This week Al goes to picturesque Banff, Alberta to visit Ken McMurdo, owner of Mountain Chocolates. Ken started his business in 1989 when Banff was just beginning to grow into the tourist attraction it has become. But it hasn’t always been a sweet time for Mountain Chocolates. Being so heavily reliant on tourism has meant many ups and downs for Ken’s business and he’s seen it all, from natural disasters to global conflicts to the pandemic. His latest challenges involve inflation and supply chain issues. How is he managing? Listen to find out.
This week Al goes to picturesque Banff, Alberta to visit Ken McMurdo, owner of Mountain Chocolates. Ken started his business in 1989 when Banff was just beginning to grow into the tourist attraction it has become. But it hasn’t always been a sweet time for Mountain Chocolates.
Being so heavily reliant on tourism has meant many ups and downs for Ken’s business and he’s seen it all, from natural disasters to global conflicts to the pandemic. His latest challenges involve inflation and supply chain issues.
How is he managing? Listen to find out.
You can learn more about Mountain Chocolates at mountain-chocolates.business.site.
Allan: [00:00:00] Hello everyone, I'm Al Grego, and this is the Yes We Are Open podcast.
Today, Bigfoot and I have made the trek 126 kilometers west of Calgary on the Trans Canada Highway to Banff National Park. My Alberta upgrade hasn't been a whole lot of fun driving around downtown Calgary. Street parking's a nightmare. But I will admit, today's road trip was a comfy ride with distractingly spectacular views of the Rockies.
The town of Banff was first settled in the 1880s, when the Transcontinental Railway was built through the Bow Valley. As the story goes, in 1883, three Canadian Pacific Railway workers stumbled upon a series of natural hot springs on the side of Sulphur Mountain. In 1885, [00:01:00] a 26 square kilometer Federal Reserve of Land was created, and a series of grand hotels were built along the rail line, and the government began promoting the area as an international resort and spa in efforts to financially support the new railway.
The area was named Banff in 1884 by then CP Rail President George Stephen. He named it after his birthplace in Scotland. Just a few years later, the reserve was increased to 673 square kilometers. This was the first of Canada's national park system. In 1985, the UN declared Banff National Park a World Heritage Site.
It remains one of Canada's most popular tourist destinations, and I can tell why. Walking around the town of Banff is like walking inside a snow globe. You're surrounded by snow capped mountains on all sides. It's the most picturesque place I've visited in my travels across the country. In 1990, the town of Banff was incorporated, becoming the only incorporated municipality within the Canadian National Park.
you Banff offers up plenty of [00:02:00] opportunities for every kind of tourist. From adventure seekers, to shoppers, foodies, to those seeking art and culture, to those who just want to relax and be pampered. The town itself is small, easy to get around on foot or bicycle. With a downtown lined with top class restaurants, bars and shops, art galleries and museums.
There's something in Banff for every tourist and every season. I'm walking in the downtown core of Banff, east along Caribou Street, toward Banff Avenue. See you later. On the northeast corner, across from the Mount Royal Hotel, is one of those many shops, and the subject of today's story, Mountain Chocolates.
That's Ken,
Ken: the
Allan: owner. He greets me, introduces me to Druva, one of his employees, [00:03:00] then shows me around his store. On one side are two large glass displays filled with all sorts of chocolates, caramel corn, peanut brittle, caramel apples, and ice cream. On the opposite wall are some displays with other assorted souvenir and gifts such as boxed chocolates and assorted teas.
Right beside the front entrance is a table beside a large copper candy kettle used in demonstrations for pedestrians walking by the shop's front window. It's late Wednesday morning, the shop is pretty quiet, so Ken and I park ourselves near the demonstration area for our interview.
Ken: Hi, my name is Ken McMurdo, and I'm the owner of Banff's Mountain Chocolates.
Alright, great. Now, when did
Allan: Mountain Chocolates open?
Ken: Started in 1989. And when I started it, it was a time when Banff was just starting to make a big changeover from a small town to a bigger town. The idea came after the real estate came. The real estate came first. And I was right in the center of Banff Avenue.
