| | Initiative 2
What’s a good way for startup businesses to get bigger? One way is to observe what big businesses do and adapt these strategies on a smaller scale. That’s how Learn Agri-Food Network members put their heads together to solve one of their members’ most pressing issues: distribution.
According to Karen Goad, the story began in Edmonton with an informal club made up of Chief Executive Officers of agri-food companies. The more this group of 12 CEOs met, the more they noticed how many issues they had in common. Example? Boxes.
“These companies all needed corrugated cardboard boxes for their products,” says Goad. “But when they compared the prices they were each paying, the prices were all over the map. They decided to pool their orders to get a better price for everyone.”
If this pull-together strategy was good enough for big-city CEOs, could it work for small rural-based businesses? Goad and her team decided to find out. They asked Learn Agri-Food members which operational issues were keeping them up at night. One commonly felt headache – the difficulty of finding reliable, cost-effective shipping seemed like the best option for shared action.
For these businesses, distribution flowed in two directions. A variety of supplies from jars to labels to ingredients were shipped from larger centres to the businesses. A variety of packaged food products were then shipped from rural businesses to market.
“We looked at a number of options,” says Goad. “The incoming shipments were coming at different times from different places, but lots of the outgoing shipments were going to places like Stony Plain , Edmonton and Calgary. We saw an opportunity to aggregate shipments. Now, five members are consolidating their shipments to common markets.”
The higher the volume of goods being shipped, the better deal a trucking company is likely to offer. With small-volume customers like these, some trucking companies just weren’t interested. Multiply the volume by five, even if the shipment is only two pallets, and commit to a regular schedule and truckers start to see it’s worth their while.
“This strategy has allowed these agri-preneurs to get their products to Edmonton and Calgary more cost-effectively,” adds Stenbraaten. “In order to make consolidated shipping work, you need a critical mass. We now have that for outbound shipments. Once we get a critical mass for inbound, we know it can work, and that it can make a real difference to these rural businesses.”
Cindy, Ian and Corinna Prins of Pik-n-Pak Produce unloading truck at Bentley Farmers’ Market.
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