HAGUE — The past few years have been challenging for most small business owners. Russ Schroeder is no exception.
Schroeder is the owner and president of Marquis Milling and Grain, a small organic milling and packaging company based at Hague, Sask., about 30 minutes north of Saskatoon.
Marquis Milling is the parent company of Nunweiler’s Flour, an organic flour and ingredients label that’s been around since the late 1980s.
Schroeder bought the Nunweiler’s Flour brand from the company’s founder, Ross Nunweiler, in 2016.
Since then, there have been plenty of changes.
In the past five years, Schroeder has started a new parent company. He’s also grown Nunweiler’s annual sales by nearly 50 percent and has expanded Nunweiler’s product line to nearly 30 products from seven.
He’s also built a new state-of the-art milling facility, complete with grain cleaners, debearders, pearlers, sifters and a low-temperature vertical impact mill that produces flour at low temperatures to protect its nutritional value.
Much of that work was accomplished in the midst of a global pandemic, not to mention a prairie-wide drought in 2021, which saw organic grain supplies drop to nearly a quarter of their normal levels.
“It’s been interesting,” Schroeder says with a smile.
“I love the organic community… and I’m a big believer in knowing where your food comes from. I guess that’s what drew me to the business initially.”
“It’s been a steep learning curve,” he adds.
“I’d do it all over again. But I might do a few things differently the second time around.”
Marquis Milling and Grain is a small organic mill that produces high-quality flours and ingredients for specialty markets.
Annual milling volumes are in the range of 400 to 450 tonnes a year.
Most of the ingredients produced by Marquis Milling and sold under the Nunweiler’s label aren’t available through larger mills.
Marquis Milling manufactures and packages products made from 16 different kinds of organic grain.
Source crops include wheat, barley and oats, as well as some not-so-common grains such as buckwheat, rye, spelt, kamut and heritage wheat varieties, such as red fife and ladoga.
In addition to selling its products through established retail channels, the company also does contract processing for large clients and sells directly to organic food manufacturers, restaurants and bakeries.
Most organic grains processed by Marquis Milling are sourced by Schroeder, primarily through a network of organic growers in Saskatchewan or neighbouring provinces.
Every bag of Nunweiler’s Flour that’s produced carries the name of the organic farmer who grew the grain, as well as location of his or her farm, a touch that appeals to organic food buyers and upholds the company’s commitment to transparency and food traceability.
“I really like the fact that I get to work directly with farmers,” says Schroeder, who spent more than 20 years working in the food service industry before jumping into the milling business.
“If you work with the farmers directly and get to know their operations, the chances of getting a fraudulent product are pretty low.”
Like most other small businesses, Marquis Milling has faced its share of unexpected challenges in the past few years.
Before COVID-19 became a household word, about 80 percent of Marquis Milling products were were sold to restaurants, bakeries and organic food manufacturers in 20-kilogram quantities.
The remaining 20 percent was sold in smaller retail packages through Nunweiler’s western Canadian retail network.
“When the pandemic hit, we saw our numbers switch from 80 percent food service sales to nearly zero because the restaurants, bakeries and everything else were closed,” Schroeder says.
“Suddenly, nearly all of our business was going through retail packaging.”
The unexpected shift creating issues in other areas of the operation.
Soon after the markets changed, Marquis Milling began to focus its efforts on retail sales. When the company’s inventory of bags and labels for retail packaging started running low, renewing inventory proved difficult. Domestic and international shipping snafus compounded an already challenging situation.
Schroeder’s take-away lesson? Learn to be flexible.
“Just-in-time delivery definitely doesn’t work during a pandemic.”
The pandemic wasn’t the only challenging factor. The drought of 2021 has had a far-reaching impact.
Sourcing organic grains — normally one of Schroeder’s favourite tasks — is more difficult and more expensive than ever.
Saskatchewan’s organic grain yields are estimated at roughly 25 percent of normal, making supplies extremely tight. And rising prices have tested the economics of value-added milling.
In many cases, the cost to source organic grain has doubled, or tripled.
Retail prices for milled organic ingredients have also risen, but not by the same proportion as organic grain, says Schroeder.
When the price of value-added organic ingredients gets too high, consumers will seek out less expensive substitutes.
Margins took another hit in late 2021 when flooding across parts of British Columbia disrupted logistics, cutting off access to the West Coast and Lower Mainland, one of Marquis Milling’s key retail markets.
Shipping costs that were normally in the range of $2,000 suddenly went as high as $15,000.
“I don’t have those kinds of margins hiding in retail bags of flour,” says Schroeder.
“These have not been normal times, these last couple of years.
“It’s been one business interruption after another. You’re almost scared to think of what the next thing is going to be.”
Obstacles aside, Schroeder enjoys what he does and is committed to guiding his company through the turbulent times.
His new milling facility is currently operating at about 25 percent capacity, a number he would like see double.
“I just renewed my mortgage, so I guess I’m in for a few more years,” he says.
“I really like the food service industry…. I like dealing directly with people and I enjoy the interaction with growers and with consumers.”
It isn’t just about making flour, he adds.
“It’s about dealing directly with bakers and restaurants owners — people who are creative and artistic and who are passionate about what they do.”
“It’s gratifying being able to work with people who care about where their food comes from, and to help them achieve something they believe in….”
