Canadian sunflower seed factory closing but Spitz brand still growing

Spitz sunflower seeds blossomedat its lone processing plant in Bow Islandin southern Alberta but the Canadian factoryis now closing down and moving south of the border, a move the company's founder says is hard to watch.

TomDroogand his wife spent decades growing theirsunflower seed farming business in Alberta into a multi-million dollar corporation with sales across North America.

Droogand his wife Emmy, apair of Dutch immigrants, started the company in 1982.

At first, the idea was to market the seeds as bird feed, until the couple realized they could sell them as a snack in resealable bags.The company expanded, marketingbags of sunflower seeds at baseball games and to people spending a lazy summer day lounging on a deck.

Thepair sold the company to American snack giant PepsiCo in2008, in a private multimillion dollar deal. Adecade later, Drooglearned the multinational haddecided to shut downthe brand's only Canadianfacility.

Droogbegan to anticipatesuch an announcement as the brand continued to grow, but the Spitz founder says that didn't make it any easier to swallow now that it's happened.

PepsiCo had investeda few million dollars recently into the original Spitz plant in recent years, so the decision to close the facility was a shock.

That's the cruelty of business.- Tom Droog, Spitz founder

"Of course I'm sad, it was our baby," said Droog."But hey, they bought it, they can do with it whatever they want."

Droogtried tosound upbeat during a phone interview Tuesday as he drove to Bow Island to meet with employees and give comforting words to the 50 startled workers, many ofwhom will be without a job once the doors on the processing plant close in July.

Not only did the company emerge as a major employer in the community, but also a major sponsor and donor in the town of about 2,000 people. The local impact of the closure won't go unnoticed.

"That's the cruelty of business," he said.

At the same time, PepsiCo plans to continue growing the Spitz brand, which gives Droogimmense pride. When the company was sold in 2008, it was producing five and a half million kilogramsof seeds a year. The Bow Island plant now processes about 14 million kilogramsand Droogsays the company is aiming to double production in the future.

"They didn't think the Bow Island plantcould handle it," saysDroog, dismissing any suggestion the decision was prompted by minimum wage increases in Alberta.

"It just becomes a numbers game. The bean counters got a hold of it and say 'What if we do this? How much will we save if we do it somewhere else?' And I think that's the bruntof the story," he said.

PepsiCosaid in a statement last week thatit made its decision based on the long-term viability of the Alberta facility and "its ability to meet our increasing volume requirements for the brand, which will continue to play an important role in our North American portfolio."

It's not immediately clear exactly where the Spitz manufacturing facility will be located, but PepsiCo has said it will be in the U.S.

While it's the end of an era in Bow Island,Droogsays he'sproud the Spitz legacy will continue as long as PepsiCo sticks with the same patented production process and maintains the distinctive flavour.

Droog's wife died in 2010 and wherever Droogtravels in Canada and the United States, he's reminded of what they built together as hesees bags of Spitz seeds on store shelves,even in parts of Mexico.

"I say 'Isn't that something' because Emmy and I started that from nothing."

From 2000: Spitz owner Tom Droog reflects on success and eyes Quebec expansion

7 years ago

Duration 12:29

This segment from 2000 follows sunflower seed producer Spitz as it attempts to expand to lucrative Quebec market.