Welcome to the Spring / Summer 2016 edition of our Food &
Our first article, "5 Keys to a Successful Succession
Plan" highlights important aspects of succession planning
in the food and beverage industry. Most business owners do not
consider planning for an exit strategy until their pending
retirement, when the issue becomes urgent and critical.
Establishing a sound exit strategy— well in advance—is
a vital part of the business planning process, and may
substantially reduce uncertainties within the family regarding the
future direction of the business.
Another area that needs greater attention by business owners is
fraud prevention and detection. Fraud is becoming more
sophisticated and is a growing problem in many food and beverage
businesses. According to the Association of Certified Fraud
Examiners "2014 Global Fraud Study", survey participants
estimated that the typical organization loses 5% of revenues each
year to fraud. The median loss caused by fraudulent activities was
$145,000 and in 22% of the cases, losses of at least $1 million
were incurred. Our second article titled "Warning Signs of
Employee Fraud" illustrates red flags of employee fraud
and practical measures that can be taken in each case to help
reduce the incidence of fraud.
In the Road to Success section of our newsletter, we share the
story of the growth of Italian Home Bakery. Discover how the
Rossetti brothers successfully grew their business and ultimately
sold it to a strategic buyer.
The Fast Facts, Trends and Recent
News section of our newsletter sets out selected food and beverage
market transactions in Canada and the United States. According to
the "2016 Food Report" prepared by Blake,
Cassels & Graydon LLP, the total value of food, beverage and
agribusiness M&A deals in Canada was $4.8 billion for the four
quarters ending September 30, 2015. This compares to $19.9 billion
in the year earlier, which spiked due to the merger of Tim Hortons
and Burger King.
In recent years, there has been tremendous growth in
Canada's craft beer market. One of Canada's major beer
producers, Labatt Breweries, was active in the fall of 2015
acquiring Toronto-based craft beer maker Mill Street Brewery. Mill
Street is Canada's largest producer of certified organic beer.
In another 2015 transaction, Labatt also acquired a number of craft
beer brands owned by the Mark Anthony Group.
In March 2016, Canadian drug store chain Rexall was acquired by
public healthcare company McKesson Corporation in a $3 billion
deal. Rexall operates 470 pharmacies and in recent years has built
larger stores offering grocery and private label product lines. The
acquisition of Rexall was widely anticipated following Loblaw's
purchase of Shoppers Drug Mart in 2013.
There were several recent notable U.S. transactions in the
grocery sector including Kroger's purchase of Roundy's
Supermarkets for USD $835 million and private equity firm, Apollo
Global Management's acquisition of grocer The Fresh Market for
USD $1.3 billion.
We appreciate the opportunity to share these
articles, best practices, market activity and trends in the food
and beverage sector. Thank you for your readership and we hope you
enjoy the newsletter!
Effective September 1, 2016, the Disposition of Surplus Real Property Regulation to the Ontario Education Act was amended with the intention to reduce barriers to the formation of health and community hubs in Ontario.
Health Canada is proposing to change the way that it regulates non-prescription drugs, natural health products and cosmetics in Canada, which will now be referred to collectively as "self-care products."
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