Agropur reports continued growth
Longueuil, February 13, 2019 – Agropur Cooperative held its 80th Annual General Meeting today and announced sales of $6.7 billion, a year-over-year increase of 4.7%.
During the past year, the Cooperative continued its progress, expanded its footprint in the U.S. market for ingredients and industrial products, grew its market share in Canada, and achieved further operational efficiencies. The Cooperative founded in Granby is now a North American player and one of the top 20 dairy processors in the world.
However, the sharp decline in whey prices on world markets and in cheese block prices in the U.S. had a negative impact on EBITDA, which decreased 18.5% to $362.1 million. Patronage dividends totalling $65.2 million were paid to members, the same amount as in 2017.
Creating long-term value
To position itself for a market recovery, Agropur made significant investments in its facilities in 2018. Notably, its plant in Lake Norden, South Dakota is being enlarged to triple its capacity. In all, Agropur has invested more than $1.3 billion in property, plant and equipment over the past five years, 56% of it in Canada. At the same time, Agropur has pursued cost leadership objectives and has succeeded in reducing costs by more than $118 million in three years, exceeding its $100 million target.
Impact of international agreements
However, government decisions during the year cast a shadow over those achievements. In November, the government of Canada weakened the supply management system for the third time in a few years when it agreed to the United States–Mexico–Canada Agreement (USMCA). Canada’s dairy industry was again used as a bargaining chip in international trade negotiations. The Cooperative is disappointed to note that when the Canada-Europe trade agreement, the Trans-Pacific Partnership and the USMCA have all come into effect, more than 15% of the Canadian market will be supplied by imports.
Only major Canadian processor to display 100% Canadian milk logo on all products
Despite these developments, Agropur remains committed to offering Canadians dairy products made with 100% Canadian milk. “With the recent arrival of American fluid milk on Canadian store shelves and the signing of the international trade agreements, it is more important than ever to know where the products we buy come from,” says Robert Coallier, CEO of Agropur. “Agropur was the first and remains the only major national dairy processor to display the 100% Canadian certification logo on all the products it sells under its own brands.” The logo certifies that the milk used in the product was sourced in Canada.
Consumer response to Agropur products remained positive. Agropur’s brands maintained their growth and many gained market share during the year. Natrel held its status as the Canadian leader in the fine-filtered, lactose-free and organic categories.
OKA cheese, which celebrated its 125th birthday during the year, launched OKA L’Artisan portion packs, which won the 2018 Best New Product Award in the “Cheese Snack” category. OKA was also a winner at the prestigious Sélection Caseus awards for artisanal cheese in 2018, with OKA L’Artisan taking first prize in its category.
iÖGO, which turned 6 during the year, is the favourite brand of millennials in its segment. IÖGO PROTEINe is the fastest-growing Greek yogurt in Canada and was voted 2018 Product of the Year in the "Dairy" category.
Agropur also won 5 gold medals at the World Championship Cheese Contest in a field of 3,400 products from 26 countries, including the award for the world’s best camembert, made in Saint-Hyacinthe.
First dairy business accelerator
In order to leverage innovation to drive its growth, Agropur has created the Inno Agropur platform, the largest dairy industry innovation program in North America. In 2018 it launched Inno Accel, North America’s first dairy business accelerator. Inno Accel matches Agropur’s knowledge and know-how with the dynamism of high-potential start-ups in order to reinvent dairy and offer consumers new experiences. The first cohort of five start-ups from Canada and the U.S. has completed the program.
The strength of the cooperative model
In keeping with its cooperative values, Agropur published its first full corporate social responsibility report in 2018. The document attests to Agropur’s social, economic and environmental commitments and describes its main initiatives to help build a better world.
Retirement of Agropur President René Moreau
“For 80 years, our members have made solidarity and profitability the inseparable twin pillars on which our Cooperative’s viability rests,” says Agropur President René Moreau, who is taking retirement after 21 years as a member of Agropur’s Board of Directors, including 5 as Vice-President and the last 2 as President. “I have been a witness to Agropur’s transformation and I have had the privilege of playing an active role in it. I have seen the extent to which the Cooperative is at once a powerful defender of its members’ interests and a catalyst for progress.”
For more information
Agropur Cooperative’s annual report is available as of today on the Agropur website, at agropur.com.
Agropur Cooperative is a North American dairy industry leader founded in 1938. With sales of $6.7 billion in 2018, the Cooperative is a source of pride to the 3,161 members and 8,800 employees who work together in pursuit of a shared goal: “Better Dairy. Better World.” Agropur processes more than 6.2 billion litres of milk per year at its 39 plants across North America and boasts an impressive roster of respected brands and products, including Natrel, OKA, iÖGO, biPro, Agropur Grand Cheddar, Olympic, Farmers, Island Farms and Québon. Agropur’s head office is certified LEED Silver. www.agropur.com
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