Live from Las Vegas the latest episode tackles changes in the way Statistics Canada measures the basket of food as part of its CPI index, a pending lawsuit in Quebec aimed at beef processors, and how getting Russian food products, or ingredients, off the grocery shelf may be harder than you think! Our very special guest on this episode is Lyne Castonguay, President and Chief Operating Officer, Dairy Division (USA), Saputo.
Live from Las Vegas the latest episode tackles changes in the way Statistics Canada measures the basket of food as part of its CPI index, a pending lawsuit in Quebec aimed at beef processors, and how getting Russian food products, or ingredients, off the grocery shelf may be harder than you think!
Our very special guest on this episode is Lyne Castonguay, President and Chief Operating Officer, Dairy Division (USA), Saputo. An accomplished Canadian executive fluent in business strategies on both sides of the border, we talk to Lyne about culture (and not just yogurt!) and establishing a business that can take on the huge opportunity of the U.S. food service and consumer dairy business. With 29 dairy plants, an experience team and a roster of great new products, in a wide-ranging interview Lyne shares her plans for growth and success for all team members.
With Michael travelling on business out of the country we skipped Trying Stuff this episode but will return with more great products to test, share our insights and sample for lunch!
Relevant Links
https://www150.statcan.gc.ca/n1/daily-quotidien/220316/dq220316a-eng.htm?HPA=1&indid=3665-1&indgeo=0
https://abcnews.go.com/Business/wireStory/beef-giant-jbs-pay-525m-settle-price-fixing-82654864
https://globalnews.ca/news/8721936/quebec-class-action-beef-suppliers-price-fixing/
About Lyne
Lyne Castonguay graduated from the Université de Moncton with a Bachelor of Business Administration and furthered her education at Harvard Business School and Emory University. Lyne previously held executive positions with a major Canadian food retailer, as well as senior roles at a large retailer both in Canada and in the United States. She has over 20 years of experience in manufacturing, retail, e-commerce and services. She joined Saputo in February 2021 as Deputy President and Chief Operating Officer, Dairy Division (USA). Following a successful transition period, Lyne was appointed President and Chief Operating Officer, Dairy Division (USA), on November 4, 2021.
About Us
Dr. Sylvain Charlebois
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.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks , The Food Professor with Dr. Sylvain Charlebois and now in its second season, Conversations with CommerceNext! You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest adventure for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:05
All right. Welcome to The Food Professor podcast, the Las Vegas edition. I'm on the road. I'm here in Las Vegas. Sylvain, welcome. Great to see you again. And, -
Sylvain Charlebois 00:21
Yeah, great to see you as well (crossover talk), I think this is the first time you've been on the road since we've started the podcast, right?
Michael LeBlanc 00:27
That's absolutely right. So, you know that my background is a little different. I'm, I'm high above The Sands here on the Vegas strip, and I'm using my laptop. And so, things look a little different, maybe sound a little different I am using my remote kit. And you and I are in the same country once again. Which is fantastic, -
Sylvain Charlebois 00:42
Same country that's right.
Michael LeBlanc 00:43
Same country.
Sylvain Charlebois 00:43
And we'll be in the same country in a few weeks from now at SIAL as well.
Michael LeBlanc 00:47
And not only in the same country will be in the same place. You and I have got (crossover talk) a podcast studio at SIAL. Thanks to the great folks at SIAL. I Hope you're going to the SIAL event. It is in mid, mid-April in Montreal. We'll be there for two three days; you're going to be speaking I'm on a panel. You're speaking a couple times. And then, hopefully, -
Sylvain Charlebois 01:05
Yeah, I'm the first speaker for the event on April 20th. And I got a couple of panels as well. And yeah, I'm so pumped. I mean SIAL is my favorite show, a trade show and lots going on there. And I'm hoping to catch up with a lot of folks that I haven't seen in a while.
Michael LeBlanc 01:23
Yeah, that's been my experience here. I'm at a convention called Shoptalk, which is the gathering, -
Sylvain Charlebois 01:28
Yeah, talk to us about Shoptalk. What's, what's going on? What is it, what is it about?
