Hiring and logistics are biggest barriers for PEI potato and tulip farmBerni Wood
When it comes to running a business of any size, few can deny that location is critical to survival. This new monthly series highlights some of the advantages and disadvantages of operating in remote or rural communities through interviews with small businesses across the country.
Dwayne Coffin is a general manager at Vanco Farms Ltd., a family-owned business that specializes in growing specialty potatoes, organic potatoes, premium cut tulips, and tulip bulbs. Vanco Farms is a member of the Canadian Federation of Independent Business (CFIB), Canada's largest association of small and medium-sized businesses with 109,000 members across every sector and region.
1. Briefly describe your business, including when it was founded, what it does and where you operate?
Vanco Farms Ltd. was established in 1980 by Peter VanNieuwenhuyzen. We pack, ship and market potatoes and fresh-cut tulips to Atlantic Canada, U.S. eastern seaboard, Quebec, Alberta, B.C. and Ontario. Peter's three sons Rit, Willem and Philip now run the business, which operates out of Mt. Albion, Prince Edward Island. The population is approximately 250 residents.
The farm is diversified and able to produce and sell specialized potato packs. Our tulip operation is seasonal as we supply fresh cut tulips to a major chain store in the Maritimes from Jan to May each year. Our head office is located in a rural town 12 minutes east of the capital city of Charlottetown.
2. What position do you hold and do you have employees?
I'm the general manager and partner of potato sales Vanco Produce, the marketing arm (potato division) for Vanco Farms. Our sister company Vanco Flowers markets the tulip operation. However, Vanco Farms Ltd. owns the entire entity. Depending on the time of year, we can have as many as 75 to 80 people on the payroll. My role is to sell and market the conventional and organic potatoes.
3. Location is obviously important when it comes to running a business: What challenges do you face operating in a small town or rural community?
Our biggest challenge is finding local people who want to work in the agricultural sector. It's extremely difficult to convince people of the long hours required to harvest our potato crop during certain times of the year. It also has been a challenge to meet our customer demand with a limited local work force. In other words, when a customer needs a load of potatoes to be delivered on a certain day, we cannot delay or change the supply chain because we have a work force that doesn't want to work extended hours to fill those customer needs.
Another major obstacle is logistics. Because of our location from most of the major markets, our freight costs tend to be higher than most of our competitors. Since we are located in a rural Maritime setting we do not have a large trucking company pool to draw from as companies in Toronto, Montreal, or Boston would have.
4. What strategies do you use to overcome these obstacles?
Essentially, as our potato business grew into a year round supply to our customers, it forced us to look elsewhere for staff. Over the past five years we have relied very heavily on the Temporary Foreign Worker Program (TFW). We have also expanded and modernized our packing facility. We have added equipment that allows us to run longer hours and become much more efficient. On the logistics side, we added our own trucking fleet to do our direct store tulip deliveries. Since our potato packing facility runs all year round, it's allowed us to offer freight to local trucking companies in the slower summer months in return for competitive freight rates during the busier shipping months.
5. Alternately, what are some of the benefits of operating in a rural or remote location?
The biggest benefit of operating in a rural area is being able to supply safe quality food. With so much emphasis on food safety these days, operating in a rural environment does help to relieve our U.S. counterparts when it comes to bioterrorism. The threat of such an act can be much more limited in a rural setting vs a huge city with millions of people. As well, having access to non-city water systems promotes a cleaner environment. Vanco Farms has an excellent food safety record and we are approved to ship our products into the U.S. with a speedier entry time through the Customs-Trade Partnership Against Terrorism (CTPAT) program.
6. What role – if any – does the government play in addressing your specific business pain points?
Government has played a huge role in being able to direct us to the right departments in reference to the TFW program. They've shown us what is required to participate in the program. As well, we have worked with our local government to access initiative funding for specialized potato packing equipment. We've also developed a computerized tracking system with the federal inspection arm of the Canadian Food Inspection Agency (CFIA) division. They have approved our computer program to allow us to generate U.S. entry shipping documents. CFIA auditing plays a major role in the success of this program as well.
7. Given that hiring is often difficult in smaller communities, do you have a succession plan in place or do you hope to sell your business when you retire?
Currently, I do not have a succession plan in place. Most of the owners including myself are relatively young in age. I am the oldest of the partners as I am in my early 40s. My plan is to most likely sell my stake in the company down the road. However, I do plan on working for a number of years to help the business grow further. Hopefully, then my share will be worth substantially more.
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Interviews have been edited and condensed.