorized the publication of their contact information in

this report as an indication of their interest in pursuing opportunities with food processors.


ALBERTA HUTTERITE COLONIES – DETAILED SURVEY FINDINGS

Survey Approach During the months of May through to September 2008, 174 colonies in Alberta were surveyed via fax, and a smaller subset interviewed either in-person or by telephone to gather information about colonies’ interest in sub-contracting and partnering opportunities with Alberta food processors.

Survey Recipients The 174 colonies surveyed represent all of the Hutterite colonies in Alberta. Surveys were delivered to the Managers or Ministers on the colonies. Responses were gathered from Managers, Ministers and other individual colony members who are responsible for food processing operations on the colony. The survey was conducted in two stages:

• General Interest Survey: A brief survey was faxed to all colonies for the purpose of determining the level of interest among colonies in pursuing food processing opportunities.

• In-person Interview: A second more detailed survey was conducted in-person and by telephone with those colonies who had expressed interest in the first survey. This survey collected information about the colonies current operations, capabilities, market activities, production and interests.

The following survey results reflect the interest and capability of the Alberta Hutterite colonies in Alberta in potentially partnering with processors.

Survey Respondents A 52% (91 of 174) response rate was achieved with the General Interest Survey, of which 25% (44 of 91) indicated an initial interest in sub-contracting opportunities with Alberta food processors. Of the 44 colonies that were initially interested, 79% (35 of 44) participated in the in-person interviews.

Current Processing Equipment and Facilities At present, most processing activity occurs on respondent colonies within the colony’s “slaughterhouse” – a multi-use facility. A range of equipment is found in the facility, including wrapping equipment, overhead cranes, etc. (Exhibit 3-1). Twenty percent (20%) of responding colonies reported operating custom processing facilities, with vegetable processing cited as an example. While automation does exist on the colonies, only one (1) colony reported the use of automated equipment.


2325

23 24

4

1714

2

9

1 14

9

0

5

10

15

20

25

30

Scalde

r

Plucke

r

Meat S

aw

Bird D

rying

Rac

k

Wrap

ping E

quipm

ent

Smoker Rail

Vacuu

m Packe

r

Overhe

ad C

rane

Vegeta

ble W

ashe

r

Poultry

Proces

sing L

ine

Labe

ller

No res

pons

es

N=35

2

0

17

9

1

8 8

43

15

13

17

12

1

10

0

24

68

10

12

14

1618

20

22

Bottlin

g - fo

od

Bottlin

g - w

ater

Canning

Baggin

g

Dehyd

rating

Vacuu

m Pac

king

Green

hous

e

Egg G

rader

Vegeta

ble Gra

der

Mixing A

nimal

Feed

Mix Med

icated A

nimal

Feed

Slaugh

ter & pa

ck -

birds

Slaugh

ter &

pack

- bee

f

Baking

No Res

pons

e

*Respondents c hec ked mu ltiple categories

N=35

EXHIBIT 3-1: Current Processing Facilities within Hutterite Colonies

Processing Capabilities Colonies report a number of food processing activities, including bottling, canning, baking and others (Exhibit 3-2). Canning, animal feed processing, and slaughtering of livestock were reported more frequently than other activities. EXHIBIT 3-2: Current Processing Capabilities within Hutterite Colonies


When asked how often some of the operations are performed, the response varied from once a year, to seasonal to once per week to daily. Some colonies commented in more detail, indicating that they are capable of producing nine (9) tonnes per hour of animal feed and slaughtering up to 1,000 birds per day.

Labour Availability Responding colonies indicated that as few as one or two to as many as 40 or more colony members could be available for food processing activities. Typically, colony members would be available to work on food processing activities sited at their colony. Twenty-eight percent (28%) of respondents (10 of 35) indicated that labour would be available on a year round basis, while 20% (7 of 35) indicated that labour would be seasonally available. Typically, there are two times a year that can present more difficulties for providing consistent labour – seeding (March/April) and harvesting (August/September).

Investment in Equipment and Infrastructure When asked if colonies would be willing to either build a facility or enhance existing facilities, provided viable business opportunity existed, 37% of respondents (13 of 35) indicated they would be prepared to build, while 42% (15 of 35) would be prepared to enhance their current processing facilities. Almost half of respondents (45%) were also prepared to purchase equipment necessary for the right opportunity, including enhancement of cooler, freezer, storage, warehousing, packaging or loading facilities.

Compliance with Regulations Approximately half of respondents expressed a willingness to pursue HACCP certification (42%, 15 of 35) and to achieve compliance with Provincial regulations (54%, 19 of 35). Willingness to pursue specific health or federal regulations rated lower at 28% (10 of 35) and organic certification at 11% (4 of 35).

Willingness to Enter Management Agreements About half of respondents (48%, 17 of 35) of respondents indicated that they would be willing to sign a management agreement with a processor. This agreement was described as a contract that would include elements such as:

• A non-compete clause; • Confidentiality clause; • Product requirements; • Procedural requirements; • Training requirements; • Planned and unplanned quality assurance checks; and • Procedures for ending a contract etc.

Colonies Interested in Pursuing Opportunities with Processors Slightly under half of respondents, (45%, 16 of 35) were willing to provide their contact information as an expression of interest in pursuing opportunities with food processors in Alberta. Contact information for the colonies is provided in Appendix D.


Interested Colonies

Suncrest Castor Jenner Jenner Veteran Veteran Big Bend Cardston Elmspring Warner Enchant Enchant Oaklane Taber Ewelme Fort Macleod High River High River New York Lethbridge Lakeside Cranford Livingstone Luncbreck Rocklake Coaldale Lomond Lomond Thompson Fort Macleod Kingslake Foremost East Cardston Lethbridge/Cardston New Rockport Lethbridge

Summary of Colonies’ Interest in Food Processing Opportunities In the survey and discussions with colony representatives, eighteen colonies identified themselves as interested in learning about potential opportunities with Alberta food and/or beverage processors. In general, colony interest centred on the opportunity to enhance their current processing activities, increase utilization of their operations, and manage risk in pursuing new markets and activities through partnership operations. Each colony’s specific interests and capabilities are described in colony profiles (Appendix D). Colonies want to formalize and grow their "ad hoc" business, in other words, they want to develop some of their existing processing and value-add activities into an organized business. Modern farming practices have reduced the dependency on labour in many operations which has resulted in colony members looking for rewarding and challenging work experiences. Colonies are also looking to better or fully utilize their existing capital. While many colonies have slaughterhouses, manufacturing ‘shops’, and vegetable processing operations, they are only used a few times a year for their own consumption. These facilities are often built to commercial standards and have available capacity. Members of the colonies are also looking to capitalize on and utilize their production and processing capabilities. Traditional processes such as canning, bottling, slaughtering and


processing, washing, bagging, pickling, sausage making, baking etc. have commercial application. These traditions and skills have been developed and passed on through colony generations over the last 500 years. Many traditional colony operations have very high entry level costs and associated risks (i.e., supply management). Taken together with industry challenges such as increasing costs of production, reduced profitability has resulted (hogs are a good example). Colonies want to look at alternative businesses that allow them to continue to be financially viable, and are looking to develop new and profitable agricultural enterprises to replace other less profitable or more risky ventures. Colonies, along with most primary producers, are realizing that in order to generate additional profit and revenue they need to consider being involved in supporting the ‘value add’ side of food processing, and are therefore looking to partner with other colonies or industries that will allow each partner to capitalize on their strengths.


ALBERTA HUTTERITE COLONIES – FOCUS GROUPS

Interview Respondents Colonies were identified by Partners at MNP based on proximity to Red Deer and Lethbridge and experience in market activity (current operations) or expressed interest in business opportunities in food and beverage processing (no prior experience). Two focus groups were held in May 2008 in Red Deer and Lethbridge. Participants included senior representatives from the colonies, either Ministers responsible for the spiritual welfare of the colony, or Business Managers responsible for the financial obligations of the colony. A total of eight (8) colonies attended the focus groups five from Southern Alberta, and three from Central Alberta.

Interest in Exploring Opportunities with Alberta Processors While participant perspectives varied on the relative attractiveness of individual processing activities, overall, it was clear that interest exists among the colonies to pursue sub-contracting and partnership opportunities with Alberta food processors. In general, if the opportunity appeared to be a good fit with their respective colony’s existing skills, interests and/or availability and presented an opportunity to realize a reasonable financial return, participants were interested in exploring the opportunity further.

Finished Production/Processing Most of the colonies that attended the focus groups are not currently supplying retailers, but are selling their ‘excess’ produce at Farmers Markets. The types of food processing that colonies are typically involved in for these purposes are the:

• Slaughter, cutting and packing of a variety of livestock such as cattle and chickens; • Preparation and packaging of vegetables; • Preparation and packaging of fruits; • Making of jams; • Processing of meats, such as sausage and jerky; • Baking of breads and pastries; • Collection and grading of eggs; and • Mixing of grains for animal feed.

The colonies in attendance indicated that approximately 75% of all colonies have their own feed mills that work for about six (6) hours per day. Batch records are kept for about six (6) months, especially where medication is added. They went on to say that most colonies are able to mix custom feed and custom medicated feed, but that most colonies only have one bin which would limit output. Although it is not common for colonies to be involved in supplier relationships with retailers, in or out of province, one colony in attendance currently produces and packages baby carrots for Superstore in Alberta. This colony has arrangements with at least four other colonies to supply them with baby carrots, which are then graded, washed, bagged and labelled before being shipped to Superstore for sale to its customers.


Labour Availability When considering future opportunities, a few colonies indicated a willingness to “pull people off of jobs that are not making any money”. One colony representative discussed the current state of the hog market, commenting that it is currently not financially viable for most colonies. This representative indicated that some colonies might seriously consider shutting down these operations to pursue more financially attractive and sustainable co-packing opportunities with Alberta food processors. By changing operations, labour could become available to work on ‘new projects’. It was acknowledged by some colony representatives that initially, this could cause some resistance among members and the colony community at large. Since these activities have been a traditional part of the culture and way of life, while processing is not, change might be challenging for some. However, some expressed that if the ”dollars made sense” they could make it work. A few attendees stated that colony members availability be assessed in this business context and cautioned that they are “not here to be cheap labour”. Generally speaking, attendees said that making labour available during the busy seasons of seeding in the Spring and harvest in the Fall could be problematic, with some attendees saying that they would not have any excess labour to work on non-colony projects, while others said that they would use ‘floaters’ during these seasons. There were also those that said they would dedicate colony members to the job, thereby avoiding the seasonal constraints and the need for constant training. An additional comment made about labour availability, is the ability of the colony to balance its workload between women and men, with one of the attendees stating that “women need time to be at home and do their things, this has to be with the men”.

Regulations and Compliance Recognizing the varying needs of processors to meet quality standards and production or delivery timelines, most colonies acknowledged that detailed specifications, controls and assurances with respect to the production process as well as third-party audits would be required. Many expressed a willingness to undertake the training and/or other certification programs that would be necessary to meet these requirements, and some were willing to undertake these programs off-site, if required. In fact, one colony member said that “even old people are taking on new learnings”. It was noted during the focus group that one (1) in fifteen (15) colonies has a provincial licence to cut meat, and most of the attendees at the focus groups were already in the planning stages of having their facilities HACCP-approved, while others have arranged for third party audits during 2008.

Co-Packing and Contractual Agreements When considering a co-packing agreement with a processor, the issue of who would control the production process was brought forward. There were varying opinions in the group as to whether or not ‘control’ of the production process should lie with the colony or the processor – the majority of the group felt that processor control would not be a problem. One attendee commented “if you are going to do something, do it right or you shouldn’t be in business”, with this sentiment being supported by the majority of the group.


Collaborating with Processors For most participants, assessing a potential business venture requires an assessment of risk as well as opportunity. Important to many colonies was an assessment of a processor as a potential business partner. A review of the company and management’s past performance and business practices, market strength for the processor’s products as well as the willingness of the company to engage in management agreements and/or contractual guarantees was essential. Of particular interest to participants was learning about the specific opportunities that might be available with processors.

General Concerns Although interest was expressed for the opportunity to work with Alberta food processors, a number of concerns were brought forward. These concerns can be grouped as follows:

⇒ Compliance inconsistencies: Some of the attendees perceive that there are double standards for colonies and others regarding rules and regulations implemented by the government regarding slaughter facilities.

⇒ Culture incompatibilities:

Some attendees cautioned that management issues could arise when dealing with “outsiders” due to the cultural differences in managing operations.

⇒ Discomfort with sales and marketing:

For some, there is a fear of being ‘stuck’ with products once production is finished. Attending colonies agreed that they would be happy to make the product, but selling the product becomes difficult as it affects their communal living by unnecessary exposure to the outside world. An example of mixing medicated feed – which requires a good understanding of and compliance with a number of rules and regulations – where the customer says ‘it is not right’ and leaves the colony with inventory that cannot be otherwise sold because it was custom-made was cited. Labelling also generated some concerns, due to the complexity of the regulatory requirements, and some indicated discomfort with this aspect of producing the product.


