New customers line up for N.B. peanut butter — and doughnuts too

G.E. Barbour may be best known for its King Cole tea, but the Sussex company’s peanut butter is apparently what everyone wants overseas.

Company president Jeff Rose said Barbours officials were in China recently to meet with an import partner and participate in a trade show.

They set up a booth that gave them an indication of how Barbours might fare if it entered the market there.

“The lineup was 30 feet for four days with people excited to try our Fatso brand peanut butter,” Rose said.

With the ever-present threat of U.S. tariffs, companies like Barbours are looking across Canada and overseas for new markets.

It made a big push into the U.S. market a decade ago and had great success with its peanut butter products, more than doubling its sales, said Rose.

But then a year ago, the company that was founded in 1867, the year of Confederation, suddenly faced the prospect of a tariff on their products going into the U.S., and possibly even a counter-tariff on the peanuts they import from the southern U.S.

The tariffs still haven’t materialized because the company's products are covered by the Canada-United States-Mexico Agreement, but it was still a wakeup call to diversify Barbours' markets.

“We realized that at the end of the day we're going to have to adapt,” Rose said. “This isn't going away. This is the new reality, and one thing G.E. Barbour has done over the last 158 years is we’ve adapted.”

Mrs. Dunster’s is less than a kilometre away from Barbours and confronting similar challenges.

Co-CEO Blair Hyslop was working for Barbours when he and his wife Rosalyn learned of the opportunity to buy the 57-year-old bakery business in 2014.

Like Barbour’s, the company embarked on a strategy for growth in the U.S. and says it's increased their sales an average of 20 per cent a year and the workforce to about 225 from 50.

At the beginning of last year, they had plans to double the size of the company in three to five years, based mainly on U.S. sales.

“It was all about expanding into other New England states,” Hyslop said. “We're eight hours from 70 million people.

“We have a strong brand in Maine and a growing brand in New Hampshire. We saw big opportunities in the northeastern U.S., so that's primarily where our eyes were focused at that point in time.”

Mrs. Dunster’s products are also compliant with the trade agreement, but the company has turned its attention elsewhere.

Fortunately, Hyslop said, national retailers like Costco and No Frills are more open to products from the region since the onset of the tariff threat and the movement to buy Canadian goods.

“We've always had a bit of a challenge breaking out of the regional mindset that [national retailers] had … that if you're from Atlantic Canada we’ll put you in our stores in Atlantic Canada,” Hyslop said.

“What we're seeing now is more of a mindset to say, ‘Oh, you're a Canadian supplier, you have interesting facilities, you have a lot of capacity, you make nice products that will give you a shot across the country.’ That's a much easier conversation today than it was a year ago.”

Rose said Barbours, which employs about 75 people, also embarked on a national growth campaign, hiring sales reps in Quebec and Ontario to market its products, including teas, nut butters and spices, to chains and smaller retailers.

The company also began attending trade shows and building relationships with retail partners in Europe, the Middle East and Asian countries such as Japan and South Korea, where Barbours already had a small presence.

Peanut butter is the main focus of the overseas efforts to diversify the company's markets..

“[It’s] an excellent protein and relatively cost-effective and it's a product that is considered to be fairly Western,” Rose said. “In some countries, they find that attractive, especially the middle-class segments, which are growing in a lot of [places].”

Mrs. Dunster’s signature product is the doughnut.

They made 50 million of them last year, and the company founded in Ingrid Dunster’s kitchen in 1968 now has the capacity to make a lot more after a $3 million investment in the Sussex facility that included a new doughnut fryer

“We can make up to 85 million doughnuts a year now, which is remarkable if you think about the fact that Ingrid Dunster started making doughnuts six at a time in a cast-iron pot,” he said.

A year ago, the company was mostly planning for growth south of the border.

“We were 100 per cent focused on New England, and today we're probably 50 per cent focused on New England in terms of expansion,” he said.

They still see the U.S. as an important market, but millions more of those doughnuts will be shipped across Canada as well.

The U.S. also remains an important market for Barbours.

But Rose, who is also the president of the Food and Beverage Association of Atlantic Canada, said companies like Barbours are preparing for a future with a more diversified customer base.

“Over the next 12 months, we're going to see a number of those companies start to venture outside of the Maritimes and sell their wares,” he said.

“I'm hopeful that three or four years from now, we're going to hear about a very interesting success story that has come out of Canada from some of the pressures that we're feeling now.”