Michael LeBlanc 01:31
Yes, Shoptalk is a gathering of eCommerce digital retailers. Basically, it's unique in that it's very focused on that. So, there's about 12, 10, 12,000 people here, you know, there's not five steps I walk where I don't recognize somebody and it's a great conference of top tier presenters and they have one-to-one meetings that they schedule.
So, get this as a retailer, you can go to Shoptalk for free, you they fly, you put you up in the hotel and give you the ticket. The trade off, and this is kind of like a Miami condo deal is you need to sit through between 8 and 12, 15-minute meetings with vendors.
Sylvain Charlebois 02:10
Really.
Michael LeBlanc 02:11
That's the model and, and it's, I'll send you a picture and I'll post it online, literally 1000 little tables with signs and as retailers they, they come here and there's a bit of a matchy, matchy kind of a you need to say I'm looking for this technology and the technology companies say I'm offering this technology you both need to agree to meet. And then Shoptalk pays for your freight, the vendor obviously pays to, to have that capability. That's how (crossover talk), the revenue model works.
Michael LeBlanc 02:38
I'm here as media I'm covering it. I've done a bunch of interviews. I set up a podcast studio here in my suite in Mandalay Bay, and I've convinced a bunch of people to come up. Lots of interesting things that what, to-, wha-, a lot of talk about the Metaverse and of course the Metaverse is kind of a little bit of a polarizing subject. Some would think it's a complete hustle. Others think there's a there, there. Some of the beauty companies are getting into this Metaverse. No one panel defined it the same way. So, it's a bit of a loosey goosey kind of thing.
Sylvain Charlebois 03:05
(crossover talk) And now how, how do you define the Metaverse?
Michael LeBlanc 03:08
Well, everybody defines it differently. You know, the biggest scope is probably and the biggest people who are behind it, of course is Meta, which was Facebook, and they're trying to build an environment that is beyond real. I mean, it is gaming, it's gamification. it's 3D, it's holographic, it's, it's a bunch of stuff it, clearly I'm struggling, -
Sylvain Charlebois 03:28
Sounds like Sunday night's Oscars.
Michael LeBlanc 03:31
Oh, my goodness. (crossover talk) The Slap Flap. Do you remember that? The Slap Flap, wow, what a, what a thing, man, they (inaudible) everybody's talking about it here. What, what goes on, man, what goes on?
So, anyway, it's a good show. I met lots, I caught up with a lot of people that I've either interviewed or, or have actually listened, which is really fun. People come up to me and go, ‘Hey’, and they show me their phone. ‘I subscribe to your podcast’. I'm like, ‘Oh my God’. Like, it's funny, right? Because you and I sit in a room and we, we make content, (crossover talk), and we see numbers and stuff. But it's different when people come up and go, I love your podcasts it's very (crosssover talk).
Sylvain Charlebois 04:03
I hear about our podcast all the time from folks that I had talked to whether on Zoom, on Skype, on the phone. So, it's always nice to hear that people are listening in and you know, we try to make the show interesting, as interesting as possible. It's one of the top food podcasts in the country. And we're pretty proud of that. And i-, it started, I guess two years ago, about two years ago, didn't it?
Michael LeBlanc 04:27
That's right, that's right, it started right after the I mean, you and I were at the Restaurants Canada Show, where we'll be together again in May.
Sylvain Charlebois 04:33
May. That's right.
Michael LeBlanc 04:34
And we, I'd, I was interviewing you for The Voice of Retail and I said hey, we should do a podcast together because I think we'd have a whole lot of things to talk about. And we're like well, it's really busy and then COVID hit and I guess we just said hey, this is the perfect time let's, let's take this thing for a test drive and, (crossover talk) it's been wonderful, thank you. Thank you for your partnership and speaking about, -
Sylvain Charlebois 04:52
For this, for this podcast, unfortunately, we can't do a Trying Stuff segment because you are in Vegas. So, we're, we're going to be back in a couple of weeks with a new Trying Stuff segment.