ALBERTA – INTERESTED PROCESSORS AND COLONIES


ALBERTA – MATRIX OF POTENTIAL MATCHES Alberta’s 40 interested processors were provided with the contact information for colonies appearing to be the “best fit” with their business needs in September and October 2008. “Best fit” was determined based on processors’ and colonies’ stated processing interests, capabilities, labour capacity, and geographic proximity gathered from the surveys and interviews. Of the 40 interested processors, 19 confirmed their interest in pursuing potential opportunities with colonies by providing a completed company profile for publication in this report (Appendix C). No. Interested Processors Potential Colony Matches*

By Location* and Stated Processing Interests

No. Interested Colonies

P1 Sunfresh Farms Ltd. Edmonton

Big Bend Cardston Elmspring Warner Enchant Enchant Rocklake Coaldale Livingstone Lundbreck Veteran Veteran

P2 Blue Kettle Specialty Food Ltd. St. Albert

Kingslake Foremost Rocklake Coaldale East Cardston Cardston

P3 Country Mom Foods Ltd. Edmonton

Big Bend Cardston Elmspring Warner Enchant Enchant Rocklake Coaldale Livingstone Lundbreck Veteran Veteran

P4 Sunrise Bakery Edmonton Kingslake Foremost Big Bend Cardston Lomond Lomond

P5 YB Quality Meat Red Deer New York Lethbridge Lakeside Cranford

P6 Vermilion Packers Vermilion New York Lethbridge Lakeside Cranford

P7 Calgary Italian Bakery Ltd. Calgary

Kingslake Foremost Big Bend Cardston Lomond Lomond Livingstone Lundbreck Jenner Jenner Lakeside Cranford Enchant Enchant Elmspring Warner

P8 Foothills Creamery Ltd. Calgary

Lakeside Cranford

P9 [email protected] Rocky View

Rocklake Coaldale

H1 H2 H3 H4 H5 H6 H7 H8 H9

H10 H11 H12 H13 H14 H15 H16

Suncrest Castor Jenner Jenner Veteran Veteran Big Bend Cardston Elmspring Warner Enchant Enchant Oaklane Taber Ewelme Fort Macleod High River High River New York Lethbridge Lakeside Cranford Livingstone Lundbreck Rocklake Coaldale Lomond Lomond Thompson Fort Macleod Kingslake Foremost


No. Interested Processors Potential Colony Matches* By Location* and Stated

Processing Interests


P10 Longview Meat & Mdse. Ltd. Longview

New York Lethbridge Lakeside Cranford

P11 Organic Ranchers Edmonton & Lacombe

New York Lethbridge Lakeside Cranford Jenner Jenner Oaklane Taber Ewelme Fort Macleod New Rockport New Dayton

P12 Sundalanda Farm St. Paul Suncrest Castor Enchant Enchant

P13 Waggers Pet Products Calgary

Ewelme Fort Macleod High River High River Rocklake Coaldale Suncrest Castor Thompson Fort Macleod

P14 Sepallo Food Ingredients Barrhead

Kingslake Foremost New Rockport New Dayton Rocklake Coaldale

P15 Bles-Wold Farm Yogurt Lacombe

Lakeside Cranford New Rockport New Dayton Kingslake Foremost

P16 Delizia's Pasta Ltd. Calgary Lakeside Cranford Livingstone Lundbreck Suncrest Castor Jenner Jenner

P17 Parkland Packers (1976) Ltd. Stony Plain

Ewelme Fort Macleod Lakeside Cranford New York Lethbridge Rocklake Coaldale Thompson Fort Macleod New Rockport New Dayton

P18 Prime Cuts Meat & Deli Ltd. Vegreville

Ewelme Fort Macleod Lakeside Cranford New York Lethbridge Rocklake Coaldale Thompson Fort Macleod New Rockport New Dayton

P19 Something Special Deli-Foods Sherwood Park

Suncrest Castor Veteran Veteran Livingstone Lundbreck Rocklake Coaldale Ewelme Fort Macleod


SASKATCHEWAN FINDINGS

SASKATCHEWAN FOOD PROCESSORS – SUMMARY OF SURVEY FINDINGS A detailed discussion of responses to the survey is provided following this section. The survey instrument can be found in Appendix A. A high-level summary of the findings from the survey of Saskatchewan food processors to assess their interest and needs with respect to pursuing co-packing and other business arrangements with other organizations and Hutterite colonies includes:

Survey Representativeness • A response rate of 22% (35 of 158 organizations) was achieved among Saskatchewan’s

food processors. • A variety of organizations responded: from start-ups to larger employers in the industry. • Responding organizations offer a wide range of products and services. • Responding organizations’ markets are predominantly within Saskatchewan and Canada.

Processors’ General Interest in Pursuing Contracting Opportunities • Slightly over half of the respondents expressed degrees of interest in pursuing co-packing

or contracting arrangements with other organizations. • General interest in pursuing co-packing or contracting arrangements “to access labour”; “to

access raw materials”; “to access additional production capacity”; “for co-packing”; and “to access capital” was almost equitable in each category.

• When qualifying contracting opportunities, on average, respondents rated “Food safety and quality controls,” “Quality of raw materials,” “Food security,” and “Contractual guarantees” as the most important qualities for consideration.

Processor Interest in Pursuing Contracting Discussions with Hutterite Colonies • Respondents indicated they were 47% “Somewhat Interested” and 18% “Very Interested” in

entering into discussions about co-packing and other opportunities with Hutterite colonies. • For those who were disinterested in pursuing discussions (30%), a perceived lack of the

colonies being able to produce consistent products was expressed, together with the fact that some felt that the provinces current co-packers were under utilized.

• More than half of responding organizations (63%) are willing to provide training to colony members. While some (23%) are willing to sell equipment to Hutterite colonies that is no longer required.

Processors Interested in Pursuing Opportunities with Hutterite Colonies Of the 35 responding firms 11 organizations authorized the publication of their contact information in this report as an indication of their interest in pursuing opportunities with Hutterite colonies.


SASKATCHEWAN FOOD PROCESSORS – DETAILED SURVEY FINDINGS

Survey Recipients A web- and fax- based survey of 158 food processors was administered during September 2008 to gather information concerning the sub-contracting and partnering interests of processors and in particular, the interest among these firms in exploring potential opportunities for co-packing or other business arrangements with Hutterite colonies. (Appendix A). Food and beverage processors selected to receive the survey were identified from the SFPA membership list as well as other industry lists. Personally addressed survey requests were delivered via e-mail or fax to senior decision-makers within each organization. Telephone, fax, and e-mail reminders were issued over the course of the survey period. MNP received a total of 35 responses for a 22% response rate.

Survey Respondents Saskatchewan’s food processing industry includes an array of product and service offerings. Of the 35 responses received, the primary product and service offerings provided by participating processors were: Specialty foods; Other; Organic foods; and Grains and (Exhibit 4-1). Other products and service descriptions highlighted by respondents include bakery, frozen entrees, and kosher products. Exhibit 4-1: Respondents by Product and Service Offerings

0

2

4

6

8

10

12

14

16

Animal

feeds

/ prod

ucts

Meat

Fish

Poultry

Specia

lty fo

ods

Ethnic

foods

Organic

food

s

Fruits

/ veg

etable

s

Grains

/ cere

als

Pulse c

ropsPas

ta

Bakery Dair

y

Frozen

entre

es

Meal re

place

ments

Herbs

Sauce

s

Condim

ents

Oils

Bevera

ges

Alcoho

lic be

verag

es

Snack

food

sHala

l

Koshe

rOthe

r

Product Categories

Num

ber o

f Com

pani

es

n = 35

* Respondents checked multiple categories


Responses were received from both small and large firms. Seventy-one (71%) of respondents had annual revenues in their prior fiscal year of $1,000,000 or less (Exhibit 4-2), 8% had annual revenues exceeding $1,000,000; while the remaining 20% of survey respondents selected “I prefer not to answer”. Exhibit 4-2: Respondents by Size of Firm

0

2

4

6

8

10

12

14

16

18

20

Under $500,000 $500,000 to $1,000,000 Greater than $1,000,000 I prefer not to answer

Revenue

# of

Res

pond

ents

n = 35


The majority of respondents firms (91%) employed 25 or fewer full- and part-time employees (Exhibit 4-3). Nearly all respondents (34 of 35) reported a year-over-year increase in revenues in the most recent fiscal period. All firms are headquartered in a Saskatchewan city or town.

Exhibit 4-3: Respondents by Number of Employees

0

2

4

6

8

10

12

14

16

18

5 or fewer 6 to 15 16 to 25 26 to 50

Total Number of Employees

# of

Res

pond

ents

n = 35


All of the responding firms generate revenue from the Saskatchewan marketplace. Approximately 75% also generate revenue in other Canadian provinces, while a small handful of processors generate income in North American and international jurisdictions, but to a lesser degree (Exhibit 4-4). Exhibit 4-4: Respondents by Market

3

2

2

3

3

3

2

2

3

3

2

20

28

3

-40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35 40

Saskatchewan

Elsewhere in Canada

U.S.

Taiwan/Hong Kong/China

Japan

Europe

Middle East

Other International

Opp

ortu

nitie

s

0% 1 to 9% 10 to 19% 20 to 39% 40% or greater

No Revenue Generated Revenue Generated

31

33

25

33

32

35

9

40 30 20 10 0 10 20 30 40

n = 35

General Interest in Co-packing and Contracting When asked about general interests in contracting, many responding processors expressed interest in entering into co-packing or contracting arrangements with other organizations. Co-packing and additional production capacity were of particular interest, while access to capital, raw materials and labour also generated interest, but to a slightly smaller degree (Exhibit 4-5). For each category, however, eight (8) processors or more selected “extremely interested” when asked “to what degree would your organization be interested in entering into co-packing or contracting arrangements with other organizations.”


Exhibit 4-5: General Interest in Co-packing and Contracting

3

6

6

11

4

2

3

2

2

4

4

9

11

13

9

8

2

2

5

5

3

2

-40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35 40

To access raw materials

To access additionalproduction capacity

For co-packing

To access labour

To access capital

Opp

ortu

nitie

s

Slightly interested Interested Somewhat interestedVery interested Extremely interested Not interested/No opinion

Not Interested or No Opinion Interested

10

13

10

12

14

40 30 20 10 0 10 20 30

n = 35

In general, comments provided about each firm’s particular needs with respect to co-packing or contracting arrangements focused primarily on four specific themes:

• Processing of raw materials; • Packaging and distribution of product; • Co-packing in-province; and • Labour for joint projects or when needed on larger in-house runs.


Areas of Priority when Qualifying a Contracting Agreement When evaluating contracting opportunities, processors’ emphasis, when averaged, indicates that food safety and quality controls and contractual guarantees rate as “very important” when pursuing a co-packing or contracting arrangement (Exhibit 4-6). A host of other qualities – from specific production / processing protocols to food security to co-packing methods – also factor into contracting decisions for many respondents.

Exhibit 4-6: Processors’ Contracting Priorities Qualities of Contracting Arrangements Average*Purchasing 1 = Not at all important

Supply of raw materials 4.4 2 = Not that importantQuality of raw materials 5.4 3 = Slightly importantCost of raw materials 5.2 4 = ImportantAccess to organic raw materials 2.7 5 = Somewhat important

Raw Materials Production 6 = Very importantCapacity to produce materials 3.4 7 = Extremely importantQuality of raw materials produced 4.9 0 = No opinionCost to produce raw materials 4.5

Finished Production / Processing * Average of all responses excluding "No opinion"Production / processing capacity 5.6 Production / processing methods 5.5 Specif ic production / processing protocols 5.7

LabourLabour attraction 4.3 Labour retention 4.5 Quantity of labour supply 4.6 Quality of labour supply 5.6 Cost of labour supply 5.2 Training and development 5.2

Regulations and LegislationHACCP certif ied 5.2 Federally inspected operations 5.3 Provincially inspected operations 4.6 FDA registration 5.0 Food security 5.9 Kosher certif ied production lines 3.6 Certif ied Organic 2.9 Halal certif ied production lines 2.3 Food safety and quality controls 6.2 Third party audit 4.8

Co-packingSource and supply ow n raw materials 4.0 Co-packing capacity 5.3 Co-packing methods 5.7 Shipping and labelling capacity 5.5 Waste management and by-product handling 4.5 Equipment and operator safety 5.4 Transportation and handling 5.6 Environmental 5.4

Business Management and Finance Access to additional sources of f inance 4.5 Proximity to your plant 4.8 Proximity to your market 4.2

OtherInsurance 5.2 Contractual guarantees 6.0 - please specify


Several respondents commented on some of the qualities they would need to see in their partners.

• “Ability to do it. You’ve got to be able to do it.” • “Delivering on the conditions agreed to. We find that most companies will offer a lot to get

the sale and then not deliver on the agreement.” • “Dependability.” • “Flexibility in production runs – some want minimum runs that are huge and way out our

league – we need flexibility to grow into it.” • “Honesty and being forthright.” • “Gluten-free packing, hard to come by.” • “I look forward to working with people who can come up with different ideas.” • “I would just like to have a nice working relationship whereby we can share suggestions and

ideas.” • “Food safety and traceability.” • “Proper management.”

