Ever look across Vancouver harbour and wonder why that giant pile of yellow sulphur powder is always there?
It has puzzled me for a long time, probably ever since my first flight to Vancouver on CP Air’s big, orange bird.
But while Vancouver’s sulphur pile seems timeless, the rest of the city’s business landscape has shifted radically in the last few decades.
The old Woodward’s and its Food Floor, where one’s great aunt would enjoy a cup of tea after picking up the Robertson’s marmalade and other necessities, were flagships of the city’s commercial scene for generations. But the firm has been as extinct as the Beringian sabre-tooth tiger for 20 years.
The other department stores, former grand dames of Granville and Robson streets, are in various stages of bankruptcy, rebranding or extreme corporate makeover.
Their business models couldn’t cope with suburban grocery stores and their convenient parking, big U.S. retailers with finely tuned supply chains, and specialty retailers.
Even the specialty retailers that stole market share from the department stores have gone through their own, even more rapid, evolutionary life cycle. Remember the big HMV music store on Robson? The record section of Woodward’s would never have had a chance against HMV, yet the digital music revolution spelled doom for HMV’s flagship Vancouver store nonetheless.
The Internet era tossed one more insult HMV’s way last month, as the staff responsible for the company’s Twitter feed tweeted their layoffs live as the axe fell on head office itself. “We’re tweeting live from HR where we’re all being fired! Exciting!! #hmvXFactorFiring,” went one tweet, before the traffic suddenly went dead.
Meanwhile, the city’s downtown is full of fancy new condo developments, high-end restaurants, luxury hotels and an improbable number of shops selling extreme outdoor clothing and equipment.
Austrian economist Schumpeter called this “creative destruction.” The market may be brutal, but it moves resources from outdated ways of doing business with remarkable speed.
You have to remember that firms like Woodward’s were themselves built on the graves of a previous generation of small shops.
Meanwhile, that sulphur pile is always there. It brings up the question of whether the sulphur people may be onto something. It is not a glamorous business. There is no particular magic to the business model: buy sulphur cheap in the interior somewhere, dump it in Vancouver until a ship comes in, and then sell it for a slightly higher price overseas.
But sulphur is always in demand. It is used for fertilizer, matches, batteries, bleach, laxatives, wine-making, shampoo and loads of other ubiquitous products.
Furthermore, it is something that Western Canada has in abundance. A lot of our production comes as a by-product from the oil sands, and sulphur output in Alberta is expected to soar in coming years as more oil sand capacity comes on stream.
Meanwhile, the drivers of demand for sulphur are strong. Experts at The Sulphur Institute (yes, there is such a thing), point out that around half of sulphur production goes into fertilizer. With a growing global population and high food prices, demand is likely to be solid far into the future.
So the sulphur people in Vancouver have positioned themselves between an abundant commodity and a global market. Not bad.
People who have invested in the next big thing, only to see it crater a few years later, might like to have a boring old business that makes moderate profits and actually pays a dividend over the long run.
I wonder if any of those big houses in the British Properties are occupied by the idle and irresponsible descendants of Vancouver sulphur barons.
Of course, the sulphur business is not immune to risk. They face high shipping costs, as well as environmental challenges and the risk of spills. Plus competitors from Kazakhstan to Saudi Arabia, who are nipping at Canada’s heels in the global sulphur league table. And then there’s the risk that China’s economy may stumble. That country absorbed 43 per cent of global sulphur imports in 2009, according to The Sulphur Institute.
Nonetheless, looking forward, I suspect that Vancouver’s sulphur pile still be there when we are reading newspaper stories about crashing condo prices and fickle consumers moving on from sipping over-priced coffee while wearing $800 down-filled jackets.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels.