2017-10-04

Family business ripe for success

by Gayle Wilson

  • <p>GAYLE WILSON PHOTO</p><p>Evelyn and David Ernst have turned their two-acre cranberry bog into a production company selling five million pounds of berries a year around the world.</p>
  • <p>GAYLE WILSON PHOTO</p><p>According to Evelyn and David Ernst, a selling trip to the renowned Sial food fair in Paris in 2010 launched their family Heckman&#8217;s Island cranberry business, Terra Beata, onto the European market.</p>
  • <p>GAYLE WILSON PHOTO</p><p>Terra Beata Cranberry Farm produces 13 different value-added products available at major grocery stores throughout Atlantic Canada, in Quebec and elsewhere in Canada.</p>
  • <p>GAYLE WILSON PHOTO</p><p>Terra Beata produces 4,000 bottles of cranberry juice a day.</p>
  • <p>CONTRIBUTED PHOTO</p><p>All in the family &#8212; young Ella Ernst helps out in the Terra Beata cranberry bog.</p>
  • <p>CONTRIBUTED PHOTO</p><p>The owners of Terra Beata attribute the cranberry farm&#8217;s success in part to the quality of the fruit they grow and process.</p>

With Thanksgiving just around the corner, and Christmas not long after that, consumers are starting to turn their collective attention to cranberries.

But for David and Evelyn Ernst and their four children, the little red berry is a regular topic year-round.

"The kids grew up with the conversation at the supper table on what's going on with the business," says David.

David and his wife Evelyn have run Terra Beata Cranberry Farm on Heckman's Island ever since they bought a 30-acre parcel of land across from their home at an auction in the late 1990s. Their four children - John, Rebecca, Ben and Ella - were each recruited into operations as soon as they became old enough to help out in the bogs.

Together, they have grown the fledgling operation, which started as a sideline business with two acres of raw cranberries destined for farmers' markets.

Terra Beata is now a 20-acre, multi-faceted business with 25 employees, handling more than five-million pounds of fruit a year, which is sold raw, frozen, and processed into preserves and juice to markets across Canada and around the world.

The company also opens its production facility to other food producers, and its fields to the community for U Pick.

The Ernsts' recipe for success has been a combination of improvisation, ingenuity, a commitment to the Maritimes, mounds of hard work, and more than a sprinkling of good luck and good timing.

"We got in just before the Local Movement, and we benefited so much. We already had our foot in the door. We already had the beginnings of a production facility and everything," says Evelyn.

"And then this local wave came in behind us and just lifted us right up."

Working as an engineer at High Liner in the late 1990s, David began to see the writing on the wall for the fishing industry. He and Eveyln, who was a teacher on maternity leave, decided to put the land they bought across from their home into cranberry production.

"It used to be that Nova Scotia was the largest cranberry producing area in the world," David told LighthouseNOW, adding that the province encouraged farmers to get into production, and offered training and assistance for them to do so.

They spent a couple of years cultivating and growing two acres, with the thought they would sell straight from the field and to one of the companies in the Annapolis Valley that packs fresh cranberries.

Still working full time at High Liner and with young, David recruited a friend to come and help with the onerous tasks as a partner in the business, although eventually they would part ways.

After David and his father-in-law had loaded their first 2,000 pounds of cranberries into a truck in October 2002 and trundled down into the Valley, they discovered that buyers there already had their supplies secured.

Refusing to be defeated, they brought the berries back to Heckman's and bought three freezers quickly via classified ads. They improvised a cranberry cleaning system using window screens and cleaned and froze what they couldn't sell directly in the Lunenburg area.

"I didn't have a market for our first crop," David explains simply. "So we got into the processing business."

While they couldn't sell their fresh, raw cranberries initially, they did find a buyer for the frozen berries, O.H. Armstrong, based in Kingston, which sold to restaurants throughout the province.

"He made a deal over the phone that's still in place today," recalls David.

Since some of his engineering projects at High Liner had him working with the marketing department, David gained an interest and awareness of marketing techniques used by large companies.

It helped serve as an inspiration to test their own possibilities at fall fairs and farmers' markets with samples and recipes. In doing so, they found that there was a big demand for fully prepared preserves, such as jams and chutneys, and juice.

While David concentrated on the engineering side of the business, Evelyn took on the marketing, bookkeeping and sales.

