SUN-RYPE
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'Sun-Rype Products Ltd.' () 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.
In 2003, Sun-Rype was named as the 9th fastest growing company in British Columbia by The Vancouver Sun.[4]
History
Incorporated on May 13th, 1946,[5] Sun-Rype was founded as 'BC Fruit Processing Ltd.'[6] 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.[7] On April 2nd, 1959, after 13 years, BC Fruit Processing Ltd. changed their name to Sun-Rype Products Ltd.[8]
Throughout their history, Sun-Rype has been known for their highly innovative and profitable ideas. For instance, in 1963, Sun-Rype teamed up with the Fraser Valley Milk Producers Association to distribute juice cartons on Vancouver milk routes. In 1979, they became the first juice manufacturing company in Canada to provide tetra packaging for their 250 ml and 1 L juice packs. Also, in 1992, they developed the 6 L bag in a box package.
In 1996, Sun-Rype celebrated their 50th year in business. In recognition of this milestone, mayor Jim Stuart of the City of Kelowna honored Sun-Rype by declaring May 13th, 1996 "Sun-Rype Day".
Failed expansion to China
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 their 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 their juices by the end of 1995.[9]
This expansion plan almost immediatedly 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.[10]
By 1998, after net losses of $5.8-million in 1997,[11] 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.[12] The company absorbed $4.4-million in losses and wrote-off China as a place to do business.[13]
Hostile takeover attempt
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.[14] The reasons behind this attempt were to not only immediately double Clearly Canadian's revenues, but also give them use of Sun-Rype's bottling plant, thus centralizing their production facilities.[15] 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 little ways for shareholders to sell the shares.[16]
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 18th, the board of directors offered an 18-page document detailing why shareholders should refrain from selling.[17] On July 24th, just days later, Clearly Canadian also sent out a document, with theirs 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 31st, the British Columbia Securities Commission issued an order for both companies to correct the statements.[9]
With the bid offer expiry date of August 7th approaching, Clearly Canadian decided to extend its offer expiration date to August 19th. They claimed they were 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.[19] 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, who spent $741,000 fighting the takeover,[20] was able to prevail over Clearly Canadian, losing only 15.8% of its shares to the beverage corporation.[21]
Initial public offering
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 12th, 1996,[22] with 2.35-million shares opening at $2.75 a share.[23] They used the profits from the offering to pay off a $6.3-million bank debt and help fund their new Chinese operation.[24]
Corporate governance
Board of directors
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.[25]
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. | 2001 |
| Robert Dawson | Owner and President of Dawson Orchards Ltd. | 1981 |
| James Eccott | ''Retired'' | 2003 |
| Merv Geen1 | Orchardist | 1992 |
| Thomas Knowlton | ''Retired'' | 2003 |
| Donald Selman | Consultant to Wolrige Mahon Chartered Accountants | 2001 |
| Eric Sorensen | President and Chief Executive Officer of Sun-Rype Products Ltd. | 2004 |
| Douglas Souter | ''Retired'' | 2006 |
1 Merv Geen is the current Chairman of the Board, a position he has held since 1992.[26]
Committees of the board of directors
The Sun-Rype board of directors currently operates the following four committees:[27]
| Committee | Members | Committee responsibility |
|---|---|---|
| Audit Committee | Donald Selman (chairman) Jess Alfonso Robert Dawson | 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) Jess Alfonso Merv Geen Douglas Souter | 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) Robert Dawson Merv Geen Douglas Souter | 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) James Eccott Thomas Knowlton Donald Selman Eric Sorensen | 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. |
Exectutive officers
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:[28]
1L tetra of Sun-Rype's flagship product, 100% pure apple juice.
| Name | Position(s) held with Sun-Rype | Position(s) held since |
|---|---|---|
| Eric Sorensen | President Chief Executive Officer | 2004 |
| Gary Pearson | Chief Financial Officer Vice-President of Finance | 2006 |
| 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 |
Primary shareholders
The following shareholders each control over 10% of Sun-Rype's 10,827,600 common shares:
| Name | Shares held | % of overall shares held |
|---|---|---|
| Jim Pattison1 | 3,467,327 | 32.0% |
| Tim McElvaine2 | 1,779,073 | 16.4% |
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.
Finance
10-year history of Sun-Rype's revenue.
10-year history of Sun-Rype's net income.
Products
Nutrition
As per Health Canada regulations, all Sun-Rype products contain a nutrition facts label displaying the nutritional value of the product.[29]
AppleWise
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.[30]
The following Sun-Rype products display the AppleWise logo:[31]
★ 100% Apple Juice and Apple Blends
★ Fruit to Go fruit snacks
★ Apple Sauce
Health Check
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.[32]
The following Sun-Rype products display the Health Check symbol:
★ All 100% Juices
★ Fruit to Go fruit snacks
★ FruitSource fruit snacks
★ Fruit Plus juices
References
1. Sun-Rype Products Ltd. (28 February 2007). ''. Retrieved on 2007 March 30
2. Sun-Rype Products Ltd. (28 February 2007). ''. Retrieved on 2007 March 30
3. Sun-Rype
4. The Top 100
5. Corporate Profile
6. Our History
7. Fifty golden years: Sun-Rype continues to bear fruit, , Yvonne, Attard, Food in Canada,
8. FAQ
9.
10. Investors left flat by beverage saga Keith Damsell
11. Sun-Rype Products Ltd. (2000). ''. Retrieved on 2007 April 2
12. Sun-Rype rethinks its expansion plans, , Eve, Lazarus, Marketing Magazine,
13. BC juice manufacturer drops plan to sell in China
14. Bid made for control of Sun-Rype Kathleen Connolly
15. Just add hype, , Michael, McCullough, Canadian Business,
16. When life hands you apples, make juice Steve MacNaull
17. Doug Mason can see clearly now, , Keith, Damsell, Financial Post,
18.
19. Deadline stretched for Sun-Rype buy-out
20. A hostile takeover bid leaves Sun-Rype a bit sour financially
21. Clearly Canadian takeover bid falls flat Rod Nutt
22. Economic Profile
23. Investment news
24. Sun-Rype files prospectus for IPO, , , , Financial Post,
25. Board of Directors Charter
26. Merv Geen
27. Sun-Rype Products Ltd. (21 March 2007). ''. Retrieved on 2007 April 14
28. Directors and Officers
29. Nutrition Labelling
30. Now More Than Ever "An Apple A Day, Keeps the Doctor Away"
31. AppleWise
32. Health Check
External links
★ Sun-Rype - Official website
★ findoutnow.ca - Fruit-to-Go promo site
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