Which is why Hurteau decided to build his own multinational, based in his hometown of Candiac, on Montreal’s south shore. He deliberately chose the name Fruits & Passion because it could be easily translated from French to English, and from the start Hurteau was exporting his fruit-scented bath foam and body milk to upscale retailers like London-based Harrods and Neiman Marcus in the United States. “The first criterion we came up with was that the brand had to be launched internationally,” says Hurteau, smartly dressed in black pinstripe pants, matching socks and a sweater sporting tiny white polka dots. “We didn’t want to be blocked by being only Quebec or only Canada focused. We wanted a concept that was international.”
That he would be going up against giants like The Body Shop and Crabtree & Evelyn didn’t seem to faze Hurteau, a college dropout who sold encyclopedias door to door before making his way into the retail franchise business. Hurteau opened a couple of high-end convenience stores in Montreal before selling out and going to work for the Canadian yarn-making division of French clothing designer Rodier. “It gave me a broad perspective of the potential of franchises, of branding in general,” says Hurteau. “They had really made it, so I thought, why can’t we?”
Whether Hurteau realized it or not, he had set himself a particularly challenging goal — consumer retail brands are arguably Canada’s greatest Achilles heel (we are the world’s leading producer of maple syrup, but even Aunt Jemima is American). What was more, Hurteau was convinced that the secret to success lay not in cheaper knock-offs of established international names, but of creating a distinctive, high-end product based on in-house formulas and bolstered by unique packaging. “We definitely didn’t want to make another Body Shop — we wanted to go beyond just claiming to be ethical and environmentally friendly,” he says. “We decided we really wanted to play the packaging card and be innovative.”
Hurteau quit his job and spent a year coming up with the proper business plan and product mix. “It’s important to base your business on something solid, and I think I did that,” he says. It was a big risk considering the year was 1992 and the country was grappling with the worst economic recession in decades. “Everybody said, ‘What are you doing?’” admits Hurteau, who chooses his words carefully and is surprisingly serious in tone despite the company’s rather dreamy image. “But I was really determined. I needed to do it. I made the decision that at one point in my life I was going to take a chance.”
With no salary and only his savings to fall back on, Hurteau hired the best chemist he could find and told him to come up with the best bath fragrances money could buy. He collected countless bottles from Italy and Spain in order to design just the right packaging. When the finished product finally debuted at trade shows in Toronto and Montreal and then in Atlanta and New York, the reaction, says Hurteau, was “incredible.” “People were lining up to write orders.” At the time, Hurteau, together with his wife and brother, were hand-mixing the formulas out of a 1,000-square-foot warehouse. But even then, they had already decided they would only go with top-end buyers. “We wanted to make sure the product didn’t end up in a pharmacy or T-shirt shop,” says Hurteau. “You’ll never win by going cheap.”
The company was profitable from day one, but to support the brand Hurteau opened stand-alone boutiques as well. The first, launched in 1995 at a Montreal-area mall, quickly became the shopping centre’s most profitable store on a square footage basis, with annual sales of $1 million. “I was very happy, very proud,” Hurteau says of the store, auspiciously inaugurated on his birthday. “Because I knew it was the beginning of a long journey.”
That journey hasn’t always been easy. Fruits & Passion’s explosive growth is largely predicated on franchising its stores; it now has 150 in twelve countries, including China, Mexico, France and Morocco. For Hurteau, franchising is the safest way to protect the company’s manufacturing base. But early on at least, he wasn’t always discriminating with every potential franchisee that came calling. “We’d get inquiries to open up stores and we’d say, ‘Let’s go for it,’” he recalls. “You have to be careful because if you only go with opportunity rather than [thinking] strategically, you end up with not necessarily the best people or vehicle.”
These days, Fruits & Passion can afford to be a little more discerning. Hurteau won’t disclose the company’s bottom line, except to say that it rings in some $100 million in sales at the retail level alone. Its extensive lines, from olive oil hand wash to eau de toilette for dogs, have been written up in virtually every women’s magazine from O, the Oprah Magazine to Elle and are so popular that at the company’s last annual inventory clearance, 22,000 customers raided the warehouse over a four-day period.