Michael LeBlanc 04:59
That's right. We'll be back in a couple of weeks and then we'll do one in person. We'll have a massive one at the SIAL show. We will be trying all kinds of stuff at the SIAL show. And thanks to the vendors who have sending us product. It's a, it's great.
And speaking of an interesting podcast today, while we don't have a Trying Stuff episode, we do have a fantastic guest, Lyne Castonguay, President of Saputo US has joined us, and it's a great conversation. She's such an incredible leader, and a leader in the food business, and Saputo is doing some amazing things, -
Sylvain Charlebois 05:34
Well, actually, you know, I wanted Sa-, Sa,-, Saputo is a well recognized, respected company, obviously, in Quebec and, and across the country. And I've always wanted to interview someone. I've always wanted to invite someone to the podcasts from Saputo. We had Lactalis, with Mark Taylor, (crossover talk). And the other major dairy player in the country is, is Saputo. And but I wasn't, I, I didn't want to invite someone from the family. I want to invite someone who really has been successful. And when I saw Lyne's appointment last fall. I thought, that's it. This is what we need. Absolutely.
Michael LeBlanc 06:12
Perfect. Yeah, it was, it was a great interview. And we'll get to that in a few minutes. Let's, let's hit the, let's hit some stories, I guess first on my mind was your post and I was reading it about Statistics Canada. And we've talked about Stats Canada over the past bunch of months. And as it relates to food inflation and how they measure inflation, you were trying to, you know, to penetrate the wall of how do you do it? And how are you? You know, what are you measuring? And they put out an announcement in their CPI announcement. I saw the CPI announcement, but I didn't scroll down, but you did. And at the bottom of it, they said, ‘Hey, guess what? We're going to change the way we, or change the basket’, right? So, let's talk about, let's talk about what that means and, and practical implications. And what are your thoughts about it?
Sylvain Charlebois 06:55
Well, typically Statistics Canada will look at several products, hundreds and hundreds of products. But on their website, the-, they will only give you 52 items you can look at and you can look at their historical data. My understanding from the notice is that they will change the Food Basket, which is honestly a good idea. I mean, the Food Basket always needs to be refreshed. Because our tastes are what we buy will change what I got concerned when they spoke about historical data, apparently, as of May, we won't have access to historical data for certain items.
Sylvain Charlebois 07:39
And, and to be honest, right now, I mean, a lot of people are concerned about food prices, people are concerned about food inflation. And, and an historical perspective always helps. Whether you're a retailer, a processor, or of course, a consumer, you want to know well, relative to last year, or the year before are prices really higher, and by how much? So, without that, that historical perspective, it's really hard for economists, researchers to get a better sense of what's actually going on, on how prices do behave.
Sylvain Charlebois 08:13
And so, I actually, you know, made, made some comments on Twitter. And, and so Statistics Canada, of course, contacted me, again, because they're very good at that. I mean, I actually have a lot of respect for people at Statistics Canada, they are very competent, but the one thing they don't do is to accept criticism. And they're not very good at that. And, and so we spoke, we exchanged emails, we didn't speak this time. We have met with them on several occasions. But this time around, they we were actually going back and forth, and I actually posed a question last week, ‘Well, how do we, how can we actually get, get more data from you with this new Food Basket?’, and I never got a, an email back, which is problematic.
So, yeah, I'm, I'm very concerned and of course, on Twitter, a lot of people were saying, are we making these changes for political reasons, too? Because it's been argued that the food inflation rate has been underestimated, right? And, and a lot of people have noticed and, and I was wondering whether or not this move right now is a sign that says that Stats Canada is basically admitting that, that perhaps they methodology needs needed to be fixed. (crossover talk),
Michael LeBlanc 09:32
So, in that way, in that way, it's not a bad thing, right, that they're updating the Food Basket. Oh, right.
Sylvain Charlebois 09:36
Oh, no, absolutely, yeah, absolutely. It's quite normal to do that. A-, an-, and of course, the, the Labor Department in the US would do the same thing when, when assessing food inflation in general. So, it's not abnormal to see our federal agency do that. But it's, it's, it's the way it's communicated. And I don't know if you actually looked at the CPI report and note, but there was also a huge note about dairy prices.
