In this episode, we're looking ahead to the year 2023. We have an extraordinary guest joining us for this episode - Robert Andjelic, Founder & CEO of Andjelic Land, the largest farm owner in Canada, who has graciously agreed to join us for a rare interview.
Welcome to The Food Professor podcast, Season 3, episode 9.
In this episode, we're looking ahead to the year 2023. We have an extraordinary guest joining us for this episode - Robert Andjelic, Founder & CEO of Andjelic Land, the largest farm owner in Canada, who has graciously agreed to join us for a rare interview.
https://andjelic.ca/
In this episode, we discuss predictions for 2023. We also delve into recent news about chicken prices and government subsidies for dairy farmers. Are there any fixable issues in the current system of supporting farmers? Along with these discussions, we will be hearing from our special guest and your host's top predictions for 2023, including "Reducetarianism" replacing "Flexitarianism," the future of the restaurant and foodservice business and the impact of the ongoing Ukraine war on global food infrastructure.
Big news we are once again working with the great people at the SIAL Food Innovation show, and will be the official podcast of the 2023 SIAL show this year here in Toronto from April 9 to 11th
https://sialcanada.com/en/
About Robert
Robert’s founding of Andjelic Land was driven by his undeniable passion for agriculture. From meeting with producers, assisting with land improvements, or promoting the industry, he is extremely hands-on with the business. He is an unwavering champion of Saskatchewan’s producers and strongly believes they are positioned to be global leaders in food production. Robert is a firm believer in local value-added businesses and is currently collaborating with private industry and different levels of government to attract value add players to the industry with a focus on Saskatchewan. These efforts have borne fruit as evidenced by several new companies opening protein extraction/ fractionation plants across the three Prairie provinces. Robert is keenly aware that the success of Andjelic Land is predicated on partnering with and supporting strong Saskatchewan producers.
Robert has spent his entire career in pursuit of excellence. As a teenager, he renovated homes in Winnipeg’s North End. He went on to cofound a masonry business that worked on countless projects throughout Manitoba starting with house fronts, then moving into commercial properties, and eventually into building schools, hydroelectric projects, cultural centers, public swimming pools, etc. During this time, Robert identified an opportunity to improve upon the industrial buildings that were then being built and started a company that quickly went on to become Winnipeg’s leading private industrial builder & developer. At one point, the whole Andjelic family was involved to achieve this goal. He sold the building portfolio in 2007 and over a decade later, this portfolio of properties continues to be some of the most desirable and sought-after assets in the city.
In 2011, Robert identified similar opportunities to improve upon the management, development, and efficiency of agricultural land. His unwavering belief in the potential of Saskatchewan’s producers and what they would be able to achieve with even more productive and efficient land resulted in the creation of Andjelic Land. You can find him driving all over the province talking to tenants and working with them to further enhance and improve the land they farm. A decade after starting his mission to provide farmers with Premium Sustainable Land™, Robert feels we have only begun to scratch the surface of Saskatchewan agriculture’s potential on its rise to global prominence. The work continues!
About Us
Dr. Sylvain Charlebois is a Professor in food distribution and policy in the Faculties of Management and Agriculture at Dalhousie University in Halifax. He is also the Senior Director of the Agri-food Analytics Lab, also located at Dalhousie University. Before joining Dalhousie, he was affiliated with the University of Guelph’s Arrell Food Institute, which he co-founded. Known as “The Food Professor”, his current research interest lies in the broad area of food distribution, security and safety. Google Scholar ranks him as one of the world's most cited scholars in food supply chain management, food value chains and traceability.
He has authored five books on global food systems, his most recent one published in 2017 by Wiley-Blackwell entitled “Food Safety, Risk Intelligence and Benchmarking”. He has also published over 500 peer-reviewed journal articles in several academic publications. Furthermore, his research has been featured in several newspapers and media groups, including The Lancet, The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Washington Post, BBC, NBC, ABC, Fox News, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.
Dr. Charlebois sits on a few company boards, and supports many organizations as a special advisor, including some publicly traded companies. Charlebois is also a member of the Scientific Council of the Business Scientific Institute, based in Luxemburg. Dr. Charlebois is a member of the Global Food Traceability Centre’s Advisory Board based in Washington DC, and a member of the National Scientific Committee of the Canadian Food Inspection Agency (CFIA) in Ottawa.
About Michael
Michael is the Founder & President of M.E. LeBlanc & Company Inc. and a Senior Advisor to Retail Council of Canada and the Bank of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience with Levi's, Black & Decker, Hudson's Bay, Today's Shopping Choice and Pandora Jewellery.
Michael has been on the front lines of retail industry change for his entire career. He has delivered keynotes, hosted fire-side discussions with C-level executives and participated worldwide in thought leadership panels. ReThink Retail has added Michael to their prestigious Top Global Retail Influencers list for 2023 for the third year in a row.
Michael is also the president of Maven Media, producing a network of leading trade podcasts, including Canada's top retail industry podcast, The Voice of Retail. He produces and co-hosts Remarkable Retail with best-selling author Steve Dennis, now ranked one of the top retail podcasts in the world.
In 2020 Michael launched The Food Professor with Dr. Sylvain Charlebois exploring the critical issues in food, grocery and food service. The Food Professor podcast is one of Apple Podcasts' top 20 business management podcasts in Canada, and currently the number one Canadian produced and hosted podcast in the category.
Based in New York, Conversations with CommerceNext is a podcast focusing on retail eCommerce, digital marketing and retail careers with episodes talking with C-level executives operating in the U.S. and internationally.
Based in San Francisco, Global eCommerce Leaders podcast explores global cross-border issues and opportunities for eCommerce brands and retailers.
Last but not least, Michael is the producer and host of the "Last Request Barbeque" channel on YouTube, where he cooks meals to die for - and collaborates with top brands as a food and product influencer across North America.
Michael LeBlanc 00:05
Welcome to The Food Professor podcast, Season 3, Episode 9 I'm Michael LeBlanc.
Sylvain Charlebois 00:10
And I'm The Food Professor, Sylvain Charlebois.
