Consult the Exports

May 5, 2014 § Leave a comment

The Northwest Territories diamond industry is aging. Gold is down in the dumps. Junior miners are dying off or hiding like scared rabbits. And the Mary River project’s delay means Nunavut will have to wait at least another year before it sees revenues from the project.

Increasingly, the territories are looking to new industries to diversify the Northern economy: farming in the NWT, fishing in Nunavut and boutique food production in the Yukon, to name a few. Shipping up here may be pricey, but as bricks and mortar stores give way to online shopping, genuine products made in the North are gaining an unprecedented and nearly unlimited market.

Sure, there are other complications: the internet is slow and unsettled land claims often complicate building and
development plans. Still, some longtime exporters are quickly becoming the commercial face of the territory while others are cashing in on the North’s cachet in Europe and Asia.

As any good survivalist will tell you, ingenuity is key. So we present eight longtime exporters with good advice on how to stay alive and get your products out of the North.

Yukon Brewing, est. 1997
WHITEHORSE, YUKON
Craft beers and spirits (vodka and whiskey); also makes soaps and t-shirts Biggest customer outside the Yukon: B.C. and Alberta Proportion of revenue generated outside the territories:less than 50%

The beer that started it all for Bob Baxter and Alan Hansen in 1997 was local right down to its recycled bottles and fireweed honey infusion. Though not the first bitter brewed in the Yukon, the Honey E.S.B. quickly defeated Molson and Labatt’s near-monopoly on the territorial beer market. That was partly due to Yukon Brewing’s (then Chilkoot Brewing’s) fearless experimentation with ingredients grown in the area.

“The Yukon’s not an agricultural mecca by any means,” says Baxter. Still, the ingredient lists of Yukon Brewing’s eight beers currently on offer showcase the best of Yukon farming: Midnight Sun coffee beans, local cranberries and blackcurrants. And each box features art by a different Yukon artist. Indirectly, then, the beers – on tap in B.C., Alberta and the Northwest Territories – serve as an exporter for other exports as well.

As another result, the beer is so iconically Northern that when the Hanover Zoo in Germany wanted to create an authentic Klondike Saloon, Yukon Brewing was the natural choice to stock it.

SHRINKING SHIPPING COSTS: Beer makes sense for the Yukon and its home-brewing heritage, but Baxter says the Yukon market has quickly become saturated. “The population is just too small and there’s too low a margin on beer products,” he says. “If we had to rely on Yukon sales, none of us would survive.” That’s why Yukon Brewing is working on a signature vodka and whiskey, using local raspberry, rosehip, sage, and possibly the hascap berry, which a local farmer has just begun producing this year. Spirits ship more economically and there’s more of an overseas market for them. “If Canadians can buy a $100 bottle of scotch from Scotland, why can’t someone in Japan buy a $100 bottle of whiskey from the Yukon?” he says. “We’re not shying away from ambition.” The first batch should be ready later this year.

Hay River Poultry Farms, est. 2009
HAY RIVER, NWT
Industrial and commercially-sold eggs Biggest customer outside the NWT: B.C. or Alberta Proportion of revenue that comes from exports: 85-90%

Polar Egg may be the recent darling of NWT locavore culture, but its mother barn, now housing Hay River Poultry, has been shipping eggs south since the mid-1980s. Polar Egg looks to expand into the Yukon and Nunavut eventually. Still, Hay River Poultry manager Glen Wallington says the spin-off company will likely use only about 30,000 to 40,000 eggs a week, compared to three times that many shipped per day from the main, 118,000-chicken farm. It’s safe to say that without Hay River Poultry’s export revenue, Polar Egg probably wouldn’t exist.

INCUBATING AN INDUSTRY: As far as capacity goes, Wallington says Hay River Poultry’s already reached its chicken quota. The eggs the southern grocery stores don’t sell go into industrial products such as powdered egg, Miracle Whip and antibiotic food preservative.

Cost-wise, help is coming: An agricultural policy is in the works. Because the territory currently has no official subsidy in place, farmers currently pay commercial rates for power, fuel and taxes – about double what mining companies pay. The Territorial Farmers Association, to which Wallington’s son belongs, is lobbying for a policy that will help with these costs.

