“Thanks to the swift and coordinated efforts of our team, the dedication of Bothwell Cheese employees, and the support of local community partners, we are thrilled to announce that production has resumed at Bothwell Cheese,” said Suzanna Dalrymple, president and CEO of Gay Lea Foods, in a news release today.

A fire broke out in the facility on June 1. No one was injured, but the area of the plant that processes whey, a cheesemaking byproduct, was damaged “extensively”, Gay Lea Foods said.

On June 3 the warehouse was open and filling orders, but the rest of the plant and its storefront were closed, Mike Langdon, Gay Lea’s vice president of corporate and co-operative affairs said.

After cleaning and inspection, packaging resumed on June 10, the news release said. The plant began operating “at close to full capacity” yesterday.

“The full re-opening depended in part on local farmers, who stepped up to provide an alternate solution for whey disposal,” it added.

This alternate solution involved discarding whey into farms’ manure storage lagoons, a move that Gay Lea Foods said was approved by the province.

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All employees were evacuated safely according to a news release from Gay Lea Foods, which owns the southeast Manitoba company.

The fire damage is confined to a section of the cheese production facility, said Mike Langdon, Gay Lea’s vice president of corporate and co-operative affairs. An investigation into the cause of the fire is ongoing.

In an email to the Manitoba Co-operator, he said it was too early to say how long cheese production would be down.

“We are encouraged by our team’s initial inspection,” he said.

Bothwell Cheese’s warehouse is operating and filling customer orders. The Factory Cheese Store is closed, but Langdon said they were optimistic it could be reopened this week.

The production facility typically receives 110,000 litres of milk per day, seven days a week, according to the company’s website. It produces 15,000 kg of cheese per day.

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Montreal-based Saputo announced last Thursday it has construction underway on a new $240 million cut-and-wrap cheese plant in the Milwaukee suburb of Franklin, to be up and running at capacity by the third quarter of 2025 (all figures Cdn$).

When the new plant is ready, Saputo said it expects to transfer other packaging operations there. To that end, the company said it plans to close its plant at Big Stone City, S.D., about 200 km south of Fargo, in the third quarter of next fiscal year, and another Wisconsin plant at Green Bay in its 2025 Q3.

Also, another Saputo plant at Tulare, California previously slated to be shut down will now get $75 million in renovations to convert to string cheese packaging, to be up and running at capacity by Q3 of 2025.

After that, a Los Angeles-area string cheese packaging plant, at South Gate, will be closed and its work transferred to the converted Tulare site, about 300 km north.

Saputo said the investment at Tulare “will help support the company’s growth ambitions and sustain its leadership position in the string cheese product category.”

In all, Saputo said, while the new Franklin plant alone is expected to take on about 600 people, about 720 positions will be affected in the pending plant closures. Affected workers will be offered opportunities to relocate to other Saputo plants and, if no spots are available, the workers will get “severance and outplacement support.”

The projects announced last Thursday “aim to solidify our ability to meet current and future customer demand and further improve our cost structure,” said Saputo CEO Lino Saputo said in a release.

Improving its capacity to produce goods in its higher-margin value-added categories will “fuel our aspirations to further enhance our value proposition as a high-quality, low-cost processor” in the U.S., he said.

The plant consolidations and investments are expected to improve Saputo’s bottom line by up to $74 million per year ($55 million after taxes) by the end of its fiscal 2027, the company said.

Saputo’s U.S. dairy division makes, sells and distributes a “vast assortment” of cheeses, including mozzarella, American-style and specialty cheeses, among other products. In its fiscal 2022, ending last March 31, U.S. revenue made up 43 per cent of the company’s total.

During that fiscal year, the company said in its annual report, its U.S. dairy division was its “most challenged platform,” up against “substantial commodity volatility” as well as “labour, inflation and supply chain pressures.”

The company’s U.S. arm in fiscal 2022 booked gross revenue of $6.41 billion, up from $6.12 billion the previous year, but the U.S. arm’s EBITDA (earnings before interest, taxes, depreciation and amortization) came in at $288 million for 2022, down from $567 million.