Michael LeBlanc 00:13
Well, Sylvain nobody here but us chickens for our first episode of 2023. We're, we are, we are looking at and tapping into your crystal ball for the year, and we have a very special guest to kick off the year, Robert Andjelic, the largest farm owner in Canada. Now you reached out to Robert.
Sylvain Charlebois 00:28
Yes.
Michael LeBlanc 00:29
And he graciously agreed to join us. And, you know, notwithstanding a recent Globe and Mail article, his company is not well known, I would say outside the farming community, would you agree?
Sylvain Charlebois 00:42
That's right. No, he I mean, the Globe and Mail article I thought was, was a really good I guess, resume for him. He's not well known. He doesn't give a whole lot of interviews. (Crossover talk) And I don't think he actually enjoys dealing with the media. It's not automatic for him. But he's an investor. He's a smart man. And I'm so happy that he accepted our invitation.
Michael LeBlanc 01:08
Yeah, it's very, I'm very happy. I'm very curious to hear the story and, and speak with him. So, I'm looking forward to that coming up a little bit later in the episode. Once again, the big news of 2023, we are working with the great people at the SIAL Food Innovation Show, we will be the official podcast. So, check out the 2023 show in Toronto, April 9 to 11th. The link in the show notes. All right, all right. So, Chicken Little, just before we get to our predictions of 2023, I have a question for you. Why did the $37 chicken cross the grocery aisle (crossover talk) raised quite a stir.
Sylvain Charlebois 01:44
Because it was skinless, boneless, and free from antibiotics. You have to pay for that. I mean, seriously, but I think it points to how people are concerned about food security, they're concerned about, about their own well-being and they're, they're looking for a scapegoat. And grocers, let's face it, grocers are the natural portal into the food industry for consumers. And they're very, very quick to blame that,
Michael LeBlanc 02:17
Yeah.
Sylvain Charlebois 02:18
Portal, because that's, that's all they know, most consumers just, they just know, groceries and that said. They don't necessarily under-, understand and appreciate exactly how things work. And in the chicken industry, as you know, Michael, it's a, it's a supply managed commodity. I mean, a lot of things do happen even before Loblaws buys anything related to poultry. So, it was really, I thought it was really interesting to see exactly how things unfolded with this, with this one picture taken by, by Siobhan Morris, a great CTV reporter in Toronto. I spoke to her twice last week about the picture. And we were both very intrigued by this whole thing. Were you surprised by, by this, by how viral it went?
Michael LeBlanc 03:04
Well, I sure was I mean, I've, you know, we see pictures of prices of food all the time. And then suddenly you're, you're on the major news channels talking about this one picture about this one issue? Do you think we can make any progress this year with Canadians in general? You know, the, the, the deck's stacked a little bit, a bi-, against the groceries, as you were saying, right?
Sylvain Charlebois 03:18
Absolutely, yeah.
Michael LeBlanc 03:20
You know the government, the government's calling the grocers to testify. They're not calling the food professors. Sorry, they're not calling the food processors. So, they are calling The Food Professor.
Sylvain Charlebois 03:37
I showed up, (crossover talk). And here's the thing Michael the CEOs didn't show up. It would have been, it would have been helpful if they,
Michael LeBlanc 03:41
Do you think?
Sylvain Charlebois 03:43
Would have showed up. Oh, yeah, I think so.
Michael LeBlanc 03:47
I don't know, I'm not sure. You know, I'm, I'm of two minds on that. I think on the one hand, it would have been helpful. On the other hand, they would have continued to be labeled as the problem versus the rest of the infrastructure, that is also the issue, right? Like, then they kind of, you know, look, then they kind of owned the issue versus, well, let's call up the President of Cargill, or let's call up some other big presidents somewhere else in the food chain. That's not happening, and I think that needs to happen. Can that happen? What do you think?
Sylvain Charlebois 04:18
I, honestly, I think, I mean, my job is to inform the public in terms of how the food industry actually works. And, and I agree with you, Michael, I think that grocers are unfairly targeted. It's, I mean, how the food industry is ascribed to, to work is, is overly simplistic right now. I mean, it's,
Michael LeBlanc 0:4:33
Right, right.
Sylvain Charlebois 04:36
Things are way more complicated than just selling stuff on shelves in a store. I mean, a lot of things can happen. Yeah.
Michael LeBlanc 04:49
Of course, I mean, and I think it's also connected to this, the other hot issue was kind of an executive bonus issue.
Sylvain Charlebois 04:53
Yeah.
Michael LeBlanc 04:54
Which you participated in. But you know, I'd like to, I'd like to, know that bonuses of the, of the food processors. I'd like to know the bonuses for those executives too, but we don't have visibility to them as much or maybe we're just not looking hard enough. What, is there something we can do to, to bring that, bring a little sunshine into the and broaden that issue?
Sylvain Charlebois 05:15
I think so. I mean, transparency is, is, is, is key, I think. Empathy is even more important right now. But I did say in Ottawa in December, that it's important that the scope of the food inflation investigation includes processors.
Michael LeBlanc 05:29
Right.
Sylvain Charlebois 05:30
And I also did mention that perhaps The Competition Bureau should be invited at the table along with Stats Can. I mean, just to clarify things to look at the data in a, in a somber way, because right now, there's, there's two, there, there's lots of emotions. And frankly, I mean, Galen Weston is onbull-. I mean, the attacks are vicious. I mean, amazingly vicious. And frankly, I don't think it's deserved.
Michael LeBlanc 06:05
Well, I mean, they're vicious in this weird world of social media, which as your own lab has proven, isn't reflective of the Canadian population when it comes to their shopping behavior. So,
Sylvain Charlebois 06:13
That's right.
Michael LeBlanc 06:15
Are we distorting our own mirror so to speak by thinking what people think about our leaders based on Twitter, which is kind of, I'd love to see a broader context. You know, Michael Medline had a great op-ed piece, I don't know how many people read it in the National Post, but about you know, I'm not gonna apologize for being successful. And so, I think this dialogue will continue. So, I think we'll be part of.
Sylvain Charlebois 06:30
Yeah.
