Gay Lea Foods Co-operative Ltd. announced it will be making a record investment of $140 million over the next four years to transform Canada’s dairy sector.
Formed in Mississauga, Ontario in 1958, the Gay Lea dairy cooperative has grown to become the largest dairy cooperative in Ontario representing 4,000 members operating 1,300 farms and producing 35 percent of Ontario’s cow milk.
The unprecedented investment on the part of the co-op is being driven by the vision of creating an innovative and market-driven business that will process more Canadian milk into ingredients that customers demand.
“As a dairy farmer and co-operative member owner, I am excited that Gay Lea Foods is driving growth through innovation and the development of new markets that will increase demand for milk from Canadian dairy farms,” said Steven Dolson, Chair, Gay Lea Foods. “I am also proud that Gay Lea Foods is once again leading the way by demonstrating that rural Ontario is capable of world class innovation and food manufacturing.”
Beginning in early 2017, phase one of the project will include a $60 million plan for expansion in the village of Teeswater, Ontario where Gay Lea member business Teeswater Creamery exists, and upgrades to the co-op’s manufacturing facilities in the Toronto area with the goal of increasing capabilities, competitiveness, and cost efficiencies while also reducing the businesses’ environmental impact.
Additionally, the first phase of the investment will call for the construction of a $3 million Research & Development Center of Excellence in Hamilton, Ontario which will serve as a working laboratory and as an innovation incubator. This facility is being developed to act as a facilitator and connector between the co-op’s R&D initiatives and its commercialization efforts.
Driving its Own Transformation
Progressive Dairy Canada reports that in March of this year, Michael Barrett, CEO of Gay Lea Foods spoke of the need for Canada’s dairy industry to drive its own transformation while addressing the 2016 South Western Dairy Symposium held in Woodstock, Ontario.
“I believe the dairy industry has been counting on certain parties to be able to change the industry, and today we are going to have to be able to rely on ourselves,” said Barrett.
“We are going to have to be able to advocate for and be able to demand change in order to transform,” he said. “Because we are not looking to take down the (supply management) system we have today. What we are looking to do is make the current system better. And I think that’s one of the challenges we have today.”
Despite being active in a sector faced with multiple challenges, Gay Lea Foods has been on a path of sustained growth and diversification in recent years.
Acquisitions include Ivanhoe Cheese in 2008, Salerno and Hewitt’s Dairy in 2014, and Black River Cheese and Stirling Creamery so far this year. Another strategic move by the co-op was its recent acquisition of a minority stake in Mariposa Dairy Ltd. – a producer of goat and sheep cheeses that sources its raw milk from Ontario goat and sheep farmers.
In addition, just last month, the co-op announced it has agreed to enter a joint venture with Vitalus Nutrition through which the two companies plan to modernize and upgrade an existing manufacturing facility in Winnipeg, Manitoba for increased butter production.
Looking forward, Mr. Barrett expressed his optimism about the latent potential in Canada’s dairy processing space when addressing the South Western Dairy Symposium, reports Progressive Dairy.
“I would rather be a utopian idealist who believes that with a little bit of effort and teamwork, you can actually solve this issue,” he said. I don’t want to be a gravestone cynic, who says you might as well give up because the sky is falling.”
“We can move forward by working together, one voice, dairy leadership and being able to understand that we are indeed on the edge of a renaissance of dairy.”