Lassonde Industries Inc.

views updated

Lassonde Industries Inc.

755 rue Principale
Rougemont, Quebec
J0L 1M0
Canada
Telephone: (450) 469-4926
Toll Free: (888) 477-6663
Fax: (450) 469-1366
Web site: http://www.lassonde.com

Public Company
Incorporated: 1918
Employees: 800
Sales: CAD 247.54 million (2003)
Stock Exchanges: Toronto
Ticker Symbol: LAS.A
NAIC: 311411 Frozen Fruit, Juice, and Vegetable Manufacturing; 311421 Fruit and Vegetable Canning; 311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing

Lassonde Industries Inc. is Canada's second largest producer of juice and fruit drinks. The company also has operations in China and Tunisia. Its products are marketed under its own Rougemont, Oasis, Fruité, and Graves brand names, and others under license (Nature's Best, Tetley, Allen's, Mitchell's, Sunkist, Sun-Maid, and Canadian Club). Although family owned for the most part, the company prides itself on its entrepreneurial culture and has developed several innovations in processing and packaging. Corn processor Produits Ronald was added to the company's holdings in 1981. Europe, where fresh corn is relatively scarce, is a big market for the company's canned corn-on-the-cob. Lassonde also produces sauces and marinades.

Origins

Aristide Lassonde opened a cannery in Rougemont, Quebec in 1918. After working for a time in Massachusetts as a baker, he had begun farming strawberries and raspberries on a plot of land southeast of Montreal in 1903. The cannery's earliest products included tomatoes and beans. First distributed in the surrounding countryside, by 1925 its products were being sold in Montreal itself.

Lassonde's son Willie took over the family business upon the death of his father in 1944. Under his direction, the cannery expanded into the production of apple juice in 1959. The Rougemont area was full of orchards.

Innovation and Acquisition in the 1970s–80s

Fruit drinks were added in 1970. Sales passed CAD 1 million in 1971, according to Marketing Magazine. By 1977, they were up to CAD 5 million. That year, Lassonde bought the assets of nearby juicer Coopérative Montérégienne. Four years later, Lassonde diversified into corn products with the purchase of Produits Ronald, based in Saint-Damase, Quebec. Produits Ronald also developed a line of sauces and marinades.

Troubled by the six hours needed by the batch method to clarify apple juice, Lassonde introduced its own continuous clarification system in 1979. The proprietary Clarifruit process was eventually licensed to other companies around the world.

Sales were CAD 20 million in 1979. That year also saw the introduction of Lassonde's Oasis brand juice packaged in one-liter laminated containers.

On September 3, 1981, the holding company Lassonde Industries Inc. was created, with A. Lassonde, Inc. and Produits Ronald as the operating subsidiaries.

The acquisition drive continued with the purchase of Vac-O-Nut in 1983. The company, which packaged and marketed imported nuts and dried fruit, was sold off nine years later. Another short-lived subsidiary was pastry products supplier BHR Bakers Specialties Ltd. Acquired in 1986, it was shut down in 1993.

Public in 1987

In 1987, Lassonde acquired Montreal-based Effex Marketing Inc. to sell its own products as well as those of others. The same year, Lassonde underwent a public offering on the Montreal Exchange.

By 1990, the company was processing 30,000 tons of apples each season. In 1991 Lassonde bought the juice and beverage unit of Cobi Foods and renamed it Greatvalley Juices Inc. It was the leading juice company in the Maritime Provinces. Lassonde's sales were nearly CAD 126 million in 1991; net income was a little less than CAD 5 million. According to Toronto's Financial Times, Quebec accounted for about 70 percent of business.

Expanding in the Mid-1990s

Lassonde expanded abroad in the mid-1990s through joint ventures and alliances. A Thai venture was created in 1993; the following year, the company invested in a Chinese nectar business. The company started a citrus juice business in China in 1995 in collaboration with its Thai partner, Tipco Foods. It soon became the majority owner in the two Chinese juice plants. By 1996, Lassonde had the third-leading brand of juice in China, noted the Financial Post.

Known for its shelf-stable beverages, in 1994 Lassonde began selling refrigerated drinks. The company also began producing Tetley tea under license for sale in both the United States and Canada. It also entered a reciprocal marketing alliance with U.S. cranberry juice producer Clement Pappas & Co.

Lassonde posted net earnings of CAD 13.8 million on sales of CAD 128 million in 1995. In 1995, the company formed a refrigerated storage business, followed by a dry storage business the next year.

