From thealbertan.com
Following past substantial growth, Fallentimber refocusing amid tariff uncertainty and reduced consumption
MOUNTAIN VIEW COUNTY – Staying afloat as a business amid the economic turmoil created by U.S. tariffs as well as other factors like evolving consumer trends necessitates not only an ability to find opportunity in challenge but especially a willingness to adapt.
That kind of entrepreneurial spirit is one Nathan Ryan endeavours to embrace.
Ryan is the general manager at Fallentimber Meadery, a family-operated business that he and his brothers established some 16 years ago.
“I’ve been working full-time in Fallentimber since 2010,” he told the Albertan when contacted for comment on Aug. 25 in light of trade negotiations between the U.S. and Canada breaking down when Prime Minister Mark Carney had just days prior opted to walk away preferring “no deal to a bad deal.”
ON Aug. 22, the U.S. instituted tariffs of 50 per cent on various Canadian products.
All of Fallentimber’s sales of mead, honey and soda are primarily in Alberta, he said.
“There is a small token amount of special order products that leave the province.”
However, even though Fallentimber currently does not directly do business anywhere in the U.S., the meadery has felt the ripple effect from recent U.S. tariffs, which increase costs for certain supplies crucial to their production line.
“We’ve seen price increases on things like cardboard,” he said.
“Now we’re starting to see aluminium increases. It took longer than I expected with aluminium, but it’s not insignificant,” he said, citing a close to 25 per cent increase since current tariffs went into effect earlier this summer.
“The cans went from about 21 cents to 28 cents starting the first of July,” he said. “That was a big jump.”
To date, Fallentimber has done what it can to eat those costs rather than pass them on to consumers.
“Through the majority of all of the cost increases we have experienced over the last five to six years, we have absorbed it,” he said.
“Our observations on retail spending lately have led us to believe holding the line is all we can do. Honey is maybe our exception, where we don't really follow market pricing; we have a finite amount of honey that meets our desired quality for sale.”
Yet while Fallentimber is finding a way forward, the situation is a far cry from what before the pandemic was a much more promising future.
“We made huge moves towards growth in 2019,” said Ryan.
“We had talks with distributors happening from the U.S. and Asia and other places,” he said.
“COVID just kind of shut all those conversations down.”
The uncertainty of 2020 and 2021 also took a bite out of their bottom line, but there was “a huge surge in growth” going into 2022, he said.
“And then we started to see people sort of recoiling and clamming up in terms of alcohol consumption, it felt like,” he said.
“It also kind of correlated with when a lot of the Health Canada guidelines started coming out,” he said, referring to revised consumption guidelines that changed from a recommended maximum of two daily alcoholic beverages to two weekly drinks to minimize adverse health effects.
“I really didn’t expect it to have any sort of effect, but I feel like it did,” he said.
“I think it was an eye opener from, you know, the end of COVID days where everybody was letting loose and happy to be out and socializing.”
As to the latest round of tariffs imposed by the U.S. on Canada, which came into effect Aug. 22 with Canada set to impose dollar-for-dollar counter-tariffs that come into effect Sept. 8, Ryan can for now only speculate how Fallentimber will feel the impact.
“I don’t know where that’s going to go just yet,” he said, anticipating at the least an impact on honey pricing.
“We’ll keep our eye on the tariff side of things,” he said.
“But that’s all pretty new for us. It’ll take a while to realize what’s going on.”
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