The company has also been courted by a gaggle of investors, eventually choosing from among seven offers, to partner with the Societé générale de financement du Québec (SGF) in October 2006. Hurteau says he went with the government development agency, which, for an undisclosed sum, took a 30 per cent stake in the company, because of its stated mission to support the international success of Quebec-based companies. With the fresh injection of capital, Fruits & Passion is looking to branch out further, either through joint ventures or wholly owned boutiques, into the United States and Europe. “Globalization is something that needs to be faced; it’s a must,” says Hurteau matter-of-factly. “If you don’t go out, everybody will be coming here. If you don’t think they need your product out there, you are done.”
THE TIP OF THE ICEBERG
The idea for Iceberg Vodka came about by the “flukiest of flukes,” admits senior vice-president David Hood. In the early 1990s, a group of Toronto and Newfoundland entrepreneurs hit up on the idea of harvesting icebergs to supply bottled water to U.S. troops during the Gulf War. They soon discovered, however, that they couldn’t just hack off bits of berg from the massive floes making their way down Newfoundland’s Iceberg Alley. As soon as the ice melted, the crystalline water became a magnet for all kinds of contaminants. Somebody suggested throwing the ice in alcohol to maintain its purity, and from there, Iceberg Vodka was born. “It was just one of those things you fall you into,” says Hood, “like the pet rock, the hula hoop or Trivial Pursuit.”
The novelty of a vodka made from 100,000-year-old icebergs harvested from the North Atlantic immediately sparked international media attention. But just as quickly as Iceberg Vodka’s star rose, the venture sputtered, admits Hood. The company lost serious money when it went with the wrong distributor in the United States, and soon after there was a falling out among the partners, who had treated the business as a sideline. Hood and David Sachs, the president and a founding shareholder, spent the next several years slowly rebuilding the company. It hasn’t been easy. With very little money and a shoestring staff of five, the company not only had to contend with the vagaries of capturing giant chunks of floating ice off the Newfoundland coast, but an even more capricious business climate onshore.
Iceberg had no choice but to manufacture in Newfoundland, which jealously guards its natural resources and forbids the export of bulk water from the province. So it teamed up with the province’s liquor commission, which had the only manufacturing capacity to speak of: a fifty-year-old plant that pumps out Screech for the local population. Idle all but three months of the year, the plant was retrofitted with “rubber bands and chewing gum,” says Hood, and in a testament to Newfoundland ingenuity, it was able to quadruple its capacity to 400,000 cases a year.
But the biggest obstacle the company has had to overcome is an ingrained attitude among the people that the province has little to sell that others might actually want to buy. “Our plans were said to be ‘too optimistic,’ at one tenth the size they are now,” says Hood, who, despite being born in Toronto, considers himself an “adopted son.” He speaks with a local twang after living in the province for a decade and marrying a local girl. “The attitude was, ‘It’ll never work, it’s too big for us.’”
Hood admits that Iceberg Vodka would be a lot bigg
er than the 250,000 cases it currently produces if it weren’t tied down by Newfoundland’s many self-imposed strictures. But since that’s not an option, the company is looking to turn what could be conceived as a handicap into an advantage — by using Iceberg Vodka’s scarcity to project an aura of exclusivity and parlay its unique business plan into a brand. “These constraints make Iceberg what it is and ensure nobody else can do it,” he explains. “There’s only one place in the world where you can get an iceberg, and that’s Newfoundland. That’s our unique proposition.”
Ironically, while the brand is predicated on being Canadian, the company has chosen not to brand itself as such, preferring that its Canadianness be implicit rather explicit. “Canada and brands, that’s kind of an oxymoron,” explains Hood. He notes that Iceberg used to tout its Canadian origins on the front label, but Canadians, assuming it had to be second rate, didn’t buy it. As soon as the company took Canada off the label, sales went up. Internationally, Iceberg was up against the notion that all good vodka came from Scandinavian or Slavic countries. So the company’s coolly packaged bottles sell the imagery associated with icebergs— purity, majesty, aloofness. “Are we marketing Canada? Yes, but we’re doing it without saying ‘Canada,’” says Hood.