In 1996, the company acquired Ruthven, Ontario-based Mar-Brite Foods Co-operative Inc., supplier of Martin, Bright, and Olinda brands of apple juice and nectars. The deal was worth about CAD 5 million. Mar-Brite, which had annual sales of about CAD 10 million, was renamed Lassonde Juices. The acquisition greatly increased Lassonde's profile in Ontario and gave it a production facility there to support further expansion to the west and into the United States, where the company was selling about CAD 3 million dollars worth of canned juice to the institutional market.

In 1996, Lassonde's Fruité (a jellied fruit drink) and Oasis brands began to be distributed by retail chains in Massachusetts and Florida. This brought the company into competition with juice giant Tropicana on its home turf.

Lassonde also was trying to win market share up north. Southern Gardens Citrus, a subsidiary of United States Sugar Corp., worked out an exclusive supply deal with Lassonde, shipping fresh, not-from-concentrate orange juice from Florida in refrigerated, 5,000-gallon tanker trucks (up to a dozen deliveries per week). Lassonde marketed this juice under the Oasis Florida Premium brand. Its Effex Marketing Inc. unit also secured private-label contracts for Southern Gardens. According to Food in Canada, the Southern Gardens deal was three years in the making.

According to the Canadian Press, Lassonde's 18 percent share of the fresh orange juice market in Canada was second only to Tropicana's 60 percent. Revenues were more than CAD 158 million in 1997, with a profit of CAD 8 million. There were about 400 employees. An apple storage warehouse was acquired during the year. One new product in the late 1990s was Vegetable Delight, a refrigerated vegetable juice.

New Brands, New Geography for 2000 and Beyond

The company explored in a new compass direction when it bought a 35 percent share in Tunisian juice company Phytoflora-Lassonde in 1999. About CAD 3 million was spent to upgrade the factory, which employed 70 people. By this time a third plant had been added in China, where the company's joint venture employed 200 people. Lassonde had another 575 employees in Canada.

Company Perspectives:

The mission of Lassonde Industries Inc. is to be a global leader in developing, producing, and marketing a distinctive, innovative range of fruit and vegetable juices and drinks as well as certain specialty food products and other products compatible with the production activities of the Lassonde Group.

Key Dates:

1918:: Lassonde opens a cannery in Rougemont, Quebec.
1944:: Willie Lassonde takes over the company after the death of his father.
1959:: The company begins making apple juice.
1970:: Fruit drinks are added.
1971:: Sales exceed CAD 1 million.
1977:: The company buys the assets of nearby juicer Coopérative Montérégienne.
1979:: The Clarifruit process for quickly clarifying juice is introduced.
1981:: St.-Damase corn processor Produits Ronald is acquired.
1982:: The holding company formed.
1987:: Lassonde goes public on the Montreal Exchange; Effex Marketing is acquired.
1991:: The juice and beverage unit of Cobi Foods is bought, renamed Greatvalley Juices.
1993:: A Thai venture is formed.
1994:: The company invests in a Chinese nectar venture.
1995:: A China citrus juice venture is started.
1996:: Mar-Brite Foods is bought, renamed Lassonde Juices.
1998:: Southern Gardens of Florida agrees to supply fresh orange juice.
1999:: Lassonde acquires share of Tunisian juice company Phytoflora Lassonde; a Nova Scotia plant and Allen's juice brand also are acquired.
2001:: A. Lassonde becomes the Sunkist licensee for eastern Canada.
2003:: The Sun-Maid license for Canada is acquired.

A Nova Scotia plant and the Allen's juice brand were acquired in 1999. Revenues reached CAD 236 million in 2000, up more than 15 percent from the previous year. This growth was from eastern Canada, not from the United States, where sales were flat, or from China, where local competition was taking a toll. In 2003, Lassonde sold off its China assets, but continued development of the Rougemont brand there through licensing.

Lassonde cautiously entered the organic foods market in 2002, growing and vacuum packing small batches of organic corn-on-the-cob. Golden Town Apple Products Ltd. of Ontario was acquired in September 2002.

A. Lassonde became a Sunkist licensee for eastern Canada in 2001. The Canadian license for Sun-Maid brand was picked up two years later. The company introduced a line of barbeque sauces in spring 2003 under the licensed Canadian Club brand name.

Net sales were CAD 248 million in 2003. At CAD 21.8 million, net earnings had doubled since 2000. Canada's growing fruit juice consumption and interest in nutrition bade well for the company, reported Montreal's Gazette. The firm extended the Oasis brand into a line of healthy snacks.

In April 2004, the Gazette reported that Lassonde was on the prowl for acquisitions. The company preferred to have bottling facilities near its suppliers and would need to acquire plants to support geographical expansion.