The same day global grain giant Glencore Xstrata announced it had regulatory approval to transfer 210 former Viterra farm retail outlets to Agrium, making that company the largest farm retailer in Canada, a smaller, but perhaps more significant celebration was taking place in Winnipeg.
On Sept. 5, Univar, a global giant in its own right, was celebrating 55 years in business for its agricultural division, which supplies products such as herbicides and supply-chain services to independent retailers across Western Canada.
Why a 55-year celebration? Because five years ago, when the division could have celebrated its 50th anniversary, no one felt much like celebrating.
Univar, which first formed as Van Waters and Rogers in British Columbia in 1958, is no stranger to mergers itself. But it was its customer base that seemed vulnerable in the rash of consolidations sweeping through the industry in recent decades.
Instead, it was Viterra that didn't survive, or at least its retail arm.
Formed as a publicly traded company through three mergers of four former Prairie grain co-operatives, Viterra was swallowed by Swiss commodities trader Glencore shortly after wheat and barley was transferred to the open market in 2012. Glencore just wanted the grain-handling side of the business. The grain-processing and farm-retailing operations were carved off and sold.
Now, 17 of its retail outlets are finding their way back to local co-operatives through a transfer deal with Federated Co-operatives Ltd. Under the deal, FCL is buying the sites from Viterra, and will transfer those sites' ownership and operations to local retail co-ops that have already agreed to accept the facilities. FCL's 235 retail co-op owners already operate 140 retail centres in the West through the co-operative retailing system (CRS).
Meanwhile, Univar -- the company that thought its sun in the agricultural field was setting --is experiencing its second year of unprecedented growth.
"With all the consolidation in the industry, naysayers said the independents wouldn't survive," said Rick Pierson, vice-president of Univar's agricultural division. "We've seen two consecutive years of record growth. Independent retail sales are stronger than ever."
Pierson estimates the independent dealers it serves have parlayed their local connections into a market share of nearly 45 per cent. "I think part of that is growers like to shop local and the independent dealer lives in the town, he spends money in the town, his kids go to school there and he raises his family there," he said. "It's a local thing. I think that's a big part of it."
It seems there is still an opportunity for the smallest businesses to thrive by capitalizing on how well they know their customers and by tapping into supply-chain networks that maintain their competitiveness.
Laura Rance is editor of the Manitoba Co-operator. She can be reached at 204-792-4382 or by email: email@example.com.