Niche market magic

PORT PERRY — Everyone told him it was impossible and even banks wouldn’t touch it with a ten-foot pole, but Jim Sheehan’s spinach swimming pool is getting rave reviews, and not for its innovative design: it’s the taste that’s driving customers wild.

The hydroponic spinach Sheehan grows in his 6,000 sq. ft. greenhouse supplies 17 to 34 regional stores and the complaints roll in when he runs out. The product sells itself, as he found out when he took it to a self-declared spinach connoisseur at a national chain.

"He’s holding up the leaf and turning it left and turning it right, sniffing it. It’s like a wine tasting. The beads of sweat are getting bigger and rolling faster off the side of my head. He eats it, looks at me, and grabs another one. He eats the whole bag in front of me," recalls Sheehan, who runs Port Perry-based Durham Foods Limited with his wife Shelley.

His spinach was listed with the store the same day.

Not far to the east, Alex McKay also has a winning product on his hands: garlic. He planted one-eighth of an acre in 2008 and by last fall was up to 12 acres. Both farmers ventured into highly specific vegetable niche markets with a make-your-own equipment philosophy, proving that new markets are out there. One farm invested a pile of cash. The other waded in slowly. Last month, both farms earned a premier’s award for agri-food innovation excellence.

Neither garlic or spinach is extensively grown in Ontario. In 2010, there were only 294 acres of garlic and just over 1,000 of field spinach. Hydroponic spinach puts Sheehan in his own class —researchers tell him he’s the only person in North America to successfully commercialize it.

Four years ago, market research and supermarket canvassing told Sheehan spinach was a year-round, $100-million import market, but he was told hydroponic spinach wouldn’t work.

"We don’t like people telling us we can’t do things," he says.

With the help of university researchers, OMAFRA specialists, local farmers, and family members, Sheehan pored two years into developing a system, aiming to beat an aggressive disease called Pythium, which eats away at the plant’s root system.

"That’s the big secret, but if you get on the Christmas card list, maybe someday," he jokes.

With the exception of a professional seeder, Sheehan built most of his own equipment. His harvester is another secret he hopes to commercialize. The two most common computerized management systems for greenhouses came with a $100,000 price tag, so Sheehan headed online.

"We bought all the relays, parts, and systems, put it all together and wrote our own program and we’re able to manage all things we want to manage just by MacGyvering it all together," he says, adding that local farmers also helped him build a flat filler for a tenth of the cost of buying one overseas.

Commercial production began in 2010 and Durham Foods now harvests 200 kilograms of spinach once or twice a week. The spinach grows in peat moss packed into Styrofoam trays that float on a pond of water, a space-saver that gives it a better yield per square metre.

This indoor "mini spinach spa" as Sheehan calls it, allows his spinach to build up sugar instead of fortifying against the elements, which can result in a bitter taste.

Diving into the new and untried was a big risk and a seven-figure investment the Sheehans had to front themselves when the banks turned them down. Lenders have now changed their tune and he’s been able to tap into government funding. Sheehan expects expansion will have the business seeing returns next year.

"We figure by 2015 we can have a vacation. We’re going to Disney!" says Sheehan, adding that he couldn’t have done it without a detailed business plan.

Alex McKay, who runs Willowtree Farm with his wife Kelty, his brother Jordan and his parents Rod and Marlene, took a very different approach with garlic.

"If we can grow it without too much trouble, we give it a try," he says. "I’ve done a lot of reading on garlic in the last four or five years, but before I started, I didn’t do much."

On 300 acres of their own plus a few hundred rented acres, Willowtree grows 20 to 30 fruits and vegetables, wheat, grain corn, and soybeans, and has a 35-head cow-calf operation and 100 ewes. Their trial and error approach hasn’t always hit on a winner. Leeks were too time consuming and they had trouble selling eggplant. Garlic is different.

"Because it’s not very mechanized, we were able to become competitive without the initial capital investment," says McKay.

To save on investment, they innovate. For planting, they use a water wheel as well as a modified corn planter for the smaller seed. McKay took the seed hopper off the planter and put a seat in its place, attaching a piece of PVC tubing as a chute for the garlic. It allows four people to plant at a time. An old hay tunnel fan does double duty to dry garlic at harvest.

McKay also plants his garlic in raised beds to help with drainage and uses soybean straw mulch, a cheap way to keep the weeds down.

The biggest expense starting out is seed. McKay had to pay other garlic farmers the going rate and at 900 to 1,000 pounds of seed per acre, it adds up. Production is high enough now that they’ll hold back 20 per cent of their harvest to replant.

McKay admits they may have hit the growth ceiling. Planting, harvesting, drying, and cleaning is done by hand, which makes garlic fairly labour intensive.

But garlic is profitable. Prices have gone up in the last few years and are holding at $4 to $5 per pound. For the last two seasons, the farm tapped into the wholesale market, selling all their garlic to a retailer at the Ontario Food Terminal in Toronto.

With small Ontario acreage in production, demand definitely isn’t a problem, says McKay. "There’s a real garlic fanaticism out there. People love their garlic."