The space came up and I was thinking, what am I going to do for a business that would be successful? [00:04:00] And I was thinking, I don't want to do a ski shop. My worry was, you do a ski shop, you buy skis, you're going to make a certain margin on it. Somebody down the street buys the same skis. They put them on sale and you're not good.
So my idea was Banff has a lot of foot traffic. How can I come up with an impulse item? Maybe get five dollars out of everybody that walks down the street. And so that's how I came up with the chocolate idea.
Where are you from originally? Have you always been in Banff? Nope. I was born and raised in Vancouver Island and my family was always in the restaurant business and I grew up working in the family business and then I went to college and took cooking class and then I was cooking out there and then, uh, it was like, Oh, this is a lot of work, small return.
So I went into hotel management and then I did that. But the reason I came to Banff is a buddy of mine wanted to come here and go skiing. I've never skied before, so I wanted to try skiing. So I came out for a ski week in February, 1980 and Sunshine Village. And I had a great time. I said, well, maybe I'll just put a resume in the personnel.
And I got a [00:05:00] job and I was going to do it for one year and continue learning how to ski. And then one year becomes two years, becomes three years. And I was food and beverage manager at sunshine village. And then you meet somebody and all of a sudden this becomes home. And so I've been here for 45 years.
Yeah. One daughter who's 32 now. So she did all her schooling, most of her schooling here until the final years of high school. And then she went out of town, but growing up here as a child, she was fortunate to be able to go skiing all the time and, and, and close to. Dad owned a chocolate shop. That did come across every once in a while, you know, every time there's a play school or nursery school or something like that.
There's, well, dad will donate. I was going to
Allan: say, I mean, my, my daughter comes home all the time saying we need to make a dozen muffins or a dozen cupcakes. I can't imagine the requests you were getting here.
Ken: Exactly. Yes, of course. They are there. They're still there. My daughter's works in Calgary and it's like, Oh dad, can you bring in six bags of bear paws?
What's that customer? Oh, it's not a customer. Okay. You're just playing. And with my margins. [00:06:00] Okay.
Allan: So, this is my first time here. I just arrived, I mean, just driving through this, it's beautiful, it's gorgeous. It is.
Ken: It's absolutely beautiful.
Allan: And it's definitely geared towards tourists, I guess, right? You would say? Absolutely. Back when you were here in the late 80s, living here, describe BAMF back then.
Ken: When I first came in 1980, I lived up at the ski hill for about four years. Five, six years. And what happens is as you get more established and start a family, you move downtown and housing was very easy to find at that time. It is definitely not that way now. Very expensive for her, but I've found a house, get married, have a child, go to school here.
And it was a great little community ski hill, right up the hill. And you can drop your kid off and go skiing for two hours and come home. So it was a great quality of life. Is the community still here?
Allan: Is it just kind of been pushed out further from the downtown or what would you describe the community to now?
Right.
Ken: I would really describe it as [00:07:00] disjointed because housing is such a critical situation here. We have no housing. We're probably short seven, 800 homes for people here. And so people spend a lot of money just affording their house. I wouldn't want to raise a family in Banff anymore. It's just too large and too much going on transitional.
Yes. So it's different, but I did it and we did well with it and it worked, but things are very different now. It's
Allan: definitely more for tourists, right? But people who live here are probably working in the tourism.
Ken: Everybody works in the tourism industry or in parks, Canada. Or at the BAMF center. So there's a lot of transients in town now, and it would be very, very hard to make it as a family without some sort of social network support.
Allan: So in the late eighties, you had this idea then to start a chocolate shop. Like, first of all, did you have a background? I know you
Ken: said you went to school for, I did for, to be a chef. And so I had a food and beverage [00:08:00] background and there was one chocolate shop in town at that time. Now there's like five.
So I just found my niche. And as I said, the space came up first and that was 1989 and they were charging key money for a retail space. So if there's a prime retail space, then the person that owns it says, well, you pay me money to take this lease. And that was then, and I paid 250, 000 and interest was 23%.
Wow. And people complain about it now, but 23%. But I have to tell you that it was a lot easier then than being in business now today. Sure. Absolutely. Because in those days, when you start the business, you come up with an idea, you know what your costs are. You negotiate contracts with people and it's stable.
Absolutely. Now our supply chain is so disruptive and there's no guarantee and inflation has put everything up. And it's very hard to make a business plan when you don't know what your costs are.
Allan: Now, this shop we're in now, is this the
Ken: original shop? I started. Just down the street here for 15 years and then I [00:09:00] moved over to this space after that lease was up and we've been here ever since.
So I think this is 35 years that we've been here and we have a good reputation. We have a lot of repeat customers. People like it when they come here because it's chocolate. It's a positive experience. If you're struggling at home or things are difficult, you want to pick me up. You want a treat. You don't even want to buy that.
800 ski suit or the 1, 000 pair of skis, but you can buy a piece of chocolate and feel good. So it's a positive thing. So we don't get any unhappy people in here.
Allan: Well, it seems like a pretty prime location. You're on the corner and across from a hotel
Ken: and we are at the center of town. So this is considered the center of Banff
Allan: village here.
Ken: Yes. Yeah. And it's also probably one of the most expensive real estates. Wow. So You know, you need a business like a chocolate shop where you can have a margin.
Normally, do you own the
Allan: building?
Ken: No, no, uh, BAMF is controlled by two industries. Basically two companies. One is BAMF Caribou properties. They own 85 percent of the hotels in town, right? And then one [00:10:00] person owns most of the high end restaurants in town. So. There's not a lot of independent business people anymore, but you are.
I'm one of the few.
Druva: Amazing.
Allan: So talk about your shop. Do you specialize in anything in
Ken: particular? Yeah. What do you sell here? Well, our signature item I would have to say would be bear paws. Um, bear paws are cashews, caramel dipped in chocolate. With cashews on the top. It does look like a bear paw. So people come here. That's kind of what they like.
Caramel corn, caramel apples. So these are the bear claws? Those are bear claws. Yep. And then we have a signature item here called a Myrtle, which is caramel peanuts, uh, chocolate, and they're. Kind of like a sandwich. Myrtle is because of my name, McMurdo. We kind of tied that in. I, uh, rebranded back about 10 years ago because this was an impulse item, but how do I make it a takeaway souvenir item?
Allan: Right.
Ken: So we tied in with some old photographs from the white museum, which is the local museum showing heritage [00:11:00] photos of the area with some pioneers from the early days of BAMF. And then we packaged it, and it's been extremely successful. When you first opened in the late 80s, you said there were a couple other chocolatiers already There was one other one in town, uh, called Ye Olde Fudgery, and they were there.
How were you received when you first opened? Very well. The new owner of Ye Olde Fudgery, we worked together, we're competitors, but we're small business people. And so when we got the sugar strike, and I can't get sugar, and he's gotta pay all the glucose, it's like, Okay, yeah, er Back and forth. So it's very good that way.
There's not many independent businesses in Banff anymore, so it's just the way the industry has changed.
Allan: All right. So you opened while we're seeing those only one other competitor in town. Now, how many competitors?
Ken: Uh, probably. Probably five. Five, wow. Yeah.
Allan: And are they independent or are they chains?
Ken: One's a chain. Independent. Probably only one of them is a [00:12:00] chain. But we also make all our stuff in the window.
Like, we make fudge and we make caramel and we make popcorn, so we do it all in the window. And again, it's the animation of seeing it and it's like, oh my god, it smells so great, you know? And then they come in. So. Yeah. That's really important to draw business in
Allan: and make a spectacle of it. Make us, we do.
Ken: Yep. Yep. And people love it. And you see little kids sticking their nose to the window and it's great wishing they can stick their finger and they, yeah, they, they do come in and sometimes the little ones, they, yeah. So it's, it's all good. Talk about to the family village, not compared to far busier. far more congested.
We probably have over tourism because it gets unmanageable in the summertime, the lineups and the wear and tear. And we're a very small town of about 9, 000 people and we service, you know, 4 million people a year come through Banff National Park. And how many of them come through this town? So it's a very small town population that has to provide infrastructure.
far greater than they can sustain. And that's a very difficult [00:13:00] situation. That's why taxes are so high. That's why operating costs are so high. So it's very difficult.
Allan: What would you say is the busy, I mean, winter is obviously busy season, right? For skiing
Ken: and stuff, but, uh, summer is it June, June 21st to, uh, Thanksgiving weekend, basically you get all the.
Bus traffic, you get all the Americans traveling, international people traveling, motorhome traffic. Skiing is a small industry relative to summer tourism. They come to see the mountains, they come to see the lakes and see the big hotels. A lot of hiking, a lot of scenic traveling. So you get a lot of traffic in the summertime.
It's, it's crazy in the summertime. It's probably Double what it is in the winter. And we used to have a shoulder season when summer traffic would stop and the bus traffic would slow down. And then there's a lull until you get into the winter ski packages. And that would be like from third week of October to Christmas.
Uh, now we don't have that. There is no shoulder season anymore. Truthfully. It's nonstop full on tourism. Good for business, I guess. Good for business. Yeah. Hard on [00:14:00] infrastructure, hard on staff. How many staff do you carry? Twelve in the summer, eight minimum. You know, there's no downtime for staff. And people come to work and they don't work a year and then take two weeks off.
They come and work for, you know, four or five months and then they want to do something else. And when people come to Banff to work, I always say to my staff, they're not here to work for me. They're here to experience Banff and what it is. So we work with that and give them, you know, people who ski, they work weekends, they get weekdays off.
So you can buy a mid week pass, which is cheaper than a regular pass. And we work four 10 hour days, so they get three days off. So they can go and explore and do their things. And that seems to work very well.
Druva: I'm Zruva and I'm a chocolatier and a cook. How long have you been working for Mammoth Chocolates?
Um, almost 5 plus years. What's your favorite part of working here? Honestly, one of the things is like the schedule works great for me. I love working here. I started working here when I was 17. Right after I graduated. And Ken lets me, like, when I was in school, like, work for the summer, work for the winter, like, come back, pick up some hours.
And I graduated last year and then I'm picking up full time. And so far, so good.[00:15:00]
Allan: So far, so good indeed. 35 years is a long time to be in the same business. You might think it's smooth sailing for Mountain Chocolates at this point. After all, Ken's got a prime location in one of Canada's busiest tourist areas and a very sweet product to boot. But here's the thing about tourism. It's one of the first things to go when the going gets tough.
So how tough did things get? Stay tuned to find out.
You're listening to Yes We Are Open. Ken McMurdo visited Banff for a week of skiing in 1980, and he loved it so much, he never left. He got married, Raised his family and eventually opened Mountain Chocolates. Now, having already worked in BAMF's tourism and hospitality industry for many years before starting his own business, Ken was [00:16:00] likely aware of the inherent volatility of that industry, but being aware and being ready are two very different things.
And nothing would prepare Ken for the string of challenges that he faced over the next 35 years of his business. How did he get through it? Let's find out. What would you say are some of the biggest struggles with Mountain Chocolates?
Ken: Well, as I said at the beginning, when I opened it up and you got a 250, 000 loan at 23%, that's a struggle.
But it wasn't a burden. It was, it seemed to have worked at the time. Things were stable and staff was good and they would stay for a long time and product costs were stable. So you could build a plan like that. But then, you know, 9 11 happened and 9 11 was absolutely huge. I had just done a business deal to go from two stores to 11 stores.
On the Friday before nine 11 and where were they going to be Bamford, Lake Louise and Jasper. [00:17:00] So I diversified with an ex partner that I had, he had a shirt company and an embroidery company. And I bought that company from him on the Friday of nine 11 went to Vancouver and that was in a golf tournament and the plane struck.
Allan: He
Ken: couldn't get back home. I get back home on the Friday after the airports opened up. And I said to the guys, I don't think we should do this deal. You know, it's just not going to work. And he goes, Oh, BAMF isn't going to decline. There's no way BAMF will go down 40%. It's not. Well, it did. It went down 60%.
So then what you do is you have to delve into saving the company. So the ones that are. further away, the ones that aren't doing well, you close those down and you hang in and you hang in, which I eventually did. And I said to myself, I will never go more than one store. If I get bored, I'm going to take up golf or do something.
And I have other alternatives. So I now just have the one store and it works well. But then 9 11 was one challenge. And then we have SARS, which was really huge, but Europeans wouldn't come over because the Asian flu. And that was in Toronto. It wasn't in Banff. It wasn't in Banff. They don't know the difference between Toronto and Banff, it's [00:18:00] proximity.
So we had SARS, then we had Mad Cow, then we had Mad Cow 2, and then we had the economic crisis of 2008. And it's just one thing after another thing. So you just kind of learn to adapt, and you begin to sound like your grandparents when they say, well I know this and I know that. And you're going, well, how can you know that?
Well, because they've lived it. And, you know, 30 some odd years later into business, you're kind of, you know, an old horse that learned through all these trials and stuff.
Allan: I've already interviewed a few businesses in the last couple of days, especially a lot this past year with interest rates soaring again. Things have gotten more difficult. Rents have gone up. Have you felt that here?
Ken: Oh, God, yes. Rent has gone up. Wages have gone up, and even if you pay the wages, you can't get the people.
Because they don't have any housing, and they're transient. But the other thing is, the product costs are what is most unpredictable. We had a sugar strike, September 28th. All of a sudden, you can't get [00:19:00] sugar. And that's like Starbucks not having coffee beans. For me, in a chocolate shop, because sugar is the main thing.
And then, sugar goes from, you know, 26 to 54 a bag and golden sugar goes from 40 to 78 and apples go from 50 to 125. How can you pass that on to the consumer? You can't. Where's your sugar coming from? A company called Rogers out of Vancouver. So they have a labor strike and all of a sudden there's three price increases and you're like, Yeah.
How do you understand that? But because Canada's inflation is going through the roof, a lot of people are riding that and putting their prices up. So it's driving costs up significantly and uh, it's hard to make the margin that you need to make to pay the wages, to pay the food costs, to pay the rent.
Sugar strike isn't something you see on the news. Well, you know, it was on the news in the West, but you know, as a person in the industry, you know, and Chocolate. They tell you that, you know, South Africa, there's a drought. So all of a sudden chocolate goes up for them. It's so unstable in today's world from what it was.
What would you say would have been the [00:20:00] heyday for mountain chocolates? 97, 97. You've got very specific date there. Well, I, I know, I, I know all my sales numbers and stuff. And it's like everything you think, Oh, things are going great. Business is good. Sales are up. And then all of a sudden something comes out of the blue that you don't know.
Like the crash of 2008 when the New York stock market went, I mean. It went from August being a great month to September going, holy heck, what the heck happened? And those are all out of your control as a small business, but they affect you and you don't know how they're going to affect you. And then you've retooled, bunker down.
And so what was it about 97? Traffic was good. A U. S. Canadian exchange rate was good. Political stability in the States was good. Americans don't travel on an election year and you learn that after four years, you know, every four years. So when. Things are good, and they know the guy's going to get re elected, then it's not every four years, it's every eight years.
So, it'll be interesting to see what happens this summer. That's interesting. Americans don't travel in an election yet. Because they don't know what the economy's going to be like. They don't know what their stock portfolio is going to be like. [00:21:00] So, you know, the Hold back on the expenses.
Allan: So during times of downturn or times of instability, what do you do here to shore things up to, you know, persevere?
Ken: You watch your labor costs. You maybe get a little bit better at. At buying, but there's not a lot of other things that you can possibly do because I'm here and somebody else has got to get the people here.
And so Banff Lake Louise tourism will increase their spending or target their market a little bit differently. So you rely a lot on
Allan: tourism to, to bring in the clients, right? Absolutely. Absolutely. Cause in terms of your marketing,
Ken: you do some local marketing, but really there's not much more you can do.
Like it is what it is. You, you need the people to come here and that's somebody else's job to have them come down and make sure that you got a good product. Agreeable. A lot of Calgarians, they come in, but that's weekend business. So you got to fill the weekdays in order to make the numbers work. And that's where the tourism bureau would come in and do midweek specials and that sort of stuff.
Do you get involved in the tourism [00:22:00] bureau? I was on the board for nine years, you know, and I've done my part there and I've done my part on the hospital board for seven years. And so you do those things and then you get. Close to retirement age, like I am, where you slow down on that stuff.
Allan: Yeah, no, it
Ken: makes sense.
It's the evolution of the cycle, right?
Allan: Coming up after the break, we find out what the future holds for mountain chocolates.
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Allan: Welcome back to Yes, we Are Open. Ken McMurdo has seen a lot of change in his adopted hometown of Banff in the last 35 years. And even more adversity for his business, Mountain Chocolates. So what does the future hold for both Ken and his business? Let's find out. Okay, so you've been in business for 35 years.
What does the future look like? I mean, you've already gone through your expansion
Ken: days and stuff. And those are long over. Yes, exactly. Because more is not always better. Right. That's the way I look at it now. And I'm happy with what I have right now and come to work and be happy, not be stressed.
Allan: Okay.
During our chat, Ken I got the impression the future of Mountain Chocolates was inextricably tied to Ken, and that any thought of succession ended at him. But if you recall earlier in his story, Ken mentioned his daughter in Calgary. So, I asked him if she had shown any interest in taking over the business.
Ken: As a matter of fact, she has, and I would not allow her to do that. Oh. Absolutely not. Because of the way the landlords work in this town, you become [00:24:00] subservient to the landlords and, uh, you know, they want a share of everything and, you know, Oh, you're making this amount of money so you can pay this amount of rent and you build your own brand equity and they feel they own it because it's their location.
In hindsight, if I would have. It would have been a different story and then you have something to carry on. And that's, that just didn't happen. And it's too late for that to happen.
Allan: So you think whenever it's time to retire, you'll probably just sell.
Ken: As far as the future outlook, I think we're solid. We have a great reputation. Got great staff, it's gonna stay the same basically. It doesn't run itself, but we have a proven product that is easy to manage. Yeah. So as you get older in life, it's manageable. Yeah.
Allan: When you look at what you've built here over the last 35 years, this is your, your creation, your baby,
Ken: how do you feel?
Good. Yeah. It is successful. I mean, 35 years in small business, it's gotta be worth something. And I think we can be here for another 15, 20 years. [00:25:00] So if I could say, That's a pretty good thing. Thank you very much. Okay.
Allan: All right, Ken, is Mountain Chocolates open? Yes, we are open. Perfect. Excellent.
That's the story of Mountain Chocolates. The volatility of the hospitality and tourism industry has been well documented in this podcast. Many of the businesses that I've visited fall into that category, and every single one talk about how exposed their business feels to factors far beyond their control.
From economic pressures, to natural disasters, to global conflicts, to political upheaval, you often feel the impact of these events before other industries. And at the same time, recovery often comes much later. All this is to say, to work in hospitality and tourism requires a special [00:26:00] kind of resilience.
And Ken seems to have it in spades. So when he says that more is not always better, and that he's happy with what he has, I believe that happiness is well earned, and as someone who's spent his career making chocolate and all things sweet, I'd say Ken is as much of an authority on happiness as anyone.
Guess We Were Open is a Miner's podcast I'd like to thank Druva and Ken for taking the time to share their story. You can learn more about Mountain Chocolates at bamfflakelouise. com. Please support this podcast by writing us a review on Apple podcasts or rate us on Spotify or wherever you get your podcasts.
If you're a Canadian small business owner or know of one with an interesting story of perseverance to tell, I'd love to help tell it. You can contact me at podcastatmuneirs. com. Tune in next week for another story of small business struggle and survival on the yes. We are open podcast. I'm Al Grego.[00:27:00]
Thank you for listening.