Federated Co-operatives Limited has expanded its agricultural retail network by entering into a joint venture with Blair’s Family of Companies.
FCL is now the majority owner of Blair’s seven Saskatchewan ag retail locations in Lanigan, Nokomis, Watrous, Liberty, McLean, Lipton and Rosthern.
Blair’s will continue to be a part owner and operator of the businesses. The seven retail outlets will operate under the Blair’s banner, so it will be business as usual for local farmers.
Blair’s Texcana Logistics fertilizer terminal near Hanley, Sask., and its farming operations, including Blair’s Ag Cattle Company, are not part of the agreement.
Ron Healey, FCL’s vice-president of agriculture and consumer business, said the deal made sense from a business perspective but also a brand perspective, due to shared values.
“Both parties are committed to serving farm customers and building sustainable communities together,” he said.
Blair’s was contacted for this story but did not respond. Darren Blair, the company’s chief operating officer, said in a news release that the joint venture is preparing the 73-year-old company for the future.
“We are stronger together and better positioned to provide our customers with the solutions they require,” he said.
The deal is subject to a Competition Bureau review.
Healey said the joint venture allows FCL to sell crop input products in markets where it had no big presence.
This is FCL’s first foray into joint ventures in the ag retail sector. In the past, it has used a two-step process of acquiring an independent retailer and then selling the asset to one of its member co-ops.
That wouldn’t have been feasible with Blair’s seven outlets scattered throughout the province. And Blair’s didn’t want to completely exit the business.
“They have a strong desire to continue to have an ownership stake and be actively involved managing the joint venture,” said Healey.
Blair’s was one of the founding members of Grow Community of Independents, an organization formed in 2010 to stave off competition from grain companies and fertilizer manufacturers attempting to consolidate the industry.
— Blairs.ag (@BlairsAg) February 3, 2021
The group eventually morphed into Winfield United Canada, a brand of Land O’Lakes Inc., a large U.S. agribusiness and food company.
If the Competition Bureau approves the joint venture, Blair’s will sever its ties with Winfield and start procuring product from FCL.
Healey said the new outlets may eventually start offering more FCL-branded products once the deal is fully approved by regulators.
The Blair’s deal gives FCL 153 locations across Western Canada that are licensed to sell crop protection products.
Healey said some competitors in that market have a global reach but that is not the intent for FCL.
“We’re operating in Western Canada. That is 100 percent where our focus is and where our profits stay,” he said.
He expects to see continued consolidation in the crop input business in Western Canada and FCL intends to grow its market share through other acquisitions and joint ventures.
Independent retailers and small grain companies accounted for 42 percent of Western Canada’s crop input business in 2016. Healey said independents are still thriving despite all the mergers and acquisitions in that sector.
“They continue to have a large portion of the market,” he said.