Michael LeBlanc 10:06
Yeah, that I read, that caught my attention for sure. Yeah.
Sylvain Charlebois 10:09
And so, I recently I had a ca-, conversation with a CDL Institute in Toronto. And we both kind of were puzzled by like, how, why would you ever put a three, four paragraph explainer about one specific category? I've never in 25 years, I've, I've never seen that. A, as much as I want to believe that the federal (inaudible) has, hasn't gotten political about food prices, that dairy note got, my yeah, got me scratching my head for sure. Did you, what did you feel when you saw that?
Michael LeBlanc 10:44
You know, as I read it, is it I thought back to what if you and I weren't talking every couple of weeks, and I wasn't as immersed and educated as I am, I would be thinking okay, this is Stats Canada trying to educate us on supply management. Which I think the vast amount of Canadians don't really pay attention to, understand, know about. So, that was my first kind of inclination, but I thought it an odd place and an odd organization to, to do that.
Sylvain Charlebois 11:07
Oh, yeah.
Michael LeBlanc 11:08
What I was just trying to say, you know, this, this affects the way we measure things, but it, it, I don't know, it, it did, it struck me as kind of odd, but I was like, I don't know I, I don't know if that was an odd thing. But what you're saying is it's a very, so to speak, an unprecedented communication,
Sylvain Charlebois 11:23
It's highly unusual to actually look at one specific category and provide a pretty explicit explainer to the Canadian public. And of course, dairy is very political in Canada, you you're saying that most people don't understand supply management, I would say a lot of politicians don't understand supply management either. Even dairy farmers don't necessarily understand supply management, as long as they get a fair price. They understand fair pricing, but they may not understand the mechanism related to the CDC, for example, the Canadian Dairy Commission and we spoke about that. And, and so I'm, I'm a little bit concerned about everything that's going on.
And of course, right now, you may have seen some of my comments in the media. There was a Toronto Star article yesterday about a potential beef cartel.
Michael LeBlanc 12:14
Yeah, that was going to be my next, my, my next question was going to be about beef. And, and there's a lawsuit, or a class action suit, apparently, what's, what's going on there.
Sylvain Charlebois 12:22
Yeah, in Quebec, (inaudible), it's only in Quebec for now. But I, if I, if I were in the meat industry, I'd be concerned about reputation and how it could impact the rest of, of Canada and consumer trust, generally speaking, now, -
Michael LeBlanc 12:24
That's at the, the processing level, right? The, the lawsuit is at the processor level, right?
Sylvain Charlebois 12:40
That's right. So, the class action lawsuit is aiming at the larger meat packers essentially, in beef. And which I find a little bizarre because when you think about collusion, often, well, grocers would benefit from, from some sort of price fixing scheme, right? Because prices go up, margins will eventually go up and, and so, and pork is not targeted at all in this lawsuit.
And so, it's, it, it mirrors what has happened in the US with the packer’s and the latest GBS settlement of 57 million US dollars. GBS is actually signing a check. But it's not admitting guilt either. And so, because I mean, proving anything is, is going to be very difficult. So, I suspect that, -
Michael LeBlanc 13:34
So, to be clear, be clear for the listeners what, whether it's GBS or this if the idea is that the processors would collude to set prices that they buy from the farmers?
Sylvain Charlebois 13:45
Well, they, they, they, (crossover talk), well they would actually not well, prices at, farm gate prices are set internationally. So, farmers will get so much money. But what is being argued is that perhaps, processors would, would basically inflate prices wholesale, to grocers. So, grocers would obviously have to sell products at a higher price.
Sylvain Charlebois 14:11
Now if you look at going back to Statistics Canada, why that this is why historical data is so important. Because people are asking, ‘Is there collusion Sylvain?’ Well, I don't know. I don't know. But let's look at price behavior how prices have behaved over the last several years and yes, I mean, beef is an attention grabber for sure. There are only two items that have actually increased more than beef since 2015. You know which one they are? Baby food and potatoes.
Michael LeBlanc 14:45
Okay.