Interest in Exploring Opportunities with Hutterite Colonies Interestingly, an identical proportion of interest was provided by Saskatchewan respondents as was noted in Alberta. Respondents were asked to rate their levels of interest in pursuing co-packing or other contracting opportunities with Hutterite colonies. Sixty-five (65%) of responding processors indicated that they would have some degree of interest in entering into discussions about co-packing and other opportunities with Hutterite colonies (18% were very interested and 47% were somewhat interested). Of the remaining respondents 30% indicated that they were disinterested in discussing opportunities with Hutterite Colonies; while 5% indicated no opinion. Exhibit 4-7: Interest in Exploring Opportunities with Colonies

Somewhat Interested47%

Very Interested18%

Disinterested30%

No Opinion5%

n = 35


Processors that indicated an interest in reviewing potential opportunities with Hutterite colonies were asked to explain why their organization would be interested in such opportunities. Some respondents indicated an interest in sourcing additional co-packing and/or production capacity.

• “Because of where some of our markets are, and their size, it is difficult to handle efficiently. May need someone to send product, package it and then send to market, without having to purchase a lot of additional equipment to keep up with it.”

• “We already use a co-packer in Manitoba and would investigate co-packing with someone closer.”

• “Current co-packer inefficient.” • “I am currently looking for a co-packer that could manufacture my products for me in a

federal facility. I want to expand my markets. I want to spend my time marketing my product rather than manufacturing it.”

• “There are very limited co-packing opportunities in Saskatchewan and I would like to have an ongoing co-packing resource.”

• “Looking for a federal plant.” • “We have a lack of co-packing availability. Any new initiative to work out would be great.

Co-packing has been our biggest stumbling block to date.” Some commented on accessing additional labour supply.

• “Need labour at harvest time and I have a large processing plan for my apples.” • “Labour shortages.” • “Our sauces are made using natural ingredients. Labour is required in preparing some of

the ingredients prior to actually bottling the sauces.” • “Our members have a labour need however it might be considered pre-processing.” • “We need people that are willing to work. We have an older staff with great strength in

teaching.” Some respondents expressed interest in finding a local supplier / an organic supplier or keeping business in Saskatchewan.

• “Needs to be close by. May open some opportunities for us as far as packaging and getting a line of products out there that we currently don't have. We're not really set up for packaging. We've looked at it in the past but it is labour intensive.”

• “Depending on what they are set up to do, may be more economical, and may be able to do a better job than what we are doing now. I work with a group in British Columbia and they are fine but too far away. If closer that is a benefit.”

• “New small business looking for help in all the above mentioned fields. Very interested in being able to have supplies locally grown and available, hopefully at a competitive price - no more long distance shipping charges for a small business.”

• “My product is made by a co-packer using my recipe, I would like to find an organic supplier - I can find a market for it.”

• “The demand is usurping my ability to supply. Would like to keep it in Saskatchewan. Others commented on perceived positive attributes of Hutterite colony operations and/or labour supply.


• “I think they could do a good job at a reasonable price.” • “They are damn good workers and do a good job. They are conscientious. We have

neighbours who are hutterite - cleaner than any federal operation. They are not federal. Not even provincial. They have all the resources and all the workers.”

• “They would do quality work. They have human resources.”

One indicated that it might present an opportunity for cost savings and/or improvements to efficiency.

• “To save money in manufacturing and packaging. Being more efficient in packaging.

Quality control, timeliness and being faster.”

A few expressed a general interest in the concept with two indicating that current conditions would prevent further investigation at this time, or that further pursuit of the opportunity would be dependent on a number of factors.

• “There is always a way of doing things differently, just looking at other possibilities.” • “In a bit of a transition stage to do this. Don't have the time to do it. Got a great product - the

market is right for it now. I have to find the time to do it.” • “Depends on all kinds of things. For example, if labour issues are going to be a problem at

my place, if production runs are of a large enough size to be worthwhile (at least 150 cases per product), if transportation can be arranged, and if storage of ingredients, and raw materials can be arranged.”

Disinterest in Exploring Opportunities with Hutterite Colonies Processors that indicated that they were not interested in reviewing potential opportunities with Hutterite colonies were asked to explain why their organization would not seek out such opportunities. Comments centred around two main themes: a perceived lack of fit between the scale of processing needs and concerns with the ability to achieve consistent delivery to standards. A few commented on fit with respect to scale of business and current operational needs.

• “What we do is largely industrial. We have very very small requirements for co-packing, we prefer to do it internally. Large 25kg is 99% of what we do.”

• “We are in a competitive market and outsourcing packaging is not economical - we have tried in the past.”

• “Extremely small private u-pick operation with neighbours as customers.” • “I'm not at that point in my business yet.”

Others commented on the need for consistency and performance to specific requirements. Two described previous experiences working with Hutterite colonies and receiving inconsistent results.

• “Core competencies are required to manufacture our products. One can't just outsource it. Also, there are major confidentiality and proprietary issues and high provincial and federal regulatory obligations.”

• “From experience I have learned that when you have co-packing done mistakes will happen. With the loss of control it can really harm a business.”


• “We're self sufficient, we've dealt with the Hutterites before - some good and some not so good, problem is consistency.”

• “I used to use their products and they have inconsistent quality. We need to have consistent top quality.”

One indicated that the development of Hutterite colony co-packing arrangements might be direct competition.

• “We are co-packing for other companies so I would view this as competition. We already have lots of processors in Saskatchewan that are under utilized and we have other large plants, larger than mine that are already in place.”

Willingness to Train Hutterite Colonies Saskatchewan processors were asked if they were able and willing to train a colony on their respective processing and/or co-packing protocols. Sixty-three (63%) of respondents indicated that they would be willing to train a colony; while 37% indicated that they would not be willing to conduct such training. For those respondents that did communicate that they were willing to provide training, the following three training areas were identified:

Specific Processing Activities, Protocols and Regulations

• “Packaging on a semi-automated line.” • “Procedure for picking apples without bruising them.” • “Basic ‘how to’ make the product.” • “Food safety handling, sourcing product, recipes.” • “How to make and package fudge.” • “Processing process, food safety, standards for gluten free processing.” • “Assistance in taking product to market.” • “Manufacturing and packaging.” • “Pre- packaging of ingredients, actual making of product.” • “Process and protocol are trainable skills.” • “The importance of how it is all done and cleanliness (that is usually good with hutterites).” • “What we're producing, what we want, formulations. No HACCP training from us.” • “Whatever it takes to do the job. How to package, how to perform necessary functions. All

of the floor activities.”

Willingness to Sell Equipment to Hutterite Colonies Processors were also asked to provide their input on their level of interest in selling equipment that they no longer required to Hutterite colonies. Twenty-three (23%) of responding processors indicated that they would be willing to sell equipment that they no longer needed to a Hutterite colony, while 77% respondents indicated that they would not be interested in selling equipment that they no longer required to a colony. For those respondents that did communicate that they were willing to sell equipment that they no longer required, the following items of equipment were identified:

• “300 ga., 500ga. SS cherry burrell tanks, some with agitation, some without, would have to check equipment & make a list, we have several large pieces. Mostly the tanks, we manage to use a lot of the pieces.”

• “Double-decked oven.”


• “Industrial sewing machines. 4 that I would like to sell.” • “Possibly the skewering machines for making kebabs and meatball forming equipment.” • “Used meat equipment.”

Saskatchewan Processors Interested in Pursuing Opportunities with Hutterite Colonies As a part of the survey conducted with Saskatchewan processors were asked if they would be willing to be listed as an organization interested in entering into further discussions with the Colonies. The following 12 companies provided their contact information, and in some cases additional information about their specific requirements, for this purpose (Appendix E).

Interested Processors

North Natural Foods Inc. Saskatoon Manitou Pemmican Company Drake DGS Plus LaRonge Schneider’s Gourmet World Delisle Classic Meats Fox Valley Thomson Meats Melfort FarmPure Foods Inc. Regina BeeWare.ca Spiritwood Howland Enterprises Inc. Yorkton Golburn Valley Oilmill Inc. Tisdale Canadian Prairie Lamb Saskatoon Fresh Air Flavours by Julie Nipawin


SASKATCHEWAN FOOD PROCESSORS – FOCUS GROUPS

Focus Group Approach A focus group was conducted in October 2008 with representatives from SFPA, MNP and Saskatchewan’s food processor community. Participants included senior representatives or business owners of specialty food and co-packing organizations. This focus group was held to gather processor information on matters relating to sub-contracting and partnering interests of processors and in particular, the interest among these organizations in exploring potential opportunities for co-packing or other business arrangements with Hutterite colonies. The following is a synopsis of feedback gathered from the focus group participants.

Focus Group Findings Focus group discussion centred on four general themes: current industry challenges, perspectives on sub-contracting with local Hutterite colonies, potential advantages and concerns of working with colonies and anticipated challenges for the industry.

⇒ A variety of factors are presenting challenges in the industry, particularly for small business

• Changes in the regulations “seem to be never ending.” • Difficult to import ingredients that meet local (Canadian) standards. • Difficult to obtain government funding for marketing and other initiatives. • Higher costs of production making competition with imports difficult. • Shortage of skilled labour limiting growth.

⇒ Interest was divided in exploring opportunities with Saskatchewan Hutterite colonies

• Those in favour, supported the exploration of possible business opportunities, particularly

in sourcing produce and labour. “Hutterites don’t want to dabble with something small so you would have to be willing to go big.” “Hutterites have a work hard ethic.” “Everyone should visit a colony. It’s amazing how efficiently they work.” “They grow beautiful veggies.”

• Others questioned the ability of colonies to respond to business requirements. “Depends on colony being utilized – some are better than others and ultimately requires the need to have a long discussion before anything could be decided.” “Everything is so specialized. Focus on what the Brethrens can do.” “Try to get brethrens to be as specific as possible about what they can do.”

• Some perceived arrangements as potentially viable, if the colony was interested in

expansion and was asked to grow more of an existing product. • Another participant viewed an arrangement whereby colony labour could be available on-

call for odd jobs to be advantageous. • It was noted that colonies would likely be available at the colony rather than at processor

locations.


⇒ A number of concerns were raised about achieving effective arrangements with

Saskatchewan Hutterite colonies

• Food safety/product quality: Regulatory protocols followed and quality achieved. • Confidentiality: Subcontracted product not sold via the “back door”; recipes not reproduced

and product sold in other markets. • Compatibility: Colony culture, particularly gender roles. • Business practices: Ability to adopt invoicing and inventory processes and marketing

perspectives. • Risk management: Production and delivery responsibility at each stage. • Cost management: Amount of training required to achieve level of proficiency (“why would

I have someone co-pack my product when I would have to be on the colony constantly monitoring the process for quality control – it defeats the purpose and costs me more time and money”).

• Business conditions: Processors’ existing labour capacity (“Need to keep our own staff busy first. It’s a waste to sit and watch someone else do the work”).


SASKATCHEWAN HUTTERITE COLONIES – SUMMARY OF SURVEY FINDINGS A detailed discussion of responses to the survey is provided following this section. The survey instrument can be found in Appendix B. A high-level summary of the findings from the survey of Saskatchewan Hutterite colonies to assess their interest and needs with respect to pursuing co-packing and other business arrangements with Saskatchewan food processor includes:

Survey Representativeness

• A response rate of 86% (58 or 64 colonies) was achieved among Saskatchewan’s Hutterite colonies.

• A variety of colonies responded: colonies with little involvement in market-focused food processing to colonies with some market-focused food processing operations.

Colonies’ General Interest in Pursuing Contracting Opportunities

• Of those responding to the detailed survey, 57% (8 of 14) expressed an interest in pursuing co-packing or contracting arrangements with food processors.

Colonies Interested in Pursuing Opportunities with Food Processors

• Of the 58 colonies contacted, 6 colonies authorized the publication of their contact information in this report as an indication of their interest in pursuing opportunities with food processors.


SASKATCHEWAN HUTTERITE COLONIES – DETAILED SURVEY FINDINGS

Survey Approach During the months of August through to September 2008, 65 colonies in Saskatchewan were surveyed via an initial introductory telephone call, paper based survey, followed by a telephone interview to gather information about colonies interest in sub-contracting and partnering opportunities with Saskatchewan food and beverage Processors.

Survey recipients The 65 colonies surveyed represent all of the colonies in Saskatchewan. Surveys were initially delivered to the Managers or Ministers on the colonies. Responses were gathered from both as well as sometimes the colony member responsible for processing operations on the colony. The survey was conducted in three stages:

1. Introductory Telephone Call: Individuals within all Saskatchewan colonies were contacted by phone to first provide the colony with a brief overview of the study and second to ascertain their interest in receiving / completing a survey.

2. Interest Survey: Based upon the information gathered during the introductory telephone call, only those colonies that were interested in completing the relevant survey were forwarded the required documentation. For those colonies that were not interested in receiving the survey, explanations were sought to explain their decision. Reasons ranged from not interested at this time to all available colony labour is deployed. A reminder fax was also sent to all survey recipients to encourage survey submission.

3. Follow-up Telephone Interview: Based upon the experiences within the Alberta portion of this study, the Saskatchewan survey process included a follow-up telephone interview with all colonies that submitted completed surveys. The purpose of these follow-up interviews was to gather further insight with respect to each colony’s available labour and resources as well as clarify their areas of business interest with Saskatchewan’s food processor community.

The following survey results reflect the interest and capability of the Hutterite Colonies in Saskatchewan in potentially partnering with processors in Saskatchewan.