Saputo’s U.S. sector has since booked improved revenue and EBITDA in each of its first and second quarters for fiscal 2023, for combined EBITDA of $199 million on revenue of $4.1 billion, up from $163 million on $3.039 billion in the year-earlier first half. — Glacier FarmMedia Network

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The plant’s 250-odd workers, represented by the Syndicat des salaries de la fromagerie — an arm of Centrale des syndicats democratiques (CSD) — have voted 73 per cent to ratify an agreement in principle with the company and were to return to work Monday (Aug. 8), the union said in a release Wednesday.

Off the job since June 29, the employees “will gradually return to work next week to clean the plant in order to resume cheese production as soon as possible,” Agropur said in a separate statement Wednesday.

Producteurs de lait du Quebec president Daniel Gobeil on July 22 had written to the company, reiterating the dairy farmer group’s request for at least a minimal level of processing work to continue at the facility, to prevent milk waste.

Quebec media reports put the Granby plant’s processing capacity at about 800,000 litres per day.

The Granby plant will now start receiving milk “in the coming weeks,” Agropur said Wednesday, which “will help ensure the supply of our customers and avoid further food waste.”

Agropur said it “believes that it has reached an agreement with the employees that will ensure stability for the coming years.”

The new collective agreement expires July 23, 2026, the union said.

“If we have reached an agreement that suits our members, it is because they have remained united throughout the conflict,” CSD counsel Bernard Cournoyer said in the union’s release.

The deal includes increases of between 2.5 and 3.5 per cent in annual worker salaries, increased RRSP contributions from the company and concessions on allowances and advances due to disability-related absences, and on choosing vacation days, the union said. — Glacier FarmMedia Network

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Montreal-based Saputo announced Monday it has an all-cash deal in place to buy Wensleydale Dairy Products Ltd. for 23 million pounds (about C$39.7 million).

Pending U.K. regulatory approvals, the deal is expected to close in the second half of this month, after which Wensleydale, which has about 210 employees at two North Yorkshire plants, would join Saputo’s U.K. dairy division as part of its Europe sector.

Saputo said the Wensleydale product line, which is exported worldwide, “will complement and broaden the company’s existing range of British cheeses” such as Cathedral City and Davidstow cheddars.

The Wensleydale business sources its milk from 40 North Yorkshire-area farms and uses its own unique cheesemaking starter cultures, Saputo said.

Wensleydale “is home to an immense amount of passion, care, and tradition,” Saputo CEO Lino Saputo said in Monday’s release.

Wensleydale was awarded Protected Geographical Indication (PGI) status by the European Commission in late 2013 “to protect the authenticity of its Yorkshire Wensleydale cheese,” the British company noted.

European PGI status recognizes the “distinctive qualities” of the cheese as well as the geographical area in which the cheese is made, “in its rightful home of Wensleydale,” the company said last month.

Last month, the company noted it would also seek status for Yorkshire Wensleydale cheese under the recently introduced U.K. geographical indication (GI) schemes to “help shoppers differentiate it over other Wensleydale cheeses, made in other counties.”

“Our creamy, crumbly iconic Yorkshire Wensleydale cheese is extremely important to us and something we are proud to protect. It is important for us and our loyal customers that it is handcrafted here in its rightful home of Wensleydale,” Sandra Bell, the British company’s marketing manager, said in a release at the time.

“The GI schemes and logos are essential to differentiating unique British brands on-shelf, ensuring we continue to protect the authentic heritage and provenance of handcrafted Yorkshire Wensleydale cheese.” — Glacier FarmMedia Network

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DFC and Toronto-based, TSX-traded Pizza Pizza — which as of March 31 included 622 Pizza Pizza and 103 Pizza 73 outlets across eight provinces — announced Thursday the company will showcase DFC’s Blue Cow in select Pizza Pizza marketing campaigns nationwide.

The Blue Cow logo rollout began in Ontario this spring and will spread across all Pizza Pizza and Pizza 73 locations throughout Canada later this year, DFC said.

Upgraded to its current form in 2016, the Blue Cow is DFC’s symbol certifying products as made with 100 per cent Canadian milk and milk ingredients.

In this case, DFC said Thursday, the Blue Cow “assures Pizza Pizza’s customers that the mozzarella cheese topping they know and love is made with 100 per cent Canadian milk.”