Fort McPherson Tent & Canvas, est. 1970
FORT MCPHERSON, NWT
Canvas walls and prospectors’ tents, outfitting gear Biggest customer outside the NWT: northern B.C. and northern AlbertaProportion of revenue that comes from outside the territories: 37%

Established in 1970 as a GNWT economic development initiative, Fort McPherson Tent and Canvas held the title of Only Factory North of 60 for many years. Its secret to success? Change nothing. Though the company has added smaller gear items such as canvas backpacks and portfolios to its production line in recent years, its signature item, the white, house-shaped, $2,000 wall tent, hasn’t been altered since the early days of Northern prospecting, when Gwich’in seamstresses from the community outfitted travellers from the south.

Aside from a website overhaul by the NWT Business Development and Investment Corporation (which owns Fort McPherson Tent and Canvas) about a year-and-a-half ago, BDIC director Leonard Kwong says it has no plans to change its motley customer base of explorers from around the world. “We plan to continue in the same direction, manufacturing canvas tents,” he says. “The bulk of our customers know about us. They know where to find us.”

STAKING A NEW MARKET: Fort McPherson’s designs are flawless but the business model isn’t. The company has rarely turned a profit: Shipping costs are prohibitively high and miners now typically come North with their own camps.

Recently, though, Fort McPherson tents have popped up in several “glamping” resorts in Northern B.C. and the U.S. The soft light cast by the pale canvas and its waterproof shell provide a lovely ambience for romantic getaways in the woods.

Uqqurmiut, est. 1987
PANGNIRTUNG, NUNAVUT
Arts and crafts Biggest customer outside Nunavut: Mississauga, Ontario Proportion of revenue coming from outside the territories: less than 50%

Uqqurmiut houses central production for almost all souvenirs of the North: the Pang hat (a wool toque with a long tassel); the amauti (a coat with a large hood for carrying children in back); the packing doll (animal-themed felt dolls with functional amautiit); the ulu earrings, baleen pendants and polar bear necklaces.

Begun as an artist-run centre in 1987, it’s become a must-see for cruise traffic along Cumberland Sound, and until the company revamps its website, most of its traffic will likely be from tourists passing through.

CRAFTING CACHET: In step with the southern economy, Northern tourism has dropped off in recent years, and Uqqurmiut’s revenues fell from 2012 to 2013 by nearly 40 per cent. In such a difficult market, Nunavut Development Corporation director Brian Zawadski says, “You have to find that niche of people willing to pay a higher price for something unique … Obviously,” he adds, “attaching any of the romance, tradition and uniqueness of the North, [such as a ‘Three Ptarmigans’ tag of authenticity on handmade products] helps.”

Pangnirtung Fishery, est. 1992
PANGNIRTUNG, NUNAVUT
Arctic char and turbot Biggest customer outside Nunavut: China Proportion of revenue that comes from outside the territories: 95%

For Obama’s first meal in Canada, he was served maple and miso-cured char. For the 2011 royal visit to Ottawa, Kitikmeot urchins were shipped fresh from Cambridge Bay and served same day. The Nunavut fishery is fast becoming a point of Canadian pride, and the Nunavut Development Corporation has invested in the Pang fishery infrastructure accordingly. Ironically, then, nearly all of the fish that comes from Pangnirtung ships directly to China. Filleted turbot, which North Americans prefer, goes for $4.25 a pound, whereas the whole fish, in high demand in China, sells for $5.60, and requires less processing. The Chinese market prefers the heads attached.

CASTING A WIDER NET: James Williams, assistant manager at the Pang fish plant, says Department of Fisheries and Oceans quotas are too strict. They’re fishing at capacity already and there’s nothing left over for the Canadian and U.S. markets. Williams and local fishermen are building capacity to add a summer harvest to the plant’s schedule, which currently operates only in winter. If that happens, he says, “I’d like to see another 500,000 turbot added to the yearly allowable catch.”

Kiluk, est. 1996
ARVIAT, NUNAVUT
Fur and skin clothing Biggest customer outside Nunavut: Ontario Proportion of revenue that comes
from outside the territory:
 less than 50%

Kiluk’s early brush with fame came a decade ago, when Miss Canada wore one of its white sealskin dresses at the Miss Universe pageant (in Panama!). PETA protested, but Zawadski says Kiluk sales weren’t affected. A greater impact, says Kiluk manager Sherlyn Kadjuk, came from a short article in The Globe and Mail this February, showcasing the company’s sealskin cell phone case. “Last year, we were probably only making about 15 cases per month,” she says. “Now we’re up to 50. We have 25 orders right now.”

