Spitz benefited from outside expertise

Alberta’s sunflower king urges entrepreneurs to source the help they need to push their companies forward.

((Alberta)) Tom Droog of Spitz International knows exactly what he wants inside every single package of the roasted sunflower seeds that carry the name of the internationally-successful company he started near the southern-Alberta community of Bow Island, AB, 25 years ago.

But when he needed help to find a better way to get those top-quality seeds into his resealable packages, Droog did what he thinks a lot of Alberta-based businesses should do more often; “I went looking for someone who was an expert in that area.”

The quest brought him to Doug Greening, the operations manager of Boss Packaging Inc, a Calgary manufacturing company that markets packaging machinery for the food industry. “Tom was looking for equipment he could use in his plant to reduce the amount of labour. We took a look and invented machines to do the job,” says Greening, whose company sells packaging machinery.

Intrigued by Droog’s no-nonsense approach to calling on outside expertise, Greening soon found himself with more than a contract to build a better machine. “I also found a mentor in Tom Droog – and there’s no question that relationship has helped Boss Packaging find new business opportunities in a sector we hadn’t even looked at previously.”

From Droog, Greening learned how to use balance sheet information to look ahead to next year’s sales. That helped Greening “chase the right projects and secure the right contracts.”

It also helped him recognize that some of Boss Packaging’s equipment was a good fit with the oil and gas sector, an industry they’d completely overlooked in the past. “The problem with entrepreneurs is that it’s easy to get tunnel vision. I do think you have to focus on what you do well. But you also need to pay attention to how your product may benefit another industry. If you don’t have someone question your decisions and challenge you on a regular basis, you may not even realize what you’re missing,” says Greening.

That willingness to seek innovation is old hat to Droog, a Dutch immigrant who moved to Alberta in 1972 with about $120 in his in pocket.

Frustrated by Canadian Wheat Board regulations for traditional crops, Droog started growing and roasting sunflowers in 1982, eventually expanding production to six flavours. Ever-focused on the consumer, Spitz buys premium-sized seeds and uses a patented roasting process that adds flavour – not weight.

Today, Spitz buys 24 to 25 million tonnes of premium-sized sunflowers a year from growers in Alberta, Saskatchewan and Manitoba.

Spitz International holds first place in the Canadian sunflower market and is in the top three in the U.S. “The brand will take off there in the next three years and we’re also expanding into Europe,” says Myles Hamilton, who joined the company in 2006, bringing years of snack food experience as a former vice president of Frito Lay.

One of the first things Hamilton did involved changing the corporate name to Spitz International from Alberta Sunflower Seeds Ltd. “In retrospect, the acronym didn’t work” jokes Droog.

“More importantly, ‘Spitz’ was so well known and we really needed to capitalize on that reputation for a superior product. Our future growth is based on carrying that reputation forward,” notes Hamilton. With his help, Spitz is moving into European markets traditionally held by other companies.

They also plan to leverage the Spitz reputation in the sunflower market and introduce sunflower kernels, a ready-to-eat shelled product. The kernels will be introduced in two flavours, salted and dill. Both will be marketed as a snack and as a topping for the salad market. Spitz is also introducing a candy-coated chocolate-covered sunflower kernel product called Spitz Rainbow Bitz. These new products will be in stores across Canada in March 2008.

Having a product consumers prefer is fundamental to Spitz’s success, adds Droog, who routinely shares his entrepreneurial focus with other business people. He’s also serving his third team as a director with AVAC, a not-for-profit company that provides early-stage investment, insight and focus to build viable commercial value-added opportunities in Alberta. AVAC programs include royalty-based investments, R&D support and business advice.

“I love my work with AVAC because I truly believe in value-added agricultural production and there are a lot of good ideas out there that need some helping to get started,” says Droog, whose own company benefited from business start-up programs offered by the Alberta Government.

Regardless of where the help comes from, entrepreneurs need sound advice from people who’ve been in business, adds Greening. “With Tom’s mentorship, I’ve learned that you need to be surrounded by good people. Accountants, lawyers, engineers, sales people, they’re all part of my team. We’re now in markets we didn’t even know about before Tom helped me see opportunities in areas we’d never explored before.”

For more information contact:

• Tom Droog
  Spitz International
  T: 403-545-6566
  e: tdroog@spitz.ca
  
• Myles Hamilton
  Spitz International
  T: 403-545-6566
  e: mhamilton@spitz.ca
  
• Doug Greening
  Boss Packaging Inc.
  T: 403-837-8848
  e: dgreening@bosspac.com
  
• Ross Bricker
  AVAC
  T: 403-274-2774
  e: rbricker@avacltd.com