Plans for Wasabi Farm Extensively Downgraded

Wasabi Root | BCBusiness
Wasabi Root in Kanazawa Market, Japan.

Vancouver Island’s Pacific Coast Wasabi turns to a contract-grower model to fill market need

The Vancouver Island company building the largest commercial wasabi growing operation outside of Japan, which previously had the worldwide market for the condiment cornered, has had to downgrade its expansion intentions when plans to take over a 14-hectare site on Vancouver Island fell through.

Since last fall, Pacific Coast Wasabi Ltd. has been constructing a series of greenhouses up and down the Island’s coast and into Washington state that will house its  wasabi operation. Now using a contract-grower model and setting up greenhouses on private farms (three in B.C., two in Washington and one in Oregon), Pacific Coast is nonetheless on track to have 1.6 hectares producing the plant by the end of 2013 (it currently has 1.1 hectares producing wasabi) and remains the largest wasabi producer outside of Japan.

Currently, 80,000 wasabi plants have taken root in the company’s Nanoose Bay operation, with more to come by the end of the year. These plants should generate approximately 16,000 kilos of rhizome—the active ingredient, found in the plant’s stem—which gives wasabi its horseradish sting. A kilo of rhizome currently trades at about $100, giving wasabi its reputation of being a high-value, low-yield market.

The worldwide demand for wasabi currently outstrips supply, partly due to concerns over radiation levels after the massive earthquake and tsunami that hit Japan’s coast in 2011. B.C.’s coast has a similar climate to Japan’s, where the plant grows along shade-covered streams. Pacific Coast’s intention is to supply a growing gap in the international market, which has until now been at the whims of Japanese production. Currently, ninety per cent of Pacific Coast’s business is coming from big American cities, such as New York.

Pacific Coast Wasabi president Brian Oates says that, aside from the culinary industry, the company hopes to eventually provide most of their product to the growing and lucrative biomedical and supplement industry, which utilizes wasabi for its medicinal properties.

Thanks to the province’s wet, warm climate, B.C. often provides an opportunity to experiment in producing untraditional crops. Most recently, rare Perigord truffles were harvested in Abbotsford, igniting investment buzz around the gourmet (hence, expensive) ingredient. In the 1990s, ginseng also saw a huge boom in the region.

Ginseng could provide wasabi with a strong lesson in agricultural economics. UBC land and food systems professor, James Vercammen, cautions that he’s seen similar niche-agriculture industries—including ginseng—boom and bust pretty fast.

“It was fairly specialized and it took years for it to get ready,” Vercammen explains. “And then the market just completely bottomed out.”

Vercammen says that businesses that focus on small crop agricultural products would do well to be the first in on the boom—which Pacific Coast is. And Pacific Coast also would have an extra safety net, he says, if its expensive greenhouses could be easily flipped to grow a more stable crop, like peppers.

Oates believes that things have worked out best for the company, saying that “in sense we were lucky, because this keeps us small and lean. If we had all that acreage and we couldn’t sell, we’d have a lot of angry investors. The way we’re doing it right now is working much better.”

To date, funding of the company has been entirely private.