Canola’s always prided itself on being a gamechanger in the edible oils marketplace. That’s why it really wasn’t so strange having Arkadi Kuhlmann, the founder and CEO of ING Direct bank, as its lead-off speaker.
Markets reporter Ed White is blogging from the Canola Council of Canada’s annual convention in San Francisco March 18-19. For regular updates visit White’s blog, here.
A lot of Canadians don’t realize it, but ING Direct got its start in Canada as an attempt to create an entirely different way of banking, with no branches, few features and actual interest on savings. And, fundamentally, it is based on savings rather than services, which is how the big banks rake in their cash. Kuhlmann gave a rousing speech and stuck his fingers repeatedly in the eyes of the traditional banking industry. ING Direct, he said, is now the 15th biggest bank in the U.S.
That’s pretty weird.
How is this relevant to canola? What the council hoped for and what he seemed to deliver – lots of people, most of who were farmers, went up to talk to him afterwards – was the message that hacking out a profitable market from giant competitors is possible if you think the competitors offer a bad service or product, and you can do it better.
That’s pretty much what canola’s done, massively increasing production in a very short period of time and aggressively moving into the healthy foods category. If you had told people 20 years ago that we would be trying to produce 15 million tonnes of canola in Canada per year by 2015, people would have no doubt said that amount of production would either never be sold, or crush prices. Well, as we’re seeing, you can grow it can they will come and eat it.
So much of the canola industry’s growth has been a leap of faith, believing that high rates of expansion are sustainable and will actually be profitable. Kuhlmann made everyone feel that this has not been a crazy idea.
