Granny’s merges with Quebec co-op, creating poultry giant

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This article was published 04/07/2019 (2514 days ago), so information in it may no longer be current.

Granny’s Poultry Cooperative has merged with a large Quebec-based poultry co-operative, Exceldor, to form a national poultry production operation that will generate $1 billion in annual revenue.

The combined entity will operate as Exceldor, but the Granny’s brand will continue to be used in Western Canada.

Craig Evans, the CEO of Granny’s, said, “This was a great opportunity for us and the real beauty of this is that we get to remain in the co-operative. We will benefit by being a much bigger player.”

More than a year in the making, the merger allows improved efficiency as two large poultry producers, which are regulated by the supply management system, will be able to achieve better economies of scale in dealing with the retailers that they both already sell to.

“When you look at the retail consolidation that has taken place over the past five to 10 years… there are fewer and fewer players,” Evans said. “We both deal with Loblaws and Sobeys and Costco and these types of organizations and this will give us better reach and better leverage to deal with these guys. There are certainly lots of synergies.”

René Proulx, Exceldor’s president and CEO, said the main objective is to create a large co-operative that will be a leader in the poultry sector in Canada. Exceldor now has more than 3,450 employees in Canada and is owned by some 400 members in Quebec, Ontario, Manitoba and Saskatchewan.

“By forging new alliances with business partners with whom we share a common vision and values, Exceldor is becoming a key player across Canada, enabling us to better serve our customers nationally and to generate value for our members, employees and partners,” Proulx said.

Granny’s will definitely be the smaller partner in the merged entity with about $180 million in annual revenue, about 600 employees and about 165 producer members. All the producer members of Granny’s co-operative voted in favour of the merger.

In addition to consolidation that is happening in the retail customer base, the poultry co-operatives are also being mindful of incremental increases in access to the Canadian domestic market that will take effect with ratification of the new North American free trade agreement as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

”But this is more about how we grow as Granny’s and Exceldor and how do we better serve our customers and all of our major customers are now national chains,” Evans said.

Evans pointed out that within the supply management quota system, he is not able to increase production of chickens or turkeys at Granny’s production facility in Blumenort, Man.

“The only way we can grow is through consolidation,” he said.

Among other things, the merger means the combined entity will control the two largest brands of turkeys in the country. Exceldor has had the rights to produce and sell Butterball-branded turkey in Canada, which is the country’s top turkey brand, and Granny’s Turkey is the second largest brand.

martin.cash@freepress.mb.ca