The Story of Artisanal Yogurt Company Tree Island Gourmet Yogurt

Using milk from grass-fed cows in the Comox Valley — and a lot of heart and soul — Tree Island Gourmet Yogurt has taken their boutique artisanal yogurt business into the big leagues.

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Scott DiGuistini, co-owner of Tree Island Gourmet Yogurt, at Birkdale Farm in the Comox Valley. The 92-year-old heritage farm raises grass-fed Ayershire dairy cows who supply the milk for Tree Island products. Photograph by Jeffrey Bosdet.

Six years ago, when Scott DiGuistini and Merissa Myles decided to launch a yogurt-making business, they were told by more than one critic that they would fail. After all, the couple would be going head to head with the big boys of yogurt, like Danone, Dairyland and Olympic.

They quickly proved the doubters wrong. Since shipping their first batch of yogurt in January 2013, their company Tree Island Gourmet Yogurt now stocks the shelves of more than 200 retailers across Vancouver Island, the Gulf Islands and the B.C. Mainland. And since receiving Canadian Food Inspection Agency certification in February 2017, which opens the door to the entire Canadian market, they now also ship to retailers in Alberta, Ontario, and Quebec.

And in that time they have grown from a husband-and-wife operation, with two helpers, to a thriving food processing firm that employs 22 people and processes 350,000 litres of milk annually. DiGuistini says they are on track for half a million.

Entrepreneurial DNA

“We had a five-year business plan and we met that in three years,” DiGuistini tells me on a sunny April afternoon at Tree Island Gourmet Yogurt’s headquarters, found on a leafy acreage next to Highway 19A in the community of Royston, a few kilometres south of Courtenay.

On one side of the gravel driveway is a two-storey cottage where the couple first lived with their young family and which also doubled as an office. When the business expanded to the point that the home office overtook the home, it forced a move to a separate house nearby on the ocean side of highway 19A. On the other side of the driveway, employees in a small bio-secure plant produce yogurt in flavours like Milano Espresso, Coconut Lime, Orange Blossom and Cardamom, and Prairie Berry.

Dip a spoon into a tub of Tree Island’s Honey yogurt and your palate might pucker a little, especially if, like a lot of consumers, you’re accustomed to the super-sweetened stuff that populates most grocery store shelves these days. But Tree Island’s product is creamy and rich — and it sells.

DiGuistini and Myles both say they have entrepreneurship in their DNA. Tree Island’s genesis occurred when the couple toured Europe, assessing job offers in DiGuistini’s academic discipline of microbiology. That’s when they were introduced to what he calls “real yogurt,” made with whole milk in the French style that leaves a thin layer of cream on top.

It was an epiphany that led them to the Comox Valley, partly for its welcoming and vibrant food and farming scene, and partly because it seemed like a good place to raise kids. DiGuistini applied his scientifically trained mind to making that wonderfully simple stuff called yogurt, which is produced from two ingredients, milk and bacterial culture. And Tree Island uses real milk, not the powdered milk that is often used as an ingredient in yogurt — and that’s one of the market differentiators of Tree Island’s product.

“We wanted to build a boutique product that would connect with the consumers,” DiGuistini says.

At Tree Island’s production facility in Royston, the company is producing their new special edition coffee-flavoured yogurt created with coffee gurus Milano Coffee CMX Valley and Milano Coffee Vancouver. Photograph by Jeffrey Bosdet.

Heart, Soul and Business

Between parenting and bootstrapping, launching the new business was a challenge at first. DiGuistini and Myles dug deep into personal savings, tapped family and friends, and secured some support from Community Futures Strathcona to help cover building and equipment costs.

By the time they had acquired, installed and retrofitted equipment to meet provincial standards, they were broke, but they had a small plant ready for inspection — a process that DiGuistini says was painfully slow.

After a six-month wait, they finally got their permit and were ready to start making yogurt and generating much-needed cash flow.

Project funding from a number of government agencies, including Agriculture and Agri-Food Canada and the Investment Agriculture Foundation, as well as a Local Producer Grant from the Texas-based Whole Foods further aided Tree Island’s growth.

