Spitz sunflower seed processing heads south

In the latest food-processing closure, PepsiCo is closing the Bow Island plant and moving the work to the U.S.

Spitz sunflower seed processing heads south
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The parent company for sunflower seed processor Spitz is poised to close the plant in the brand’s hometown, but says it’s still “committed” to Canadian-grown seeds.

However, the company’s founder says the closing of the Bow Island processing plant is another sign that President Donald Trump’s bid to bring jobs back to the U.S. is paying off at the expense of Canada.

PepsiCo, the U.S. parent for Frito-Lay, the owner of Spitz International since 2008, says it will close the plant in southeastern Alberta later this year and shift production to a third-party co-packer in the U.S.

Closing the plant where growers Tom and Emmy Droog founded Spitz in 1982 is “a business decision based on an extensive evaluation of the long-term viability of this site and its ability to meet our increasing volume requirements for the brand,” PepsiCo said in a statement.

The company is “proud of our relationships with our Canadian sunflower seed growers and is committed to using their quality seeds which have helped to make Spitz the market leader in Canada,” said PepsiCo spokesperson Sheri Morgan.

Frito-Lay had previously consolidated Spitz’s operations at Bow Island after shutting its Medicine Hat distribution facility in 2016.

Sunflower growers Tom and Emmy Droog founded Spitz in 1982 and made their company a North American force through a pair of innovations — adding flavouring to their sunflower roasting process and selling their products in resealable bags. But the couple was also famous for the way they treated people. When they owned the plant, it didn’t run on nights or weekends so workers could spend time with their families. And the couple would pay for a summer farm tour and BBQ for their growers in Alberta and Manitoba, and knew all of them on a first-name basis.

But times have changed, and Tom Droog told the Globe and Mail newspaper that two factors — shipping costs and Trump’s protectionist approach — sealed the fate of the Bow Island facility.

Most of the sunflowers processed by the plant came from Manitoba, and while that province is the country’s sunflower capital, its acreage pales in comparison to South and North Dakota.

PepsiCo had more than doubled production at the facility and given the shipping costs, the “numbers game” favours a more central processing plant, Droog told the Globe.

But any processor or manufacturer will also be thinking of the mercurial U.S. president when reviewing their production in Canada — and thinking about the political points they could score by relocating jobs to the U.S., he said.

“Trump is not done yet,” Droog told the paper.

In January, Campbell Soup announced it is closing its Toronto soup and broth plant and moving production to U.S. facilities. Dr. Oetker also announced in January it is closing its pizza-making plant in Grand Falls, N.B. Although it promised to move most production to an Ontario facility, one-third of production will go to the U.S.

There is growing speculation that this sort of southward shift of jobs and investment may persuade the White House that dragging out NAFTA negotiations will work in its favour. The next round of talks on redoing the trade deal will take place in Washington next month. But with Mexico going to the polls this summer and U.S. congressional elections taking place in the fall, the talks could be suspended after that until 2019.

Meanwhile, even after announcing the closure, Frito-Lay’s Spitz website continued to trumpet the company’s origins in Bow Island, stating the brand started “with a little company and a great idea about sunflower seeds with a difference.”

“We hope you get out there and enjoy all our delicious flavours and taste the Spitz difference for yourself,” the site stated. “And when you do, think of the folks in Bow Island, who couldn’t be prouder.”

PepsiCo said it will be offering financial counselling and job placement services to the 53 workers who will lose their job when the plant closes later this year.

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