For Arbre Joyeux, innovation in agriculture is a little like cooking at Christmas. You need an outstanding team, a few well-measured trends, a heaping helping of talent and just a pinch of ambition. Simmer briefly in market forces, until your kitchen fills with the aroma of your very own innovative juices. That, in a nutshell, is this Beauce company's recipe for success. Under the ownership of Renald, Norman and Yvan Gilbert since 1975, the reputation of Arbre Joyeux now extends beyond Canadian borders, setting the stage for success.
Through its alliance network with some 50 chains, including Home Depot and Canadian Tire, Arbre Joyeux sells over 200,000 balsam and Fraser fir trees annually, throughout Canada and into the US Midwest. The company's 2,500 acres of land is home to a stock of 1.8 million live trees. In addition, Arbre Joyeux negotiated substantial harvesting rights to meet demand in the US market.
Renald Gilbert says that he learned to speak English through his business transactions over the telephone. "I contacted American distributors to let them know about our Christmas trees. You can't ask for a better way to learn. Over the phone, you rely on voice and tone to communicate. You have to be clear and instil confidence with the very first call and you learn fast when you have to. We had the advantage of knowing our product and our delivery capacity well." Sales skyrocketed from $647,000 in 1995 to over $6,700,000 in 2003.
The Gilbert brothers have always had trees in their blood. "Our father, a woodlot operator in his day, liked to hitch up the horses in his spare time to fell the trees on our family's land. That's how we got interested in converting the cultivated land into a Christmas tree operation. And that's how we got started," explains Renald, a forestry engineer by profession. Renald and his wife, Marjolaine Tardif, first started the fir tree operation. Marjolaine created an entire computerized invoicing system. Then Renald's brothers, Normand and Yvan, joined the business, and it has been a wild ride. Renald explains further, "For the first few years, we were all working and we kept spending and spending to keep the business running. Then one day, we went for it!"
The turning point for the company was in the 90s, right in the middle of the recession. So the brothers relied on their savvy to set themselves apart from the competition. Based on where the market was going at that time, Arbre Joyeux anticipated that Canada would not be able to meet the demand for Christmas trees between 2001 and 2004. Arbre Joyeux was already increasing production by 10 to 20 per cent annually, and even this was not enough to satisfy demands from the very impressive partnership growing with American distributors.
The business had to go one step further to survive in this increasingly voracious market. The Gilbert brothers got wind that a producer in Saint-Honoré was planning to get out of the industry. Most of that producer's tree sales were to wholesalers - a less profitable option. Arbre Joyeux began looking into financing solutions, approaching banks and explaining that they wanted to purchase an additional live stock of 800,000 trees. This would double the operation's production capacity.
However, preparing a financing package for forestry requires considerable resources, which are not always readily available. Khalid Berrahou is Arbre Joyeux's financial controller: "FCC understands agriculture inside out, and therefore they were comfortable with the future value our trees would bring. They understood the importance of this opportunity for us and the real value of the land that Arbre Joyeux wanted to acquire."
It goes without saying that Christmas tree production is a sector unlike any other. It takes many years before the product leaves the ground to go to market. Christmas trees reach maturity after two years in a greenhouse, two years in a nursery and at least eight years in the field. All decisions are based specifically on future needs and demand.
When Arbre Joyeux cuts down 200,000 balsam and Fraser fir trees, over 300,000 are replanted to meet the anticipated increase in sales 10 years down the road. Factors affecting growth rate also need to be taken into account, such as disease, variable weather conditions and a loss rate of 5 per cent per year.
Similarly, competition tactics in the field reflect this strategic mindset. Despite the increased risk, Arbre Joyeux determined that it was more profitable to count on a balanced combination of harvesting rights and Christmas trees planted at 50¢ a piece. By making the necessary adjustments to the soil, the operators are able to optimize growing conditions and maximize the number of trees maturing in 10 rather than 12 years.
Arbre Joyeux's real expertise is in being able to predict the needs of its clients and their customers. Since Arbre Joyeux broke into the US market, order books have grown to include some 30 by-products and other specialities distributed throughout its alliance network.
"Two years ago, we proposed a piece of novelty merchandise to Home Depot, called Kissing Balls, that are polystyrene foam balls, decorated with fir branches and hung in a room the same way you hang mistletoe. We felt there would be a demand for this type of product. We made the proposal and we were right," says Khalid Berrahou.
Arbre Joyeux has had the same success with canes, crucifixes, hands and miniature decorated potted trees, for use in smaller homes with limited space and offices. Another product custom designed for the American market is a cover to place over graves made of a metal trellis wound with pine branches. "It's a very American tradition and when we developed the product, we satisfied a consumer need, without requiring distributors to invest any time or money." Berrahou continues.
The most daunting challenge is clearly the transportation of trees to their point of sale. Maintaining a solid business relationship with some 20 transportation companies needs constant attention and innovative solutions.
"We load 700 to 750 trees on each truck. Transporters don't like to waste time loading and unloading at point of sale, as the first trucks that are quickest to unload are the first trucks ones served by the warehouse receivers. We have developed a unique system of loading the trees on conventional palettes reducing waiting time for truckers at shipping and delivery points, and helping to negotiate more competitive shipping prices," Khalid Berrahou explains.
