GREEN MOUNTAIN
HOPES TO BRAND ST. MICHEL ‘QUARTIER DU CAFé’.
Montreal has a Quartier latin, a Quartier international, a Quartier des spectacles. How about a Quartier du café? It’s just an idea, a corporate trial balloon, but the man behind it, Sylvain Toutant, the new president of Green Mountain Coffee Roasters Canada, thinks it’ll take off.
The new Quartier wouldn’t exactly be central. In fact, it would be in an industrial park way out in the city’s north-end, north of the Metropolitan Expressway in St-Michel.
And it would be a lone show. Besides a Tim Hortons outlet or two in the area, GMCR is the only company around that has anything remotely to do with coffee.
But the Quartier would have local brand recognition — a big plus. Brand, as in Van Houtte, a Montreal institution that dates to the early 20th century.
The Van Houtte coffee factory, Quebec’s largest, has been in StMichel since 1994, just west of Pie IX Blvd. near Jarry St. There’s a roasting plant, two distribution centres and a head office.
In September 2010, Vermont-based GMCR bought the business for $915 million and began hiring new staff, buying up adjacent real estate, renovating its buildings, anchoring itself in the community.
The expansion is being fuelled by the success of the K-Cup, plastic coffee capsules made by GMCR subsidiary Keurig, filled here with Van Houtte, Green Mountain and other brands.
Since production of the K-Cup began four years ago, GMCR’s revenues have risen exponentially from roughly $500 million a year to $3.8 billion, with a fair chunk generated here in Montreal.
GMCR could have concentrated its manufacturing at its home base in Burlington, Vt., or in Toronto, where it has another factory. But it didn’t. It stuck with the Van Houtte assets it acquired here. Now Toutant — formerly CEO of the SAQ and Réno Dépôt, and briefly an executive vice-president at Kruger — wants some recognition for the company’s determination to stay in Montreal and grow the business. Among the ideas he’s floating:
Rename a stretch of 19th Ave. “Albert-Louis Van Houtte
Ave.” after the French immigrant who founded the company in 1919;
Open a Van Houtte bistro on the avenue that will also supply schools with free food;
Get more GMCR employees to volunteer in the community, on the company’s dime;
Brand the neighbourhood with GMCR and Van Houtte signage; Open a coffee museum whose centrepiece will be Albert-Louis Van Houtte’s original roasting machine;
And finally, give the district an added cachet by designating the entire area Montreal’s “Quartier du café.”
What do city officials — and GMCR’s corporate neighbours — think? Not much, yet. To the city, the ideas are so embryonic it’s pointless to discuss them publicly. To neighbours, they’re a non-starter: You can’t call the area a “coffee neighbourhood,” they say, when all you mean is you.
But Toutant, backed by the union representing many of his employees, is adamant: GMCR is here to stay and deserves its place in the Montreal imagination as a landmark of all things coffee.
“We think that we can create the kind of coffee culture that Albert Van Houtte dreamed about,” the 49-year-old executive said Monday after inviting The Gazette to his office to discuss the project.
“Coffee is a very social beverage, and we think we can do more than just produce coffee here. We think we can have a bigger impact in this neighbourhood.”
He doesn’t just want people to follow their nose: breathing i n the smell of roasting Arabica coffee sourced from 15 countries that emanates from the factory’s smokestacks.
“We need more visibility,” said Toutant, who has been with GMCR since 2008 and was appointed company president six weeks ago, in late October. To start, a bold expansion plan over the next three years:
150 new jobs, bringing the St-Michel operation to roughly 1,000 people; $45 million in new investments; Close to 50,000 square feet of new production space.
The expansion plan also includes: a new head office on Jean-Rivard St. (bought and occupied since September); a refurbished roasting plant, to be ready by the spring; and, eventually, new roasters to replace the 40-year-old equipment there now.
Ambitious? You bet. Things aren’t just percolating at GMCR, they’re positively bubbling over — unfortunately, with some bitterness souring the brew.
The parent company’s stock price has been volatile. It plunged fivefold in 2011 and most of this year from a high of $106 after a U.S. Securities and Exchange Commission investigation found fault with GMCR’s accounting practices. It then rebounded in the last quarter of fiscal 2012 amid improved earnings. Shares now trade at about $39.
And while consumer demand for single-serve capsules has driven much of the company’s success in the coffee business (as it has Nestlé, with Nespresso, and Kraft, with Tassimo), the K-Cup’s patent expired in October. Now competitors like Starbucks (Verismo) are rushing in with their own capsules to fit Keurig machines.
Anticipating that, however, GMCR has branched out into otherlines: organic, fair-trade, and now, in the U.S., espresso (with the new Rivo brewer), lattes and cappuccino (the new Vue), and a new line of cold drinks (Snapple ice teas, for the K-Cup and Vue).
Besides pumping out all those non-recyclable K-Cups (800 per minute, thanks to fancy Italian robotics), as well as bags and cans of coffee, the plant in St-Michel will be the centre for all of GMCR’s new business in Canada.
