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Canada’s Gay Lea and Vitalus Announce Joint Venture

Canadian dairy co-operative Gay Lea and value-added dairy processor and supplier Vitalus have announced a joint venture for the processing of dairy products and butter in Winnipeg, Manitoba.

Under the joint venture between the Ontario-based co-op and British Columbia-based processor, the partners plan to upgrade an unnamed, existing processing plant in Winnipeg with the goal of increasing drying capacity and butter output in Western Canada.

“Vitalus is pleased to partner with Gay Lea Foods and Dairy Farmers of Manitoba to increase much needed drying capacity while further developing the dairy ingredients industry, adding growth and new market opportunities for Canadian dairy,” said Philip Vanderpol, President, Vitalus Nutrition Inc.

The venture brings together Vitalus, a producer and supplier of customized dairy ingredients that boast superior nutritional value and functionality that are used in the production of confections, snack foods, infant formula, protein drinks, nutrition bars, and dairy products, and Gay Lea Foods Co-operative, which is owned by more than 4,000 Canadian farmer-owners and accounts for 35 percent of the cow’s milk for Ontario. Gay Lea has also opened its membership to licensed dairy goat farmers and now processes goat milk into value added products to meet the growing demand in the Canadian market.

“Gay Lea Foods is excited by the opportunities that the joint venture brings to both the Co-operative and Canadian dairy, through increased processing capacity for ingredients and butter while extending our open membership to farmers in Manitoba,” said Michael Barrett, President and CEO, Gay Lea Foods commenting on the venture.

A Decade of Steady Growth

A Dairy Sector Report issued earlier this year by Farm Credit Canada states that the country’s dairy consumption has seen a decade of slow by steady growth, and is projected to continue to see continued growth on the back of higher consumption in butter, yogurt, and specialty cheeses.

“The industry is entering a new era, in which modernization of both dairy production and management practices will be key to future success,” said J.P Gervais, chief agricultural economist with Farm Credit Canada. “Innovation is the primary driver of productivity in Canada’s dairy sector. It allows producers to tap into the growing demand for specialty dairy products in Canada, as well as remain competitive in our domestic market.”

In the five years between 2009 and 2015, Canada saw consumption of butter increase by 11 percent as consumers began opting for more wholesome foods and ingredients, and as Christmas 2015 approached, the country was dealing with low butter supplies, indicating strengthening demand.

However, although butter and yogurt are expected to be the main drivers above milk and ice cream for growth in the Canadian dairy sector, milk consumption in the country is still expected to increase by 6.8 percent between 2015 and 2024, according to long-term projections from Agriculture and Agri-Food Canada.

“Modernization of both dairy production and management practices will be key to our competitiveness,” said Gervais. “Continued refinement of management practices could result in improved efficiency and productivity in dairy operations of all sizes. This will support a healthy Canadian dairy sector in the long-term.”

Answering the Call

This joint venture between Gay Lea and Vitalus will position the two partners to capitalize on these growth trends within the sector. It will also open a new market for Manitoba dairy farmers, as Dairy Farmers of Manitoba will be supplying the raw milk for the plant and will have the opportunity to join Gay Lea as member owners.

“Dairy Farmers of Manitoba is pleased to provide milk for this joint venture,” said David Wiens, Chair, Dairy Farmers of Manitoba. “This new opportunity and our commitment to working together to increase processing capacity in Manitoba will help ensure the continued sustainability of the Canadian dairy industry today and for future generations.”

Lynda Kiernan

 

 

 

 

 

The post Canada’s Gay Lea and Vitalus Announce Joint Venture appeared first on Global AgInvesting.


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