Sylvain Charlebois 14:46
Yeah, and so you, you got to wonder okay, is there a collusion in baby food now? Is there a collusion in potatoes? This is quite concerning, I think because beyond beef, beyond the meat sector, I do think there's, there's potential for, you know, consumers to start distrusting the, the, the food industry. I mean, that, that's certainly something that, that concerns me a lot. Because I mean, in back in 2017, I was actually defending, I had an op-ed in The Globe and Mail in November, defending the industry because there were rumors of a bread cartel, a bread price fixing scheme, only to be proven wrong by Galen Weston himself, that when he admitted in December 2017, that he wo-,that his company was part of a bro-, bread price fixing scheme.
Michael LeBlanc 15:38
Once, once bitten, twice shy, right, Sylvain?
Sylvain Charlebois 15:41
And seven years later, the Competition Bureau hasn't been able to charge anybody, fine anybody. We, our lab has worked with a Competition Bureau, we've actually provided them with some reports. They it, it's, it hasn't gone anywhere. So, these cases are really, really difficult to prove.
Michael LeBlanc 16:01
Yeah. Well, on the other side, or let's say on the extreme integrity side, why don't we get to our interview with Lyne Castonguay, such a tremendous leader for the Saputo group. And it's a fantastic interview, and she talks a lot about culture, right? The organizational culture and why they've been successful internationally, how they, how they bring themselves to market and how they operate. So, why don't we get to that interview, right now?
Sylvain Charlebois 16:27
Well, welcome to the podcast. We have a special guest today, Lyne Castonguay, who is President and CEO of Saputo’s US Dairy Division. We are very thrilled to have you on the show today, Lyne.
Lyne Castonguay 16:42
Thank you for having me. It's a pleasure to be here.
Sylvain Charlebois 16:45
So, let's start things off. We want to know more about yourself, your personal and, and professional journey and, and tell us more about Saputo I think most peop-, most listeners would know about Saputo, but from the inside, how would you describe Saputo as an organization?
Lyne Castonguay 17:02
Well, first about me. I was born and raised in New Brunswick. So, I'm a French Canadian. And I am married with two children. Both my husb-, well my husband and my children are all Canadian. I graduated from the University of Moncton. And then I furthered my education later on in life at the harvest, Harvard Business School. I've worked over 20 years in manufacturing, in retail ,and eCommerce and in services. I've been in both Canadian companies and American companies and have been in the US now for just under 20 years.
Lyne Castonguay 17:37
And I joined Saputo in February of 2021. So, it's been over a year now, as the Deputy President and Chief Operating Officer. And then following a successful transition period, I was officially appointed President, in November, so of 21.
And the reason why I joined Saputo and, you know, obviously Saputo is a great Canadian iconic company. It was founded in Montreal, and by the Saputo family. It went public on the TSX in 97, done a series of acquisition has grown immensely, you know, 36 acquisitions since 97. We operate internationally now, we're obviously in the US, and Australia, Argentina, and the UK, as well as obviously, in Canada still. And so, and we're one of the top 10 dairy processors in the world. But most importantly, the reason I joined Saputo was because of its culture. And it's been just a pleasure to be here and to get to know, the passionate teammates that I work with every day.
Sylvain Charlebois 18:46
So, I so with the culture, ho-, how would you describe so Saputo's culture for someone who's never worked at the company?
Lyne Castonguay 18:54
You know, the, the company has core values, and they live by their core values. It's a very entrepreneurial company. And the company has stayed true to the values that it was founded upon, all those years ago. And we, we do leave, live those values every day, we recognize our teammates for living our values. And so, it's a very, you know, some of those values are as follows, the very family-oriented environment, entrepreneurial, so focused on ownership and commitment, hands on approach, very passionate, passionate about food and dairy, obviously, passionate about one another. And then really, the really neat thing about Saputo is its operational efficiency they manufac-, we manufacture absolutely incredible quality product that so, so very focused on operational efficiency, and that's made us great.
Sylvain Charlebois 19:52
In the US, how many plants do you have currently?
Lyne Castonguay 19:55
We currently have 29, we acquired (crossover talk), three manufacturing facilities this year. We did two acquisitions and we added to the family. We have three new plants that joined the family this year through the acquisition. So, we have 29 manufacturing facilities.