Survey Respondents The introductory telephone call resulted in 56 responses or 89% (58 of 65 responded to the introductory telephone call to determine individual colony interest in participating in the survey). A further 24% (14 of 58) indicated an initial interest in sub-contracting opportunities with Saskatchewan food and beverage processors. After interviews, a final 8 of 14 indicated an interest in opportunities with food processors.

Processing Facilities Most of the slaughterhouses (processing facilities) that the Hutterites operate have multiple uses. Exhibit 5-1 illustrates the equipment reported in most facilities in Saskatchewan that supports the variety of their processing operations. Seven (7%) (1 of 14) colonies reported operating custom processing facilities, with sausage and jerky processing given as an example.


Exhibit 5-1: Current Processing Facilities within Hutterite Colonies

109

1211

2

10

7

0

3

0 0 0 00

2

4

6

8

10

12

14

Scalde

r

Plucke

r

Meat S

aw

Bird D

rying

Rac

k

Wrappin

g Equ

ipmen

t

Smoker Rail

Vacuu

m Packe

r

Overhe

ad C

rane

Vegeta

ble W

ashe

r

Poultry

Proces

sing L

ine

Labe

ller

No res

pons

es

N=14

A very low level of operational automation exists. Only one (1) colony responded that they use automated equipment.

Processing Capabilities Colonies report a number of food processing activities, including bottling, canning, baking and others (Exhibit 5-2). Canning, mixing animal and medicated animal feed together with the slaughtering of livestock feature more dominantly in terms of current capabilities. When asked how often some of the operations are performed, the response was very varied, from once a year, to seasonal to once per week to daily.


Exhibit 5-2: Current Processing Capabilities within Hutterite Colonies

10

97

0

5

12 2

98

98

1

02468

10121416182022

Bottlin

g - fo

od

Bottlin

g - w

ater

Cannin

g

Baggin

g

Dehyd

rating

Vacuu

m Packin

g

Greenh

ouse

Egg G

rader

Vegeta

ble G

rader

Mixing A

nimal

Feed

Mix Med

icated

Animal

Feed

Slaugh

ter &

pack

- bird

s

Slaugh

ter &

pack

- bee

f

Baking

No Res

pons

e

*Respondents checked multiple categories

N=14

Labour Availability Responding colonies indicated that as few as 1 to 10 to as many as 21 to 30 colony members could be available for food processing activities. Eight (8) of the 14 colonies indicated that 1 to 10 could be available; just one colony indicated the larger pool of available labour. Typically, colony members would be available to work on food processing activities sited at their colony. Labour availability was noted as variable with respect to the size and stage of the “life cycle” of the colony. Respondents commented that if the colony is newly split, members will typically not be available to assist or participate in non-colony projects, while those in the ‘middle’ will make their decision to participate based on factors such as:

• Track record of the company; • Company financials; • Contractual guarantee; and • Market opportunity, etc.

Forty-three (43%) of respondents (6 of 14) indicated that labour would be available on a year round basis, while 28% (4 of 14) indicated that labour would be seasonally available. Generally speaking, it was reiterated that two times per year can present difficulties for providing labour – seeding (March/April) and harvesting (August/September).

Investment in Equipment and Infrastructure When asked if colonies would be willing to either build a facility or enhance existing facilities, provided the opportunity was viable, Forty-three (43%) of respondents that had an opinion said that they would either build or enhance processing facilities. A larger percentage of respondents, 50% were also prepared to purchase the necessary equipment for the right opportunity. While


colonies indicated the presence of cooler, freezer and potato storage, most noted that there is not additional capacity for non-colony use at this time. An absence of appropriate loading docks and labelling equipment was noted by some in addition to a willingness to build or expand as required. Some colonies expressed willingness to adopt new practices to manage orders or requirements including the use of e-mail in place of fax or other current methods.

Compliance with Regulations The More than half of responding colonies expressed a willingness to pursue health (8 of 14) and provincial (10 of 14) regulations.

Willingness to Enter Management Agreements Sixty-four percent (64%) of Saskatchewan respondents indicated that they would be willing to sign a management agreement with a processor. This agreement was described as a contract that would include elements such as:

• A non compete clause; • Confidentiality/proprietor clause; • Product requirements; • Procedural requirements; • Training requirements; • Planned and unplanned quality assurance checks; and • Procedures for ending a contract, etc.

Colonies Interested in Pursuing Opportunities with Processors Six (6) of the 14 colonies were willing to provide their contact information as an expression of interest in pursuing opportunities with food and beverage processors in Saskatchewan. Contact information for the colonies is provided in Appendix F.

Interested Colonies

Bench Shaunavon Bone Creek Gull Lake Carmichael Gull Lake Spring Lake Swift Current Clear Spring Kenaston Sunnydale Perdue


SASKATCHEWAN HUTTERITE COLONIES – INTERVIEWS Unlike the Alberta portion of this study, Saskatchewan Hutterite colonies were not engaged through a focus group. The primary consideration for not convening a focus group was due to the fact that a considerable portion of colonies were heavily involved with harvesting activities during this phase of the study. Representative participation was expected to be difficult to achieve. Nonetheless, consultation with individual colonies was a key component of this study and individual telephone inquiries were made with the majority of colonies in the province, with detailed interviews conducted with the 14 colonies interested in pursuing opportunities with food processors. The majority of colony perspectives provided during these contacts are provided within the colony survey results. For those colonies that expressed disinterest in pursuing opportunities at this time, most indicated that labour was also in short supply for colony operations and other projects and could not be reasonably made available for work with processors.


SASKATCHEWAN – INTERESTED PROCESSORS AND COLONIES

P6

P4P2

P7

P8

P9

P5

P10

P11

H1 H2

H3 H4

H5

H6

Regina

Yorkton

Sout

hern

Sas

katc

hew

anN

orth

ern

Sask

atch

ewan

P3

Saskatoon

P1

Map not to scale

FOOD PROCESSORS

North Natural Foods (P1)Manitou Pemmican Company (P2)DGS Plus (P3)Schneider’s Gourmet World (P4)Classic Meats (P5)Thomson Meats (P6)FarmPure Foods Inc. (P7)BeeWare.ca (P8)Howland Enterprises Inc. (P9)Golburn Valley Oilmill Inc. (P10)Canadian Prairie Lamb (P11)

HUTTERITE COLONIES

Bench (H1)Bone Creek (H2)Carmichael (H3)Spring Lake (H4)Clear Spring (H5)Sunnydale (H6)

Prince Albert

Fresh Air Flavours by Julie (P12)

P12


SASKATCHEWAN – MATRIX OF POTENTIAL MATCHES Given the small numbers of respondents in Saskatchewan, all processors were matched with all 6 interested colonies. Of the 20 interested processors, 12 confirmed their interest in pursuing potential opportunities with colonies by providing a completed company profile for publication in this report (Appendix E).

No. Interested Processors Potential Colony Matches* By Location* and Stated

Processing Interests


P1 North Natural Foods Inc. Saskatoon

P2 Manitou Pemmican Company Drake

P3 DGS Plus LaRonge

P4 Schneider’s Gourmet World Delisle

P5 Classic Meats Fox Valley

P6 Thomson Meats Melfort

P7 FarmPure Foods Inc. Regina

P8 BeeWare.ca Spiritwood

P9 Howland Enterprises Inc. Yorkton

P10 Golburn Valley Oilmill Inc. Tisdale

P11 Canadian Prairie Lamb Saskatoon

P 12 Fresh Air Flavours by Julie Nipawin

Bench Bone Creek Carmichael Spring Lake Clear Spring Sunnydale

H1 H2 H3 H4 H5 H6

Bench Bone Creek Carmichael Spring Lake Clear Spring Sunnydale


ALBERTA AND SASKATCHEWAN – COMPARISON OF FINDINGS By and large, the findings from Alberta and Saskatchewan for processors and colonies are more similar than dissimilar. In fact, the proportion of interest among processors in pursuing potential opportunities with Hutterite colonies was identical in Alberta and Saskatchewan. On balance, a few small differences were demonstrated in the data collection and consultation with processors and colonies. These include:

PROCESSORS • A slightly higher response rate was achieved in Saskatchewan (22%) (versus 18% in

Alberta). • A significant number of processors indicated interest in the survey portion of the study, but

did not wish to express formal interest by submission of profile for this study in both Alberta and Saskatchewan.

• A smaller percentage of surveyed Alberta processors (24%, 19 of 79*) provided profiles for publication. [*Companies that did not provide a survey response, but did become aware of the study and provided a completed profile are included in the total of 79.] Saskatchewan profiles provided totalled 11 of the 35 surveyed (31%).

• Alberta processors (according to the survey results) appeared to emphasize a need for more specialized protocols and vendor performance requirements than were provided in Saskatchewan processor comments.

• Saskatchewan processors appeared to emphasize a greater desire to source locally for additional capacity and/or other supply arrangements.

• Alberta processors described considerably more equipment that could be available for sale to colonies.

COLONIES • Alberta colonies appear to have more available labour and more existing capacity to pursue

potential business arrangements with food processors. • Saskatchewan colonies, perhaps given the time of year they were surveyed (September),

did not provide a similar level of information about processing interests and capacities as was found in Alberta.

NEXT STEPS • The Alberta phase of this study began earlier in 2008 than the Saskatchewan phase. As

such, Alberta processors and colonies have had more time to pursue discussions. • Alberta processors were matched with Alberta colonies; likewise with Saskatchewan.

Matches across provincial boundaries might also be advantageous for both groups and provinces.


STATUS OF MATCHES At November 20, 2008 the following activity between processors and colonies that were introduced, or otherwise supported through this project’s activities and communications, includes:

• Sundalanda Farms / Iron Creek Colony (Alberta): Sundalanda Farms has toured Iron Creek Colony and commented that they were “impressed” with the operations. The two may perform a test kill of bison in late November 2008.

• Greens, Eggs and Ham / Hairy Hill Colony (Alberta): Greens, Eggs and Ham currently sub-contracts Hairy Hill Colony and has identified opportunities for development of processing activities.

• Waggers Pet Products / Suncrest Colony (Alberta): Preliminary discussions have occurred.

• Country Mom Foods / Multiple Colonies (Alberta): Country Mom Foods is drafting correspondence for interested colonies to assess potential interest.

• Organic Ranchers / Multiple Colonies (Alberta): Organic Ranchers will be contacting colonies to assess potential interest.

• Prairie Spicy Foods / Multiple Colonies (Saskatchewan): Prairie Spicy Foods will be contacting colonies to assess potential interest.

Based on discussions with interested processors in Alberta (Appendix C) and Saskatchewan (Appendix E), additional introductions and assessment for potential business arrangements between colonies and processors associated with this project are expected.


CONCLUSIONS AND RECOMMENDATIONS

CONCLUSIONS In consideration of the survey and focus group findings, as well as in-depth discussions with processors and colonies throughout this study:

• Interest appears to exist within these two groups in both Alberta and Saskatchewan to pursue business opportunities on a case-by-case basis.

• A number of Alberta and Saskatchewan food processors have stated levels of interest in exploring discussions with Hutterite colonies and verified their interest by authorizing publication of their information in this report.

• Successful business arrangements between food processors and Hutterite colonies exist today, although perhaps more commonly in Alberta.

• As can be seen within the food processing industry, or any industry, a significant range of interests and capabilities exist within Alberta Hutterite colonies.

• Some Hutterite colonies have indicated a willingness to diversify business activity and “build to suit” to demonstrate capabilities and proficiency in food processing and meeting contracted expectations.

• It is noted that because of the Colonies virtual self reliance, which includes access to their own source of capital for investing in ventures, the Hutterites are in a relatively good position to spend funds on strategic food processing collaborations on their Colonies during the current economic downturn.

• In keeping with the Hutterites cultural and religious beliefs they are looking for food processing development on their Colonies which are located in rural areas, therefore government should consider the Colonies endeavours in food processing as part of its commitment to encourage sustained rural economic development and should support these initiatives accordingly through funding food processor associations to help implement the recommendations indicated below.

RECOMMENDATIONS With a view toward supporting these interests, and achieving practical business arrangements between these two groups, it is recommended that:

• A practical manual for processors and Hutterite Colonies be developed and distributed outlining a step by step guide on how food processors and Colonies can follow a transparent due diligence process, training program, payment options and contractual agreements. This proposed manual would guide them towards successful outsourcing relationships that clarify responsibilities and resources at the start of the relationships in order to build trust.

• To build the trust and understanding required for successful collaboration between processors and Hutterite Colonies, the associations should:

o Provide cross-cultural training to processors so that they can better understand the Hutterite culture and how to achieve mutual objectives; and


o Provide training to Hutterites so that they can fully appreciate the dynamics of the food processing industry and resulting expectations and business obligations they must meet.

• Contacts be maintained with interested parties by establishing a registry to facilitate interaction between colonies interested in exploring opportunities with food processors and processors interested in seeking information about colonies.

• Information be collected and reported on an ongoing basis to both colonies and processors on the successful business arrangements that have been completed or are underway between processors and colonies.

• Where an appropriate business case exists, a Hutterite colony or colonies: o Undertake a pilot project to demonstrate the standards of performance with respect

to food security, compliance with delivery, specifications, etc. that is required by the industry.

o Complete third party evaluation / specialized training to demonstrate the capacity and willingness to undertake long-term development of food processing operations.

o Communicate these achievements effectively within the food processing industry.

