|Type||Public (TSX: SRF)|
|Founded||May 13, 1946|
|Founder(s)||BC Fruit Growers Association|
|Headquarters||Kelowna, British Columbia, Canada|
|Key people||David Lynn, President & CEO|
|Industry||Food and beverage|
|Products||Juice, Fruit snacks|
|Revenue||▲$135.1 million CAD (2007)|
|Net income||▲$4.6 million CAD (2007)|
Sun-Rype Products Ltd. (TSX: SRF) is western Canada’s largest fruit-based food and beverage manufacturer. Since its foundation in 1946, Sun-Rype has been producing juices and fruit snacks in Kelowna, British Columbia, in the heart of the Okanagan.
Incorporated on May 13, 1946, Sun-Rype was founded as BC Fruit Processing Ltd. This organization was founded by the BC Fruit Growers Association as a profitable alternative to use their process-grade apples in production rather than throwing them out. On April 2, 1959, after 13 years, BC Fruit Processing Ltd. changed its name to Sun-Rype Products Ltd.
In 1963, Sun-Rype teamed up with the Fraser Valley Milk Producers Association to distribute juice cartons on Vancouver milk routes. In 1979, it became the first juice manufacturing company in Canada to provide tetra packaging for its 250 ml and 1 L juice packs. Also, in 1992, it developed the 6 L bag in a box package.
In November 1994, Sun-Rype announced plans to expand to China. The company signed a memorandum of understanding with Shanghai Jinqiao EPZ Scientific Development Co. Ltd. to produce and sell its juices in the Asian country. With a plant located in the Jinqiao Export Processing Zone in Pudong, Sun-Rype invested 65% of the $13–million project cost and anticipated to be selling its juices by the end of 1995.
This expansion plan almost immediately started to falter, and in 1997, Sun-Rype was forced to create a new joint venture with Lion Group, a Malaysian conglomerate. With this deal in place, Sun-Rype received land, equipment, and future working capital, while Lion Group took over ownership of the Asian subsidiary.
By 1998, after net losses of $5.8–million in 1997, the venture was not proving to be profitable, so in March of that same year, Sun-Rype decided to pull out of the Chinese market. The company absorbed $4.4–million in losses.
In July 1996, just on the heels of Sun-Rype's 50th anniversary, Clearly Canadian Beverage Corporation initiated a $40–million hostile takeover bid of Sun-Rype. The reasons behind this attempt were to not only immediately double Clearly Canadian's revenues, but also give it use of Sun-Rype's bottling plant, thus centralizing its production facilities. In order to initiate the takeover, Clearly Canadian began buying as many shares as possible from local apple growers who had been issued the shares over the last five decades in return for the process-grade apples used in production by Sun-Rype. At the time of the takeover attempt, Sun-Rype was still a co-operative organization, not a public company, so there were few ways for shareholders to sell their shares.
Shareholders were given the option of either one Clearly Canadian share per Sun-Rype share, or $1.61 and a half of a Clearly Canadian share per Sun-Rype share. This offer finally gave true financial value to the shares, inclining many shareholders to sell them. Both Sun-Rype's board of directors and the BC Fruit Growers Association argued against the takeover attempt to shareholders, and on July 18, the board of directors offered an 18–page document detailing why shareholders should refrain from selling. On July 24, just days later, Clearly Canadian also sent out a document describing to shareholders why they should sell their shares. Both of these documents contained invalid and misleading information about each company, such as share values and purchase options to shareholders, so on July 31, the British Columbia Securities Commission issued an order for both companies to correct the statements.
With the bid offer expiry date of August 7 approaching, Clearly Canadian decided to extend its offer expiration date to August 19. It claimed it was doing this to give shareholders more time to decide whether or not to sell their shares. This extension caused further rifts between the two companies, with Sun-Rype claiming reason for the extension, while Clearly Canadian stayed focused on acquiring as many shares as possible. With the final bid deadline fast approaching, Clearly Canadian used many tactics in an attempt to gain more shares, including sending out circulars, hosting public receptions, and getting cozy with community press. In the end however, Sun-Rype, which spent $741,000 fighting the takeover, was able to prevail over Clearly Canadian, losing only 15.8% of its shares to the beverage corporation.
