Canadian dairy co-operative Agropur has reached a deal to sell its yogurt processing business and plants to the Canadian arm of French dairy giant Groupe Lactalis.
The deal, as announced Thursday, will include Agropur’s plants at Granby, Que. and Delta, B.C. plus the operations at a distribution centre it leases at Longueuil, Que. Financial terms of the deal weren’t disclosed.
Agropur’s Canadian yogurt business, operating under the name Ultima Foods, includes the Iogo and Iogo Nano yogurt brands, as well as the Olympic brand of yogurt, sour cream and kefir. Lactalis’ current Canadian yogurt roster includes the Astro, Siggi’s and Stonyfield brands.
Yogurt today accounts for about two per cent of Agropur’s milk processing volume and three per cent of its sales, the co-operative said.
“Current market conditions, increasingly aggressive competition and our desire to streamline our business model have prompted us to focus on our most strategic lines of business,” Agropur president Roger Massicotte said in a release.
The yogurt sale, he said, is meant to allow Agropur “to pursue our growth strategy and concentrate our investments.”
“We are very proud of all we have accomplished with Iogo and Olympic, two brands that have played an important role in growing the yogurt category in Canada,”Agropur CEO Emile Cordeau said in the same release.
“However, Agropur’s decision to focus its efforts on its strategic segments means we must streamline our operations. We thank the dedicated employees whose tireless efforts have built Iogo and Olympic into brands consumers trust.”
The co-operative’s yogurt business includes about 450 employees, who will join Lactalis.
The Ultima yogurt business started in 1993 as a joint venture between Agropur and Agrifoods International Co-operative. The j.v. went on to buy B.C. yogurt processor Olympic Dairy in 2004 and introduce Iogo as a new Canadian brand in 2014. Agrifoods International sold its stake to Agropur in 2017.
The deal with Lactalis is subject to the usual conditions — including regulatory approval from the federal Competition Bureau.
The deal “will reinforce Lactalis Canada’s position in the dairy category and will help enable key customer partners in both the retail and foodservice channels (to) meet the growing consumer demand for yogurt products,” Lactalis Canada CEO Mark Taylor said in a separate release.
The company, he said, “is confident that this transaction will positively support dairy farmers, retailers, consumers” and the affected plants’ home communities.
Lactalis, which took over Parmalat in 2011, today operates 17 Canadian plants in Ontario, Quebec, Alberta and Manitoba. Among recent acquisitions, it set up a deal earlier this fall to buy several cheese businesses from Kraft Heinz, among them its grated cheese business in Canada. — Glacier FarmMedia Network