Agrocrop Exports Ltd. president Yash Karia has learned when to turn business away. The company, based in Brampton, Ont., claims to be the Western Hemisphere’s largest producer of private-label packaged pulses, lentils, beans and peas. But it won’t box up legumes for everyone: Agrocrop only accepts customers who place full-pallet, full-truck orders—customers like Loblaw, Sobeys, Walmart Canada and, internationally, the grocery chain Aldi. “There are many smaller retailers we could get volume from,” says Karia, “but it wouldn’t work for the company.”
Karia prefers to keep the team lean (he personally deals with all suppliers and vendors) to keep costs down. Servicing smaller clients would demand more people to fill more meagre orders. “We wouldn’t be as competitive as we are, and [it] wouldn’t give us this edge we have today with larger clients.”
Karia’s parents founded Agrocrop as a general food trading company when the family first arrived in Canada from India in 2000. In 2006, Karia, then 22, entered the business. Within a year, bored with the desk work of trading, he told his father he wanted to work on something more tangible. Karia’s father challenged him to start a bean-packaging plant to compliment the trading business. So he rented an 8,000-square-foot facility and got to work.
His timing was good. Canada is one of the world’s largest pulse producers, and global demand for pulses has nearly doubled since the 1980s. As lentils became menu mainstays from Toronto to Taiwan, Karia decided to phase out the trading side of the business to focus solely on packaging beans and pulses. Agrocrop now calls a 110,000-square-foot packaging plant and warehouse in Brampton, Ont., home and will move to a facility with double the space in nearby Caledon, Ont., this spring.
Karia knows he’s selling a commodity and that the giant brands in his client base can be ruthless about pitting suppliers against one another to achieve the lowest possible prices. That’s why he is focused on keeping costs down—there’s that small team, big customer model again—and supplementing the wares with such loyalty-engendering value-added services as same-day shipping. “We’ve built in what we call a switching cost,” he explains. “If [a customer] is going to move to another vendor, we want them to think about what they will lose when they leave.” It seems to work: Agrocrop’s client roster might be relatively limited, but it hasn’t lost a single member in 10 years.