• To build trust, strategic interaction including visits by food processors to the most advanced Hutterite facilities to better understand opportunities should be encouraged. Food processor associations have an important role to play in this regard and should coordinate these strategic, trust-building study trips that can build on the information gathered in the project.


APPENDIX A: PROCESSOR SURVEY Surveys in Alberta and Saskatchewan were identical save for two modifications: references to Alberta were replaced with Saskatchewan and the size of revenues (Question 15) was modified from $2 million in the Alberta version to $1 million in the Saskatchewan version. The final difference was giving credit to the Agriculture Council of Saskatchewan on the front cover of the survey for Saskatchewan.

Alberta Food and Beverage Processors Processor Needs Assessment Survey

We are excited about the potential

our industry holds… . . . and we need your help

to develop the opportunities that work for you.

What is this about? What is the benefit to you?

Who is involved? What do we need?

• Finding new opportunities to meet your needs;

• Understanding your interest in an alternative co-packing opportunity;

• Understanding your specific needs with respect to accessing capital, production capacity, and/or additional labour;

• Assessing whether your requirements could be provided by a Hutterite colony in Alberta.

• If a match between needs and capabilities, and both parties are willing, we can put you in contact to pursue discussion.

You could:

• Gain access to a reliable source of raw materials;

• Increase your production output;

• Outsource or redirect your co-packing arrangements to a local facility;

• Help grow your business through an increased supply of labour;

• Access state of the art processing and packing equipment.

All right here in Alberta.

This study is supported and funded by the:

• Agriculture and Food Council;

• Industry representatives;

• Alberta Food Processors Association.

• Please complete the attached survey by May 23, 2008

• Then, fax it to

(780) 454-1908 “Attention: Andrea Mondor”

• The survey will take approximately 20 to 30 minutes to complete.

• To ensure your confidentiality, results will only be reported in aggregate.


Questions? Please contact Andrea Mondor at (780) 453-5375. You have been identified as an individual within your organization who is knowledgeable about the specific issues affecting your business. Should someone else in your organization be a more suitable respondent for this survey, we ask that you please forward this document to him or her for completion. Section 1: The Opportunities A specific co-packing opportunity between Hutterite colonies and other food and beverage processors has been identified as having strong potential for the industry. Partner responsibilities are characterized as follows:

Colony • Produce and/or process product to quantity requirements and quality specifications.

• Meet or exceed production and/or processing food safety, handling, packaging, certification and other requirements.

• Package product to quanitity requirements and quality specifications.

• Meet pre-determined order schedule.

• Provide access to primary inputs (in some cases).

Processor • Itemize quantity requirements.

• Define product quality specifications.

• Define production and/or processing food safety, handling, packaging and other requirements.

• Guarantee purchase of predetermined quantities as per contract obligations.

• Agree to pre-determined order schedule.

• Arrange for pick-up of the product (optional).

• Sell equipment or train on a fee-for-service basis (optional). This opportunity is just one of many that might be possible for processors and colonies. Today’s Hutterite Colonies Alberta is home to approximately 17,500 Hutterian Brethren living in 175 colonies located from Waterton in Southern Alberta to north of Grand Prairie. Almost all colonies are sustained through agriculture. In addition to more traditional agricultural operations, a number of colonies have developed and implemented new technologies, ideas, patents and products. With effective colony operations but low agricultural commodity prices, colonies are increasingly pursuing new initiatives and diversifying.


Section 2: Information about Your Organization 1. What is your organization’s primary business? (Please check one of the following) Processor

Other

(please describe and then continue to Question 3)

2. If you are a processor, which categories are your primary product and service offerings?

(Please check all that apply.)

Animal Feeds / Products

Meat Fish Poultry

Specialty Foods Ethnic Foods Organic Foods Fruits / Vegetables

Grains / Cereals Pulse Crops Pasta Bakery

Dairy Frozen Entrees Meal Replacement Herbs

Sauces Condiments Oils Beverages

Halal

Alcoholic Beverages Snack Foods

Kosher

Other

(please specify all)

3. How do you like to communicate orders with your suppliers? (Please check all that apply) Telephone

Fax

Email

Specialized order system ( ECCnet Registry)


Section 3: New Ideas and New Opportunities 4. To what degree would your organization be interested in entering into co-packing or contracting

arrangements with other organization(s)? Description

1 = Not at all Interested, 2 = Disinterested, 3 = Slightly Interested, 4 = Interested, 5 = Somewhat Interested, 6=Very Interested,

7 = Extremely Interested, 9 = No Opinion

To access raw materials 1 2 3 4 5 6 7 9

To access additional production capacity 1 2 3 4 5 6 7 9

For co-packing 1 2 3 4 5 6 7 9

To access labour 1 2 3 4 5 6 7 9

To access capital 1 2 3 4 5 6 7 9

Other (Please explain)

1 2 3 4 5 6 7 9

5. When pursuing a co-packing or contracting arrangement with another organization, how important are the

following qualities to you?. (Please circle a rating scale for each quality.) 1 = Not at all Important, 2 = Not that Important, 3 = Slightly Important,

4 = Important, 5 = Somewhat Important, 6=Very Important, 7 = Extremely Important,

9 = No Opinion Purchasing Labour

Supply of raw materials 1 2 3 4 5 6 7 9 Labour attraction 1 2 3 4 5 6 7 9

Quality of raw materials 1 2 3 4 5 6 7 9 Labour retention 1 2 3 4 5 6 7 9

Cost of raw materials 1 2 3 4 5 6 7 9 Quantity of labour supply 1 2 3 4 5 6 7 9

Access to organic raw materials 1 2 3 4 5 6 7 9 Quality of labour supply 1 2 3 4 5 6 7 9

Raw Materials Production Cost of labour supply 1 2 3 4 5 6 7 8

Capacity to produce raw materials 1 2 3 4 5 6 7 9 Training and development 1 2 3 4 5 6 7 9

Quality of raw materials produced 1 2 3 4 5 6 7 9 Regulations and Legislation

Cost to produce raw materials 1 2 3 4 5 6 7 9 HACCP certified 1 2 3 4 5 6 7 9

Finished Production / Processing Federally inspected operations 1 2 3 4 5 6 7 9

Production / processing capacity 1 2 3 4 5 6 7 9 Provincially inspected operations 9 2 3 4 5 6 7 9

Production / processing methods 1 2 3 4 5 6 7 9 FDA Registration 1 2 3 4 5 6 7 9

Specific production/ processing protocols 1 2 3 4 5 6 7 9 Food Security 1 2 3 4 5 6 7 9

Kosher certified production lines 1 2 3 4 5 6 7 9 Transportation and handling 1 2 3 4 5 6 7 9

Certified Organic 1 2 3 4 5 6 7 9 Environmental 1 2 3 4 5 6 7 9

Halal certified production lines 1 2 3 4 5 6 7 9


Food safety and quality controls 1 2 3 4 5 6 7 9 Business Management and Finance

Third party audit 1 2 3 4 5 6 7 9 Access to additional sources of finance 1 2 3 4 5 6 7 9

Co-Packing Proximity to your plant 1 2 3 4 5 6 7 8

Source and supply own raw materials 1 2 3 4 5 6 7 9 Proximity to your market 1 2 3 4 5 6 7 9

Co-Packing capacity 1 2 3 4 5 6 7 9 Other

Co-Packing methods 1 2 3 4 5 6 7 9 Insurance 1 2 3 4 5 6 7 9

Shipping and labelling capacity 1 2 3 4 5 6 7 9 Contractual guarantees 1 2 3 4 5 6 7 9

Waste management & by-product handling 1 2 3 4 5 6 7 9

- please specify

1 2 3 4 5 6 7 9

Equipment & operator safety 1 2 3 4 5 6 7 9- please specify

1 2 3 4 5 6 7 9

- please specify 1 2 3 4 5 6 7 9

- please specify 1 2 3 4 5 6 7 9


Section 4: Exploring Opportunities with Hutterite Colonies 6. Representatives of Hutterite colonies have expressed interest in pursuing co-packing and other

contracting opportunities with food and beverage processors in Alberta.

To what degree would your organization be interested in entering into discussions about co-packing and other opportunities with Hutterite colonies?

1 2 3 4

Very interested Somewhat interested Disinterested No opinion

If you indicated an interest in reviewing potential opportunities with Hutterite colonies,

a. Please explain why your organization would be interested.

b. Are are you able and willing to train a colony on your processing and/or co-packing protocols?

Yes No

If yes, please describe the training you would be willing to provide.

c. Are you interested in selling equipment that you no longer require?

Yes No

If yes, please describe the equipment you would be interested in selling.

d. If you indicated a disinterest in reviewing potential opportunities with Hutterite colonies, please

explain why your organization would be disinterested.


Section 5: Insight into Industry Challenges 7. Please complete the following table for positions where you are concerned with issues of attraction,

retention, supply, quality, cost, training and development, and/or other labour issues.

Estimated annual number of vacancies (all positions listed below)

1

Very concerned

2

Somewhat concerned

Please explain the issues that you are encountering

Position 1

_______________________

1 2

Position 2

_______________________

1 2

Position3

_______________________

1 2

Position 4

_______________________

1 2

Position 5

_______________________

1 2


Section 5: Insight into Industry Challenges (continued) 8. Is your organization unionized?

Yes No

9. Do you provide training to your employees?

Yes No (please continue to Question 10)

a. If yes, what type of training do you provide?

10. How do you provide training for your employees?

In-house Program External Contract Services

Mix of Both

Section 6: Information about Your Organization 11. If you are a processor, are your facilities:

a. Federally inspected? Yes No N/A

b. Provincially inspected? Yes No N/A

c. HACCP (Hazard Analysis Critical Control Points) certified Yes No N/A 12. How many full-time employees do you have?

13. How many part-time employees do you have?

City:

Province/ State:

14. Where are your Alberta operations headquartered?

Country: 15. In the last fiscal year, what were your company’s annual revenues?

Under $500,000 $500,000 to $2,000,000

Greater than $2,000,000

I prefer not to answer

16. Over the past two or three years, on average, what has been your organization’s rate of annual revenue growth?

_______________ %

I prefer not to answer


Section 6: Information about Your Organization (continued) 17. To what degree are the following jurisdictions current markets for your organization’s products?

(Please circle rating scale.) 1 2 3 4 5

Jurisdictions

(40% of revenues or

greater)

(20% to 39% of revenues)



(0% of revenues)

Alberta 1 2 3 4 5

Elsewhere in Canada 1 2 3 4 5

United States 1 2 3 4 5

Taiwan / Hong Kong / China 1 2 3 4 5

Japan 1 2 3 4 5

Europe 1 2 3 4 5

Middle East 1 2 3 4 5

Other International 1 2 3 4 5

Section 7: Information about You 18. In the final report, would you be willing to be listed as an organization interested in entering into

discussions with the Colonies? No confidential information will be provided.

Yes No 19. Would you like your name to be entered into the draw for a $500 Best Western Travel Card?

Yes No


Please provide us with the following information about yourself:

Section 8: Reviewing the Results

Information from this study will be reported by the Alberta Food Processors Association Fall -2008.

Section 9: Your Feedback

20. Is there additional information you would like us to know? Do you have any other comments?

Thank you!

Your participation is greatly appreciated.

To ensure confidentiality, the information you provided will be reported in aggregate.

( ADDRESS ) ( CITY / TOWN ) ( PROVINCE )

( FAX NUMBER )

( NAME OF ORGANIZATION )

( PHONE NUMBER ) ( POSTAL CODE )

( TITLE AND RESPONSIBILITIES )

( FIRST NAME ) ( LAST NAME )


APPENDIX B: HUTTERITE SURVEY The same survey was used for both Alberta and Saskatchewan.

Is your colony interested in: Providing employment and business opportunities to your colony? Being part of a creative solution in addressing the Alberta labour shortage? Working with Alberta Food and Beverage Processors?

What is this about? What is the benefit to you?

• Finding new opportunities for the Hutterian Brethren living in your colony;

• Understanding your interest in co-packing opportunities;

• Understanding your capacity and interest with respect to supplying capital, production capacity, and/or additional labour to food and beverage processors in Alberta;

• If there is a match between their needs and your capabilities, and both parties are willing, we can put you in contact to pursue discussion.

You could:

• Grow your operations through industry partnerships;

• Increase your production output;

• Create new employment opportunities for members of your colony;

• Help grow your business through an increased demand;

• Expand your operations through the supply of new products.


Section 1: Current colony operations

Supply

Please mark with an X all the crops that your colony grows Wheat Barley Canola Peas Lentils Chickpeas Mustard Sunflower seeds Other:

Please answer the following questions on productive capacity How much milk does your colony produce? What is your quota on milk? How many wieners does your colony sell in a year?

How many market hogs does your colony sell in a year?

How many calves (beef) does you colony sell in a year?

How many feeders (beef) does your colony sell in a year?

How many market cattle (beef) does your colony sell in a year?

How many sheep does your colony sell in a year?

