BC Tree Fruits is continuing with machinery upgrades and the sale of properties as part of a plan to lower costs, increase efficiency, and get growers the best prices for their fruits. The cherry line was upgraded in Oliver in the winter of 2012, which increased the capacity of the line by 66%. Currently the four packinghouses owned and operated by the BC Tree Fruit Cooperative are located in Osoyoos, Oliver, Winfield and Kelowna.
In Kelowna, the Vaughan Avenue packinghouse is for sale, and a few blocks away, the store property on Clement Avenue has a potential buyer. If there are no hitches that sale should be complete by mid-October.
“The Kelowna packing house is still for sale,” explains Chris Pollock, marketing manager for BC Tree Fruits. “In the past we’ve run apples, cherries and pears at the Kelowna location. At the moment, it is the only place we pack pears and it is one of two packinghouses for cherries. We will be ceasing operation of the apple line at the Kelowna packing house either this year or in the near future.”
BC Tree Fruits hopes the buyers of the Kelowna packinghouse would lease back the property to them; however, if that is not feasible, the cherry and pear line can be taken to one of the other three Okanagan packing houses.
“We are trying to be more efficient with the properties we do have and to streamline operations into less facilities,” says Pollock. “There’s less overhead and property taxes by leasing. We’ve also seen a reduction in our crop volume and we’ve had to react to that. At the end of the day, we are trying to return as much money as we can to our growers. When you have a lot of operating and overhead costs and the volume isn’t there, decisions to lower costs have to be made.”
Although consumers will no longer be able to buy fruit directly from BC Tree Fruits at the Clement Avenue location, it will still be available at local stores and BCTF’s Osoyoos storefront will continue selling directly to consumers.
Along with premium grade fruit, the BC Tree Fruit stores sell lower grade fruit, which is used for cooking and canning by many consumers. Even without a central Okanagan store, Pollock says, “Some of our retailers have discount banners and tend to take a lower grade of fruit as their demographic is more price conscious consumers who want fruit as cheap as possible.”
BC Tree Fruits sells this lower grade fruit to the Overwaitea group for PriceSmart foods in the Lower Mainland and Loblaws has a no frills banner that buys some lower grade fruit. Lowest grade fruits still go to companies like SunRype for juices.
Meanwhile, in Winfield, upgrades will help the packinghouse be more competitive. Renovations should be complete by apple season and will include new equipment and storage.
“We are basically adding new equipment and modernizing the plant,” explains Pollock. “The machines we had before, for example apple sizers, were old and weren’t as efficient. With the new sizers we will lower electricity consumption, get more accuracy in our grading, have less maintenance costs and less downtime on the line. We can get more boxes packed per bin. It will ultimately result in better quality in the boxes, which results in better pricing per box, which results in us being able to give the grower better money.”
There are two parts to the Winfield renovations. The first is the upgrades for the sizers, electronics, and bin fillers. Three-quarters of the funding for the $1 million upgrades came from the provincial and federal governments.
Alan Tyabji, CEO for BC Tree Fruits, says, “This investment not only shows commitment to the industry, but it has enabled the Cooperative to remain competitive with Washington State shippers.”
The second upgrade is far more expensive, but will provide even bigger returns. “We are upgrading the CA [Controlled Atmosphere] storage,” says Pollock. “CA allows us to store the fruit for months on end. When we bring it back out of a CA room for sale it will be just as fresh as at harvest time.”
Similar storage in Washington State allows them to sell 2012 varieties, like red delicious, long after the 2013 harvest is complete. “With CA storage, the room is sealed, oxygen is removed and replaced with nitrogen,” explains Pollock. “It basically puts the apples to sleep. It slows the aging process down to next-to-nothing. When we need to bring the apples out for sale, we let the nitrogen out and let the oxygen in and the fruit starts to mature normally. It will allow us to stay competitive in the market place by having fresh fruit available in February, March, April and May.”
To install the new CA storage, the old storage rooms were completely gutted. They replaced the old ammonia system with a new, more efficient nitrogen system. The panels of the room had to have new seals installed, making it completely airtight. The shell of the building was kept intact while everything inside was rebuilt. The CA storage upgrades cost $7.5 million, with the federal and provincial governments kicking in $2.5 million through the AgriFlex program.
“These upgrades were necessary for us to lower our packing costs,” says Pollock. “It’s one of the highest costs our growers’ cooperative has. More accuracy and increased speed in getting our fruit to market will results in higher returns to the growers. Even our new bin filler is more gentle, which results in a higher quality volume, which means higher return.”
Being competitive with markets like Washington is crucial for BC Tree Fruits. Last year’s Washington harvest consisted of 120 million 40 pound cartons of apples. BC Tree Fruits sold three million.
“We need to educate people to look for the BC Tree Fruits leaf logo on our products. It’s about getting consumers to understand what that brand represents. I want them to know when they buy that fruit they are supporting 520 grower families instead of a company in Washington state or New Zealand. Now with our upgrades, you know our product will be fresh because of the new CA system. The new upgrades [also] allow us to stay competitive with the [independent] valley brokers here.” ■