The logo has been displayed on product labels and in campaigns by processors such as Agropur, Lactalis, Gay Lea, Organic Meadow, Fairlife and Bothwell Cheese, as well as by fast food chains such as McDonald’s Canada in a soft-serve ice cream campaign last summer.

In all, DFC said, the logo has been used by over 500 licensees, including about “three dozen” restaurant chains, on about 8,600 products.

“DFC looks forward to partnering with Pizza Pizza as it expands across the country, further supporting our commitments behind the Blue Cow that have made it one of Canada’s most trusted brands,” DFC president Pierre Lampron said in a release.

The logo, he noted, is recognized by “no fewer than nine out of 10” Canadians.

“Customers know the Blue Cow and now they can support Canadian farmers by grabbing a slice of their favourite pizza,” Adrian Fuoco, vice-president of marketing for Pizza Pizza Ltd., said in the same release.

Pizza Pizza, he said, is “a homegrown success story, enriching the livelihoods of over 700 local franchisees, and the Blue Cow reaffirms our strong ties to hardworking Canadian farmers and small business owners.”

The chain in recent years has built up backstories for several of its products and ingredients, billing its chicken products as coming from birds raised without antibiotics and fed all-vegetable-grain diets, and pizza dough made with 100 per cent Canadian wheat. It also committed itself to source egg ingredients from “100 per cent cage-free sources” by 2025.

The chain has also launched new products such as plant-based protein toppings and crust options such as a cauliflower-based crust and an “Uncrust” for keto dieters.

‘Food preparation’

The Canadian chain’s cheese sourcing hasn’t always been Blue Cow-grade, however.

Eight years ago, it was a sore spot with DFC and Canada’s provincial milk marketing boards, when the chain was found to be importing pre-packaged pizza topping kits combining shredded mozzarella and sliced pepperoni from the U.S.

The pizza kits at that time were classified for tariff purposes as a “food preparation” and thus weren’t subject to the tariff rate quotas (TRQs) imposed on dairy imports under Canada’s supply-managed dairy marketing system.

The dairy organizations at the time criticized the chain’s actions as “a blatant example of circumvention of the government’s tariff system” on cheese imports.

DFC and the provincial boards in 2013 tried to challenge the Canada Border Services Agency’s (CBSA) classification of the pizza kits at the Canadian International Trade Tribunal (CITT), but were rejected for lack of standing.

Later that year, the federal government plugged that loophole by requiring that the cheaper U.S. mozzarella in such kits be classified under the tariff lines for fresh cheese, regardless of their packaging.

The Canadian Restaurant and Foodservices Association, a longtime critic of Canada’s dairy pricing framework, criticized the federal government at that time for having “suddenly shut down a pizza cheese import process that the courts have twice upheld.”

Deliveries up

In its year-end financials in early March, Pizza Pizza reported overall system sales of about $488.3 million for the year ending Dec. 31, down from $553.5 million in 2019.

Same-store sales growth was down 12.5 per cent in 2020 from 2019 on the pandemic-related loss of walk-in sales and “non-traditional” sales such as those from its kiosks at sports and entertainment venues.

However, the company noted an increase in delivery sales at its Pizza Pizza and Pizza 73 stores alike, which “partially offset this reduction.” — Glacier FarmMedia Network

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Internationally it’s a perennial target in trade negotiations, and particularly the dairy industry. That sector, over the years, has endured the ‘death of a thousand cuts’ as every time Canada has inked a trade deal, it’s seen another piece of the pie parted out to foreign competition.

Internally pundits, think-tanks and others have enjoyed taking more than a few potshots at it. It’s a form of orderly marketing that’s been decidedly out of favour for decades, as market economics and globalization have been on the ascendancy.

The latest salvo is a report, Supply Management 2.0, from academics at the University of Guelph and Dalhousie University.

As our Glacier FarmMedia colleague John Greig reports on the front of our livestock section, the authors arrive at four main conclusions:

•  Create a voluntary program for farmers to exit the industry.
•  Make significant changes to increase transparency at the Canadian Dairy Commission.
•  Remove interprovincial trade barriers on dairy products and create an innovation fund for the sector.
•  Initiate a 20-year plan to reduce general tariffs, develop an export strategy, create a Canadian brand and provide an incentive for innovation.