Michael LeBlanc 06:31
Part of, part of the show. Now speaking of cheddar, as the kids would say, earning money. Did you stumble upon the flood of subsidiaries, herring, heading to dairy farmers? Did you know they were already there? And like, you've tweeted a couple of times, and of course, that really, speaking of Twitter, resulted in the usual flood of back and forthness with dairy farmers and all that stuff is, you know, you talked about an amazing amount of subsidies going to dairy farmers from the Canadian government, some announced very late in the year. Is there, is the system that we have in place ever going to work fairly? And I mean, and is it even that a fair comment? What's your take on where we are with dairy?
Sylvain Charlebois 07:27
Well, first of all, I think we need to be more transparent with the Canadian public. A lot of announcements have been made to buy peace, essentially. And let's call it like it is, these are not compensations, these are subsidies. And the reason why Ottawa is not using the word subsidy is that we don't want to upset trading partners (crossover talk).
Michael LeBlanc 07:52
Trade agreement. That's because of the trade agreement, (crossover talk) right?
Sylvain Charlebois 07:54
And we're facing disputes right now, with (crossover talk), New Zealand and the Americans. Because as we, when we ratify these agreements, we agree to issue quotas to import products from abroad, but these quotas, the way that things were operationalized is highly questionable. As a consumer, you can tell when going to the grocery store, there's not a whole lot of imported products in the dairy section. Why? Because quarters were given to companies, which really didn't have much of an interest to import more products from abroad. And so, and that's why the Americans and New Zealanders are questioning how we, we did things in Canada. So, when people say dairy farmers gave up a lot, I do question that I actually don't think they gave up anything. And if you ask a dairy farmer, how much did they lose when these deals were ratified? The answer is zero. I mean, all, all they do is they recalibrate quotas, and because of the demographic growth while you're selling more dairy products, anyways, and a lot of dairy farmers exit the industry because they retire. And we, and we're seeing fewer and fewer dairy farms in Canada, we're down to about 9000 now. So, we have to be, I think the most important thing now is to be honest with ourselves and say that the current regime is not working for Canadians, especially for the dairy sector outside Ontario and Quebec. I mean, look at Nova Scotia, we had 900 dairy farms in 19-, 1990, four processing plants were down to one processing plant and we've lost over 700 dairy farms.
Michael LeBlanc 09:50
Well, let's talk about that for a little bit like, like that's, that's pretty stunning news. Now with all these subsidies, why would farms close up just because they aged out and because the next generation doesn't want to run them? That's a pretty precipitous drop, what's going on there?
Sylvain Charlebois 10:05
Oh, it's the quotas, that's all. And if kids want to take over, they can, if they don't, the marketing board will take quotas back and redistribute them, and, and give them to farmers who are sticking around. Farms are actually getting larger, and they're becoming more efficient. And, and I want to be clear here, ending the quota system in Canada would be a mistake. However, I think there are some issues related to price fixing. And we saw that with the Canadian Dairy Commission. I mean, the system is quite opaque. And we shouldn't actually allow dairy farmers to run and self-regulate. And that's what's going on right now, a lot of people are saying, well, it's, it's a highly rig-, highly regulated industry. It's not, it's a highly self-regulated industry, it's a big difference.
Michael LeBlanc 11:00
Yeah, interesting. So, interesting. And you've made the point in social media, like you're, you're a big fan of farmers, you're just not a big fan of this system. Is that a fair kind of summary?
Sylvain Charlebois 11:09
And every time it's the same thing, dairy farmers take it personally, and it's not an attack towards them. It's not their fault. I mean, it's and frank-, and I think boards have too much power and farmers have no, very little say in terms of how to make things happen. How to improve the system, the palm oil, the bu-, the Buttergate incident is another good example of how Canadians have zero say on quality. You know, last year or a couple of years ago, the scandal erupted both you and I talked about it. We had like Lactalis, Mark Taylor, to talk about it a couple of years ago. But the, the, the reality is that dairy farmers are using palm oil derivatives to increase butterfat content, because it's the cheapest way to do it. Again, let's be honest, but it does have an impact on the quality of the butterfat that companies like Lactalis and Saputo are buying. So, and, and consumers have no say, which is really problematic. And anybody who has struggled in Europe and other places would have noticed that dairy products in Canada are, are subpar. They're not very good, unfortunately.
Michael LeBlanc 12:29
Well, interesting, interesting. And I'm sure we'll be talking about it more in 2023 because it's going to continue, continue to be a high-profile issue, particularly if the maple, the Toronto Maple Leafs make the playoffs with that big milk (inaudible).
Sylvain Charlebois 12:43
I mean, a $20 million man like who can afford to put $20 million. Oh, yeah, dairy farmers,
Michael LeBlanc 12:50
Dairy farmers. All right, speaking of farmers, let's change tax here and go to a different type of farming discussion. Let's get to our, our guest, Robert Andjelic, the largest farm owner in Canada. We're gonna learn more about him and his business and his perspective on farming. So let's have a listen to that now.
Sylvain Charlebois 13:08
So, we're very pleased to actually have a special guest today, Robert Andjelic, Founder and CEO of Andjelic Land. We're reaching Robert, in Alberta today. How are you doing, Robert?
Robert Andjelic 13:21
Well, (inaudible), thank you. How about yourself?
Sylvain Charlebois 13:25
Very good. So, I'm joined also with, with Michael listening in from, from Toronto. And, and, frankly, what brought us to invite you and we're so pleased that you were able to accept our invitation is, is that you're not, your business is not very well known. But the Globe and Mail article on your business and on you last summer was, was very well done. It described very well what you're all about, your vision for agriculture, and, and frankly, I was just very, very impressed. And so I that's why I wanted to have you on our show just, so before we go into the business and what you do. Tell us a little bit more about, about yourself, how you, how you got into farming and farmland management.
Robert Andjelic 14:13
Well, first of all, thank you for the invite, and I'm honored to be your first guest for 2023.
Sylvain Charlebois 14:16
That's right.
Michael LeBlanc 14:18
That's right.
Robert Andjelic 14:20
That's a really good one for everybody.
Michael LeBlanc 14:23
Welcome.