"I was thinking, 'Well, the grocery store is full of cranberry juice, what could we possibly make that's not already out there?"

They settled on pure cranberry juice, with no water and no sugar, "because at the farmers' market, in that group of people, that's what they're looking for," explains Evelyn.

"And even though it was already on the market in one-litre glass jars, they sold for $10. We decided we'd go with a smaller bottle for $5. And people liked it."

With their ear to the market, they also began producing no-sugar jams and dried cranberries with less sugar.

However, they admit it took a lot of experimentation to get the products right.

They got their first big retail break when they approached the owner of what was then the Save Easy in Mahone Bay.

"On the spot, he's like, 'Give me 10 cases.' Well, up until then, the most anybody had ever bought was one case of 12 bottles...We were in shock," recalls David.

In 2005, they were invited by Atlantic Wholesalers, a subsidiary of Loblaws Company Ltd., to have their products tested in four Superstores in Halifax.

The category buyer for the company admitted to them, "'I've never listed a local product, ever.'"

By 2006, their products were in all of the Atlantic Canada Superstores. As luck would have it, though, that gain coincided with their "worst crop ever," according to David.

"Evelyn looked at me and said, 'We've got to buy some cranberries.'"

They found one farmer in the Annapolis Valley in a position to sell, but he stipulated that they take his entire crop - more than 50,000 pounds - and that they would have to harvest them.

They rented freezer space and froze about 40,000 pounds, and the following year had another bumper crop of their own.

"So we were in the export business. We didn't plan to be. But we had these berries, and I needed to sell them," explains David.

By 2007 they were exporting to the U.S.

They had gotten another break exhibiting at the Sial food fare in Paris in 2010, where a stroke of luck put them in a prime spot and they secured a contract with Russian buyers.

"That was our big explosion into the European market," suggests Evelyn.

"We had really good, dark, red fruit, and some other people had quality issues," elaborated David. Moreover, they were able to be price competitive at a time when other companies were looking to cover various investments.

Today, Terra Beata produces 13 varieties of preserves, in addition to juice, which are available in both Superstore and Sobeys throughout the Maritimes, as well as at retailers in Quebec and elsewhere in the country.

They produce 4,000 bottles of juice a day alone.

The two-acres under cultivation have expanded to 20. The 5,000 sq. ft. metal frame building they picked up second-hand initially to house their farming equipment has since grown to a 14,500 sq.ft. production facility.

Terra Beata produces cranberry products for other name brands, as well as leases out its production facilities to other food producers creating a variety of products.

It also makes what Evelyn calls "industrial ingredients" - dried, unsweetened cranberries for tea and nutraceutical companies and low-sugar dried cranberries for makers of granola bars.

Frozen commodity cranberries for large bakeries such as those catering to Tim Hortons and major grocery stores potentially are big business.

"We found some of these customers in Canada, but when we started it was more Americans that we found," says David.

"And we've expanded our line because grocery stores don't want to work with a line that just has one flavour." adds Evelyn, noting that early on they began adding blueberry and sour cherry to their retail mix.

The company is no longer selling to Russia because of a series of economic sanctions imposed on that country by the Canadian government beginning in 2014.

However, Terra Beata has since made good inroads into Germany, England, France, Belgium, China, New Zealand and Israel.

Still, with the price of cranberries dropping two-thirds from roughly $1.50 a pound to $0.50 a pound due to over capacity in the market, the Ernsts admit they had to become more efficient just to stay in business.

The family members are still the ones to work in the fields, as they say it's not cost-effective or logical to employ workers to undertake the necessary tasks.

They've struck shareholding deals with farmers to ensure their supply costs are manageable, and are looking to eschew costly fees commanded by freezer storage companies in Dartmouth and Moncton, which are capitalizing on storage needs amid the current glut of blueberries on the market.

Long-term, the Ernsts want to expand their storage capacity and increase mechanization to optimize operations.

Right now, about 80 per cent of the five million pounds of cranberries they handle are sold as frozen commodity, where the margins are small. They want to reduce that to 50 per cent, putting the other half into the processed market.

"Because that's where we can control the price. The price is not always going up and down," explains Evelyn.

In any case, the cranberry growers on Heckman's Island are determined to stay committed to their Maritime roots.

"Our focus is Atlantic Canadian fruit and Atlantic Canadian products. We want to do something that's going to add to the infrastructure of Atlantic Canada," insists Evelyn.

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