Sylvain Charlebois 20:10
Tell us more about brands at, at Saputo, what are some of the brands? Well, we know a lot of the brands that you support but tell us more about how successful some of these brands have been over the years.
Lyne Castonguay 20:24
Well, yeah, so the brands and the products, the product categories are somewhat similar, but somewhat different, and between Canada and the US. So, in the US, we focus a lot on, you know, we have cheese, obviously cultured products. So, in the cheese area, in the case, you would see Frigo is one of our great brands, Stella is our great brand, Salemville, Treasure Cave, Montchevre. So, all these are great cheese products that we have in the US. We also actually manufacture a lot of private label products. But on the cultured side of the business, we also have a great brand, very well known in the Northeast of the United States called Friendship. We actually just are launching now a brand new product called Vitalite, which is our dairy alternative product. So, a plant-based product,
Sylvain Charlebois 21:20
Really, hmmm.
Lyne Castonguay 21:21
And they're fabulous and delicious, is actually a North American launch. We're launching it in the US first. But it came through an acquisition that we made in the UK, or overseas with (inaudible). So, there's a lot of experience and expertise there from, from that part of the world that we're bringing here. And they're phenomenal plant-based product. So, I'll definitely have you guys taste it. You can tell me what you think about them. I'm biased, obviously. But they're great.
Sylvain Charlebois 21:50
So, it's called Vitalite, -
Lyne Castonguay 21:53
Vitalite or, yes.
Sylvain Charlebois 21:54
Yeah, we would love to try that, (crossover talk), absolutely.
Lyne Castonguay 21:57
Yeah, we just actually were in Vegas at the pizza show. And we're excited because you know, there's a lot of, there's a lot of plant-based product. But if you think about it, there's not a burger that has a plant-based burger with a plant-based cheese on it. So, we're actually excited to kind of marry those two together. So, we'll definitely, -
Sylvain Charlebois 22:15
That's wonderful.
Lyne Castonguay 22:16
(inaudible) in front of you.
Sylvain Charlebois 22:16
Well, congratulations. Yeah, absolutely.
Lyne Castonguay 22:18
Thank you.
Michael LeBlanc 22:20
We'll get to a little bit more of this. I think later in the, in the discussion, I want to talk about, you know, opportunities for growth and what's new, it sounds like, you know, plant based as a category, you know I am here in Vegas as well right now. And, and you know, you go up to the Starbucks, so that local place, and everyone seems to be adding a plant based whether it's oat, all kinds of different things, almond milk. So, how, how do you see the plant-based? Is it a complementary category that's going to grow? And just, you know, you're going to welcome it to the Saputo family and, and just follow that trend?
Lyne Castonguay 22:49
Yeah, I think, you know, first we manufacture plant based alternative dairy beverages as well as the cheese. So, we do both, and we do all almond and oat, etc. A lot of it is, is private label in that space from the brokerage side that we manufacture. And we did go into it because there is growth, there is demand. And, you know, not everybody can, you know, from a from a pure choice, right, some people choose not to consume dairy products. And, and also there's, there's some that can’t consume it. My son, for example, is, is lactose intolerant. So, he's, he's been testing many of our products. But so, so it's a question of, you know, some of it is choice. And some of it is also because people just from a nutrition perspective, or dietary restrictions perspective can't consume it. So, it is an alternative. It is, it is an opportunity. It is a growth segment. And we wanted to, you know, disrupt ourselves and innovate in that space as well.
Michael LeBlanc 23:53
So, you, you went from Deputy President now President in November, so less than a year? What's you know, broad question, how's it going? What is it like for you in, in your role? What is what has changed? What's an average day in your life? I guess you're back on the road traveling more with 29 plants, you're probably traveling a bit and also starting to go to trade shows. I'm here at a trade show. It's my first one in two years. You know, there's the, the front facing piece, which is mostly on the food service side. But talk a little bit about your role and, and how you approach it. And you know, coming from Canada, we're always curious to see how the operating or the governance is different in the United States and how you've adapted to that.
