Berwick ON – I think one of the reasons I like Tom Manley so much is that we both have vision. Vision is what lets people take ideas and make them become something very special sometimes.
I mean, who would think that a little out post in Berwick Ontario could turn into what Mr. Manley has created in Homestead Organics which now boasts sales in the millions each year, and employs 13 people, specializing in Soy and other organics?
Now Tom is turning his sites to the bigger picture and following the trend that many are taking turning away from factory foods created with genetically modified seeds and upping the ante and this regions position in the Organic foods industry by creating Organic Central.
The Organic Market in Canada was counted as $2 Billion in sales in 2008 and reached 2.5% of total retail food sales. The problem is that 80% of organic food is imported; therefore, Canadian producers and processors have a great opportunity for import replacement. In 2008, Canada Organic Growers reported 3,715 certified organic farms in Canada, 1.5 million certified acres in production, and 1,203 certified organic processors & food handlers. The organic sector in North America reports about 20% growth per year continuously for the last 20 years, except the recent recession year at 5% growth. Some European countries report about 8-10% organic food. The USA has reached about 3.5% organic food in retail channels in 2009. The Canadian organic sector should quadruple the organic market in the years to come just to catch up to the world trend.
Mr. Manley is taking an old Textile plant (the old Dominion Textile plant in Long Sault Ontario) and reinvigorating it; something that will create opportunity and jobs for South Stormont Ontario and the region.
Organic processors are largely self-made entrepreneurs that started in homes, garages, sheds, and barns. At their start of business, the simple operations required minimal infrastructure and low capital investments. But growth over the years encounters problems with zoning, access to clean water, waste disposal, hygiene, food processing standards, storage space, amenities for staff, transportation, and so on. They quickly outgrow their facility and invariably need industrial food grade space equipped with amenities for staff, water, power, storage, refrigeration, shipping & receiving, and processing space.Homestead Organics in Berwick is a typical case. It started on the farm in 1988 but outgrew the barn and moved to the Berwick feed mill in 1997. It now processes 6,000 tonnes, moves 5 M$ of products, and employs 12 people. Having doubled sales in the last 5 years, it needs to expand again to double sales in the next 5 years. In conversations with other players in the organic sector in Canada, it became clear that many other businesses are in similar situations and need a place to relocate and expand.The Wal-Mart’s of the world have mastered distribution channels with large volumes, economies of scale, and negotiating power. The only way to compete is to re-new the regional food systems by implementing ecology of scale: multi-purpose infrastructure, co-location, integrated supply chains, collaboration, innovation, superior taste and quality, local supplies matched to local markets, and niche marketing.
The plan is to create Organic Central, a hub or cluster of organic agri-food businesses in Eastern Ontario. All would improve their economies of scale and savings through synergy and collaboration, shorten their supplies lines by trading among each other, participate in the national R&D networks, provide an incubator for businesses acceleration and innovation, and exploit a shared commercial kitchen and packaging systems.
After visiting several locations and even considering a new construction in Berwick next to Homestead Organics, an industrial building in Long Sault was finally chosen for its proximity to large markets and transportation routes to Ottawa, Montreal, Toronto, and New York, the low property cost, the absence of development fees, the availability of natural gas and electrical power, and large space for future growth.
What really gets exciting about this project is its scope. It’s not about expanding Homestead Organics, but…
Organic Central is a joint venture between Homestead Organics and and a number of private investors. The site has an excellent industrial building with 200,000 square feet on 65 acres with easy access to the 401 highway. The property has the appropriate zoning, public water supply, public waste water management, electrical, and telecommunication support.The landlord of Organic Central would be responsible for property ownership, capital improvements to the property, property management, and facility maintenance. The landlord will market the Center to organic agri-food businesses. The Center may provide optional common services on a cost recovery basis plus profit: shipping and receiving bays, telecommunications, a conference & training center with A/V capabilities, and expert support services (mechanical, HR, IT, marketing).
Organic Central will start with a half dozen businesses with 30 jobs and $10M in revenues collectively. Within 5 years, Organic Central will double the volume of operations and increase the number of businesses to reach 50 jobs and $20M in sales. The regional economy is also impacted as these agri-food businesses flow 60-70% of their revenues to local farms.
And from what Tom told me there’s going to be a retail outlet so that many of us will now have a nearby option to purchase many items not currently available easily.
Tom Manley at Eco Farm Day 2011
More to come!