The deal, as announced Thursday, will include Agropur’s plants at Granby, Que. and Delta, B.C. plus the operations at a distribution centre it leases at Longueuil, Que. Financial terms of the deal weren’t disclosed.

Agropur’s Canadian yogurt business, operating under the name Ultima Foods, includes the Iogo and Iogo Nano yogurt brands, as well as the Olympic brand of yogurt, sour cream and kefir. Lactalis’ current Canadian yogurt roster includes the Astro, Siggi’s and Stonyfield brands.

Yogurt today accounts for about two per cent of Agropur’s milk processing volume and three per cent of its sales, the co-operative said.

“Current market conditions, increasingly aggressive competition and our desire to streamline our business model have prompted us to focus on our most strategic lines of business,” Agropur president Roger Massicotte said in a release.

The yogurt sale, he said, is meant to allow Agropur “to pursue our growth strategy and concentrate our investments.”

“We are very proud of all we have accomplished with Iogo and Olympic, two brands that have played an important role in growing the yogurt category in Canada,”Agropur CEO Emile Cordeau said in the same release.

“However, Agropur’s decision to focus its efforts on its strategic segments means we must streamline our operations. We thank the dedicated employees whose tireless efforts have built Iogo and Olympic into brands consumers trust.”

The co-operative’s yogurt business includes about 450 employees, who will join Lactalis.

The Ultima yogurt business started in 1993 as a joint venture between Agropur and Agrifoods International Co-operative. The j.v. went on to buy B.C. yogurt processor Olympic Dairy in 2004 and introduce Iogo as a new Canadian brand in 2014. Agrifoods International sold its stake to Agropur in 2017.

The deal with Lactalis is subject to the usual conditions — including regulatory approval from the federal Competition Bureau.

The deal “will reinforce Lactalis Canada’s position in the dairy category and will help enable key customer partners in both the retail and foodservice channels (to) meet the growing consumer demand for yogurt products,” Lactalis Canada CEO Mark Taylor said in a separate release.

The company, he said, “is confident that this transaction will positively support dairy farmers, retailers, consumers” and the affected plants’ home communities.

Lactalis, which took over Parmalat in 2011, today operates 17 Canadian plants in Ontario, Quebec, Alberta and Manitoba. Among recent acquisitions, it set up a deal earlier this fall to buy several cheese businesses from Kraft Heinz, among them its grated cheese business in Canada. — Glacier FarmMedia Network

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Agropur and Agrifoods International Co-operative, which combined their yogurt manufacturing and marketing operations in 1993 to form Ultima as a 50-50 joint venture, announced a deal Thursday which will see Agropur become Ultima’s sole owner.

Ultima, which bought B.C. yogurt processor Olympic Dairy in 2004 and launched its own Canadian brand, Iogo, in 2014, today has about 660 staff in plants at Granby, Que. and Delta, B.C., with annual sales of over $300 million.

Ultima currently also makes Yoplait yogurt products for the Canadian market in a co-packing deal with that brand’s majority owner General Mills.

The two companies said the deal is subject to “the usual authorizations, including those of the Competition Bureau,” which an Agrifoods spokesperson said they hope to receive within the next couple of months. The deal’s financial terms won’t be released, the spokesperson said.

“This transaction continues along the course we have charted and will support our long-term development in the yogurt category,” Agropur president Rene Moreau said in a release Thursday. “We are always very proud when we are able to keep processing assets in the hands of Canadian dairy farmers.”

Agrifoods president Tim Hofstra described the deal as “a very positive transaction as it will create the optimal condition for Ultima Foods’ development.”

Agropur CEO Robert Coallier described the deal as “a unique opportunity to develop and optimize our business model.”

He also described the partnership with Agrifoods to date as “very fruitful,” having led to the rebranding of Olympic and the creation of the Iogo brand, “a launch that is considered a milestone in the history of Canada’s food industry.”

For its part, Agropur said it expects the deal “will augment Agropur’s range of products in the fresh dairy market”, adding that Ultima “will continue to be the only national Canadian-owned yogurt-maker.”

Burnaby, B.C.-based Agrifoods, formed as a dairy farmers’ co-operative in Western Canada, was previously best known for the Dairyworld milk business, which it sold to Saputo in 2001.

