Canada: Food Report 2015


Since the middle of the last decade, the competitive environment for Canadian food manufacturing and agriculture has changed dramatically. Increasing input and energy costs coupled with a rising Canadian dollar value challenged the competitiveness of Canadian exports globally. Additionally, increased importation of food products continues to negatively impact the trade balance in the processed foods industry.1 These circumstances have significant implications given that approximately half of the value of primary agriculture production in Canada is exported. It remains to be seen whether the recent decline of the Canadian dollar and falling energy prices will help to reverse this trend.

Despite the challenges, Canada's food and agribusiness industry has generally shown resilience. While the recent global recession drove revenues down in most manufacturing sectors, food and agribusiness sectors experienced modest increases. In response to challenges, the food and agriculture sector has restructured and transformed, and the sector continues to be a leading employer in Canada.

In 2014, the Canadian food and agribusiness sector was once again the subject of a number of high-profile transactions (see Notable Transactions, page 2). Canada continues to be a leading exporter, and a significant importer, of agricultural and agri-food products. In 2015, we anticipate growth in the global food and agribusiness sector to be fuelled by reduced input and lower energy costs and as such Canada remains well-positioned to benefit from such increased growth.

The last issue of this report provided an overview of significant transactions and certain regulatory changes affecting the food, beverage and agribusiness sector.

In this issue, we again highlight notable global and Canadian M&A transactions. We also present five feature articles. The first article discusses current trends in commercial urban agriculture and highlights significant international and Canadian initiatives. The second article discusses investment in Canadian farmland by both Canadian and international investors. This report also contains an article comparing the legal landscape of food labelling class actions in the United States and Canada and summarizes Canada's two contested certification decisions with respect to food labelling. We have also included an article outlining the requirements for labelling alcoholic beverages, as well as charts and graphs showing deal values and trends.

This report was prepared by the Blakes Food, Beverage & Agribusiness group based on non-confidential information acquired through our practice and from a review of public information. The information was gathered in the first three quarters of 2014. Our goal in preparing and presenting this report is to highlight those trends and opportunities we believe will have an impact on the food, beverage and agribusiness sector going forward.

The information contained in this report is intended for general informational purposes only and does not constitute legal advice. While care has been taken to ensure the information herein is accurate, we make no representations regarding its accuracy. This report should not be relied on to replace professional advice, legal or otherwise, relating to any specific circumstances.


Featured Canadian Transactions

Maple Leaf Sells Canada Bread to Grupo Bimbo

On May 23, 2014, Grupo Bimbo, S.A.B. de C.V. of Mexico (Grupo Bimbo) completed its acquisition of Canada Bread Company, Ltd. (Canada Bread) for aggregate cash proceeds of C$1.83-billion by way of a plan of arrangement. Canada Bread is Canada's largest bakery and the owner of the Dempster's baked goods brand, while Grupo Bimbo is one of the world's largest baked goods companies, with operations in 19 countries. The transaction was completed with the support of Maple Leaf Foods Inc. (Maple Leaf), which had held 90 per cent of the shares of Canada Bread. Shareholders received C$72 per share, a 34 per cent premium. Canada Bread was delisted from the Toronto Stock Exchange on May 26, 2014. The acquisition gives Grupo Bimbo a leading market share in Canada and a foothold for expansion into the United States and the United Kingdom, while also allowing Maple Leaf to focus on its core meat operations.

OTPP Acquires Majority Stake in Burton's Biscuit Company

On November 18, 2013, Teachers' Private Capital, the private equity investment division of the Ontario Teachers' Pension Plan (OTPP) agreed to acquire a majority stake in Burton's Biscuit Company (Burton's) from the Canadian Imperial Bank of Commerce and funds managed by affiliates of Apollo Global Management, LLC for US$563.71-million. Burton's is the second-largest biscuit supplier in the U.K. It owns and bakes brands such as Maryland, Jammie Dodgers and Wagon Wheels, and bakes Cadbury biscuits under licence. The acquisition represents the latest in a string of investments by OTPP in U.K. businesses.

Saputo Outbids Rival for Control of Warrnambool Cheese & Butter

On October 17, 2013, Montréal-based dairy company Saputo Inc. (Saputo) announced that it would make a take-over offer for Australian dairy producer Warrnambool Cheese & Butter Factory Co. Holdings Ltd. (WCB). Over the next three months, Saputo increased its offer four times, from an initial offer price of AU$7 per share on October 7, 2013, to a final offer price of AU$9.40 per share on January 28, 2014, in an effort to outbid rival bidders Murray Goulburn Co-operative Co. and Bega Cheese Ltd. When the final offer closed on February 12, 2014, Saputo had acquired an 87.92 per cent interest in WCB for approximately C$500-million. Since Saputo did not acquire 100 per cent of the share capital in WCB, it remained listed on the Australian Stock Exchange.