Lyne Castonguay 24:34
Yes, I would say well, first, I mean, adopting from Canada in the US since I've been here now for, for some time, you know, it's probably transitioning to this role was a little bit easier, I guess. (crossover talk) It is, it has been, it has been interesting because I was I transitioned to a new industry. And so, you know, starting a new role in the middle of a pandemic, is certainly vary interesting and challenging. The results, obviously of Saputo USA are not where we want them to be. I'm very, very optimistic about the future. We have had, the team is working really hard. We've been, you know, it's been challenging,
Michael LeBlanc 25:14
And the restaurants need to come back, right, food service needs to come back.
Lyne Castonguay 25:16
Yes, yes. It's starting to.
Michael LeBlanc 25:18
Yeah, you see, you see it here, it's interesting, as I said, the first time I'm back in the States, and, you know, you walk these big casinos. And, and boy, you see, you see the impact, right, it's, it's starting to come back, but I'm not surprised that, you know, any volumes would be, would be down. It's just, it's not there yet right? It's not back.
Lyne Castonguay 25:35
It was, it was very interesting, because we were starting to see things start to, it felt like it was turning the corner, and then Omicron hit, (crossover talk), and it really kind of stopped again. And it was, you know, what's been challenging specifically for us from a manufacturing perspective. And, you know, with 29 manufacturing facilities, we employ, you know, well over 6000 Associates in our manufacturing facility. And we've been, we've been really impacted by COVID and COVID absences specifically.
Lyne Castonguay 26:05
And so, and then, obviously, we have the chall-, the same challenging market conditions that others have with supply chains, labor shortages, you know, are real, the low unemployment rate in the United States, you know, is, is interesting, and, and we, we’re in some markets where we employ a large, you know, section of the population, you know, because we're in smaller rural markets and many of our manufacturing facilities.
Lyne Castonguay 26:31
And then obviously, the inflationary pressures have been tough. And in addition to all of these challenges, we actually decided to, we had two unique dairy businesses in the US, two separate divisions. One was the cheese side, and the other one was more of the Saputo, dairy food side, or the cultured product and aseptic product, and we merge those two. So, not only are we facing kind of those challenges, but we're also kind of seeing these, these, this merger and this opportunity that we have to, to align our processes and leverage our scale, etc. So, it's been an int-, absolutely interesting year.
Michael LeBlanc 27:10
Yeah. Let me ask you one more question about culture in the way you operate a lot of people here, we're seeing their direct reports for the first time. I was chatting with the president of FTD florists who I know, and he met his CFO for the first time in 18 months, in person, if you can believe it. Is, is that something that you've as a corporate culture, it was probably the case for many that they wouldn't be hiring remotely for executive roles or, you know, office roles had office roles, but now that, that's expanded. Do you, do you welcome that? Is that something you, you look at? In other words, would you hire someone from across the country to have a role within head office? And, and has that changed for you? And you've been, you know, you've been a leader for a long time has it changed your perspective on, on how you hire and where you access your talent?
Lyne Castonguay 28:00
Yeah, so, so, the first part of your question, you know, starting in the, the COVID times, we were very deliberate, like, with the way we did our we, we for certain meetings, we actually operated in a bubble. So, I was fortunate, early on, to be able to meet the entire senior leadership team in the US and be wor-, you know, so we would, you know, test, you know, for COVID. And then actually, you know, operate in a bubble where we couldn't go outside, you know, stuff like that. So, we were able to get in front of each other and be more productive early on, but we weren't able to do that everywhere. So, and we continue to operate on the frontline. So, our plants continued to operate and, -
Michael LeBlanc 28:43
Yeah of course.
Lyne Castonguay 28:43
Stay open and so it was a different. Yeah. And then the offices, to your point, the offices, we have, you know, we have offices in Milwaukee, we have offices in Lincolnshire, which is a sub-, suburb of Chicago, and then in Dallas. And for the most part, those were shut down and the majority of our teams worked remotely. Now as we approach the future, we've, you know, we've done return to office in early March, and we've actually lifted our masks mandates, and we've always operated and followed the CDC and OSHA guidelines in the US, but so it's, we've kept our environment safe.
