The Canadian International Grains Institute’s name and brand will carry on despite a merger with Cereals Canada effective June 1.
“From a Cigi standpoint I don’t think much is going to change,” Trent Rude, Cigi’s chair and director of merchandising at Viterra, said in an interview April 14.
“One of the main things we wanted to do is maintain the brand of Cigi. In the milling industry globally it has a very, very strong brand and is very well respected when it comes to nations around the world that are buying Canadian wheat and milling Canadian wheat. That was one of the main, important things.”
Cigi, formed in 1972 to support domestic and international field crop processors with independent technical services such as end-use quality evaluations, milling and end-use support, will maintain its brand as a division within Cereals Canada, Rude said.
It was decided to maintain the Cereals Canada name to reduce confusion.
In recent years most of Cigi’s focus has been on wheat and durum functionality, overlapping with some of what the Canadian Grain Commission (CGC) does, raising questions about the CGC’s future mandate.
And while the respective boards of the two organizations strongly endorsed merging when they met April 13, the National Farmers Union panned the move, fearing the end-game is to undermine the CGC.
Why it matters: While many farmers only have a vague idea what Cigi does, thousands of international millers, bakers, pasta and noodle makers know it well. Farm leaders and grain companies agree it plays a valuable role in developing and maintaining wheat customers.
The ‘new’ Cereals Canada will begin June 1, with a new 16-member board of directors. One of its first jobs will be to select a chief executive officer.
Cam Dahl has been Cereal Canada’s CEO since its creation in 2013, following dismantling of the Canadian Wheat Board Aug. 1, 2012.
The organization represents Canada’s cereal value chain on issues such as market access, market development, advocacy and innovation. Dean Dias is Cigi’s interim CEO.
Cereal Canada’s new board and CEO will consider where to locate, Cereals Canada chair and Richardson’s senior vice-president corporate affairs and general counsel, Jean-Marc Ruest, said in an interview April 14.
Cereals Canada, with six employees, is located in the old Grain Exchange Building in downtown Winnipeg.
Cigi has just under 30 staff located a few blocks away in the Canadian Grain Commission building.
“I think it would only make sense for co-location of all of the employees, and the new merged entities, under one roof,” Ruest said.
“Cereals Canada doesn’t have a very large staff so it’s fairly easy for them to move in with Cigi, but again that will be a determination the new board and their eventual CEO will work out.”
Ruest added there are pros and cons to be located downtown.
One positive is it’s close to a number of grain company offices, making it more convenient for interaction between company executives and visiting grain buyers.
But downtown isn’t the easiest place to have test flour mills and other grain-processing equipment.
Collaboration between Cereals Canada and Cigi had been increasing, including on New Crop Missions promoting Canadian wheat and durum.
In May 2018 the Manitoba Co-operator first reported the two were investigating a formal merger. At the time their respective leaders said they saw a lot of common ground, including mostly having the same farm and industry members.
“The two groups work so well together and there’s so much overlap with a lot of things that Cereals Canada is doing and what Cigi is doing,” Rude said.
“The leadership group was very optimistic and very comfortable with the collaboration and the staff seemed to be as well.”
The farmer-members in Cigi are the wheat commissions in Manitoba, Alberta and Saskatchewan, while the industry is represented by a number of grain companies.
The same holds for Cereals Canada, however, it also has farmer-members from grain organizations across Canada.
Cereals Canada’s role, as set out in its new bylaws, will be much the same too, Ruest said.
It’s expected farmers will pay slightly more in membership fees than they do now. Under the old fee structure farmers, grain companies and life-science and seed companies contributed 39, 39 and 22 per cent respectively, to Cereals Canada. Going forward the tab will split 50-50 between farmers and companies, Dahl said in an interview April 22.
Farmers and companies will pay $2.4 million a year each, plus another $2 million or so will come from the federal government through the Canadian Agricultural Partnership.
The fee structure change also means farmers will make up half of Cereal Canada’s directors.
“It’s not going to be huge (fee increase),” Manitoba Wheat and Barley Growers’ Association chair Fred Greig said in an interview April 22.
Several grain companies that withdrew from Cereals Canada might rejoin.
“So in the end it may be very similar to what we’re presently spending,” Greig said.
There could be other new members such as flour millers, Dahl said.
Some wondered if Cigi’s reputation might be undermined by a merger.
“I don’t think that’s going to make much difference,” Ruest said.
Cigi is known for its objectivity, so long as that remains, so will its credibility with buyers, he said.
“It’s almost like they (Cigi) provide you with the owner’s manual of what your Canadian wheat is going to be like this year,” Ruest said.
“There are some years where what Cigi is saying is ‘unfortunately the quality of Canadian wheat this year will not be as good as it was in previous years. That being said, here is how we can mitigate those quality issues. We have found through testing we can adjust processes in certain ways to make up that quality difference’.”
Canada still has a great reputation for high-quality and consistent-quality wheat, Ruest said. Cigi is there to help Canadian wheat buyers get the most from the product and demonstrate Canada’s commitment to customer satisfaction, he said.
“We’re not just there for the quick sale.”