Roll out the barrels
BC’s Okanagan Barrel Works has found a niche producing aspen and pine barrels for markets as far away as Jamaica, and has also supplied barrels for special customers, such as the producers of the hit movie “Pirates of the Caribbean.”
By Paul MacDonald
Entrepreneur Cal Craik is taking value-added wood manufacturing in British Columbia in a whole different direction with his company Okanagan Barrel Works. Based in the Okanagan Valley town of Oliver, Craik is producing barrels made from BC pine and aspen and is making sales as far afield as Jamaica. One of their biggest customers in recent years for the aspen barrels has been the Coffee Industry Board of Jamaica, which uses the barrels to ship their premium coffee beans around the world. “With aspen, it’s readily available in BC, it’s relatively inexpensive and there is no odour or flavour transfer from the wood to the coffee,” says Craik. “It works well. With pine, there can be a pitchy kind of odour and that will transfer to the coffee beans.” That is a definite no-no.
Craik explains that there are coffee tasters and consumers out there who are every bit as discriminating as sophisticated wine tasters—and they want their coffee beans pure. Shipping coffee in barrels has become a tradition for the Jamaican coffee board. During the 1920s and 1930s, flour was shipped to Jamaica in barrels. There were all these surplus barrels, so coffee producers started to ship their product in barrels, and the practice continues to this day. And those coffee contents can be very valuable—upwards of $60 a pound for Jamaican Blue Mountain coffee, the most expensive commercial coffee in the world. Okanagan Barrel Works’ larger barrels will hold 150 pounds of coffee, making a barrel of coffee worth a cool $9,000.
Craik received an order for 7,000 of the aspen barrels from the coffee board in 2002. Although the 2003 order was down from that figure, he’s hoping to get production cranked up again in 2004. The company occupies a unique market niche since it is the only remaining cooperage—barrel maker—in Canada. Okanagan Barrel Works also produces other slack barrels, which are used for a number of purposes, often for retail store displays. An Ontario distributor recently bought 3,000 of the barrels for grocery store displays.
The front end of the barrel component production process is outsourced to small reman operations, such as Yes Marketing of Penticton. The lodgepole pine comes from a Weyerhaeuser mill, while the aspen is from northern BC mills, sourced through brokers. In the case of the pine, wood this small would normally be destined for the chipper, so Craik is indeed adding value. They purchase select and better aspen, then take out the culls. “We like to high grade the wood a bit more, especially for the Jamaican coffee business,” says Craik. “They want clears and they want white wood.” A good portion of the premium coffee is shipped to the demanding Japanese market, “and they want it in clear, white barrels.”
The reman companies take the rough boards, split them to thickness and mold them on each face. The chopping to length, grading, shaping and bending and final assembly of the staves into barrels is done at Okanagan. With the high grade wood used for products such as the barrels for Jamaica, Craik is left with some secondary wood, which is used for making barrels for the general retail market. “We’ll make barrels that don’t require clears—some people like the knots in the wood in the barrels, it gives them character.” In addition to manufacturing the aspen and pine barrels, Okanagan Barrel Works also acts as a distributor for the major lines of French and American oak barrels.
These barrels arrive in “knock-down” form, with already jointed stave sets, and Okanagan assembles the barrels. This is the “tight” or watertight, market as compared to the “slack” barrel market, the non-watertight barrels. This additional market fits well—very well, considering that Oliver is in the middle of the Okanagan wine region, with literally dozens of small-to-large wineries within a couple of hours’ drive. “We make some extremely good wines in this region. We’ve got the best grape growing region in Canada, with our soil and the climate.” They also have a side-business remanufacturing existing wine barrels. Okanagan has custom equipment that “shaves” out the wine-soaked staves of the barrels, and they are “re-toasted.” Toasting involves putting the inside of the barrels over an oak fire. “The dark colour you see inside a wine barrel is caramelized sugar, phenols and vanilla.” ”We want to heat the wood and toast it so it brings the natural elements out of the wood fibres.
And it gives the wineries another year out of the barrel. “It’s a little bit of art and science, monitoring the temperature and the time over the fire,” he adds. Aside from a new Ballestrini shaper, purchased through distributor Eurotech Services, that shapes the wooden staves for the loose barrels, their equipment comes from another era. The crozer, which cuts the ends of the barrel staves after they have been heated and bent, dates from the 1940s. It was basically “a pile of bolts” when Craik got it from Missouri.
He put it together and re-worked the pneumatics. “And my hoop press dates back to before 1920 and it’s still working fine. The equipment hasn’t changed a lot over the years—barrel making is still barrel making.” Okanagan has a website—www.winebarrels.com —which has generated a good amount of business for the company. “We get lots of hits on the website, but the orders should be a reasonable size,” Craik explains.
Smaller orders might face some hefty freight charges, but the company is willing to fill orders for as small as one barrel. The Jamaican Coffee Board, in fact, found them through their website. After sending some sample shipments, Craik did a business trip down to Jamaica—and came back with the order for 7,000 barrels. Besides Jamaica, other places, such as Costa Rica, also produce premium coffee. Craik recently met with the consul general of Costa Rica—apparently some of their coffee producers are looking to high grade their coffee, and are considering shipping in barrels as part of the presentation package. Following a company restructuring in 2001 and a busy year in 2002, the company saw a bit of a falloff in sales in 2003.
But Craik and his partners are looking longer term, and might have to expand their operations. “I can see us with a much larger facility producing 1,000 to 2,000 wine barrels a year in a few years, plus the aspen and pine barrels market. Our growth is going to be very measured and careful.” Even a small piece of the wine barrel market would be lucrative—between just BC, Washington and Oregon, there is an annual need for 20,000 barrels.
Craik notes that there are cooperages in California—with its huge wine industry—that can produce 50,000 barrels a year. And in Kentucky, which is bourbon country, cooperages will turn out over 400,000 barrels a year. With the aspen and pine barrels, Craik sees further opportunities in Canada and the United States. There are lots of niche markets, such as providing promotional barrels to coffee houses. Securing such a contract from coffee giant Starbucks, with its more than 7,500 locations, would keep the company busy for quite a while. And there are also niche markets.
They supplied barrels for the hit movie “Pirates of the Caribbean,” and produce antique butter churns, water pails and other items for historical groups. And then there’s the Pacific Rim. “There are companies that are doing similar products in the US, but they are on the eastern seaboard, so we have a geographical advantage. We’ve got the whole Pacific corridor to work with.” They are already talking with a company that is going to do some marketing on their behalf in Asia.
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Tuesday, September 28, 2004