Some of these recommendations make sense, mainly the voluntary exit program and the call for more transparency at the dairy commission.

As the authors rightly point out the voluntary exit program would help offset what appear to be inevitable quota losses as free trade agreements begin allowing offshore competitors to take their bite.

And the dairy commission is, at present, the very definition of a captive regulator, staffed almost entirely by veterans of one dairy organization or another. It’s unpalatable when the telecommunications sector does it to the CRTC, and the fact it’s being done here for the benefit of the dairy sector won’t make this any more palatable for Canadian consumers, should they ever fully cotton on to how the sector is structured.

But other parts of the report seem more like wishful thinking by adherents to what appears to be an evaporating markets consensus.

The call to remove interprovincial trade barriers, for example, seems a fairly transparent attempt to target the Quebec dairy sector. One may not care for interprovincial trade barriers, but they exist in many sectors, and it seems a stretch to expect the dairy sector to lead this charge.

An even greater stretch is the desire to turn Canada into some sort of a ‘brand Canada’ export powerhouse. One has to wonder exactly what the authors envision. It won’t be fluid milk. And milk solids are a lowest-common-denominator product when we’re mainly talking about their use as ingredients for processed goods.

I seriously doubt any major food manufacturer will be looking to adopt the “Intel Inside” strategy.

That leaves premium dairy products like fine cheeses, which have proven popular the world over. There’s only one problem with that strategy — it takes a lot of skill and knowledge to produce these, and right now Canada simply doesn’t have enough of either.

Here Quebec is furthest down this road. It’s lured European cheese makers to come to Canada, and it’s the only province where raw milk cheese that’s aged less than 60 days can be sold.

In Manitoba the situation is more dire. There are commercial plants that make excellent cheese, but they’re not the sort of products that seem likely to spread around the world and carve out a market niche.

And the regulatory environment, at least currently, doesn’t look to be very supportive.

Take the curious — and infuriating — case of Dustin Peltier and Rachel Isaak. The two Winnipeg foodies and restaurateurs hoped to keep one of Manitoba’s few artisanal cheeses alive and available, the famed Trappist cheese from the village of Holland.

They acquired the recipe and training from the last qualified Trappist brothers, and began making cheese. Only to run into a bureaucratic runaround from the provincial Agriculture Department.

Inspectors there insisted — despite more than a century of evidence to the contrary — that the cheese simply couldn’t be made safely from unpasteurized milk, a stance that cost the couple tens of thousands of dollars.

The report’s recommendation of a 20-year plan might be overly optimistic on this front.

And even at that, it would only amount to a drop in the proverbial milk bucket.

What risks being lost here is a secure, local and affordable source of dairy products for Manitoba citizens, something the pandemic has brought into crystal-clear focus.

It may well be time to re-evaluate supply management. But that process can’t be ideologically driven.

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The Canadian arm of Amsterdam-based Upfield said Wednesday it has bought a 164,000-square foot industrial building at Brantford and “brings a significant investment involving the purchase of land, infrastructure improvements and equipment.”

Upfield, which formed in 2018 when consumer goods giant Unilever spun off its worldwide spreads business, now bills itself as the largest plant-based consumer products company in the world.

The Violife plant-based cheese substitute brand came to Upfield in January, when it closed a deal to take over Greek plant-based and dairy-free processor Arivia.

Upfield said Wednesday it will expand its operations onto the 17.4-acre Brantford property — while ending operations at its current Toronto processing site, at Etobicoke.

The company, which has 86 employees at Etobicoke, said it “looks forward to welcoming members of its existing workforce to Brantford,” where it also expects to generate “additional employment opportunities” between next year and 2023.

The new plant, which Upfield expects to have “fully operational” by the end of 2021, will include improvements to support the company’s expanding spreads and margarine product portfolio.

Upfield said it also plans to set up a “scaled-up manufacturing platform” that will support “new innovations” such as Violife as well as the Becel line and other spreads.

