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Squeezing into the competitive juice market has meant playing a background role for a low-profile British Columbia orchardist with a growing processing business. Markus Keller of Keremeos, in British Columbia’s Similkameen Valley, Canada, produces 500,000 liters of juice a year that’s sold under its own name, Worrenberg Farms, as well as a host of private labels.

One of the newest additions is the Valley Breeze label, sold exclusively in British Columbia through Kin’s Farm Markets, a Richmond-based chain of greengrocers with 20 outlets that focus on competitively priced fresh fruit and vegetables.

Kin’s initially sold four-liter plastic jugs of Worrenberg Farms-branded juice, but developed the Valley Breeze label at Keller’s urging.

"I encouraged them to make their own brand, partly because if they invest a little bit of time and effort themselves, they’re likely to stick with the product," Keller said. The effort has paid off for all concerned.

"It’s been doing quite well. I never expected them to be moving it the way they are," Keller said.

Better margins

Valley Breeze apple juice is part of the ongoing growth of Kin’s, which has added wholesale and distribution wings and also operates a store in Ontario.

David Gray, principal of the Vancouver, B.C.-based retail consultancy dig360, says private-label products are attractive to retailers seeking to round out their product offerings with high-quality products that offer better margins than brand-name products.

A producer of private-label products benefits because its access to markets increases without the risk of cannibalizing sales of any of its other brands because the products are usually offered through a specific retailer.

The additional channels into the marketplace in turn allow the producer to boost production, reducing per-unit production costs.

"The bigger the volume, the more units you’re spreading your fixed costs over," Gray said.

Meanwhile, the retailer gets to control the brand’s presence in the marketplace.

Since private-label goods have become upscale items for many retailers rather than cheap knockoffs catering to bargain-hunting shoppers, Gray explained that retailers have a tool that allows them to compete effectively against better-known, upmarket brands. It can be a significant marketing opportunity, he said.

Natural

Keller believes the appeal of his juices stems from the fact that they’re completely natural, though they are pasteurized.

Pressed using old-fashioned mechanical means rather than enzymes and bottled without preservatives, each batch reflects the flavor of the apples that went into it.

"Our juice is unique because basically we don’t use anything—we simply squeeze the apples and use the juice," he said. "Each time you will buy it, it will look different and it will taste different."

The juice Keller produces comes primarily from conventional fruit, with just 10 percent from organic apples. Being in a glass jar is also important, not just because glass packaging doesn’t breathe like plastic, ensuring the long-term stability of the juice, but because of the backlash against all manner of plastic packaging by environment-conscious consumers. Recent concern in Canada regarding hard-plastic containers containing the endocrine disrupter Bisphenol A has also fuelled a shift by health-conscious consumers away from plastic packaging.

Started by Markus’ father, Herbert, the business remains family-run and reflects the family’s roots in Winterthur, Switzerland, near Lake Constance.

"My father always said, ‘You know, in Switzerland everywhere [there’s] a little juice operation doing this and that, and here, all you have is Sun-Rype,’" Keller said. "It basically didn’t make sense to him that it was like that."

Sun-Rype Products, Ltd., based in Kelowna, British Columbia, is western Canada’s largest manufacturer of juice-based beverages, with annual sales of Can.$135 million in 2007.

Using a simple rack-and-cloth press from Switzerland, Herbert and his wife, Margrith, began making juice in 1982, bottling it and applying basic paper labels. The pressings increased, but the operation remains family-run, with two employees in addition to Markus and his parents.

"We came from making juice underneath our porch to making 500,000 liters a year!" Markus said proudly.

The apples usually come from the local packing house as well as direct from local orchardists. While the Kellers have a 14-acre orchard, much of its fruit is sold to the fresh market. Keller plans to open a distillery and cider house in 2009, however, so some of the trees are bearing European cider varieties designated for the new venture.

Despite his plans for diversification, Keller plans to stay small because he believes it’s where the opportunities are. With consumers seeking local producers and niche products, he believes smaller retailers can be viable outlets for his products.

Worrenberg-brand juices will continue to be sold through well-known retailers in British Columbia, including Whole Foods and local chains such as IGA. Keller prefers to avoid competing directly with a major producer.

"My rule is: I play under the radar, so I don’t become a thorn in the side of a big company like Sun-Rype," he said. "It also helps on the trust factor. When the consumer knows it comes from a family operation, a small operation, they know that they can trust us more."