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The Sunterra experience

Alberta agricultural entrepreneur Dave Price believes in using business adversity as a springboard to commercial advantage.

Meet the Price family, the brains and brawn behind the Sunterra group of businesses. The family includes: (left to right) Glen, Flo (mother), Dave, Doug, Ray, Stan (father) and Art Price. Contributed photo

Alberta agricultural entrepreneur Dave Price believes in using business adversity as a springboard to commercial advantage.

Over the past 50 years, his family’s farm business, Sunterra Enterprises, has evolved from a struggling beef and grain operation in Acme, Alta., to a very successful producer and processor of high-quality beef, pork and lamb products. The items are sold under the Sunterra label out of the family’s own chain of exclusive gourmet grocery stores in Calgary and Edmonton.

During a recent presentation to farmers in Nova Scotia, part of Agra Point International’s biennial Agrifest, Price used lessons learned from his family’s on-farm difficulties. These lessons are readily applicable to a wide range of farm commodities.

Lesson one: Move on quickly from failure
Dave’s parents established their farm in the 1950s with the goal of raising purebred Herefords and growing grain. But, in their first four years, they were hailed out and sustained losses due to depressed beef prices. The couple decided to diversify into hogs and dairy production, while shifting from grains into forages.
His parents also changed their swine operation from finishing pigs into farrow to finish and began producing breeding stock for other producers.…

The matriarch of the Price family, Flo, works in her kitchen. Contributed photo

Lesson two: Improve your commodity constantly
Price observed that as the swine industry production intensified and more swine health issues arose, the family improved their herd genetics by importing Landrace and by partnering with P.I. Canada.

By 1971, when pigs were selling for 18 cents per lb., Price said he and his four brothers realized.

Lesson three: Focus on customer relations
…so, they designed into their production planning better breeding and genetics for increased meat quality.

They also spent a fruitless few years meeting with various meatpacking companies to determine what they wanted.

“They would never say, only what they did not want,” said Price.

He believed the packers wanted to make it easier for themselves to discount the value of the animals they were offered.

In 1989, the Price brothers, therefore, decided to buy a small provincially inspected meat packer, Trochu Meats, to help their genetic quality improvement program. It also gave them “an oppor-tunity to differentiate what we are doing from the general product delivered to the market,” observed Price.

Davre Pice

Lesson four: Move up the food chain
In other words, the Prices value-added their commodity to increase their returns in comparison to what their fellow
producers were getting for their undifferentiated commodity.

Price said they decided to operate on “a demand-pull basis. We wanted to know in advance what the customer wanted and in what volume.”

Lesson five: niche market
In the Prices’ case, it was Japan.

For that market, Sunterra focused on what their Japanese customers wanted, “not on what we produced,” Dave said.

To increase their understanding of Japanese tastes, the Prices brought Japanese butchers to Alberta to work with the staff at Trochu to satisfy Japanese importers.

Some 90 per cent of Trochu’s export production now goes to Japan and Taiwan. Since 1989, when the Prices bought the plant, Trochu’s labour force has grown from 12 to 1,000 employees.
Lesson six: Work your way further up the food chain
Besides Trochu, Sunterra Enterprises now has Canada’s largest federally inspected lamb plant in Innisfail, Alta., in which the Prices also have a joint venture slaughtering beef, bison and elk. Sunterra also has moved east and is now in a joint venture in an Ontario packing plant.

Integration is the key for the Price family. Sunterra Market not only sells fresh produce, it also markets meat from pigs and cattle grown, raised and processed through the Sunterra group of farms and businesses. Contributed photo

In conjunction with the lamb plant, they have built a new lamb feedlot that will work with the sheep industry on genetic trials to produce the best grain-fed lamb for domestic and export markets. Moreover, Dave and his brothers are partners with 450 other Alberta ranchers in Ranchers Beef, a new processing facility that will be a fully integrated, quality-focused system to produce, process and market beef, with complete traceability from feedlot to consumer to promote better beef genetics.

“We want to know what we started with is what we ended with,” said Dave.

Ranchers Beef, founded in 2004, is a response to the massive market disruption caused by the 2003 discovery of BSE in an Alberta cow and, as such, constitutes Price’s seventh lesson.

Lesson seven: Turn a crisis into an opportunity
Dave and his brothers have found success because, like their parents, they have learned to find opportunity in the circumstances they found themselves in.

They founded Sunterra Quality Food Markets to offer high quality and a high level of service as an alternative to the few services available in the big box stores.

His family also has recognized with the trend to greater consolidation in food retailing that if they moved their farm business away from treating food as a commodity, they could ensure themselves better returns “by using our ability to be flexible and customer-centered.”

Having both knowledge “generated in house” and the ability to make quick decisions has allowed the price family to offset the advantage large corporations have in the mass production of food commodities, he said.

Associated with their specialty grocery stores, they have a catering business, which has given “tremendously valuable feedback down the chain from our butcher to our farm. If they (customers) like a product and spend their dollars; there is no quicker feedback,” said Dave.