Upfield Canada president Dan Bajor, in a release Wednesday, said the Brantford expansion is part of a plan to build up its space in the plant-based foods business in Canada — and that includes introducing the Violife line in this country.

The Brantford plant, he added, will supply the Canadian consumer market but also will “support the export of Violife to the United States and eventually to markets in Latin America.”

Upfield’s Becel product lines in Canada are made with canola and sunflower oil as well as palm oil and soy extracts. Its non-vegan line includes small amounts of buttermilk, while its plant-based butter substitutes include pea protein.

Its Violife line, meanwhile, is coconut oil-based. It includes cheddar, mozzarella, parmesan and feta-flavoured products for use as non-dairy substitutes in pizza, sandwiches and other food items. — Glacier FarmMedia Network

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After weak sales results and several billion-dollar writedowns over the past two years, there has been market speculation about which categories Kraft Heinz will offload from its balance sheet. The company has reportedly also looked for buyers for its Maxwell House coffee business and Ore-Ida frozen potatoes brand.

Tuesday’s deal, which is expected to close in the first half of 2021, includes Kraft Heinz’s U.S. natural, grated, cultured and specialty cheese businesses — including its Breakstone’s and Cracker Barrel brands — and its grated cheese business in Canada. Kraft Heinz is also selling its international cheese unit outside of Canada and the U.S.

The Chicago-based company will retain its Philadelphia, Kraft Singles, Velveeta and Cheez Whiz brands in the U.S. and Canada. It will also keep the Kraft, Velveeta and Cracker Barrel Mac + Cheese businesses worldwide.

A banking source not involved in the deal said the shredded cheese business in the United States would likely be attractive to Lactalis, as it is “extraordinarily profitable.”

“Buying pre-shredded cheese is like giving money away,” the source said.

Lactalis, which took over Parmalat in 2011, already sells Cracker Barrel cheese in Canada, along with brands such as Black Diamond, Balderson, Amooza, P’tit Quebec, Galbani and President.

— Reporting for Reuters by Richa Naidu in Chicago and Martinne Geller in London. Includes files from Glacier FarmMedia Network staff.

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“Everyone is under hardship,” said David Wiens, chair of the Dairy Farmers of Manitoba. “The need for food banks will only go up at this time.”

DFM, Bothwell Cheese, along with other milk transporters and processors, have donated milk and cheese to Winnipeg Harvest for many years. They’ve committed to donating an additional 6,000 kilograms of cheese in the next few months, said Lynne Roy, Bothwell’s brand manager.

This represents 60,000 litres of milk, said Wiens.

Since the COVID-19 pandemic shuttered most of the food-service industry, demand for dairy products has dropped, leading to some dairy farmers in other provinces being forced to dump milk. Wiens said Manitoba farms haven’t needed to dump milk because of the excess of milk-processing capacity in the province.

Meanwhile, with businesses closed and many out of work, food banks across the provinces have seen a 30 per cent increase in demand for food said Kiersten Haight, communications co-ordinator with Winnipeg Harvest.

In the same time, donations have dropped 60 per cent, Haight said. She explained that many donations come from food drives and private events, which are now nixed by social distancing measures.

Winnipeg Harvest, which distributes to food banks around Manitoba, is also getting fewer donations from grocery stores.

The organization has resorted to buying groceries, which Haight said it wasn’t doing before the COVID-19 crisis, which led to an urgent call for donations of money on Winnipeg Harvest’s website.

Milk and cheese are a “hot commodity” in food hampers, Haight said. Winnipeg Harvest prioritizes giving milk to pregnant women and mothers, she added.

However, dairy farmers have been told to reduce production and to expect a drop in milk blend price.

“We will have to reduce our production to the point where we don’t have the surpluses we have today,” Wiens said. “So we can maintain a livelihood for our dairy farming families.”

To stay afloat amid lower demand, farmers will need to dry off cows sooner than usual, change feeding strategies to produce less milk, or consider culling cows, he said.

Uncertainty is also taking its toll, said Wiens. They can’t predict what will happen next month or, when things begin to reopen, how much damage will have been done to the food-service industry. Meanwhile, seeding season is approaching.

“This is really kind of burdening heavily on farmers right now,” said Wiens.

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