The hostile takeover attempt by Clearly Canadian proved how unsatisfied shareholders were with Sun-Rype management styles and caused differences within the company, apple growing community, and investors. As a result, Sun-Rype finally went public on the Toronto Stock Exchange on November 12, 1996, with 2.35–million shares opening at $2.75 a share. It used the profits from the offering to pay off a $6.3–million bank debt and help fund its new Chinese operation.
Sun-Rype's board of directors is responsible for overseeing the conduct and affairs of the company. One of the boards' main responsibilities is to supervise management in carrying out their responsibility of day-to-day operations. Other duties include reviewing and approving Sun-Rype management's strategic plans, financial objectives, business plans, and budgets. The 8-person board is elected by Sun-Rype shareholders.
The Sun-Rype board of directors currently consists of the following individuals:
|Name||Position(s) held outside of Sun-Rype||Board member since|
|Jess Alfonso||Vice-President and Director
of Pacific Opportunity Capital Ltd.
Owner and President of Seamark Development Corp.
|Robert Dawson||Owner and President of Dawson Orchards Ltd.||1981|
|Donald Selman||Consultant to Wolrige Mahon Chartered Accountants||2001|
|Eric Sorensen||President and Chief Executive Officer of Sun-Rype Products Ltd.||2004|
|Audit Committee||Donald Selman (chairman)
|Responsible for reviewing company financial statements and certain other public documents required by regulatory authorities and making recommendations to the board of directors with respect to such statements and documents.|
|Capital Allocation Committee||Thomas Knowlton (chairman)
|Responsible for providing counsel and advice to management with respect to capital expenditure requests related to key strategic initiatives over and above those approved by the board of directors annually.|
|Compensation & Corporate Governance Committee||James Eccott (chairman)
|Responsible for nominating qualified candidates to serve as directors of the company, Sun-Rype’s overall approach to corporate governance, and assessing the effectiveness of the board of directors as a whole, the committees of the board, and the contribution of each individual director. This committee also has responsibility for deciding executive compensation.|
|Executive Committee||Merv Geen (chairman)
|Responsible for ensuring that Sun-Rype's mission and strategic direction is reviewed annually as part of the regularly scheduled board meetings, is directed to work with management on developing the direction for the three-year strategic plan, and to assist with determining the agenda and plans for the annual planning session.|
Sun-Rype's executive officers are responsible for the day-to-day management and operation of the company's business.
The following executive officers are the most prominent employees of Sun-Rype:
|Name||Position(s) held with Sun-Rype||Position(s) held since|
Chief Executive Officer
|Gary Pearson||Chief Financial
Vice-President of Finance
|Andrea Krause||Vice President of Human Resources||2005|
|Dave McAnerney||Vice President of Manufacturing||2005|
|Cameron Johnston||Vice-President of Marketing||2004|
|Cindy Wilker||Vice President of Supply Chain||2004|
|Gail Prichard||Corporate Secretary||1997|
|Name||Shares held||% of overall shares held|
1 2,104,718 shares registered under Great Pacific Capital Corp. and 1,362,519 shares registered under 4123239 Canada Inc.
2 1,752,673 of these shares are controlled, not owned, by McElvaine Investment Management Ltd. on behalf of their clients. As a result, Tim McElavine, President of McElvaine Investment Management Ltd., indirectly controls these shares.
In 2003, Sun-Rype launched a new campaign called AppleWise. They decided to launch the program because of the recent amount of research completed on the benefits of antioxidants, such as heart health, the fighting of diet-related cancers, the reduction of hypertension, and diabetes management. The program is not only designed to educate consumers about the benefits of consuming antioxidants, but also to promote Sun-Rype’s apple based products.
The following Sun-Rype products display the AppleWise logo:
Currently, many of Sun-Rype's products are part of the Health Check program administered by the Heart and Stroke Foundation of Canada. The Health Check symbol on the package means that the product's nutritional information has been reviewed by the Foundation and meets specific nutrient criteria based on Canada's Food Guide to Healthy Eating.
The following Sun-Rype products display the Health Check symbol: