How Just Quality International grew by doing the right thing

Yupeng Liu used his own moral compass—and philanthropic awakening—to create a company that stands apart

Yupeng Liu (right) at one of PROFIT 500 winner Just Quality International’s processing facilities

Yupeng Liu (right) at one of PROFIT 500 winner Just Quality International’s processing facilities (Photograph by Will Figg)

At 26 years old, Yupeng Liu felt his career had stalled. Liu worked at a food distribution company in Brampton, Ont., and the path to senior leadership was a long one, clogged by others. Liu, who became an expert in frozen fruit and vegetables while at the firm, decided to go back to school to earn an MBA. His industry contacts, however, kept calling him, eager to hear his thoughts on the frozen spinach market, or to get his help connecting with a produce buyer. The idea of starting his own business took hold.

Still, it wasn’t until a serendipitous encounter happened at an airport that he decided to act. On a flight home from a vacation to New York, he saw an ad campaign from HSBC centred on the idea of living life without regret. “I didn’t want to say 10 years down the road, ‘You know, I had the opportunity to create my own company, but I didn’t do it,’” he says. So he scrapped his MBA plans and founded Just Quality International (JQI)in 2010.

It’s proven to be a smart decision: JQI has grown its revenue by 8,697% over the past five years, earning it the No. 4 spot on the 2016 PROFIT 500 ranking of Canada’s Fastest-Growing Companies. The firm sources produce from around the world—broccoli from China and Guatemala, papaya from Mexico—and sells it to packaged goods companies, grocery stores and restaurants. JQI also produces a consumer-facing line of frozen vegetable mixes under the name Arctic Harvest. Liu attributes the company’s blockbuster growth to his deep knowledge of the industry, and, crucially, his transparent approach with suppliers and customers.

If that sounds painfully earnest, well, Liu is the kind of guy who is fond of the movie Forrest Gump. “Every time I feel down, that’s the movie I will go and watch,” he says. It’s that kind of honesty that makes Liu instantly likable. He’s humble and—unlike the stereotype of the fearless, boastful CEO—open about his business concerns. “We just opened a new division in Chicago,” he says. “I don’t know how it’s going to work out. But I have to remain confident.” He’s constantly expanding his knowledge of business strategy and leadership (his office contains a thick stack of books he’s reading), and he’s got a wry sense of humour. It amounts to a disposition that’s proven an important asset in an industry predicated on relationships.

Liu learned the fundamentals of business at his previous job, after graduating with a commerce degree from the University of Toronto Mississauga. He started in logistics for the food distribution company, and after two years, proposed starting up a frozen fruits and vegetables division. His superiors liked the idea, and tasked him with spearheading it. Liu built a network of contacts with old-fashioned cold calls, and the new division was humming within a few years. The business development expertise he honed during that time, not to mention his voluminous contact list, helped him get JQI off the ground quickly.

His bond with clients was so strong, in fact, that suppliers allowed Liu to delay payment in the early days. “They’d say, ‘I understand you’re just getting started. Pay me when you get paid,’” he says. The arrangement helped buoy the fledgling company until it was financially sound enough for bank financing. Such a high level of trust could only be built by treating suppliers fairly, according to Liu, particularly when it came to pricing. “All the other competitors try to squeeze suppliers as much as they can,” he says. Indeed, witness the recent price wars in the Canadian grocery sector, with majors chains demanding price breaks from vendors and distributors. Such demands have ripple effects throughout the entire chain. “Our mentality is to work with suppliers,” Liu says. That doesn’t mean he readily sacrifices his own financial well-being to benefit the farmers he purchases from; rather, Liu says he’s upfront about market conditions and the reasons for demanding a certain price. The same goes for his customers: “We want them to understand why they’re paying a fee for this service.”

As JQI has grown, so too has Liu’s sense of social responsibility. It started with customers asking about the labour and environmental conditions in the locations JQI sources from—not only are there regulations to honour, but consumers are increasingly demanding that food brands treat workers fairly and, in the case of produce, not use pesticides excessively. Although Liu works only with quality suppliers (those that can provide on-site medical care to workers, for example), he wanted to do more than adhere to minimum standards. “I thought, ‘If there’s anything I can help with, I will,’” he says. One example: North American consumers demand perfectly shaped fruits and vegetables, which means a lot of produce grown in developing countries is diverted for use as fertilizer or juice. Instead, Liu partnered with a supplier in Guatemala to donate ugly but still perfectly intact mangoes and pineapples to local schools.

Another example: On a trip to Guatemala last year—Liu frequently travels to source countries to meet with suppliers—he struck up a conversation with an older American gentleman while having dinner. The man, Mitch Denburg, had been in Guatemala for decades and ran a non-profit called the New Roots Foundation. Liu has since joined the board of directors, and gotten involved with a project to donate cacao trees to farmers and purchase the beans come harvest time.

Liu, true to form, is upfront that there’s an element of self-interest at play. “If you are a good person, good things will happen to you,” he says. “You’re going to get something bigger in return. It could be money, or it could be experience.” (In his case, he says, it’s both.)

Liu’s steadfast belief in karma should help sustain him through a period of uncertainty as the company expands. JQI is planning to launch its own line of juice, and Liu recently hired a chief marketing officer to build the brand. Similarly, the company debuted a line of dried strawberries earlier this year under the name Global Growers. Developing and marketing custom products is a riskier, more capital-intensive business than simply importing and exporting produce. And Liu made a misstep at JQI once before when he strayed into distributing juice concentrate. (His timing was off, he says, as he got in at the peak of the juice concentrate market cycle—yes, there is such a thing.)

As a result, he intends to keep focused on his core business, even as he explores new revenue streams, reasoning: “That’s where the bread and butter is.” Or, one could say, the broccoli and spinach.