Ice cream ranks high on the list of discretionary items that are among the first to be cut from household budgets in difficult economic times.
So, it’s a surprise that Chapman’s, Canada’s biggest independent ice-cream maker, has just announced a $200-million expansion to its facilities in Markdale, Ont.
The 175,000 sq. ft. expansion, which adds a third plant to Chapman’s production complex, is supported by an interest-free loan of as much as $27 million from the Ontario government.
It will make Chapman’s the largest single-site ice-cream producer in North America.
Even during the current cost-of-living crisis, demand is growing for Chapman’s products. The firm makes about 280 items including ice-cream bars, cones and sandwiches, frozen yogurt, sorbet and water ice treats.
Chapman’s needs more capacity for a planned wider range of products, and for potential overseas expansion.
It’s a wonder that this all-Canadian enterprise has thrived against the colossi of Switzerland’s Nestlé S.A. (Parlour, Häagen-Dazs), the world’s biggest food company, and Britain’s Unilever PLC (Ben & Jerry’s, Breyers, Good Humor). The two offshore Chapman’s rivals boast combined revenues of $258 billion.
As a private, family-owned business, Chapman’s doesn’t disclose its financial performance. But Chapman’s says it is posting record revenues.
Chapman’s has greatly benefited from the Buy Canadian movement.
“Since March, we’ve seen month-over-month record sales,” Ashley Chapman, son of co-founders Penny and David Chapman and chief operating officer of the firm, said at a news conference in September.
“Canadians are really picking up this anti-American sentiment, and that couldn’t be better for Chapman’s ice cream right now,” he said.
But the secret of the 52-year-old Chapman’s success might be its commitment to new-product development.
In addition to traditional ice cream, Chapman’s makes frozen treats that are free of nuts, gluten, added sugar, lactose and eggs. It also makes low-calorie, non-allergenic and kosher products.
Chapman’s latest new flavours include peach melba and butter tart ice cream, which COO Chapman describes as a “quintessentially Canadian flavour.”
Chapman’s two existing plants are in Markdale, a hamlet of about 1,200 people in Grey County south of Owen Sound.
Chapman’s will increase its workforce by about 200 people when its newest plant comes onstream next year, raising total employment to more than 1,000 workers.
The starting wage at Chapman’s is $22.75, compared with Ontario’s minimum wage, which rises to $17.60 on Oct. 1.
Husband and wife entrepreneurs Penny and David Chapman had just six employees when they launched their business in 1973. They started with only 15 flavours.
The couple opted against the common practice at the time of selling to scoop shops that served highway traffic and instead sold only to retailers.
Today, Loblaws, Sobeys and Metro carry wide selections of Chapman’s products. Their labelling is sometimes misleading, though.
The big grocers’ online stores often identify foreign brands as “Prepared in Canada,” wrongly suggesting that they are made by Canadian firms.
Oddly, Metro’s online store awards bold maple leaf icons to the likes of Häagen-Dazs but to only a few of the many Chapman’s products it carries.
This is unlikely to be a banner year in profits for Chapman’s. The Chapman family decided in March to freeze its prices until the end of the year.
Chapman’s will absorb tariff-related extra costs, unlike Walmart and other major firms that have said they will pass the added costs to their customers.
“Food insecurity was already an unacceptable problem in Canada,” Ashley Chapman told Toronto Life magazine in March in explaining why he and his parents decided to freeze prices. “Tariffs are just going to make everything worse.”
Ashley Chapman has been scrambling this year to find alternatives to Chapman’s longtime U.S. suppliers of fruits and nuts, including almonds (California), pecans (Georgia) and black cherries (Michigan).
Chapman’s is increasingly sourcing from Europe, and Ashley Chapman expects the change will be permanent.
“We’ve got to get rid of the uncertainty in our business,” Chapman said.
“And unfortunately, sourcing anything from the United States equals uncertainty under (U.S. President Donald) Trump.” Chapman’s is “doing some major changes and giving a lot more business to Canadians firms instead of American,” he said.
“These are two-, three- and four-year contracts. So even if Donald Trump wakes up smarter than he did yesterday” the U.S. suppliers will be out of luck, Chapman said.
Chapman supports Canada’s supply management system in dairy products that protects from foreign competition the small family farms that supply Chapman’s.
He hopes the system, a target of Trump’s ire, isn’t bargained away in negotiations between Canada and the U.S. to resolve the trade disruption.
With its consumer-friendly pricing, attention to R&D, above-average pay and business expansion at a tough time for Ontario manufacturers, Chapman’s is giving new meaning to ice cream as a comfort food.