Robert Andjelic 14:24
And my family came to Canada in 1958 story of, it's true I guess with most Canadians, if they follow their family ancestry that came with a few suitcases and $32 and then within the second year, he bought a house that was being remodeled and the guy somehow ran into problems, and he sold it. And I know he bought it for around $1,000. This is back in the 60s, we started doing house renovations and I participated and all that came. When I came from school, my job was to work on the house renovations and up to eight, nine o'clock at night and so on. And then dad was in masonry. Then I helped him with masonry. He was doing house fronts. I was only 12 at that time and then he started his own masonry company and eventually I joined him. And we were doing public projects, swimming pools, schools, warehouses, slowly we started doing warehouses. And that's how you know how we got into ultimately, we dropped masonry altogether and we were just doing warehouses.
Sylvain Charlebois 15:02
Where were you building essentially?
Robert Andjelic 15:05
We were concentrated in Winnipeg strictly, eventually we dropped masonry, and we concentrated on warehousing. That lasted, we were partners until about 1987. Dad and my brother John went their way and I went my way with developing my own portfolio.
Sylvain Charlebois 15:22
Your own business, okay.
Robert Andjelic 15:25
Well, in the 1980s, while I was concentrating strictly on warehousing, warehouse office space.
Sylvain Charlebois 15:29
Okay.
Robert Andjelic 15:30
And then I saw that the recession was coming and nine, in the 1990s and I got ready for that, (crossover talk). It was the early 90s. Very early 1990 on. Well, anyway, I pulled through it. I bought a lot of buildings that were being reposs-, that were repossessed, and banks and lending institutions didn't want to care-, or couldn't carry them or wanted,
Sylvain Charlebois 16:04
Right.
Robert Andjelic 16:06
Them off their books. So, they, they sold them to me and, (crossover talk).
Sylvain Charlebois 16:30
That was I remember that was the, that was the Olympia and York bankruptcy in Toronto. I remember that it was 91, 1991, right.
Michael LeBlanc 16:39
Was it mainly Manitoba and in winni-, in the Winnipeg area, (crossover talk)?
Robert Andjelic 16:43
All of Manitoba,
Sylvain Charlebois 16:45
Okay, okay.
Robert Andjelic 16:47
In the 1990s and on is when we took over the industrial market, we became the (inaudible) largest warehouse office developer and owner base, I had my old family in there, my wife was in there doing the books. My son was there doing leasing. And my other son, Steven, was doing the financing end and so on. My daughter (inaudible) was looking after the construction, and so on. They all had expe-, or a certain amount of education in those fields. Eventually the portfolio grew, I think at its peak it was around 3 million square feet.
Sylvain Charlebois 17:49
Wow.
Robert Andjelic 17:50
So, and then in around 2006, I sensed another, that was when the subprime issue hit the fan.
Sylvain Charlebois 17:59
Oh yeah.
Robert Andjelic 18:01
And I sensed that coming, I put the portfolio up for sale.
Sylvain Charlebois 18:10
And in terms of farming and farmland, when did it occur to you that perhaps farmland was gonna be a good place to invest? Wh-, what, when, when did they click in your head, happen?
Robert Andjelic 18:26
Well, it just didn't happen suddenly, I was always investing in land to some degree in farmland specifically. Then I got into rare earth metals, because I found out that China had, I think, at that time was 98% controlled 98% of the world's market. That turned out very well, because eventually, the US did figure out that they needed rare earth metals, for their security and their smart bonds and all kinds of different things. And then they started buying into it, and then I sold it. And then at that time, I was thinking like, for the children and grandchildren, what's the best thing to do? Like. I didn't like the idea of the markets going up and down in the turmoil in the stock markets. At that time, I looked at what Canada fits in, what does Canada have no matter who wins the industrial race or the high-tech race or whatever? What do they need that Canada has so that they can't reproduce within their own country? At the same time, I didn't want that currency exchange risk. That's how I boiled it down to far-, farmland. And then of course, when you're looking at farmland, it all comes up, whether like Manitoba, Saskatchewan and Alberta and I started comparing prices and I found that Saskatchewan farmland was about half the price of the Manitoba. farmland, equal production land and in other words, if I can grow 50 bushels per acre canola, in Manitoba and I compare that same, similar type of land that can produce the same in Saskatchewan, it was half price. And then Alberta was three or four times higher. So, that's how I concentrated on Saskatchewan.
Sylvain Charlebois 20:34
Most of your land that you bought, that you owned is in Saskatchewan, right?
Robert Andjelic 20:40
Yes, the current place is in Saskatchewan, but I'm looking to we're (inaudible), because Saskatchewan farmland came up so much. And it's basically caught up to Manitoba now. So, now we're starting to look into Manitoba. And if you look hard enough and long enough, some are even available for similar pricing in Alberta. So, we're starting to look in Manitoba and Alberta right now for expansion.
Michael LeBlanc 21:15
Okay, and what I mean, it's funny listening to you, it's, thank you for sharing your, your journey. I think the only thing you've been not successful at since you were 12 is retiring by the sounds of things. So, what at this point, you've amassed a fair bit of property? What's the, what's the scale of your business? If you, if you can share that? I mean, how much property have you, have you, have you amassed, so to speak? And then what do you do with that property? What's the business model here? How do you, how do you make money from, from this investment in this portfolio?
Robert Andjelic 21:49
Farmland has a lower cap rate, capitalization rate, than other forms of real estate investments, such as office space, retail, industrial, warehouse office, and so on. It's about half.
Sylvain Charlebois 21:56
Wow, okay.
Robert Andjelic 21:58
But I figured that the land in Saskatchewan would have to quickly, fairly quickly catch up to the land in Manitoba. So, I knew it had a lot of upside for a little while until it increased in value and catches up.
Michael LeBlanc 22:17
Right.
Robert Andjelic 22:18
Which right now, like I said, it has just about caught up.
Michael LeBlanc 22:35
What's and I think, as I read that now you're the largest farm owner of property in the country, is that, is that a fair statement?
Robert Andjelic 22:46
Yes, it is, it's at right now, it's just under 230,000 acres.
Michael LeBlanc 22:53
Wow. And so, what do you do with that property? So I, you know, it's interesting as you talk about, you know, the productivi-, I think productivity of farmland is sometimes dependent on skill and weather and all these things? How do you monetize that portfolio? Do you just sell it? Or do you actually, I think you lease it out or rent it. Talk about that a little bit?
