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The Canadian Dairy Industry

The Canadian Dairy Industry. Rationalization. The Canadian Dairy Industry. 3 rd largest sector of the Canadian agri-food economy after grains and red meat 281 federally inspected processing plants

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The Canadian Dairy Industry

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  1. The Canadian Dairy Industry Rationalization

  2. The Canadian Dairy Industry • 3rd largest sector of the Canadian agri-food economy after grains and red meat • 281 federally inspected processing plants • $10 billion, accounting for 13.7% of all processing sales in the food and beverage industry in Canada (A snapshot, 2007)

  3. The Canadian Dairy Industry • Has followed the same rationalization process as most other food and beverage processing industries with • a trend toward fewer but larger firms and • plants operated by fewer people • as a result of a significant amount of merger and takeover activity (The Canadian, 2009)

  4. The Canadian Dairy Industry • 26,000 people working on dairy farms and • 20,500 other workers at the primary processing level (A snapshot, 2007)

  5. The Dairy Farm, 2001 compared to 1970 • Number of farms 19,000 • ↓ 84 % • Number of cows • ↓ 52% • Average number of cows/farm 59 • ↑ 159% • Volume of milk/farm • ↑ 515% (A snapshot, 2007)

  6. The Dairy Processing Industry • 1965: 1413 plants • 2001: 292 plants • Major companies include • Parmalat, Italy – bankrupt in 2003; restructured • Saputo, Canada - $5 billion sales; world’s 19 largest dairy producer • Neilson, Canada - $600 million sales (A snapshot, 2007) (Saputo, 2008)

  7. Neilson Dairy • Founded 1893: a small grocery store and 1 cow • Acquired by George Weston in 1947 • Weston already owned Donlands Dairy in eastern Toronto, and the Royal Dairy in Guelph • Also in 1947, acquired Clark Dairy in Ottawa • In 1981, the company incorporated all three under one corporate structure, giving them all the popular Neilson brand name

  8. Neilson Dairy • In 1987, Neilson purchased the Canadian operations of the Cadbury Confectionery Company, and started producing Dairy Milk, Caramilk and several other brands. • In 1981, Neilson also got exclusive distribution rights and a manufacturing license to produce Haagen-Dazs premium ice cream.

  9. Neilson Dairy • In 1990, William Neilson Ltd. sold its ice cream production business to Ault Foods and • restructured into two separate companies: • Neilson Cadbury, based on Gladstone Ave., producing chocolates and confections; and • Neilson Dairy, based in Halton Hills (Georgetown) and with a facility in the former Clark Dairy premise in Ottawa, producing milk products (Company, 2009)

  10. Neilson Dairy • George Weston Limited sold Neilson Cadbury in 1996. • October 2008 Saputo purchased Neilson Dairy business from George Weston Ltd. for $465 million in cash (Saputo, 2008)

  11. The Future • Static or declining growth: • Based on declines for the past 15 years due to an aging population, growing consumer preference for low-fat foods and immigrants who consume fewer dairy products • heavy competition from other beverages such as bottled waters, juices and soft drinks. (The Canadian, 2009)

  12. The Future • Saputo will continue to acquire more small dairy companies in Canada, US and Europe • Less focus on milk as a beverage and more on milk products as snacks and ingredients in order to appeal to immigrants

  13. References The Canadian dairy processing industry. (2009, April 8). Agriculture and agri-food Canada. Retrieved October 19, 2009, from http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1171984113239&lang=eng Company history. (2009). Neilson dairy. Retrieved October 15, 2009, from http://www.neilsondairy.com/en/index.htm Saputo swallows Neilson dairy for $465M . (2008, October 22). CBC news blog. Retrieved October 19, 2009, from http://cbc-news-blog.blogspot.com/2008/10/saputo-swallows-neilson-dairy-for-465m.html A snapshot of the Canadian dairy industry. (2007, April 18). Ministry of agriculture food & rural affairs. Retrieved October 14, 2009, from http://www.omafra.gov.on.ca/english/livestock/dairy/facts/snapshot.htm

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