Please list any other livestock your colony has, and how much of each, your colony sells in a year. How many layers do you have? What is your quota on layers? How many broilers do you have? What is your quota on broilers? How many turkeys do you have? What is your quota on turkeys? How many geese do you have? Please list any other birds your colony has, and how much of each, your colony sells in a year.


Please mark with an X all the garden produce that your colony grows Carrots Lettuce Peas Radish Cucumbers Corn Peppers Potatoes Zucchini Pumpkins Strawberries Raspberries Tomatoes Beans Rhubarb Other:

a. Do you have any custom processing facilities?

Yes

No

b. If Yes, please describe what type of custom work you do in those facilities.


Storage

Please mark with an X which types of storage your colony has

Do you have extra space in your storage facilities, and how much space do you have.

Cooler space Freezer space Potato storage Warehouse Other:

Co – Packing

Please indicate if your colony does any of the following:

What can you do in a day?

How much more do you think you can do in a day?

How often do you do it?

Bottling (Food) Bottling (Beverages) Canning Bagging Vacuum Packing Grading: Eggs Grading: Vegetables Mixing Animal Feed Mixing medicated Animal Feed Slaughter & pack: Birds Slaughter & pack: Cattle Other:


Availability of colony members

How many members of your colony are available for employment?

What are the ages of the available members?

How many women are available?

How many men are available?

Type of availability of these colony members, for example: year round or Seasonal

Are you prepared to take training on the colony? Yes

No

Are you prepared to take training off the colony? Yes

No

Invest Capital

If there were an opportunity, would you build a processing facility?

Yes

No If there were an opportunity, would you enhance/update your current processing (slaughter) facility?

Yes

No If there were an opportunity, would you purchase necessary equipment (new or old from an Alberta processor) to do the processing job?

Yes

No

Regulations

If there were an opportunity, please indicate what your colony would be willing to comply with? (Please check all that apply.)

Kosher HACCP Provincial license Federal license

Halal FDA registration Organic certification Safe By-product

disposal (environmental)

Food Security Third Party Audits Health License


Section 2: Information about Processing on Your Colony

a. Please indicate what capabilities your processing plant has? (Please check all that apply.)

Shipping Labeling Loading Dock Transport

Refrigerated Truck Other:

b. How do you currently communicate orders to retailers? (Please check all that apply) Telephone

Fax

Email

Web

c. If you currently sell your products outside of Alberta, where do you sell them?

d. Are you prepared to sign a management and confidentiality agreement?

Yes

No


Section 3: Information about Your Colony e. In the final report, would you be willing to be listed as a colony interested in entering into discussions

with Food and Beverage Processors? No confidential information will be provided.

Yes No Please provide us with the following information about yourself:

Section 4 Reviewing the Results

Information from this study will be reported by the Alberta Food Processors Association fall -2008. Section 5: Your Feedback

f. Is there additional information you would like us to know? Do you have any other comments?

Thank you!

Your participation is greatly appreciated.

To ensure confidentiality, the information you provided will be reported in aggregate only.

( ADDRESS ) ( CITY / TOWN ) ( PROVINCE )

( FAX NUMBER )

( NAME OF COLONY )

( PHONE NUMBER ) ( POSTAL CODE )

( TITLE AND RESPONSIBILITIES )

( FIRST NAME ) ( LAST NAME )


APPENDIX C: PROFILES OF ALBERTA PROCESSORS INTERESTED IN PURSUING OPPORTUNITIES WITH HUTTERITE COLONIES As a part of survey conducted with Alberta Processors survey recipients were asked if they would be willing to be listed as an organization interested in entering into further discussions with the Colonies. The following 19 companies’ profiles expressing this interest are provided.

No. Interested Processors

P1 Sunfresh Farms Ltd. Edmonton

P2 Blue Kettle Specialty Food Ltd. St. Albert

P3 Country Mom Foods Ltd. Edmonton

P4 Sunrise Bakery Edmonton

P5 YB Quality Meat Red Deer

P6 Vermilion Packers Vermilion

P7 Calgary Italian Bakery Ltd. Calgary

P8 Foothills Creamery Ltd. Calgary

P9 [email protected] Rocky View

P10 Longview Meat & Mdse. Ltd. Longview

P11 Organic Ranchers Edmonton & Lacombe

P12 Sundalanda Farm St. Paul

P13 Waggers Pet Products Calgary

P14 Sepallo Food Ingredients Barrhead

P15 Bles-Wold Farm Yogurt Lacombe P16 Delizia's Pasta Ltd. Calgary

P17 Parkland Packers (1976) Ltd. Stony Plain

P18 Prime Cuts Meat & Deli Ltd. Vegreville

P19 Something Special Deli-Foods Sherwood Park


APPENDIX D: PROFILE AND CONTACT INFORMATION FOR ALBERTA HUTTERITE COLONIES INTERESTED IN PURSUING OPPORTUNITIES WITH PROCESSORS

H1 H9

Colony Name: Suncrest Colony Name: High RiverContact Information: Paul Hofer

Box 780Castor T0C 0X0Phone: 403-882-2476Fax: 403-882-2398

Contact Information: Dave HoferBox 5610High River T1V 1M7Phone: 403-395-2107 Fax: 403-395-3907

H2 H10

Colony Name: Jenner Colony Name: New YorkContact Information: Edward Hofer

Box 68Jenner T0J 1W0 Phone: 403-898-3931Fax: 403-898-2063

Contact Information: James HoferBox 905Lethbridge T1J 3Z8Phone: 403-345-3884 Fax: 403-345-3855

H3 H11

Colony Name: Veteran Colony Name: LakesideContact Information: Mike Stahl

Box 500Veteran T0C 2S0Phone: 403-575-2169Fax: 403-575-2190

Contact Information: Joe WipfBox 9 Cranford T0K 0R0Phone: 403-320-4508 Fax: 403-320-4519

H4 H12

Colony Name: New Rockport Colony Name: LivingstoneContact Information: John Waldner

Box 10New Dayton T0K 1P0Phone: 403-733-2122Fax: 403-733-2173

Contact Information: Mike WalterBox 207Lundbreck T0K 1H0Phone: 403-628-2226 Fax: 403-628-2203

H5 H13

Colony Name: Elmspring Colony Name: RocklakeContact Information: Andrew Wipf

Box 300Warner T0K 2L0Phone: 403-642-2252Fax: 403-642-2029

Contact Information: Eli EntzBox 1297Coaldale T1M 1N1Phone: 403-345-3892 Fax: 403-345-3896

H6 H14

Colony Name: Enchant Colony Name: LomondContact Information: Joe Hofer

Box 300Enchant T0K 0V0Phone: 403-739-2231Fax: 403-739-2225

Contact Information: Joe WalterBox 220Lomond T0L 1G0 Phone: 403-792-2102 Fax: 403-792-2170

H7 H15

Colony Name: Oaklane Colony Name: ThompsonContact Information: Eli Waldner

Box 4390Taber T1G 2C8Phone: 403-223-2950Fax: 403-223-1071

Contact Information: George Tschetter Box 160 Fort Macleod T0L 0Z0Phone: 403-553-3715 Fax: 403-553-3724

H8 H16

Colony Name: Ewelme Colony Name: KingslakeContact Information: George Hofer

Box 250Fort MacleodPhone: 403-553-2606Fax: 403-553-3367

Contact Information: John WaldnerBox 40Foremost T0K 0X0Phone: 403-867-2268 Fax: 403-867-2032


The following 16 Hutterite Colonies provided details for a profile. No. 1Colony Name: SuncrestLocation: Red DeerColony Members 67Colony Members Available for Work 20-30

Capabilities and Current Production Canning, bagging, vacuum packing, vegetable grading, mixing animal feed, mixing medicated animal feed, slaughter & pack birds and beef

Garden: Carrots, potatoes, peas, beans, cauliflower, broccoli, cabbage, lettuce, corn, tomatoes, radishes, peppers, onions, pumpkins, strawberries, raspberries, rhubarb, beets, zucchini, sunflowers

Crops: Barley, wheat, canola, peas, lentils, chickpeas, mustard

Livestock: Cattle, hogs, ducks

Specialized Production, Equipment and Training

N/A

Current Market Activities Vegetable production and processing, and chicken production and processing

Willing to Undertake The colony is planning on growing organic vegetables and also plans on constructing a facility to process organic vegetables for the retail market. In 5yrs new vege proc

Additional Information N/A

Colony Interests Vegetable supply and processing

No. 2

Colony Name: JennerLocation: BrooksColony Members 55Colony Members Available for Work 6

Open to a variety of opportunities






N/A

Current Market Activities N/A

Willing to UndertakeJenner is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification

Additional Information They are not willing to slaughter more poultry

Colony Interests Baking


No. 3Colony Name: VeteranLocation: Red DeerColony Members 82Colony Members Available for Work 30






N/A

Current Market Activities Veteran supplies a couple of local grocery stores with radishes and potatoes

Willing to Undertake Veteran is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification


Colony Interests Veteran is in the process of establishing a new colony and would be interested in exploring a variety of business opportunities

No. 4Colony Name: New RockportLocation: LethbridgeColony Members 59Colony Members Available for Work 5

Increase the slaughtering and processing of birdsGrow and process more vegetables

Capabilities and Current Production Canning, bagging, vacuum packing, vegetable grading, mixing animal feed, mixing medicated animal feed, slaughter & pack poultry


Crops: Barley, wheat, peas, canola, chickpeas, mustard, durum, camelina

Livestock: Cattle, hogs, broilers, turkeys, ducks


New Rockport has a provincially licensed and inspected slaughter house. The colony also has a separte HAACP approved facility that is used for their vegetable and produce operation. They also have a refrigerated transport trailer for both poultry and vegetables

Current Market Activities New Rockport slaughters and packs broiler chickens and sells these birds to a customer in Calgary for further processing. The colony also markets fresh vegetables in Southern Alberta and Calgary

Willing to Undertake New Rockport is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification


Colony Interests


No. 5Colony Name: ElmspringLocation: Lethbridge/WarnerColony Members 52Colony Members Available for Work 10

Growing and processing vegetablesBaking

Capabilities and Current Production Canning, bagging,vegetable grading, mixing animal feed and medicated animal feed, slaughter and pack birds and beef

Garden: Carrots, potatoes, peas, beans, cauliflower, broccoli, cabbage, lettuce, corn, tomatoes, radishes, peppers, onions, pumpkins, strawberries, raspberries, rhubarb, sunflowers

Crops: Barley, wheat, durum, corn, canola, peas

Livestock: Cattle, hogs, broilers, ducks, turkeys


N/A

Current Market Activities Elmspring grows, clean, grades, cuts, packages and markets garden produce to major grocery store chains across Southern Alberta. The vegetables are marketed unders Elmspring Farms.

Willing to Undertake Elmspring is willing to improve their existing slaughter house and processing facility and will also consider building a new facility and/or purchase new equipment. They are also willing to comply with requested special regulations


Colony Interests

No. 6Colony Name: EnchantLocation: LethbridgeColony Members 41Colony Members Available for Work 16

Colony Interests They would be willing to look at any opportunity in the food industry from baking bread to suppling potatoes

Capabilities and Current Production Canning, bagging, vegetable grading, mixing animal feed, mixing medicated animal feed, slaughter & pack birds and beef


Crops: Barley, wheat, corn, canola, potatoes



Potatoes processing equipment, this includes being able to wash and bag the potatoes

Current Market Activities Enchant grows and markets fresh vegetables and specializes in the production, grading, storage and marketing of potatoes. Currently, they produce 2,000 tons of potatoes for retail

Willing to Undertake Enchant is willing to construct a new processing facility and is also willing to purchase new equipment, take training and have their facilities comply with required Federal, Provincial and other specialized regulations



No. 7Colony Name: OaklaneLocation: Lethbridge/TaberColony Members 56Colony Members Available for Work 35-40






Bagger, vegetable washer, and pea shelling equipment

Current Market Activities Oaklane sells garden produce to a customer in Taber

Willing to Undertake Oaklane is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification

Additional Information Looking for something that they can still be available for seeding and harvest

Colony Interests N/A

No. 8Colony Name: EwelmeLocation: Lethbridge/Pincher CreekColony Members 61Colony Members Available for Work 60

Capabilities and Current Production Canning, slaughtering of poultry and beef


Crops: Barley, wheat, corn, canola, potatoes



The colony has a Provincially licensed and inspected slaughter house where they specialize in broiler bird slaughter and processing. The colony owns transport equipment and refridgerated trailers

Current Market Activities Ewelme slaughters and markets approximately 1,400 broiler chickens per month with its primary market in Calgary. The colony has slaughter capacity to process 1,400 birds per day and would be very interested in a custom slaughter opportunity.

