Strong consumer demand for natural food has prompted Federated Co-operatives Ltd. to introduce its own organic line.
Its stores are expected to initially offer as many as 19 Co-op Gold Organics products, such as red kidney beans, maple syrup and peanut butter.
Scott Banda, FCL vice-president of corporate and legal affairs, said the products will add to a variety of organic goods already in the stores.
He expects the Co-op label to give greater credibility to the new products among consumers already familiar with the brand.
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George Stinka, a director with Gateway Co-op in Canora, Sask., said it’s difficult to know how popular the new line will be, but said some members are likely willing to try something new.
“There is more and more interest in organics as time goes on.”
Stinka said many rural consumers already have access to organic food because of their practice of growing large gardens.
Banda anticipated a good response from urban and rural shoppers.
“If we weren’t fairly comfortable with that, we wouldn’t have done it.”
Banda said creating Co-op organics was an opportunity to service a niche market where there is good demand among customers already familiar with the Co-op label.
“People shop there looking for quality products and we’ve just given them another line,” he said.
Banda hopes loyalty to Co-op products will help FCL weather the global economic turmoil of 2009 better than other businesses.
“When times get tighter, people tend to stay closer to home and look for who is serving their community and who’s got their back,” he said.
FCL affiliates are locally owned, deal in food, fuel and crop supplies and return savings and profits directly to owner-members.
“Our co-ops are integral members of the community who provide service in good times and in bad,” he said.
“That has created a loyalty among people. As we walk through tougher economic times, we retain their business.”
Banda said it’s business as usual for the fiscally conservative FCL, which will continue to seek products at reasonable prices and sell them to retailers that in turn will share profits as dividends with members.
FCL reported record sales of $8.4 billion and record earnings of $755.5 million for the fiscal year ended Oct. 31, 2008.
The 2008 results are a 55 percent increase in sales from the previous year’s $5.4 billion, and a 15 percent increase in earnings from $659.5 million.
Federated doubled its ownership stake in NewGrade Energy Inc., a heavy oil upgrader in Regina, to 100 percent from 50.
It returned $533.7 million of its $755.7 million in earnings to member retail co-ops and kept the rest to finance its operations.
During its 80th annual meeting March 2-3 in Saskatoon, Glen Tully was re-elected president of the FCL board along with vice-chair Beryl Bauer.
Re-elected board members include Keith Corbould, Don Fluney, Don Russell, Barry Gosnell and newly elected Dusty MacDonald.
FCL provides central wholesaling, manufacturing, marketing and administrative services to retail co-ops in more than 500 communities in Western Canada. The system is made up of 270 retail co-ops representing more than 1.3 million members.