For the most part, Iceberg has been getting the message across through word of mouth, with a few strategically placed ads in places like Penthouse magazine and by going to trade shows. It’s a slow approach, but given the company’s production limitations there’s not much of a choice. The good news is, the Newfoundland Liquor Corp., finally convinced that Iceberg is the real deal, has committed to investing $2.5 million in a new production facility. Iceberg is also spending $25 million for a new water plant on Trinity Bay. After ten years and $150,000, the company finally got U.S. FDA approval in 2005 to sell its iceberg-category water south of the border.
Just back from a trade mission to the Middle East, where he was sounding out potential distributors for Iceberg Vodka, Hood plans to add the water to what he envisions as a growing franchise of Iceberg-brand products, ranging from rum and gin to flavoured coolers. He knows it will be tough to sell the vodka, which is already distributed in the United States, Mexico, Germany, Switzerland, Israel, Australia and Hong Kong, into countries like Egypt and Qatar, but just like the experience in Newfoundland, he sees it as a long-term proposition. “Even if you lose in the beginning,” says Hood, “the long-term strategy has you winning in the end.”
EXTREME VISIONARY
“Welcome to Extreme CCTV ” reads the simple yet strangely discomfiting greeting perched atop an otherwise empty front desk. “You are under video surveillance. Visitors please sign in.” Guests quickly scan the modest office located in Burnaby, British Columbia, for evidence of a camera, but there is none in sight. Yet, before leaving the lobby, Jack Gin, the company’s intensely driven founder and chief executive points to an innocuous light switch outfitted with the firm’s cutting-edge technology. He proudly showcases products in various stages of development and assembly: a camera, still in the testing phase, that can fit into a cigarette lighter, while another bulletproof variety is about to be shipped to Haiti. “The Vancouver police force took an M16 to it and it still worked,” says Gin enthusiastically.
Like Gin, Extreme CCTV’s patented cameras and infrared illuminators are suited to extreme situations. Designed to withstand harsh climes and poor visibility and, in effect, to see in the dark, the company’s cameras have gone down volcanoes in Antarctica in –70oc weather and are used to monitor psychiatric hospitals and jails, where patients and inmates are most at risk of harming themselves under cover of darkness. Extreme’s surveillance technology is now sold in over fifty-six countries and can be found eyeing London’s Big Ben and the Egyptian pyramids. Its client list reads like a who’s who of the rich and paranoid, from the U.S. department of homeland security, Saudi sheiks and Israeli embassies to Fortune 500 CEOS , Wayne Gretzky and Jennifer Lopez.
Not surprisingly, Extreme’s office is filled with the accolades that come with success. Since Gin built the company from the ground up in 1997, he has been named B.C. Exporter of Year in 2001 and Canadian exporter of the year in 2003. The province wanted to nominate him a second time, but Gin, who is not shy about promoting himself, demurred. His company, which combines patented technology and a flair for marketing with global reach, is a rare commodity in British Columbia, where exports are dominated by natural resources and foreign-owned branch plants like Electronic Arts, the California-based video game developer, which boasts a massive facility outside Vancouver, and Marine Harvest, the Dutch–Norwegian fish-farming multinational.
Gin, who approaches his business with an almost religious fervour, attributes Extreme’s successful start-up to “sleepless nights,” “relentless intensity” and “calculated audacity.” This is not his first venture into the security industry; in the mid-1990s Gin launched the security-products division at Silent Witness, another B.C.-based company, which was later sold to Honeywell. In 1997 he was eager to strike out on his own and zeroed in on the still untapped market for “infrared illumination” night-vision cameras in North America. Gin put his house on the line with a personal guarantee, and within a few months came up with prototypes and products to sell. That year, flying to New York on Aeroplan points and staying in a budget hotel, he managed to showcase his new cameras at the International Security Conference, a prestigious industry trade fair. Within a month he’d made his first sale.
