There is no definitive recipe for developing a successful entrepreneurial business, especially one about which you know little.
Gus and Sandra Hargrove have done exactly that, starting 15 years ago and turning what they intended as a retirement project into a thriving company that coaxes the most out of Crown land in Divide, New Brunswick.
The Canadian Organic Maple Company began exporting maple syrup, arguably Canada’s most famous liquid, in 2000. They tapped 30,000 trees that year and grew by 10,000 a year until tropical storm Arthur hit in July last year, costing them 39,000 trees.
But recovery was swift and they’re now looking at 250,000 trees. Today 20 people work full-time with part-timers joining in during harvest season.
“We were taking a tremendous risk,” says Ms. Hargrove. “We had little idea what was involved in running a maple business.
“First we had to build roads, which was going to take a lot of our retirement money. Were we scared? Yes. My greatest fear was this was a tremendous investment and we would have to work very hard to get the money back out.”
But, they had both been in the engineering business, with food business connections, and understood the necessity for due diligence and a strong business plan. Good timing and considerable research didn’t hurt either.
Canadian Organic Maple in New Zealand
On a trip to New Zealand in the late 1990s they were struck by the popularity of organic foods. “When we got home, we knew we would have a natural organic bush from the get go” says Ms. Hargrove. “
It was a brave move. The maple industry was on the verge of change, but there was no guarantee the buying market would embrace the premium price set for organic maple syrup.
The organic route
Regardless, they took the organic route, convinced the organic food industry would blossom as it already had started to do in New Zealand and across Europe.
With first-year syrup sitting in bottles waiting for buyers, Ms. Hargrove consulted a small New Brunswick government agency set up to help businesses find export markets and flew to one of the two “most fancy” food shows in the United States.
“I went to New York and walked around with my mouth open,” she says. “It was so large. But the maple industry is extremely small by global standards and the show had only three or four maple booths.”
Ms. Hargrove scattered business cards, talking with anyone who would listen. Luck came when a salesperson read her card and said, “This is exactly what we are looking for.”
Organic was the key word. It turned out this company had been hunting organic maple syrup for a major customer and could not find a producer. “We got a call the following week, and that’s where the first year’s supply went. The organic word got out and we grew from there.”
Not that growth ever happens alone. The Hargroves know they hit the market at the right moment. Organic food is the rage in a growing number of countries – the U.S., Japan and Europe in particular – and they have plenty of trees for expansion on the rented Crown land.
But launching a business of this sort is an expensive project and Mr. Hargrove talks of the importance of EDC’s assistance in the early years.
“At first, customers weren’t prepared to pre-pay because they didn’t know us, and we weren’t prepared to ship without payment.” he said. Buyers needed to know the Canadian Organic Maple Syrup Company was reliable, and they needed to know their buyers were credible.
They turned to EDC, which undertook credit checks on potential customers on behalf of Organic Maple Syrup and guaranteed payment should difficulty arise.
Clearly, this quintessential Canadian company has mastered the art of growing a naïve retirement plan into a thriving concern, and the Hargroves are happy with the path their family business has taken since they “went into the forest and built a community.”