Willing to Undertake Ewelme is willing to construct a new processing or slaughter facilityand is willing to comply with specialized regulations


Colony Interests Growing and developing the chicken slaughter and processing business. They would also consider a custom slaughter opportunity


No. 9Colony Name: High RiverLocation: CalgaryColony Members 52Colony Members Available for Work 50






Recently upgraded, provincially inspected slaughter house

Current Market Activities High River Colony specializes in broiler bird production, slaughter and processing where they currently slaughter and sell 1,000 to 1,500 birds every 8 - 10 weeks. The colony's primary market is Calgary

Willing to Undertake High River is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification


Colony Interests Develop and grow their broiler chicken operation

No. 10Colony Name: New YorkLocation: LethbridgeColony Members 64Colony Members Available for Work 20

Colony Interests Develop and grow their beef jerky operations

Capabilities and Current Production Canning and processing of vegetables, slaughtering and processing poultry and beef


Crops: Barley, wheat, peas, sweet corn, beans, oats, durum, chickpeas, canola, potatoes

Livestock: Cattle, hogs, broilers, ducks, geese


The Colony has a fairly new slaughter house that is Provincially licensed. The colony also possesses a license for processing beef jerky for retail sale,and the manager has taken meat cutting and sausage making classes

Current Market Activities New York produces and sells various flavours of jerky as well slaughtering and processing chicken. Their fresh produce is also marketed.

Willing to Undertake New York is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification

Additional Information A member of the colony is on the provincial producer board for laying pullets


No. 11Colony Name: LakesideLocation: LethbridgeColony Members 51Colony Members Available for Work 5

Meat processing - patties and sausageDairy processing - cheese, butter and cottage cheese

Capabilities and Current Production Canning, slaughtering of poultry and beef


Crops: Barley, wheat, peas, sweet corn, beans, oats, durum, chickpeas, canola, potatoes

Livestock: Cattle, hogs, broilers, ducks, geese


They have specialized sausage and patty making equipment, used primarily for beef - they can produce up to 2,100 patties per hour. The colony manager has also taken training in making sausage

Current Market Activities Lakeside has significant experience in making sausage, cheese, butter, and cottage cheese to Fm's. The colony also has a licensed feed mill so they often make and sell feed, primarily for other colonies.

Willing to Undertake Lakeside is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification

Additional Information A member of the colony is on the Alberta Hog board

Colony Interests

No. 12Colony Name: LivingstoneLocation: Lethbridge/Pincher CreekColony Members 57Colony Members Available for Work 15

Colony Interests GreenhouseBaking

Capabilities and Current Production Canning, bagging, vacuum packing, vegetable grading, mixing animal feed, mixing medicated animal feed, slaughter & pack birds and beef, greenhouse production


Crops: Barley, wheat, oats



N/A

Current Market Activities Livingstone sells their garden produce at Farmer's markets

Willing to Undertake They are willing to enhance their food processing facilities and purchase equipment, as well as take additional training and comply with any required regulations



No. 13Colony Name: Rock LakeLocation: LethbridgeColony Members 66Colony Members Available for Work 4

Vegetable processingSlaughter and processing meat

Capabilities and Current Production Canning, bagging, vacuum packing, vegetable grading, Mixing animal feed, mixing medicated animal fee, slaughter & pack birds and beef


Crops: Barley, wheat, peas, lentils, mustard, flax, durum, chickpeas, canola

Livestock: Cattle, hogs, broilers, ducks, geese, sheep, turkeys


Recently upgraded slaughter house is HAACP approved, and the manager has taken training on meat cutting. There is a special facility for processing strawberries which is also HAACP approved

Current Market Activities Rock Lake specializes in growing, washing, and packing strawberries for markets across Southern Alberta, and has been in this business for many years. The colony specializes in vegetable production and processing and supplies a number of retail stores in Southern Alberta (IGA's and Sobeys) under the name Rock Lake Farms. Rock Lake also has a solid market in the poultry sector and produces and processes broiler chicken and turkeys for resale.

Willing to Undertake Rock Lake is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification

Additional Information One member is on the Board of Directors for the Lethbridge Inland Terminal and another member is on a committee of the Lethbridge Exhibition Board related to the Farmer's Markets

Colony Interests


No. 14Colony Name: LomondLocation: LethbridgeColony Members 56Colony Members Available for Work 5

Colony Interests No preferences defined

Capabilities and Current Production Canning, bagging, vacuum packing, vegetable grading, mixing animal feed, mixing medicated animal feed, slaughter & pack birds and beef, greenhouse production


Crops: Barley, wheat, peas, canola, chickpeas, mustard, durum, camelina

Livestock: Cattle, hogs, sheep, broilers, turkeys, ducks, geese


They have a greenhouse

Current Market Activities Lomond grows and markets fresh vegetables together with some baked goods, buns and bread - typically this is only done when there is excess of colony need

Willing to Undertake Lomond is in need of a new slaughter house and is prepared to build and equip a modern facility that will comply with all specialized regulations

Additional Information N/A No. 15Colony Name: ThompsonLocation: Lethbridge/Pincher CreekColony Members 56Colony Members Available for Work 5

Colony Interests Grow poultry operation - this includes raising and slaughtering them. The colony has room for 5,000 to 10,000 more birds

Capabilities and Current Production Canning, slaughter and package poultry


Crops: Barley, wheat, oats, potatoes

Livestock: Cattle, broiler, ducks, geese, turkeys


They have a two provincial licenses, one to slaughter birds and another to sell potatoes. The colony owns a cooler van for transport. Some members on the colony are starting to take food safety training that includes the handling and shipping of produce

Current Market Activities Thompson has been selling small amounts of Turkeys and Broilers locally and in Calgary. For the past 20 years they have been selling potatoes to stores in the Crowsnest Pass in 5 and 10lb bags. Over the past dozen years they have been selling more of the extra garden produce as well.

Willing to Undertake Thompson is willing to enhance or construct a new food processing facility and purchase new equipment, participate in training, and comply with the required health, HAACP, Federal, Provincial regulations, and/or organic certification



No. 16Colony Name: Kingslake

Location: Lethbridge - ForemostColony Members 44Colony Members Available for Work 4 - Seasonal

Vegetable processingFruit processingBaking

Capabilities and Current Production Canning, bagging, vegetable grading, mixing animal feed, mixing medicated animal feed, slaughter & pack birds and beef

Garden: Carrots, potatoes, peas, beans, cabbage, lettuce, corn, tomatoes, radishes, peppers, onions, pumpkins, cauliflower, broccoli

Crops: Barley, wheat, canola, peas, durum.

Livestock: Cattle, hogs


New slaughter house is near completion with separate rooms and coolers for vegetable processing. The facility is Provincially licensed and HAACP approved

Current Market Activities Kingslake has grown, cleaned, graded, cut and packaged carrots for Superstore and the Cherry PIt ( a major Farmer's Market in Calgary) from the colony's own production as well as utilizing at least four other colonies as suppliers. Kingslake carrots are packaged and sold in different sizes under the Kingslake Farms name or brand. The colony has been active in this business for more than 10 years and markets about 45 tonnes of carrots per season, 15 tonnes from their own production and about 30 tonnes from their colony suppliers. All indications are that their customers are wanting more next season

Willing to Undertake N/A

Additional Information The manager from the colony, John Waldner, is the chairman of the board for the Alberta Egg Producers Co-operative and has been in that role for a number of years. John has been the driving force behind additional value added egg processing ventures on behalf of Alberta Egg Producers

Colony Interests


APPENDIX E: PROFILES OF SASKATCHEWAN PROCESSORS INTERESTED IN PURSUING OPPORTUNITIES WITH HUTTERITE COLONIES As a part of the survey conducted with Saskatchewan Processors, survey recipients were asked if they would be willing to be listed as an organization interested in entering into further discussions with the Colonies. The following 12 companies’ profiles expressing this interest are provided.

No. Interested Processors

P1 North Natural Foods Inc. Saskatoon

P2 Manitou Pemmican Company Drake

P3 DGS Plus LaRonge

P4 Schneider’s Gourmet World Delisle

P5 Classic Meats Fox Valley

P6 Thomson Meats Melfort

P7 FarmPure Foods Inc. Regina

P8 BeeWare.ca Spiritwood

P9 Howland Enterprises Inc. Yorkton

P10 Golburn Valley Oilmill Inc. Tisdale

P11 Canadian Prairie Lamb Saskatoon

P12 Fresh Air Flavours by Julie Nipawin


No. P1

Company Name: North Natural Foods Inc.Contact Information: Simon Bird

Box 31016Saskatoon, Saskatchewan, S7H 5S8Phone: 306-227-8362www.northnaturalfoods.com

Company Overview: Produces authentic, user friendly Aboriginal foods.

Primary product & service offerings: Bannock

Extremely Interested: Access to Raw Materials, Access to Additional Production Capacity, Co-packing, Labour and Capital

Extremely Important:Purchasing - Cost of Produce Raw MaterialsLabour - Cost of Labour SupplyRegulations and Legislation - FDA Regulation, Food Security, Food Safety and Quality, Third Party AuditCo-Packing - Co-packing Capacity and Methods, Shipping and Labelling Capacity, Waste Management and By-Product Handling, Equipment and Operator Safety, Transportation and Handling

Business Management and Finance - Access to Additional Sources of Finance, Proximity to MarketOther - Contractual Guarantees

Specific Interest in seeking out business opportunities with Hutterite Colonies:

Seeking additional co-packing capacity.

Equipment that the Processors are interested in selling:

No Indication

Type of training that the company is willing to provide:

The product is easy to produce thus training is very minimal

Current Staffing Requirements: No Indication

Vacancies: No Indication

Active Markets: Saskatchewan and the rest of Canada

Areas of interest in entering into co-packing or contracting arrangements with another organization.

Important Qualities when pursuing a co-packing or contracting arrangement with another

i ti


No. P2

Company Name: Manitou Pemmican CompanyContact Information: Curt Eby

Box 81Drake, Saskatchewan, S0K 1H0Phone: 306-363-4923

Company Overview: Combines the flavour of berries and bison meat to produce a unique bison jerky called 'Bison Pemmican'

Primary product & service offerings: Meat



No. P3

Company Name: DGS PlusContact Information: Deb Prodahl

Box 1685LaRonge, Saskatchewan, S0J 1L0Phone: 306-425-2853Fax: 306-425-2835

Company Overview: Produces flavourful and low salt Greek seasonings.

Primary product & service offerings: Seasonings

Extremely Interested: Access to Raw Materials, Access to Additional Production Capacity, Co-Packing, Access to Labour

Extremely Important:Purchasing - Supply, Quality and Cost of Raw MaterialsRaw Materials Production - Capacity to Produce Raw Materials, Cost and Quality of Raw MaterialsFinished Production / Processing - Production / Processing Capacity, Methods and ProtocolsLabour - Labour Attraction and Retention, Quantity and Quality of Labour Supply, Cost of Labour Supply, Training and Development Regulations and Legislation - HACCP Certified, Federally and Provincially Inspected Operations, FDA Registration, Food Security, Food Safety and QualityCo-Packing - Source and Supply of Raw Materials, Co-packing Capacity and Methods, Shipping and Labelling Capacity, Waste Management and By-Product Handling, Equipment and Operator Safety, Environmental, Transportation and Handling

Business Management and Finance - Access to Additional Sources of Finance, Proximity to Plant, Proximity to MarketOther - Insurance, Contractual Guarantees


Very interested in having the raw materials grown and available at a competitive price.


No Indication


There is very little training involved in working with a dry product.



Active Markets: Saskatchewan


Important Qualities when pursuing a co-packing or contracting arrangement with another organization.


No. P4

Company Name: Schneider's Gourmet WorldContact Information: Brent Schneider

Box 383, 303 1st St WestDelisle, Saskatchewan, S0L 0P0Phone: 306-493-3199Fax: 306-493-2491 www.sgw.ca

Company Overview: Produces a large variety of flavourful snack foods and other snack products.

Primary product & service offerings: Condiments, Seasonings and Snack Foods

Active Markets: Saskatchewan, the rest of Canada and the Unites States


No. P5Company Name: Classic MeatsContact Information: Lester Lodoen

Box 127Fox Valley, Saskatchewan, S0N 0V0Phone: 306-558-7017Fax: 306-975-6850 www.classicmeats.com

Company Overview: Product development company - producer of a high quality, pre-cooked meat on a stick called the New York Stick. With flavours of spiced beef, BBQ pork, meditteraneon chicken, and southwestern chicken. Produced firstly for Canada, maybe USA later. Would be interested in working with colonies in western Canada.

Primary product & service offerings: Meat

Extremely Interested: Access to Raw Materials, Access to Additional Production Capacity, Co-Packing, Sales and Distribution

Extremely Important:Purchasing - Supply and Quality of Raw MaterialsRaw Materials Production - Quality of Raw MaterialsFinished Production / Processing - Production / Processing Capacity, Methods and ProtocolsLabour - Labour Retention, Quantity and Quality of Labour Supply, Training and Development Regulations and Legislation - HACCP Certified, Federally Inspected Operations, FDA Registration, Food Security, Food Safety and Quality, Third Party AuditCo-Packing - Source and Supply of Raw Materials, Co-packing Capacity and Methods, Shipping and Labelling Capacity, Waste Management and By-Product Handling, Equipment and Operator Safety, Environmental, Transportation and Handling

Business Management and Finance - Access to Additional Sources of Finance, Proximity to Plant, Proximity to Market

Other - Insurance, Contractual Guarantees


Using Hutterrite facilities and access to a good, reliable work force.


Double-decked oven


Processing of product.







No. P6Company Name: Thomson Meats Ltd.Contact Information: Wally Garchinski

Box 3429Melfort, Saskatchewan, S0E 1A0Phone: 306-752-2802Fax: 306-752-4674 www.thomsonmeats.ca

Company Overview: Thomson Meats Ltd. is an integrated meat processing firm. They produce and provide a variety of fresh and processed food items.