Agrifoods’ remaining brands include organic dairy product line Organic Meadow, foodservice and private-label dairy line Meadowfresh, organic juice, soup and dairy line Happy Planet and, under the Earth’s Own label, SoFresh almond and cashew beverages, So Nice soy and almond beverages and So Good soy beverages.

“Moving forward from today’s transaction, Agrifoods is excited to enhance our focus on innovating and nurturing our family of brands and continuing our leadership role in the health and wellness industry in Canada,” Hofstra said. — AGCanada.com Network

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Ultima Foods announced last week it will put up $10.8 million of its own funds plus a $3.6 million interest-free loan from Investissement Quebec, the investment arm of the provincial government, toward an expansion of its plant at Granby.

The “new equipment and procedural fine-tuning” at the Granby plant will boost its weekly production from 2.7 million units to 4.8 million, the company said June 6.

“Not only do we have to serve consumers, who are always on the lookout for new products, but our facilities must also be extremely efficient to build our relations with our clients,” Ultima president Martin Parent said in a release.

Ultima, which said it today produces about 30 per cent of the yogurt consumed in Canada, had “reached the limit of its drinkable yogurt production capacity.”

Optimization of operating costs will allow Ultima to “reinvest even more in the development of new yogurt products,” the company added.

Ultima, which markets its wares under the Olympic and Iogo brands, said the latest investment is expected to create 35 to 40 jobs at the facility.

Ultima’s expansion announcement came just two days before it announced a recall of certain sizes and formats of its Iogo smoothies, protein drinks and Nano drinkable yogurt, due to the “possibility of the presence of plastic fragments.”

The company said June 8 it took the action voluntarily “in an overabundance of caution,” noting no fragments have been found in any finished product and no consumer complaints have been reported.

The recall, which on June 8 included products distributed in Western Canada, Ontario and Quebec, expanded the next day to cover the products nationwide. — AGCanada.com Network

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The Quebec co-operative, which in 2016 landed on Rabobank’s list of the world’s 20 largest dairy companies for the first time, booked net earnings before patronage and income taxes of $153.99 million, on sales of $5.95 billion, for the year ending Oct. 29, up from $87.82 million on $5.87 billion in fiscal 2015.

Patronage dividends to Agropur’s 3,271 members for 2016 totalled $60.11 million, up from $40.59 million in fiscal 2015.

“Agropur’s performance is the result of the sum of all the initiatives we have taken in recent years: our mergers and acquisitions, our cost-cutting programs, our major investments in our brands and in our facilities in both Canada and the U.S.,” president Serge Riendeau, wrapping up his 15th and final year in the post, said in a release Thursday.

“We are prouder than ever of our business model, which helps spread the wealth and develop local communities.”

CEO Robert Coallier, in the co-op’s annual report, said it was able to boost earnings from operations (before interest, taxes, depreciation, amortization and non-recurring costs) by 34.6 per cent, to $411.68 million, “despite still-unsteady global prices for whey products and a fiercely competitive Canadian market environment.”

The Longueuil-based co-op in 2016 also mapped out a cost reduction program expected to produce $100 million in savings over three years, yielding $41 million in savings in fiscal 2016.

The co-op said its focus in 2016 was on “integrating the numerous acquisitions of recent years” but still included “substantial” investments worth $150 million in its Canadian and U.S. plants.

Agropur’s Natrel brand “topped the rankings” in fine-filtered, lactose-free and organic dairy categories, the co-op said.

The Olympic and Iogo brands, a joint venture between Agropur and Ultima Foods, “posted the strongest growth in the fresh dairy products category” in Canada with sales increases of 10 per cent and six per cent respectively, above the industry-average three per cent.

The co-op in 2016 also rolled out Inno Agropur, a diayr product innovation initiative, including the Inno Challenge, in which over 60 participants submitted project proposals and three concepts have been selected for co-development “in the coming weeks.”

Agropur in 2016 also pledged all the products it makes in Canada and sells under its own brands will contain 100 per cent Canadian milk and dairy ingredients and bear the Dairy Farmers of Canada “Quality Milk” certification logo.

Agropur products displaying the logo are expected to appear on grocery shelves also “in the coming weeks.” — AGCanada.com Network

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