Robert Andjelic 23:12
Well, all the land is leased out, what we do is, we put it up on bids. And generally speaking, we get anything that's available, any land package that goes up on bids, and get 6-7-8 on the average bids per package. We have a lot of choices as far as picking the right tenants, that is a similar mindset as us towards the land that is taking care of the land and making it the most productive and more efficient it can be.
Michael LeBlanc 23:32
Right.
Robert Andjelic 23:33
And we do a lot of due diligence in that field. We have four of us field coordinators, field and tenant coordinators that go and talk to the tenants and make sure that they have the right business practices and the right attitude towards the land, taking care of the land and making it the most productive they can. Progressive farmers and so on.
Michael LeBlanc 24:19
It's super interesting because it's inherent in your business model that you choose partners or, or customers or clients that share your values, not just you know, not just like to give you the dollar more for that property. Let's,
Robert Andjelic 24:46
Absolutely.
Michael LeBlanc 24:47
Right, right and I mean, and that's what, that's what's coming out to me is that you're, you're inherently engaged in that. Now let's, let's talk about how Canadian farming is doing. I mean, you say you have six or seven people who want that farmland, is it competitive enough and, and what's your perspective on the industry, itself, the agricultural industry? Obviously, you're a big, big player in it, obviously you're looking for very skilled operators and talk about, talk about that perspective with your experience?
Robert Andjelic 25:06
Well, like I said, we do a lot of due diligence and rent payment, or total offer like isn't the only criteria. We look at producer's other fields and how they're taken care of, and so on. That's the reason we have so many field people to do checks and so on. And like I said, prices and everything, sometimes we go to the lower bid to get the best producer that's the best towards the land and has the right things and returns all the nutrients back, whether it be fertilizer, micro-, macronutrients, or whatever.
Michael LeBlanc 25:53
When I hear, when I hear sophisticated operators, do you, do your clients tend to be larger corporations? Or are they you know, small to mid-size, so to speak, operators, they're both hey?
Robert Andjelic 26:04
They're both as long as they are good producers that's what matters to us. I don't care about his size. Although our portfolio to some degree is geared towards larger size, because I identified a number of issues with farmland, and like large equipment, 90-foot cedars these days, they can't be, they don't have the turning radius of the old 10-12 footers to go around a rockpile and sense.
Sylvain Charlebois 26:33
Right.
Robert Andjelic 26:34
Bluffs and so on. So, the land has to be made efficient for the 90-foot cedars not the old 10, 12 footers.
Michael LeBlanc 26:52
So that's, so that's the equipment we're talking about. And that's of course capital investment. Now, do you? I've been reading on your site, you know, that canola basically made a lot of these farms. And now that may be shifting over time, are you, are you positive, are you positive on the sector, if we put it in investment terms that this is a, that the Canadian farms are doing well, and farmland is doing well. But basically, your investment thesis is panning out for you?
Robert Andjelic 27:18
Well, it's panning out very well, because we've identified that I've identified the needs or the crops that I want to target, or that I want my tenants to target by the nature of the area I chose, which is canola. And as you know, there's four plants, new plants, crushing plants going up. And Yorkton has already two or three. And there's more to go in, Regina.
Sylvain Charlebois 27:50
That's right, (crossover talk) how many crushing plants are being built right now in Saskatchewan? Is it like, I think there's four or something.
Robert Andjelic 27:55
Four new ones, (crossover talk).
Sylvain Charlebois 27:57
Yeah. that's incredible and I'm sure that's bringing a lot of wealth to, to the province and for producers as well,
Robert Andjelic 28:07
Well, I always did favor more value added locally. And I work towards that, through my meetings. Like when those articles came out about us, whether it be in The Western Producer, or Globe and Mail, or whatever, I get calls from all over the world. Italy, Germany, England, even Israel and of course New York and Los Angeles, San Francisco and so on, wanting to know how they can participate in agriculture. Now it's not as many avenues open to them for investments like there is let's say in conventional real estate of warehouse office or retail or whichever one there's lot more but so I diverted them towards the value added
Michael LeBlanc 29:10
As the largest farm owner in the country. Are you, you know pee-, in the industry, would they, people describe you as you're not a farmer are you; do you consider yourself a great steward for the land? Is that part of your philosophy? And how do you describe yourself when you introduce yourself? Hi, I'm Robert. I do the following things. What, what is that first line for you?
Robert Andjelic 29:30
Well, I may not be a farmer, actually a producer in the strictest sense, but I have as much interest in the land as any producer does because that's both of our bread and butter. The better we are towards the land and giving back to the land to what it needs and as far, as far as nutrients and so on is concerned that's very important to us. Because both of us depend on it, but I do promote agriculture. I guess that's the biggest thing. I'm a big agricultural promoter, in all senses, whether it'd be evaluated because I don't believe in sending out a dollar's worth of product seed, and then buying it back as a finished product for $20.
Sylvain Charlebois 29:46
Yeah.
Robert Andjelic 29:47
I want value added locally, I met with a lot of people and quite often put lenders to gather the capital together with the businesspeople that want to start up some value added. We've done a lot of that, I've gotten a lot of connections, actually in Toronto, and in all the.
Michael LeBlanc 30:13
Yeah, no doubt.
Robert Andjelic 30:16
Lending institutions, whether it'd be pension funds, life insurance companies, all the major banks and so on, through my old business, because that was just as capital intensive as farming is. And a lot of these people that we used to work with were 30-40 years ago, now are higher up in the organization. And they listen to it because I can compare their investments in, let's say, traditional real estate, and explain to them how farming and agriculture differs, and how much better it is. And the fact that it's not correlated to the stock market. It has a lot of advantages that conventional real estate doesn't. But they don’t they un-, they don't understand the conventional as I do, because being in that business, most of my life, up to 65 is when, when I started farm-, or buying farmland, (crossover talk).
Sylvain Charlebois 32:02
But your approach to investing is, has it changed between real estate, commercial real estate, industrial real estate versus farmland? Are you approaching your investment portfolio the same way, as when you were dealing with real estate, conventional real estate?