Renald Gilbert is the first to admit that his sense of innovation has always been born of a desire to help make the job easier for his co-workers. "When I worked as a forestry engineer, I had trouble understanding why loggers had to walk through the mud to get to the job site. With better planning the forest road network could have been better maintained. It just makes sense, doesn't it?" he concludes. Kudos!
Through its alliance network with some 50 chains, including Home Depot and Canadian Tire, Arbre Joyeux sells over 200,000 balsam and Fraser fir trees annually, throughout Canada and into the US Midwest. The company's 2,500 acres of land is home to a stock of 1.8 million live trees. In addition, Arbre Joyeux negotiated substantial harvesting rights to meet demand in the US market.
Renald Gilbert says that he learned to speak English through his business transactions over the telephone. "I contacted American distributors to let them know about our Christmas trees. You can't ask for a better way to learn. Over the phone, you rely on voice and tone to communicate. You have to be clear and instil confidence with the very first call and you learn fast when you have to. We had the advantage of knowing our product and our delivery capacity well." Sales skyrocketed from $647,000 in 1995 to over $6,700,000 in 2003.
The Gilbert brothers have always had trees in their blood. "Our father, a woodlot operator in his day, liked to hitch up the horses in his spare time to fell the trees on our family's land. That's how we got interested in converting the cultivated land into a Christmas tree operation. And that's how we got started," explains Renald, a forestry engineer by profession. Renald and his wife, Marjolaine Tardif, first started the fir tree operation. Marjolaine created an entire computerized invoicing system. Then Renald's brothers, Normand and Yvan, joined the business, and it has been a wild ride. Renald explains further, "For the first few years, we were all working and we kept spending and spending to keep the business running. Then one day, we went for it!"
The turning point for the company was in the 90s, right in the middle of the recession. So the brothers relied on their savvy to set themselves apart from the competition. Based on where the market was going at that time, Arbre Joyeux anticipated that Canada would not be able to meet the demand for Christmas trees between 2001 and 2004. Arbre Joyeux was already increasing production by 10 to 20 per cent annually, and even this was not enough to satisfy demands from the very impressive partnership growing with American distributors.
The business had to go one step further to survive in this increasingly voracious market. The Gilbert brothers got wind that a producer in Saint-Honoré was planning to get out of the industry. Most of that producer's tree sales were to wholesalers - a less profitable option. Arbre Joyeux began looking into financing solutions, approaching banks and explaining that they wanted to purchase an additional live stock of 800,000 trees. This would double the operation's production capacity.
However, preparing a financing package for forestry requires considerable resources, which are not always readily available. Khalid Berrahou is Arbre Joyeux's financial controller: "FCC understands agriculture inside out, and therefore they were comfortable with the future value our trees would bring. They understood the importance of this opportunity for us and the real value of the land that Arbre Joyeux wanted to acquire."
It goes without saying that Christmas tree production is a sector unlike any other. It takes many years before the product leaves the ground to go to market. Christmas trees reach maturity after two years in a greenhouse, two years in a nursery and at least eight years in the field. All decisions are based specifically on future needs and demand.
When Arbre Joyeux cuts down 200,000 balsam and Fraser fir trees, over 300,000 are replanted to meet the anticipated increase in sales 10 years down the road. Factors affecting growth rate also need to be taken into account, such as disease, variable weather conditions and a loss rate of 5 per cent per year.
Similarly, competition tactics in the field reflect this strategic mindset. Despite the increased risk, Arbre Joyeux determined that it was more profitable to count on a balanced combination of harvesting rights and Christmas trees planted at 50¢ a piece. By making the necessary adjustments to the soil, the operators are able to optimize growing conditions and maximize the number of trees maturing in 10 rather than 12 years.
Arbre Joyeux's real expertise is in being able to predict the needs of its clients and their customers. Since Arbre Joyeux broke into the US market, order books have grown to include some 30 by-products and other specialities distributed throughout its alliance network.
"Two years ago, we proposed a piece of novelty merchandise to Home Depot, called Kissing Balls, that are polystyrene foam balls, decorated with fir branches and hung in a room the same way you hang mistletoe. We felt there would be a demand for this type of product. We made the proposal and we were right," says Khalid Berrahou.
Arbre Joyeux has had the same success with canes, crucifixes, hands and miniature decorated potted trees, for use in smaller homes with limited space and offices. Another product custom designed for the American market is a cover to place over graves made of a metal trellis wound with pine branches. "It's a very American tradition and when we developed the product, we satisfied a consumer need, without requiring distributors to invest any time or money." Berrahou continues.
The most daunting challenge is clearly the transportation of trees to their point of sale. Maintaining a solid business relationship with some 20 transportation companies needs constant attention and innovative solutions.
"We load 700 to 750 trees on each truck. Transporters don't like to waste time loading and unloading at point of sale, as the first trucks that are quickest to unload are the first trucks ones served by the warehouse receivers. We have developed a unique system of loading the trees on conventional palettes reducing waiting time for truckers at shipping and delivery points, and helping to negotiate more competitive shipping prices," Khalid Berrahou explains.
Renald Gilbert is the first to admit that his sense of innovation has always been born of a desire to help make the job easier for his co-workers. "When I worked as a forestry engineer, I had trouble understanding why loggers had to walk through the mud to get to the job site. With better planning the forest road network could have been better maintained. It just makes sense, doesn't it?" he concludes. Kudos!
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