Primary product & service offerings: Meat, Frozen Entrees, Snack Foods, Organic Foods, Meal Replacements, Poultry



No. P7

Company Name: FarmPure Foods Inc.Contact Information:

Carl Flis316 1st Avenue EastRegina, Saskatchewan, S0J 1L0Phone: 306-757-3663 www.farmpure.com

Company Overview: Mandate is to produce food, beverages and intermediate products from pure grains grown in an environmentally friendly manner.

Primary product & service offerings: Specialty Foods, Grains/Cereals, Kosher, Bakery

Extremely Interested: Access to CapitalInterested:Access to Additional Production Capacity, Co-Packing

Extremely Important:Finished Production / Processing - Production / Processing Methods and ProtocolsLabour - Training and Development Regulations and Legislation - Federally and Provincially Inspected Operations, FDA Registration, Food Security, Kosher Certified Production Lines, Food Safety and Quality, Third Party Audit

Co-Packing - Co-packing Methods, Shipping and Labelling Capacity, Waste Management and By-Product Handling, Equipment and Operator Safety, Transportation and Handling Dedicated Gluten Free facility


Very interested in labour quality and quantity arrangments.


No Indication


Packaging on a semi-automated line

Current Staffing Requirements: Packaging Line


Active Markets: Canada, the United States and Europe



organization.


No.P8

Company Name: BeeWare.caContact Information: Peter Zuck

P.O. Box 691Spiritwood, Saskatchewan, S0J 2M0Phone: 306-763-2506www.beeware.ca [email protected]

Company Overview: Produces only chemical free, natural skin care products including raw honey, and candles.

Primary product & service offerings: Natural food and body products.

Interested: Access to additional Production Capacity

Important:Raw Materials Production - Cost to Produce Raw MaterialsRegulations and Legislation - FDA RegistrationCo-Packing - Co-packing Capacity, Equipment and Operator Safety, Environmental, Transportation and HandlingBusiness Management and Finance - Access to Additional Sources of Finance, Proximity to Plant, Proximity to MarketOther - Insurance, Contractual Guarantees


Needs to increase supply of products as demand is increasing. Needs a larger work and salesforce.


No Indication


Manufacturing and Packaging

Current Staffing Requirements: Quality Control, Sales






No. P9

Company Name: Howland Enterprises Inc.Contact Information: Wink Howland

RR3, Box 55Yorkton, Saskatchewan, S3N 2X5Phone: 306-783-7046Fax: 306-786-6001 www.howlandshoney.com

Company Overview: Produces 100% Canada #1 white honey for sale within North America and the world.

Primary product & service offerings: Honey

Interested: Co-Packing, Access to Labour

Extremely Important:Regulations and Legislation - Food Safety and Quality, Third Party AuditBusiness Management and Finance - Proximity to Plant

Important:Finished Production / Processing - Production / Processing Capacity, Methods and ProtocolsLabour - Quality of Labour Supply, Training and Development

Regulations and Legislation - Federally and Provincially Inspected Operations, FDA RegistrationCo-Packing - Co-packing Capacity and Methods, Shipping and Labelling Capacity, Waste Management and By-Product Handling, Equipment and Operator Safety, Environmental, Transportation and HandlingOther - Insurance, Contractual Guarantees


Very interested in co-packing possibilities.

Equipment that the Processors are interested in selling: No Indication

Type of training that the company is willing to provide: None



Active Markets: Canada, United States and Japan




No. P10

Company Name: Golburn Valley Oilmill Inc.Contact Information: Frank Hulsebosch

Box 2168Tisdale, Saskatchewan, S0E 1T0Phone: 306-873-5547www.gvo.ca

Company Overview: Provide high quality organic and kosher products including cooking oils, grains, seeds, etc. to promote a healthy lifestyle.

Primary product & service offerings:Animal Feeds/Products, Specialty Foods, Ethnic Foods, Organic Foods, Kosher, Oils

Active Markets: Saskatchewan and the rest of Canada, United States


No. P11

Company Name: Canadian Prairie LambContact Information: Gordon Schroeder

2213C Hanselman CourtSaskatoon, Saskatchewan, S7L 6A8Phone: 306-933-7166Fax: 306-933-7182 www.prairielamb.com

Company Overview: A company that aggresively develops lamb based products for the retail marketplace. There are currently 200 sheep producers dedicated to producing top quality sheep products.

Primary product & service offerings: Specialty Foods, Meat, Ethnic Foods, Frozen Foods, Snack Foods, Meal Replacements

Extremely Interested: Co-Packing, Access to Labour and Capital, Sales and Marketing

Extremely Important:Purchasing - Supply, Quality and Cost of Raw MaterialsRaw Materials Production - Cost and Quality of Raw MaterialsFinished Production / Processing - Production / Processing Capacity, Methods and ProtocolsRegulations and Legislation - HACCP Certified, Federally Inspected Operations, Food Security, Food Safety and QualityCo-Packing - Transportation and HandlingOther - Contractual Guarantees


Very interested in increasing co-packing capacity.


No Indication


Production techniques and product formulation.

Current Staffing Requirements: Marketing and Sales, Production Manager






Company Name: Fresh Air Flavours by JulieContact Information: Julie Rempel

Box 1899Nipawin, Saskatchewan, S0E 1E0Phone: 306-862-9140www.freshairflavours.com

Company Overview: Goal is to bring the unique tastes of outdoors into natural fresh products for healthy eating.

Primary product & service offerings: Specialty Foods, Sauces, Condiments

Extremely Interested: Access to Raw Materials, Access to additional Production Capacity, Co-Packing, Access to Labour, Access to Capital

Extremely Important:Purchasing - Supply and Cost of Raw MaterialsRaw Materials Production - Cost to Produce Raw MaterialsFinished Production / Processing - Production / Processing Capacity, Methods and ProtocolsLabour - Cost of Labour Supply Regulations and Legislation - Federally Inspected Operations, Food Security, Food Safety and QualityCo-Packing - Co-packing Capacity and Methods, Shipping Other - Contractual Guarantees


Wants to expand business by working with a co-packer to produce product in a federally inspected facility. Owner would like to focus more on marketing. The owner is also interested in having rhubarb, onion and garlic grown and processed locally. Possibly looking for man/woman power for harvesting wild products


No Indication


All training for production, handling and processing, except for training related to federal processing requirements



Active Markets: Saskatchewan

No. P12




APPENDIX F: PROFILE AND CONTACT INFORMATION FOR SASKATCHEWAN HUTTERITE COLONIES INTERESTED IN PURSUING OPPORTUNITIES WITH PROCESSORS H1 H2

Colony Name: Bench Colony Name: Bone CreekContact Information: Andy Wurz

Box 1118Shaunavon S0N 2M0Phone: 306-297-3270Fax: 306-297-4172

Contact Information: Toby MandelBox 60Gull Lake S0N 1A0Phone: 306-297-3556 Fax: 306-297-4193

H3 H4

Colony Name: Carmichael Colony Name: Spring LakeContact Information: Amos Entz

Box 759Gull Lake S0N 1A0 Phone: 306-672-3989 Fax: 306-672-3987

Contact Information: Daruis HoferBox 935Swift Current S9H 3V5Phone: 306-627-3325 Fax: 306-627-3378

H5 H6

Colony Name: Clear Spring Colony Name: SunnydaleContact Information: Mike Wurz

Box 130Kenaston S0N 2N0Phone: 306-252-2813 Fax: 306-252-2800

Contact Information: Andrew WurtzBox 69Perdue S0K 4B0Phone: 306-237-4361 Fax: 306-237-4437


No. 1Colony Name: Bench

Location: ShaunavonColony Members 61Colony Members Available for Work 10

As per phone call on Oct 8 not sure what is going to happen in the future so no further comments

Capabilities and Current Production

Garden: Carrots, potatoes, peas, beans, cabbage, lettuce, corn, tomatoes, radishes, peppers, onions, pumpkins, cauliflower, broccoli

Crops: Wheat, Barley, Canola, Peas, Corn, potatoes

Livestock: Hogs, Cattle, Horses, Broilers, Chicken


Information not available

Current Market Activities Information not available

Willing to Undertake Information not available


Colony Interests

No. 2

Colony Name: Bone Creek Location: Gull Lake Colony Members 47Colony Members Available for Work 4 to 6

Capabilities and Current Production Canning, bagging and slaughtering for their own use only

Garden: Carrots, potatoes, peas, beans, cauliflower, broccoli, cabbage, lettuce, corn, tomatoes, radishes, peppers, onions, pumpkins, strawberries, raspberries, rhubarb

Crops: Wheat, Canola, Peas, Barley, Potatoes

Livestock: Cattle, Hogs, Chickens, Broilers,


None

Current Market Activities They currently have a potato production operation whereby they bag 5 and 10 lb bags which are then sold to the Saskatoon Co-op. They sell approximately 40 tons of potatoes per year

Willing to Undertake Some of the licenses


They would be interested in an opportunity that supports employment for 4 to 6 men fulltime, anything from a beverage to a potato production line. They are not interested in any slaughter opportunities.

Colony Interests


No. 3Colony Name: Carmichael Location: Gull Lake Colony Members 36Colony Members Available for Work 6

Colony Interests The opportunity they are most intersted in is to be able to grow their vegetable production and sales operation. Their second choice, if the opportunity was right is chicken slaughtering.

Capabilities and Current Production Bagging, Canning, Slaughtering (chickens, hogs, beef), and Sausage making (pork - twice a year). Small scale vegetable grading and selling of potatoes, carrots, and beets locally


Crops: Barley, Wheat, Canola, Peas, Potatoes

Livestock: Hogs, Chickens, Broilers, Cattle,


N/A

Current Market Activities They currently sell potatoes, carrots, beets and some other garden vegetables at a local retailer which equates to approximately $300 per week. They started this business last year, have had an increase in sales this year, and would like to continue to grow this businesss.

Willing to Undertake The colony would consider complying with any licenses that made sense for the opportunity

Additional Information N/A No. 4Colony Name: Spring Lake Location: Swift Current Colony Members 46Colony Members Available for Work 10

Capabilities and Current Production Canning, bagging, slaughtering (beef, hogs, poultry). Growing and processing vegetables


Crops: Barley, Wheat, Canola, Peas, durum, Lentils

Livestock: Cattle, Hogs, Broilers, Ducks, Geese


None

Current Market Activities The Colony sells about 3,000 birds per year to other local farmers and at local restaurants

Willing to Undertake Willing to comply with Licenses


Colony Interests They are interested in increasing three areas of production: vegetable production and processing, baking (pastries and bread) and finally sausage making


No. 5Colony Name: Clear Spring Location: KensatonColony Members 54Colony Members Available for Work 20

They are not interested in slaughtering. At the time of the interview, they were interested but with very limited time and resources, but wanted to be kept apprised of opportunities in the near future

Capabilities and Current Production Slaughtering (birds), bag (but don't clean) potatoes to sell to local neighbours


Crops: Wheat, Barley, Canola, Peas

Livestock: Cattle, Hogs, Layers


N/A

Current Market Activities They are only involved in local sales which are very small. The colony will if sell extra corn in Saskatoon if they have it

Willing to Undertake Not looking at complying with any licenses. Would not bet on it.


Colony Interests

No. 6Colony Name: Sunnydale Location: PerdueColony Members 56Colony Members Available for Work 5 Unfortunately, there was limited information available regarding Sunnydale due to timing of their harvest.


ENDNOTES i Alberta Employment and Immigration, Occupational Supply and Demand Outlook, 2007-2017. ii Workforce Benchmarking Study Results, http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/afi12051 iii Alberta’s Agriculture Processing Industry: Directory 2008. Alberta Agriculture and Food, Government of Alberta. 2008. P.4. iv Agriculture and Rural Development, Business Plan 2008-11, http://www.finance.alberta.ca/publications/budget/budget2008/agric.pdf v Benchmarking and Demand Forecast Study for the Agri-Food Processing Sector: Final Report. Alberta Agriculture and Food, Government of Alberta. 2008. P.35. vi Agriculture and Agri-Food Canada; and the Saskatchewan Food Processors Association vii Province of Saskatchewan, 07-08 Annual Report, Ministry of Agriculture, http://www.agriculture.gov.sk.ca/Default.aspx?DN=f47e74f8-d1a3-444f-8230-b052e9c5252b viii Saskatchewan Food Processors Association, www.sfpa.com and Saskatchewan Food Industry Development Centre Inc., www.foodcentre.sk.ca ix A "Grown in Canada" food label, Canadian Federation of Agriculture, http://www.cfa-fca.ca/pages/index.php?main_id=321 x Figures based upon consolidated Hutterite Colonies financial statements reviewed by Meyers Norris Penny LLP xi The Courts and the Colonies, The Litigation of Hutterite Church Disputes, Alvin J. Esau, http://www.ubcpress.ubc.ca/books/pdf/chapters/courtsandcolonies/chapterone.pdf xii http://www.ualberta.ca/~german/PAA/Hutterites.htm. Retrieved 25 September 2007. xiii Ibid. Retrieved 25 September 2007. xiv http://www.omafra.gov.on.ca/english/farmproducts/factsheets/production.htm

assessing an alternative solution to labour shortages in the food

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