By adding web marketing through Ivalu, the Nunavut Development Corporation’s online store, Zawadski and Kadjuk hope to increase exposure of Northern products to the south.

HOMEGROWN AND STAYING THAT WAY: Online marketing, of course, is limited by the bandwidth of the territory. More than that, though, distribution of Kiluk’s products into the States is nearly impossible, since marine mammal products have been banned there since the 1970s. And with sealskin products still banned in Europe, Kiluk is functionally restricted to Canada. That’s okay, says Zawadski. “Even if those markets opened up, we would be able to immediately deal with the demand. We don’t yet have those capabilities.” Adds the website: “The vast majority of our clients continue to be in Nunavut and Nunavummiut are the people we work to serve.”

Skookum Brand, est. 1997
DAWSON CITY, YUKON
Custom-made anoraks and winter accessories Biggest customer outside of the Yukon:Germany Proportion of revenue generated outside the territory: 50%

Megan Waterman arrived in Dawson in 1996, fresh from design school in southern B.C. and looking for inspiration. She found it in the Yukon’s traditional craft and clothing designs, and in the trappers course she took to learn the hide-tanning process from start to finish. A year later, she’d set up The Fashion Nugget, a retail shop, and established several different textile lines, including some that were naturally dyed – Fireweed Fabrics – and a selection of “Skookum” anoraks (not to be confused with parkas; anoraks are lightweight coats, regardless of how heavy-duty).

But when she realized Skookum had the potential to break into an international market, she sold the other companies and closed The Fashion Nugget to run a custom-made anorak factory. Now, operating on a “just-in-time” manufacturing schedule, Waterman produces approximately 500 anoraks per year from her Dawson workshop, alongside two to five seasonal employees. Customers choose their own style, colour and fur from a drop-down list of choices on the website, and the anorak usually ships within two weeks.

Wherever possible, Waterman sources Northern products. Fur comes from the Mackenzie Valley Genuine Fur Program or the fur harvesters auction in North Bay, Ontario, and the rest of the materials hails from the south.

Because Skookum sells mostly online (with the exception of a few retailers, who are releasing her new line of accessories this fall), Waterman says, “It doesn’t really matter where we are, logistics-wise, and customers love the fact that they’re buying a genuine Northern product.”

INDUSTRY PIGGYBACKING: Because there’s no real clothing industry in the Yukon, Waterman says she has to piggyback on other sectors to increase brand-recognition. Since she started decking German guides Nature Tours of Yukon in Skookum, European sales have increased dramatically.

Muskox Products Company, est. 1997
INUVIK, NWT
Pelts, skulls and qiviut (muskox wool) Biggest customer outside the NWT: Banff, Alberta Proportion of revenue that comes from outside the territories: 86%

You’d think the fact that Northern meat products can’t leave the territory without prohibitively expensive federal inspections (about $100,000 per muskox harvest) might destroy the NWT’s muskox export. Not so for Inuvialuit Development Corporation subsidiary Muskox Products Company. Muskox meat hasn’t been sold outside the NWT for nearly a decade, but the fur, hides, horns and skulls have. Aside from the meat, which goes fast within Inuvik anyways, more than $100,000 is usually generated from the skin, the horns and the qiviut – about five kilograms of soft, luxury under-fur, per animal, made into sweaters and sold in ski towns.

Still, the GNWT has heavily subsidized the muskox harvest in recent years, and project coordinator Jiri Raska says it’s looking to the Inuvialuit community to come up with proposals on how to run a sustainable harvest. One option is to install a permanent, on-the-grid abattoir instead of the current, portable Quonset-hut set-up. He’d also like to see the community harvesting the animals regularly throughout the year, rather than corralling the animals, hundreds at a time, across tens of kilometres of tundra to a frantic and highly variable slaughter once or twice per year.

ACCOUNTING FOR THE HERD: To make a regular harvest viable, says Raska, “someone needs to take a proper count of the animals to see what scale is sustainable. We need to know how much of the resource is available.” Also, no one knows how much demand there is for the meat in the south because he says the guidelines for shipping the meat are too stringent. “Maybe we could look at making it easier to get muskox down to markets where people are willing to spend big dollars.”

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