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Your Neighbourhood Multinational

Local producers pay a price to distribute through big box stores

by Hillary Bain Lindsay

Large grocery chains may carry local products, but do they treat farmers with respect?  Photo: Scorpions and Centaurs
Large grocery chains may carry local products, but do they treat farmers with respect? Photo: Scorpions and Centaurs

TATAMAGOUCHE - Organic grain farmer Drew Jeffery had already bought the seeds for his fields when he learned that Sobeys would no longer be carrying Speerville Flour Mill products.     

“It got me very worried,” says Jeffery, who farms 700 acres on PEI and normally sells half of what he grows to Speerville.

“There's no other local company besides Speerville in the whole Maritimes that buys certified organic grain,” he says.  “Makes you wonder about your own future as a farmer.”

Speerville Flour Mill has been supplying Atlantic Canada with whole grain flours and cereals since 1982. One of the founding principles of the Mill was to provide a market for grain and other products produced by Maritime farmers.

Speerville was notified via email on March 27 – farmers had already ordered seeds and planned their season by then – that effective immediately, Sobeys would no longer be ordering any of the Mill’s products.  The reason given was Speerville’s prices.

Tony Grant, one of the Mill’s managers, describes his initial response to the email as “complete disbelief.”  Sobeys has carried Speerville products for 15 years and been one of the Mill’s largest customers, representing one third of its annual sales.

The story is a familiar one to organic farmer Norbert Kungl.  Kungl has grown organic vegetables in Nova Scotia for over two decades.  For years, he tried to access a larger market through grocery stores like Sobeys and Atlantic Superstore, but found the packaging, shipping and consistency demands on a small producer like himself increasingly difficult to manage.   

The last straw for Kungl came over five years ago.  At the time, Sobeys was regularly ordering organic vegetables from Kungl’s farm, Selwood Green.  “That was fine for a year or so and then in the middle of the season they said they wanted to cut their numbers back.”  Within two or three weeks, Sobeys’ order went from two to four pallets of vegetables to less than one pallet.  

“They left me hanging with a lot of stuff in the field,” says Kungl.  “[They didn’t] even have the decency to give me a two-month window so I could wind down my planting.”

Kungl has never looked back.  “I have no desire to work with large corporations,” he says.  “It soured the whole experience, dealing with someone [who's] so removed from the actual production and producer.  Turned me into a firmer believer in satisfying the local market.”

These days, Kungl has a farm stand and restaurant at the Seaport Farmers' Market.  His restaurant uses ingredients from his own farm and also buys from other farmers in the region. “We rode the wave for a while of trying to play with the big guys.  We had some successes and some failures.  In hindsight, I'm quite happy to just be dealing with the fact that we are producing for a very local market.”  

Rupert Jannasch has had a different experience with large grocery chains.  He farms organic vegetables, berries, and now sheep in Hants County. Jannasch started selling his grape tomatoes to Sobeys in 2006 and continues today.  He says his experience dealing with Sobeys has been a good one.  “I have no complaints,” he says.

Jannasch recognizes, however, that his positive experience as a small producer with a large company isn’t necessarily the norm.  He thinks there are some specific reasons for that, including the fact that grape tomatoes have a relatively long shelf life, and are easy to package and display. “For lettuce or broccoli for example, it would be a totally different story,” he says.  “Much more difficult to meet requirements.”

In general, Jannasch doesn’t believe small producers should lay their hopes for distribution at the feet of large corporations.  “In most cases I don't think it will work.  …It's very difficult to produce the quality, the volume, and the packaging that they are looking for.” Jannasch sees CSAs, farmers markets, and smaller independent grocers (which together make up the bulk of his business) as the way forward for the local food economy.

Theresa Richards couldn’t agree more.  Richards is the Executive Director of the Atlantic Canadian Organic Regional Network (ACORN). She understands the allure of large grocery chains, but ultimately, she doesn’t see them part of the solution.   

“A lot of farmers see the benefit of accessing these larger retail outlets so [their product] can be accessible to the average consumer,” she says.  However, although large supermarkets are convenient for consumers, they’re ultimately not about healthy, sustainable, local food – or about supporting the farmer, says Richards.  “The challenge is that for large supermarkets, the bottom line is financial.”

On June 14, Sobeys announced its purchase of more than 200 Safeway stores in Western Canada for $5.8 billion. Sobeys estimates the merger will save $200 million annually within three years, due to economies of scale. 

As the Nova Scotia-based company gets bigger and expands Westward, Richards sees Sobeys’ decision to drop Speerville as a clear example of the company’s bottom line trumping farmers and the environment.   

In an interview with the CBC, a spokesperson for Sobeys said that an increase in Speerville’s prices motivated the company  “to look at alternatives to ensure we have competitive prices for our customers."  But according to Richards, the replacement products cited in the CBC article are not offering what Speerville does. “While some of [the companies] may be considered local companies and are based out of the region, they're not sourcing from local farms.  In the case where one company is sourcing from local farms, it's certainly not organic.”

Speerville is very unique, says Richards.  “It’s certified organic and working with local farmers.  It’s totally different.”  

Speerville Manager Tony Grant is hoping that the Mill’s unique product will help them through this challenge. “We have enough brand loyalty and we have such a high quality product that we feel that we're going to come through this well.”

“We're not quitters, we don't give up,” Grant continues.    “Especially when we're in a situation where we have over 30 organic farms in Atlantic Canada that grow for us…We're going to do our best to build the sales that are going to use up the product that [the farmers] provide to us.”

Out in his fields, Drew Jeffrey is sowing his grain, and hoping there will be a market for them, come harvest time.


This article is part of our continuing Just Us! Just Journalism series, dealing with food security, cooperatives and sustainable farming. We thank Just Us! Coffee Roasters for a portion of the funding that made this article possible.

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Topics: Food
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