Which means it can afford to think big.
“We’ve had to move to follow the market,” Toutant said.
“Now we’re saying: ‘Okay, we have a three-year plan in front of us, we want to keep on investing in the neighbourhood, we’d like to give back to the community,’” added the executive, who lives 10 minutes away by car in Ahuntsic.
“We want to make sure we do something significant. People drive by, they drive along Pie IX, 19th Ave., 17th Ave. and they say: ‘Whoa, it smells good around here,’ but they don’t know why.
“We want to tell t hem they’re in the coffee neighbourhood of Montreal. Few people know it, but it’s our responsibility to make them recognize the value of what we’ve got here.”
Out his office window, Toutant has a view of the old St-Michel quarry — “the future Central Park of Montreal,” he said grandly of a site that, in winter, is just a vast snow dump.
But on the other side of the quarry in the distance, still in St-Michel, is something more inspirational: the Cirque du Soleil and École nationale de cirque complex called La TO- HU, which opened in 2004.
Different mission, vastly different visibility — but an idea of what the Quartier du café could be.
“Just look at what they’ve accomplished — it’s absolutely amazing,” Toutant said. “Yes, it’s a different mindset, it’s show business, but it just shows what a difference a business can make in a neighbourhood and the life of people.
“I’d like to follow in their footsteps with our expertise, which is coffee and manufacturing jobs. We have the same purpose: We want to make sure we have a positive impact.”
But is anyone listening? Toutant has only just started bending people’s ears.
He has asked for meetings with the city and province. First up: Ani Samson, mayor of Villeray-St-Michel-Park Extension borough (through a spokesman, she said it’s “premature” to comment). Next: ÉlaineZakaïb, Quebec’s new Industrial Policy minister (and ex-head of the Fonds de solidarité of the FTQ, which used to be a minority shareholder in Van Houtte, before the sale to GMCR).
Convincing his corporate neighbours might be hard. For starters, some find the aroma of roasting coffee a bit overpowering.
“We do know they’re across the street — we can smell them, especially in the morning in the winter when we come in,” said Betty Sanon, human resources manager at Guess Jeans Canada’s distribution centre, directly across 19th Ave. from where the new Van Houtte bistro would go.
“It smells like something’s burning, like there’s a fire in our own building. If I was able to get rid of it, I would,” Sanon said. “I drink coffee, I love coffee, but just having to put up with that smell — it can be really, really coarse.”
That said, a Van Houtte bistro across the street would be welcomed by Guess’s 150 employees, she added; they wouldn’t have to go to Tim Hortons on Jarry on their lunch and coffee breaks.
But calling the whole area a Quartier du café? That’s something else entirely.
“I don’t think it’ll happen. It doesn’t make sense — there are other businesses here,” Sanon said. “There’s us, and Sami Fruits and Kim Phat — what does Van Houtte want us all to do? Move out?”
As for renaming the street, good luck with that, she said. The borough has been through this before.
“Look how long it took to get a street named for Gary Carter, the baseball player,” who died last February. “It was a huge thing,” she said. “For the city to name a street after Van Houtte, just because the Van Houtte factory is there, that’s a long shot.”
Toutant, however, is optimistic. “If people who work here, who walk every morning through the neighbourhood, if they have somewhere they can focus, it’ll be better for everyone,” he said. “Yes, it’s an industrial neighbourhood, but just go over to Pie IX and St. Michel Blvd. There are schools and shops and community organizations — there are a lot of people around.”
Forty per cent of the 400 people who work in the Van Houtte plant live in the neighbourhood, many of them new immigrants from southern coffee heartlands like Haiti. GMCR has started making an inventory of local businesses and organizations it thinks it can help, like a local gym that gives boxing lessons to kids.
Under company policy, GMCR allows every employee to take up to 52 hours a year to volunteer in the community — without losing any salary.
“These are little things that you do,” Toutant said. “You can brand it, you can try to get your name on the street, but if you don’t do what’s right in your neighbourhood, if you don’t create that culture of giving back, I think you’re missing the point. ... If we do that, we’ll earn the right to be the Quartier du café.”
It’s a vision the company’s main union shares. “Mr. Toutant’s motivation is to keep the work here in Quebec,” said Alain Lachaîne, president of Local 501 of the United Food and Commercial Workers Union, which has 280 members working in St-Michel.
Van Houtte was hit by a strike in 2008, but relations have improved under the new owners, so there’ll likely be labour peace for the three years of the expansion. The production workers’ collective agreement runs to 2015, mechanics just signed their first contract and lab workers recently signed to 2017.
“Van Houtte is now an American company, and we were all a bit scared the production could have been transferred to the States,” Lachaîne said. “But Mr. Toutant is working hard to have it stay here, and is even investing to make us grow — $45 million.
“Sowe’reworking with him to make sure it happens.”