With half of Extreme’s $24 million in annual sales coming from the United States and the remainder from Europe, Asia, Canada and Latin America, the company was global from the get-go, says Gin, who travels about twice a month. “Going global was the natural thing to do, because Canadians were not going to buy my stuff,” he says. To compete in the multi-billion-dollar security market, Gin came up with a five-pronged strategy that included a narrow but global focus, a differentiated product, in-house engineering and a “team of passionates” to bring it to fruition. “Teamwork is not about helping each other out, it’s about individual excellence,” says Gin of his hundred-member staff on four continents. “It’s not about going as fast as the slowest guy, it’s about winning.”
As for the last prong in the strategy— branding — it’s all about being “noisy.” “We have no fear about talking to anybody,” says Gin, who admits aggressive marketing might not come naturally to many Canadians. “Maybe a lot of Canadians don’t do that because we are reserved.” His advice: “Just be brave.”
DEPANNEUR DYNASTY
It’s easy to miss the headquarters of North America’s second-largest independent convenience-store chain. Tucked away on the second floor of a nondescript low-rise in the industrial outskirts of Laval, there’s not even a sign outside to mark the retail empire that in 2005 rang in $10 billion in revenue. “I’m allergic to head offices,” admits Alain Bouchard, the ebullient founder and chief executive of Alimentation Couche-Tard. His low-key quarters, a ménage of cluttered paperwork and proudly framed press clippings, are a stark contrast to the retailer’s sleek, eye-catching outlets. But like the company logo — an owl sleeping with one eye open — the unassuming ambience belies an entrepreneurial energy that never sleeps.
Bouchard was already dreaming of building a variety-store operation as a teenager growing up in the small northern town of Baie-Comeau. At eighteen he was stocking shelves at a Perrette depanneur, and at twenty-eight he had his first franchise. Within ten years he’d expanded to 115 stores. But, he says, he always knew he would venture beyond Quebec and even beyond Canada. “I always had in mind to grow and go outside of Quebec and eventually out of Canada,” says Bouchard, who, like Methanex’s Choquette, didn’t learn to speak English until he was an adult. “It was natural to me, the same way as I see it as natural to go outside North America.”
But what seems to come easily to Bouchard doesn’t to many Canadians. The hugely competitive U.S. market has been a retail graveyard for all too many Canadian brands, from
Canadian Tire, Mark’s Work Warehouse and Future Shop to Birks, Second Cup and People’s Jewellers. Not surprisingly, when Bouchard started making plans to push into the United States, one of Couche-Tard’s major shareholders, mutual fund company Fidelity Investments, opposed the move. Bouchard held tight for a couple of years, buying the Mac’s chain in Ontario and Western Canada, before cautious investors were finally convinced that he was up to the task. By 2003 he’d acquired half a dozen U.S. chains. Among his acquisitions was the spectacular $1.1 billion purchase of some 2,290 Circle K outlets and affiliates.
Analysts and the business media immediately fretted that he’d bitten off more than he could chew, but the ever-optimistic entrepreneur never looked back. He slashed costs by half at the Circle K stores, introduced a decentralized management structure and brought in scanners to track sales in order to better tailor the merchandise mix to each individual outlet. The overriding philosophy, he says, is to adapt to each new market and empower each store manager. “These folks are the people that run the business and create value,” explains Bouchard. “The most important people, after our customers, are our store managers.” As part of the company’s emphasis on marketing, it also began implementing its successful multi-service-centre concept in U.S. locales, co-branding with fast-food outlets and offering an eclectic mix of gourmet coffee and high-speed wireless Internet access. “I love the U.S. market,” says Bouchard. “I see so many opportunities.”
With Couche-Tard’s 3,000 U.S. stores in 23 states generating 75 per cent of its revenue, the company is now gearing up to go farther afield— into Asia, where there are some 3,397 Circle K licensees in Japan, Taiwan, Hong Kong, mainland China and Indonesia. “We want to build on Asia,” says Bouchard excitedly. “We want to do joint ventures in China with licensees — start with a small base, learn how to develop China and, after the first couple of years of testing and fine tuning, roll out a big platform.”
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