Loblaw switches organic milk suppliers

Thursday, November 14, 2013

by SUSAN MANN

Food retailing giant Loblaw Companies Limited’s decision to switch organic milk suppliers came with “no firm answer” as to why, says a spokesperson for its former supplier, Ontario farmer-owned co-operative Organic Meadow.

“We’re disappointed about the milk proposition however they (Loblaw) continue to support us in a large way with some new news that our kefir (a cultured milk drink) is now available nationally across the country,” says Michelle Schmidt. Schmidt says the decision was a surprise. Co-op members were told about it at their annual meeting in August.

The switch took effect Oct. 14 when the Loblaw began stocking organic milk made by Neilson Dairy, which is owned by Saputo Inc. Sandy Vassiadis, corporate communications director for Saputo, couldn’t be reached for comment.

A woman who answered Loblaw’s PR department’s telephone said the company would not provide comment over the phone. A spokesperson could not be reached via email.

Loblaw was Organic Meadow’s number one customer for its milk and milk is the co-op’s top product line.

Schmidt says the discontinuation “has posed quite a challenge to our business” and to the co-op’s 100 farmer members (of those more than 60 are dairy farmers; there are also egg and grain farmer members).

“There’s a lot of pride that comes from the fact our farmers can go into the store and see the fruits of their labour on store shelves,” she says. “More than dollars and cents, it’s a huge impact to their pride.”

Organic Meadow built a new facility in 2009 in Guelph and “when you don’t have your milk available at such a strong retail partner it does have an impact on our ability to effectively and efficiently utilize that plant,” she adds. The co-op is sorting out how it will use the plant efficiently now that “things have changed.”

Loblaw has “massive reach,” she notes. Without milk products in Loblaw stores, the farmer co-op faces a challenge of “being able to make our products accessible to all of our loyal customers who love it and want it.” She adds the sales team is actively working on finding new customers and selling more milk to other grocers.

The co-op’s milk is still available at other grocery retailers, including Longos, Metro, Whole Foods and several independent health food stores.

And it’s not all bad news for Organic Meadow. Schmidt says along with offering Organic Meadow’s kefir nationally Loblaw is also adding the co-op’s ice cream and frozen vegetables to its product lineup by the end of the year. As well, Loblaw still carries Organic Meadow’s other products, such as cheese, yogurt, butter, cottage cheese and sour cream.

Schmidt says there has been an outpouring of support from Organic Meadow’s customers. According to an Organic Meadow survey done in May of 500-plus customers, more than 60 per cent said they would be willing to switch supermarkets “to find our milk” if Organic Meadow milk wasn’t available in their regular store.

Shelly Juurlink, Organic Meadow spokesperson, says according to a newsletter they get from Dairy Farmers of Ontario there are 77 organic dairy farmers in the province. The total organic production in September, the most recent number, was 2,159,747 litres. The utilization for September was 97.5 per cent. That means 97.5 per cent of the organic milk that was produced was used to make organic products.

Juurlink says utilization has been ranging from 85 to 97.5 per cent this year, depending on what processors ask for in any given month. BF