Penticton’s industrial area has attracted an arm of Canadian business Sangster’s Organization to the city.
Canadian Bio, the manufacturing portion of the supplement/nutrition company, has bought a 33,000 square foot building at 260 Okanagan Ave. and will be re-locating from Saskatoon.
“It is an ideal building for my needs and it is virtually walk-in ready. It was extremely attractive because right now we have space concerns in Saskatoon,” said Sangster’s president and CEO Darryl Sangster. “Real estate costs in Saskatoon are extremely high right now and there is no buildings pre-developed that would have worked for us.”
Canadian Bio produces a wide range of high quality natural health products, ranging from vitamins and herbal solutions to organic natural food choices such as hemp seeds. They will take over the building that Trophic Nutritional Supplements formerly was in.
“Right now the manufacturing side of our business is a division that is really growing. About 85 per cent of our revenue is Sangster’s products but we are looking to expand more to third-party,” said Sangster. “A lot of the demand we can’t supply right now because we don’t have a combination of the equipment or the space. This facility allows us the room to purchase the equipment.”
Sangster said he has offered moving packages to his current employees, but added he may have to hire people when they set up in the spring. He plans on slowly winding down Saskatoon operations while winding up in Penticton when they take possession of the building in March and be full-scale operational with 10 employees in June or August.
“Hopefully with the potential business that will come from this move we will keep growing the manufacturing,” he said, adding that could mean more jobs created.
Sangster said they have a firm footing in supplements in the Canadian marketplace. His great-grandfather started the business in 1960 then his father founded Sangster’s Health Foods in 1971. In 2010, Sangster and his wife purchased the company, entering it into the third-generation as a privately owned family business. He pushed toward vertical integration of the whole organization with the acquisition of Canadian Bio to efficiently manufacture and control Sangster’s product line.
“The industry as a whole is expanding as the consumer becomes a lot more educated and aware of their health, they are making proactive decisions,” he said. “This is all positive for the industry as well.”
Canadian Bio are working on a different business model than the few bigger companies in the country.
“We satisfy the small market players. As a smaller business, prior to us manufacturing, we were forced to buy product from the few select manufacturers in Canada which means we had to play with minimum lot cases,” he said.
That means Sangster’s, which has 37 stores across Canada including one in Cherry Lane Shopping Centre, was forced to carry a two-year supply of the product. With 250 different skus, it was becoming a potential risk when considering shelf life of a product.
“Big players won’t do small runs. We can have a small market business that has their own line, but can’t afford to buy 2,000 bottles of Vitamin C come to us and produce 500 bottles,” said Sangster.
Penticton economic development officer Colleen Pennington said she is currently working on taking inventory of available industrial properties to capture more opportunities such as this one. They also have been introducing Sangster to local resources.
“We are a small city and want to use that to our advantage so people wanting to come to Penticton to do business know we are welcoming them with open arms and helping them get up and running more quickly,” said Pennington. “If by default that word of mouth of how we treat companies spreads, it is just another positive.”