Aryzta Acquires Pineridge Bakery

On March 10, 2014, Aryzta AG (Aryzta) agreed to buy Pineridge Bakery Inc. (Pineridge) from Pineridge Group, a unit of Swander Pace Capital LLC, for C$377-million. The transaction closed on April 2, 2014. Pineridge is a leading producer of fresh and frozen baked goods in the Canadian market. Aryzta, a Switzerland-based global food business with a leadership position in the speciality frozen bakery sector, made the acquisition concurrently with its acquisition of Cloverhill Bakery, an American baked goods company.

Post Holdings Acquires Golden Boy Foods

On February 1, 2014, Post Holdings Inc. (Post) completed its acquisition of Golden Boy Foods Ltd. for C$320-million in accordance with an agreement announced on December 9, 2013. Golden Boy Foods Ltd. is a British Columbia-based manufacturer of private-label peanut and other nut butters, as well as dried fruits and snacking nuts. Post, a consumer goods company known largely for its breakfast cereal brands, made the acquisition as part of its strategy to strengthen its nutritional products and private-label products categories.

Teachers' Private Capital Invests in Flynn Restaurant Group

An investor group comprised of Teachers' Private Capital, a unit of OTPP, and Flynn Restaurant Group LP's (FRG) management team, led by Chairman and CEO Greg Flynn, acquired an undisclosed minority stake in FRG, a San Francisco-based owner and operator of franchised restaurants, from GS Capital Partners LP, a unit of Goldman Sachs Group Inc., and Weston Presidio LLC, for an estimated US$300-million in cash, in a privately negotiated transaction. With 640 restaurants and US$1.4-billion in sales, FRG is the largest restaurant franchisee in the U.S.

Cooke Aquaculture Acquires Meridian Salmon Farms

On May 14, 2014, Cooke Aquaculture (Cooke), a New Brunswick-based aquaculture business, completed its acquisition of Meridian Salmon Farms Ltd. (Meridian) from Marine Harvest ASA for US$203-million. Meridian has assets located in Shetland and Orkney, and the mainland of Scotland. The acquisition adds U.K. assets to Cooke's portfolio of fish-farming operations, which includes operations throughout Atlantic Canada and Maine, as well as in Spain and Chile.

Forty Creek Sold to Davide Campari-Milano

On June 3, 2014, Italian beverage producer Davide Campari-Milano S.p.A. (Campari) reported the completion of its previously announced acquisition of Forty Creek Distillery Ltd. (Forty Creek) for C$198.2-million. Forty Creek, an Ontario-based producer of spirits, is best known for its self-titled brand of premium Canadian whiskies. For Campari, whose portfolio includes an array of alcoholic and non-alcoholic beverages, the acquisition is an entry point into the growing Canadian whiskey products market.

TreeHouse Foods Acquires Protenergy Foods

On May 30, 2014, TreeHouse Foods, Inc. (TreeHouse), a U.S.-based food-processing company specializing in private-label packaged foods, completed its acquisition of Protenergy Foods Corp. (Protenergy) from Whitecastle Investments Ltd. Protenergy, which is based in Ontario, specializes in the production of soups and sauces in aseptic and sterile packaging. The acquisition will enable TreeHouse to expand its offering of broths, soups and gravies sold under both private labels and corporate brands. TreeHouse paid an estimated C$170-million in cash for the business.

CPPIB Acquires Farmland Portfolio of Assiniboia Farmland

On January 10, 2014, the Canada Pension Plan Investment Board (CCPIB) completed a previously announced transaction to acquire the assets of Assiniboia Farmland LP (Assiniboia), a fund that owns and manages a portfolio of farmland in Saskatchewan, for C$128-million. The acquired portfolio includes approximately 115,000 acres of farmland located throughout Saskatchewan, which largely produces wheat, barley and canola. The acquisition was made pursuant to the CPPIB's agricultural investment program, launched in 2012, which targets the acquisition of farmland in Canada, the U.S., Australia, New Zealand and Brazil.

To view the full article please click here.

The editors would like to thank Andrew Cyr (Articling Student), and Pei Li, Jason Kolarich, David Mender, and Sarah Emery for their assistance in the preparation of this report.


1 Douglas Hedley and Canadian Agri-Food Policy Institute (CAPI), "The State of Canada's Processed Food Sector: Trade Balance," November 2012, online:

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