Robert Andjelic 32:21
Basically, saying that you, you're right on there, it is almost identical. And the fact that you have to improve what you have, give the tenant the best product that you can give him, the most efficient, and then buy right, and then lease right and so on. It's very similar, actually. But there's a lot of benefits to la-, farmland or agriculture, as I said, over other types of investments in real estate.
Sylvain Charlebois 32:55
That's, that's, that's wonderful I mean I have to, I have to congratulate you for, for your success. It's been incredible to read about your story, about your business, I think a contribution to farming and agriculture goes beyond just farmland management. I mean, you just mentioned the infrastructure being built to support farmers out West with the crushing capacity that we're seeing, that we've never seen before. Farmers need a market and, and basically your, your, it seems as though you're, you're, you're kind of empowering agriculture to set up a value chain. So, so Canadian farmers can sell their products, value added products, it seems to me that that's what you're doing.
Robert Andjelic 33:50
Well, that was my goal from the start. Because like I said, I'm a very firm believer in valuing and not shipping an item out for $1 buying it back with 20.
Sylvain Charlebois 33:56
That's right.
Robert Andjelic 33:58
I've been doing that all along. And the thing is like that most producers don't appreciate like when they knock, or size and so on is the fact the amount of work I've done with the lenders, now then it benefits every producer in the three prairie provinces, because if the lenders believe in that segment of business being agriculture, they will lend more easily into that field. And they'll be a lot more lenient if there are some problems because they understand the future is far brighter than what they're currently in the type of real estate and I can explain the differences to them. Since I have my track record, and they used to, I used to be their competitor. And they were actually fairly easy to compete against contrary to most people's beliefs that institutions are hard to compete against. That is not true. Because they need 3, 4, 5 people for everyone on mine and they can't be anywhere near as efficient. Yes, they have a lot of money. But the bottom line is they have to answer to their board, and they have to make a profit.
Michael LeBlanc 35:25
Yeah. So, there's a lot of, the bigger you get the lot of process, somehow you've, you found the size, mastered the scale, but yet, retained that kind of efficiency of the basically the, the family business and the sophistication of the large players. So, it's quite a, it's quite a story. Sylvain, thank you so much for introducing Robert to our listeners, because it's a fantastic story. Robert, thanks so much for joining us on the, on the podcast. It's been a real treat to get to, to get to know you, I'll, I'll put a link into your website. So, if folks want to learn a bit more about your company or who knows, maybe you want to reach out for investments or otherwise, they'll be able to get a hold of you through your website. Is that the right place we should point people to?
Robert Andjelic 36:10
That or they could reach me through the email robert@andjelic.ca.
Michael LeBlanc 36:17
Well, I'll put that in the show notes. Listen, thanks again, so much for joining us on the, on the podcasts it's a really great way to kick off 2023 with a very, (crossover talk).
Robert Andjelic 36:26
And I'd love to talk about agriculture with anybody that has any interest in entering the field in any which way, value, especially value added or financing, or any other aspect of it.
Sylvain Charlebois 36:42
That's wonderful. Well, again, thank you for your time, Robert. I know you're really busy. But thank you so much for joining us today on The Food Professor podcast.
Robert Andjelic 36:53
Thank you. And you have a great one, only three, and we'll talk down the road.
Sylvain Charlebois 36:56
All right, take care.
Michael LeBlanc 37:01
Well, you know, listen, that was such an interesting interview with Robert, he's got a very different perspective. I didn't know he existed, or that part of the world existed prior to The Globe and Mail article, and then you reached out and connected. And so it was great to have him, in his words, tell the story and give us his perspective on farming, yeah?
Sylvain Charlebois 37:19
Oh yeah, he's a straight shooter, a hard worker, he made his money in telecom, in an industry he knew very well. He invested almost a billion dollars in an industry he didn't know anything about 10 years ago.
Michael LeBlanc 37:25
Wow.
Sylvain Charlebois 37:26
And, and, and he's a non-farmer. And this is really, I think the unique thing, it's, it's so un-Canadian to allow agriculture, to, to, to, to, to, to, to have someone like him involved, heavily involved so,
Michael LeBlanc 37:30
Heavily involved, yeah.
Sylvain Charlebois 37:34
And his approach is very refreshing. It's very different. And when you talk to farmers out West, I mean, lots of farmers are very, very entrepreneurial. But his, his approach is, is, is also quite unique, which is, which is really interesting.
Michael LeBlanc 38:10
Well, and for the many, many great Canadian farmers who are listening to the podcast, let us know what you think. All right, let's, let's close out with the top predictions for 2023. You put out a tweet, (crossover talk) January 2, and let's, let's take it from the top. And I'm gonna, I'm going to ask you a quick question about each of them. So, your first one was Couche-Tard becoming a grocer. Now they've had a, they've kind of got left at the aisle or a brush with this, when they tried to buy that big grocer in, in France. But what, what is making you think about this, in terms of this year, is their year to be beyond what they are today?
Sylvain Charlebois 38:47
Well, I think that, I think that Couche-Tard is actively looking for a new model. I mean, it's been successful with, with gas stations and, and getting, getting,
Michael LeBlanc 38:52
Convenience stores, (crossover talk).
Sylvain Charlebois 38:55
Gas dollars being converted into food dollars. And, and some of these Convenience stores are out of this world. I mean, they actually, they're selling products you wouldn't even find in a grocery store. They have to have a private label. I mean there's lots of things going on at Couche-Tard that are just truly amazing. So, they tried to buy Carrefour in Europe, and they failed because governments were more sensitive to, to (crossover talk) to the fact that.
Michael LeBlanc 39:30
Foreign owner, right? Yeah
Sylvain Charlebois 39:32
Exactly but I would be surprised, I mean we often talk about new entrants in Canada and frankly, doing business as a grocery in Canada is not easy. It's a, it's a large country. But Couche-Tard has the ability to buy Loblaw, I mean, that's how big it is.
Michael LeBlanc 39:37
Yeah.
Sylvain Charlebois 39:38
So, because Carrefour is much larger than Loblaw. And so, (crossover talk). I actually think that this year is going to be the year. I just don't know if it's going to happen in Canada or outside. of Canada. I just don't know. But I do think that Couche-Tard will, will position itself as a, as a new grocer eventually or (inaudible) 12 months.