However, heart and soul and the ability to recognize and play to one another’s strengths are key to the business’s success for DiGuistini and Myles. They’ve have found that balance, a one-two business punch that’s helped production grow roughly 1000 per cent since its first year of operation. DiGuistini is the self-described risk taker, the guy in the yogurt plant tweaking systems; Myles, who in her previous life worked for the YWCA in community economic development, focuses on the front end — orders, shipping, marketing, payroll and other administrative details.

And as much as Tree Island’s success depends on heart and soul, for DiGuistini and Myles, it’s also about confidence, conviction and business smarts.

Operating in the black is obviously key. But DiGuistini and Myles are as focused on profitability as they are on helping to change the way consumers think about and value nutritious food, and also how they relate to the farmers who produce it and the entrepreneurs who add value to it. 

Tree Island has developed strong ties to local producers, sourcing milk from Guy Sims, a second-generation farmer who raises pasture-fed dairy cows at Birkdale Farm on the Comox Peninsula, and honey from Big D’s Bees Honey in Black Creek.

And the couple doesn’t shy away from advocacy. Canada has a tightly controlled supply-management quota system for dairy, which gives farmers both price and market, and a policy of no antibiotics and growth hormones in fluid milk; however all milk — whether from pasture-raised or factory-fed cows — was lumped together. 

So DiGuistini and Myles joined a movement working with then-agriculture minister Norm Letnick and the BC Milk Marketing Board to implement increased “traceability” and to support innovation within the supply management system. This would enable processors like Tree Island to source milk from farmers raising pasture-fed dairy cows that produce milk richer in Omega-3s, beta carotene, and CLAs (conjugated linoleic acid) than the milk from corn-fed cows. This, in turn, allowed these farmers to fetch a premium price for their milk.

The couple’s lobbying efforts were successful, a crucial victory for DiGuistini and Myles given the current lack of any certified organic dairy farmers on the island. “Now we can tell the farmer’s story,” DiGuistini says.

Photograph courtesy of Tree Island Gourmet Yogurt.

Tree Island also took a critical look at their packaging and, in 2015, became the first in Canada to use dairy containers reinforced with cardboard and made with 50 per cent less plastic (the plastic in their containers is BPA-free) than standard yogurt’s plastic packaging.

And rather than outsourcing distribution, DiGuistini and Myles chose to keep it in-house; another hallmark of their attention to detail and quality.

“It helps us maintain relationships with retailers and also ensures our yogurt arrives at the shelves fresh,” DiGuistini says, noting that fresh yogurt packaged at the Royston plant on a Wednesday is trucked cross-country and on the shelves at Slater Street Market in downtown Ottawa the following Tuesday morning.

Managed Growth

The entrepreneurial couple’s forward-thinking approach and community-agriculture philosophy has made their company a darling of the Vancouver Island’s small-scale food sector. It’s also what first caught the attention of Ali Ryan, head chef at Spinnakers Gastro Brewpub and president of the Island Chef’s Collaborative (ICC.) Tree Island was one of the first small producers to apply for a $10,000 zero interest microloan, which ICC offers with the support of Van City Credit Union. 

According to Ryan, since then Tree Island and the more than three dozen chefs that belong to ICC have had a “close and mutually supportive relationship.”

“I have had the pleasure of having Scott and Merissa’s Greek yogurt on my menu for three or four years now,” Ryan says. “Their yogurt is the perfect example of how the quality of locally, sustainably and sensitively produced food is just better, both in taste and nutrition.”

“As early champions of grass-fed dairies, sustainable packaging and whole foods,” he says, “I think Tree Island has been instrumental to the growth of the Island’s artisan-food industry.”

These are busy times for DiGuistini and Myles. Their cell phones ring constantly and a steady stream of couriers and trucks pull up the driveway at their Royston plant. The week of this interview they clocked record sales to date, all at a time when they were producing their first line of fruit yogurts, made from organic Okanagan peaches, Fraser Valley strawberries and berries, including Haskap berries, an obscure but healthy native to the boreal forest that’s cultivated in Saskatchewan. Production has nearly outstripped the capacity of their current plant; however, they’re keeping quiet about future expansion plans.

“It’s in the works,” Myles says. “I guess our approach from the start has been ‘managed growth.’ All of our accounts have happened organically and by word of mouth.”

And for a growing enterprise like Tree Island, advertising doesn’t get much better than positive word of mouth. 

This article is from the June/July 2018 issue of Douglas.