Enterprises

Cranberry producers capture fresh opportunity

New products have energized consumer demand, and this Quebec firm is leading the charge.

The folks who brought you canola oil and soy milk might quibble, but when it comes to product development breakthroughs over the past quarter-century, what can top cranberries?

Once largely a seasonal item, cranberries now appear on consumer shopping lists in many forms: frozen, dried, in a multitudeof juice products and a variety of baked goods. The catalyst? Growing consumer understanding of the cranberry’s unique nutritional profile.

From where Jean-Francois Bieler is sitting, there’s only one problem, and it’s not a bad one to have.

“We can’t keep up,” says Bieler, General Manager of Atoka Cranberries Inc. in Manseau, Que. “We could sell two to three times what we produce right now, but we can’t get more supply.”

From one grower to 50

When the Bieler family first entered the cranberry business in 1984, they were only the second producer in all of Eastern Canada. Today, the industry has approximately 50 producers. Atoka sources cranberries from its own family farms, as well as dozens of carefully selected growers in Quebec, the Maritimes and the U.S. Atoka’s 110 employees process the raw product into fresh, concentrated juices and dried cranberries.

“There aren’t a lot of small fruits where Canada, and in particular Québec, have an advantage,” says Bieler. “We can produce cranberries at a lower cost than anywhere else in the world.”

During the 1980s and especially the 1990s, consumers began to learn about the health benefits of these berries, and processors stoked this demand with new products that combine taste, health and convenience. Case in point: dried cranberries, sales of which have grown at 20 per cent per year over the past five years and are now Atoka’s biggest category. If it seems that cranberries and cranberry juice are showing up everywhere these days, you’re not imagining it.

“It's really become a staple item now,” says Bieler. “For example, cranberry juice is now second only to orange juice, and at about the same level as apple juice.”

Expansion takes time

If consumers can’t get enough cranberries, why not just crank up production? Bieler explains that it’s not so simple.

There’s a popular misconception that cranberries are grown in water. All the same, they do grow best in the sandy, acidic soil that’s often found on the edge of marshes or bogs. Since these locations are often subject to environmental protection, approving new cranberry sites takes time and effort.

Even once permitted, the initial investment is substantial. Bieler estimates that establishing one new acre of cranberries costs about $35,000. It takes three years for that acre to produce its first crop, and a further two years to get a mature crop. Even when conditions are right, coaxing a viable crop from these lowgrowing vines is no slam dunk.

“There’s a lot of know-how involved in growing cranberries,” says Bieler, “and there’s a natural cyclicality to a cranberry crop, where a good year tends to be followed by an average year.” In 2007, for example, Quebec’s production declined by 35 per cent compared to the previous year.

Wanted: more growers, with diversification

Like many farm sectors, cranberries have been affected by the rise in the Canadian dollar. Since 98 per cent of Atoka’s products are sold in U.S. dollar equivalents, a stronger loonie might have slowed the growth of the industry, but it seems very little can stop it.

“The dollar went up,” says Bieler, “but the value of the crop went up even more. The dollar has really pushed us to work on our yields and our production methods, so in a way, it’s been good for us.”

With more demand than supply, and markets from Europe to Asia to Australia eagerly buying, what’s next for Atoka? To balance the risk that the growth of the industry can’t be sustained, Atoka plans to diversify. Starting in 2009, the firm will market a line of dried blueberries. But make no mistake: the crop that gave Atoka its identity will continue to be its mainstay.

Jean-Francois Bieler will continue to seek growers who want to embark on the same journey his family has taken over the past 25 years.

“We are trying to encourage more people to get into cranberry production,” he says. “The cranberry industry right now is very profitable for those who have the expertise to grow a quality crop. This is a good place to be.”