Michael LeBlanc 40:10
All right, number two, Ottawa will declare peace with agriculture. Now, after the first part of our podcast, are you still, are you still thinking that will be the case? This, The Competition Bureau's work will be done and reported on what's, what do you think here?
Sylvain Charlebois 40:27
Well, I think that (inaudible) especially here, I'm talking about farmers and, and we, we talked about the fertilizer mayhem story before the holidays and, and, and of course, there's, there was this "don't label my beef" campaign. Also last year, you could see that Ottawa wasn't making an effort to understand agriculture. But now, I actually have a sense that the government in Ottawa will start listening. It will start to listen, and it will go out on the road and listen to shareholders before they actually go too far.
Sylvain Charlebois 40:40
Now, I think that's going to happen at AG Canada. Will it happen to Health Canada? I don't know. There's lots of issues there. For example, there's a new private bill, C252 looking at advertising towards children, for example, that's going through, that's going through Parliament, it's going to go through Parliament this spring. We don't know what's going to happen there. But frankly, there is a code, an industry code preventing unethical advertising towards children already. And the Quebec model, actually was the inspiration for that new code. So again, I, I, I can tell you right now, Health Canada is not even trying to listen to industry in terms of what, what it is doing to protect our children. And so, I'm not sure it's going to happen to Health Canada, but I have a sense that AG Canada will change its approach and the tone that Mr. Bibeau actually had in 2022 will change.
Michael LeBlanc 42:09
Interesting. All right. That sounds like change for the better would, (crossover talk).
Sylvain Charlebois 42:13
Yes, I would say so. Absolutely yes. Farmers, farmers need a voice. I mean, they need to be heard.
Michael LeBlanc 42:19
Absolutely,
Sylvain Charlebois 42:20
No pun.
Michael LeBlanc 42:21
You connected to that. The grocer Code of Conduct will be created. Now this has been ongoing for close to a year it got started earlier last year, we reported on (crossover talk),
Sylvain Charlebois 42:32
Oh, my goodness it's been going on for years. Oh, yeah. It only really happened because two years ago, Michael Medline decided, when he was talking about the Empire Club, that enough is enough. And that forced everyone to, to go to a table to negotiate. And I was very pleased to see the Retail Council of Canada acknowledging that there was an opportunity to, to make things better for everyone, not just for processors, but for retailers as well. So, I think there's going to be an announcement very soon, about a Code of Conduct. Yeah, probably within the next couple of weeks even.
Michael LeBlanc 43:11
Oh, that's a very specific prediction. All right. Well, we'll talk about you know, we'll talk about more about the code, because I think once we, once we get this announcement that you think is going to happen, we get a bit more clarity on what it means we'll have a long discussion about it. Maybe we will get some, (crossover talk).
Sylvain Charlebois 43:26
Yeah, most importantly, I think I mean, those are the two main issues that I think a lot of people will be looking for about the code is whether or not it's going to be mandatory. And I think it will be and two, will the government be involved? And my guess is that it will be involved to a certain extent.
Michael LeBlanc 43:46
Yeah.
Sylvain Charlebois 43:47
Yeah.
Michael LeBlanc 43:48
Well, notwithstanding the notwithstanding clauses of the area's constitutional limits around provincial and federal legislation,
Sylvain Charlebois 43:54
It's not a slam dunk for sure.
Michael LeBlanc 43:57
Yeah.
Sylvain Charlebois 43:58
But, but all, all AG ministers are involved in a discussion. So, all provinces and the federal government are involved. So, at least, I think that, I think the process was very well managed. And both RCC and FHCP were involved and were actually quite engaged. So, I was very happy that the process is going very well so far.
Michael LeBlanc 44:23
Last but not least "Flexitarianism '', will (crossover talk) die and be replaced with reduction-it-terian-ism. Okay, we got it. Okay. Say that for me reduction-a-terian say that for me?
Sylvain Charlebois 44:32
Reduction-a-terian-ism.
Michael LeBlanc 44:35
Reducetarianism okay, what, what on earth are you (crossover talk)? All right, I get "Flexitarianism '' which is you know, choosing different plant based but what are you talking about?
Sylvain Charlebois 44:46
What's motivating Flexitarians? Animal welfare, the planet, health. It's about reducing the focus that is going to shift. I actually do think that less is going to be better for, for a group of people. Flexitarians to me, was always an ill-defined term, everyone's, everyone's a Flexitarian. I mean, you and I we're Flexitarians, once in a while we may reduce this, we may reduce that. But "Reducetarianism", reduct-, even, even I actually find (inaudible). The focus on reducing the amount of resources used to produce food, or reducing the amount you're consuming is going to be the focus, I think. And the environment is actually going to be a big driver, I think. Yeah.
Michael LeBlanc 45:41
I was curious as to whether you thought about reduction in terms of the number of ingredients on an ingredient deck, but you're talking overall, people are going to reduce the amount they're consuming and be more thoughtful about it. Is that a fair summary?
Sylvain Charlebois 45:53
No, your point is correct. It's the number of ingredients incorporated into recipes, for example, that is going to be key. And, and, and I've been thinking about it a lot about AI these days. I mean, I actually believe that perhaps this year, we could see the first ever cookbook written by artificial intelligence. Who knows?
Michael LeBlanc 46:07
Well, I (crossover talk).
Sylvain Charlebois 46:11
Generate, like hearth, earth friendly recipes.
Michael LeBlanc 46:23
Well, all I have to say is, Hemingway's typewriter didn't write The Old Man and the Sea. So, my bets on you. But you're right. So that's, that's 2023 from, from your perspective. Now, I got a few, (crossover talk),
Sylvain Charlebois 46:39
What is your perspective, my friend? I want to hear your list.
Michael LeBlanc 46:42
I do have a few things I'll do a few, do a, I do have a few thoughts about 2023. My overarching thinking is, the tide is going out and we're about to see who's swimming naked. Now that is an appara-, not a paraphrase, but an interpretation of something Warren Buffett said, basically, you know, that's when the tide goes out, the easy money stops, times get a bit more difficult in terms of, you know, the business models, and then you really see the weaknesses, of which businesses will, will rise and fall. And I think it's been a couple of three years of the COVID era that has been masquerading a lot of weakness in different sectors, and you're going to start seeing that in 2023. You know, there is still some funding available for startups, there's still lots of that going on, but it's gonna get tighter, and there's gonna be more demand. And they're gonna want to see this thing called profit. And you see that everywhere, right? You see Amazon cutting 18,000 people,
Sylvain Charlebois 47:22
Yeah.
Michael LeBlanc 47:23
And shutting down entire divisions. I mean, it's just a rationalization and a rationale around let's make sure we're making money here. And I think that's what's behind Amazon, a very successful company. They're just saying, maybe, you know, that apparently, they lost $5 billion on the Alexa business last year alone.
Sylvain Charlebois 47:36
Wow.
Michael LeBlanc 47:37
That's, that's real money, man. Like, you know, Alexa, why did you lose so much money? Oh, now it's telling me the official currency of Canada, it's not answering the question, it refuses to answer that question.
Sylvain Charlebois 48:08
Probably not, it's not hard wired to answer a question like that. How dare you ask, Michael,
Michael LeBlanc 48:11
I'm probably gonna have some service suspended because of that.
Sylvain Charlebois 48:14
That's right. Exactly.
Michael LeBlanc 48:16
You know, for the food industry specifically, I'm thinking it's a mixed but overall better year for the restaurant and food service business as people shift from buying stuff to experiences.
Sylvain Charlebois 48:29
How can it be worse?
Michael LeBlanc 48:31
It's true, it's true, but it could stay bad. Because they could go into some like I think, as you know, as food inflation hits, as people kind of start to watch their wallets a little carefully, you're gonna see less buying and stuff. Retail I think is going to be not challenged because it's the wrong interpretation to say retail. Let me put it differently. I think that's retail sales and the economy used to be fairly lockstep, right, you could predict how the economy was going from retail sales. I think that's gonna be a little bit because people are like, Okay, I got enough stuff. I don't need another TV, my TV I bought during COVID still works fine. And they're going to shift to experiences. So, you're gonna see tourism is going to rebound somewhat, not all the way back. Food inflation, though, is going to keep people at home. The ongoing labor situation continues to put stress on operators, right. I think the Ukraine war is going to get worse before it gets better. So, strength to the people of Ukraine, and.
Sylvain Charlebois 49:01
That's pretty predictable. Yeah.
Michael LeBlanc 49:04
A desperate and bitter Russia means more stress in the global food infrastructure. I don't know how, but I think there's going to be some more stress there. And then last year, I think grocers will continue to have a strong year. I mean, listen to the COVID era implications on behavioral changes of people you know, they're working at home more. They're eating more at home, they're having friends over and enjoying, you know, their friendship and cooking more. And I think that's also a big jump-all moment for grocers. We've got, right 800,000 close to a million new Canadians over the past two years, grocers are gonna, are gonna benefit immediately. You got a million new people in the country, all looking for somewhere to buy their food. So, you know, I think it's going to be a super interesting year and I can't think of anybody better to talk about it with than you, because it's gonna be a fun, fantastic year. Let me tell you.
Sylvain Charlebois 50:22
Yeah, absolutely. And yeah, I basically agree with all your predictions, I think those are solid predictions. And yeah, it's gonna be interesting to see how food service comes out of, we're starting to see some major bankruptcies in Toronto and elsewhere. So, the cleaning up is still ongoing now due to COVID and everything else. And of course, consumers are recalibrating their budgets with what's happening right now with interest rates and, and food prices. So yeah, I actually think that 2023 will be overall a better year for the sector and, and with Ukraine and Russia. I agree. I actually don't think it's going to end this year.
Michael LeBlanc 51:03
No, I don't think so either. I think that yeah.
Sylvain Charlebois 51:06
Yeah, unfortunately.
Michael LeBlanc 51:08
Yeah, I think, I think its something unfortunately, we're gonna have to keep talking about (crossover talk) one degree or another.
Sylvain Charlebois 51:12
That's from an agri-food perspective, things are going to be way more predictable than last year, because last year, February 24, was really just violent. It was something that markets just didn't expect. And that's why we saw bushel wheat at $13 US. I don't think it's gonna happen this year.
Michael LeBlanc 51:32
Yeah, I, I, I, disagree. I think Russia is going to do something that we don't anticipate out of desperation, and I think I'm worried that that has an implication not unlike the initial impact, but we'll see. I hope I'm wrong. I hope I'm wrong on that.
Sylvain Charlebois 51:45
Yikes.
Michael LeBlanc 51:46
Let's see, um, I ho-, I hope I'm wrong.
Sylvain Charlebois 51:50
I hope you're wrong on that one too.
Michael LeBlanc 51:53
But you know, who's not wrong is all the people who have been following and listening. We are having great numbers listening to our podcast. So, thank you out there.
Sylvain Charlebois 51:56
Yeah.
Michael LeBlanc 51:57
For everyone who's listening and telling friends and keep doing it.
Sylvain Charlebois 51:59
We are gonna be celebrating our best episodes in 2022, right?
Michael LeBlanc 52:02
Yeah, that's, we're gonna, we've, we've done that actually all week. Just to run up to this. We put out our best episodes and, and celebrate which ones they are. So, thank you again. And the best is yet to come as Ted Rogers would often say for now, let's leave it there. I'm Michael LeBlanc, Consumer Growth Consultant, podcaster, media maven. And you are.
Sylvain Charlebois 52:30
I'm The Food Professor, Sylvain Charlebois
Michael LeBlanc 52:33
And we'll be back with our strong roster of great interviews already lined up for the rest of the year. Lots of topics that I think in the next episode, we'll be talking about the Code of Conduct maybe, according to your prediction. So, stay tuned, dial back in and by all means, give us any let us know your feedback and, and stay tuned and until then, safe travels everyone.
Sylvain Charlebois 52:41
Take care.
SUMMARY KEYWORDS
farmland, people, buying, dairy farmers, grocers, farmers, agriculture, talk, Canada, farming, land, food, Saskatchewan, year, big, industry, Manitoba, producer, Robert