Lyne Castonguay 29:21
And now we are going back, and we have an approach that is threefold. So, we have teammates that will actually continue to work remotely. Some of our teammates that support our manufacturing facilities have to travel all the time. And so, they have to be to be near an airport and they need to travel to visit our, out manufacturing facilities. So, the majority of them are remote and we'll continue to work remote. And then we have some folks that are going to be in the office five days a week very few of them, what we've approached and what we've looked at is more of a hybrid work, or what we call a flexible work arrangements, where we allow our teammates to work three days a week in the office and two days at home or off site.
Lyne Castonguay 30:04
So, that's the approach that we've taken. Now I've, I've always been kind of that progressive leader. I've had glo-, you know, national roles where my team was everywhere. And you know, I think that the most important thing is getting comfortable on Teams, or Zoom, which is not great. But, (crossover talk), -
Sylvain Charlebois 30:20
Yeah, yeah,
Lyne Castonguay 30:22
But it's, but I always encourage, obviously, to have as much as we can to have mee-, meetings in, in person, because you know, that energy is so palpable, and it's a very different vibe when you're in the office working. You can get so much, so many things done, rather than booking a whole 30 minute Zoom, you can pop your head up in somebody's office and say, ‘Hey, by the way’, you know, so, -
Sylvain Charlebois 30:43
Yeah.
Lyne Castonguay 30:43
There's, there's merit to that, I think, and given our culture, I think the companies that have, you know, high culture, high energy, passionate about working together as teams, it made it a little bit harder to be on Zoom. I mean, at first, it was kind of neat and cool. But then at some point, we had some of our teammates that said, ‘You know, there's no separation between home and work anymore. And I'm looking forward to go back to the office’. So, you know, we re-opened the offices, and you're, you can see it, like people are excited to be back, you know, some obviously are not as excited. They wanted to stay home forever.
Michael LeBlanc 31:19
(Crossover talk), I'm sure that factors into your hiring strategies, right. I talked to executives all the time, who say when we go to hire some people, they're like, I'm, you know, I'm in wherever I'm going to be there. So, in a tight labor market, you know, good to be able to offer that flexibility, right?
Lyne Castonguay 31:36
You're absolutely right. But no, I think it's also an opportunity, because, you know, you have some people, you know, we have a manufacturing facility and Lena, Wisconsin and to, you know, some people want to go back to their roots, they want to go back to their families. And so, they've (crossover talk), had, you know, so they're not looking for jobs in the market where, you know, we would have perhaps not had people looking for so, you know, I think it's also opportunity for us. So, we just need to make sure that we're you know, telling our story. And we're, we're present and, and we're actually telling the company, or telling the people in the US about Saputo.
Michael LeBlanc 32:11
Let's pivot the conversation to talk about in-, your international business and not in the kind of scope and scale. But if you step back and look at a lot of businesses based in Canada that go international, there's a range of success, you you're on the far end of success. You're very successful. What, what, what do you attribute to that, in terms of is it, is it the approach the entrepreneur approach you described, but what makes in short, what makes Saputo a successful international company?
Lyne Castonguay 32:38
So, our operational focus, I would say, our dairy expertise, and our people centric culture, is really exportable anywhere. And I do think that we have deliberately sought and acquired companies that have a fit with our culture, and that really has enabled and fueled our success.
Lyne Castonguay 32:59
And I think of the acquisition we made with, in the Carolinas this year in the US. So, we acquired two companies, or it's the, it's one company, but to have two manufacturing facilities, one was under the Carolina Dairies name, and the other one was Ameriqual. So, we acquired these two. And you know, the minute we got there, there was this complete fit, we felt it, it was, you know, culturally we aligned. We talked and thought about people the same way, etc. So, I think that that's what makes us successful. It's not just about looking to do acquisitions, but it's looking to make sure that you know, wi-, that they'll fit because that will help us kind of fast forward the integration, and really kind of realize our business case, when we're looking at the, these acquisitions globally.
Michael LeBlanc 33:43
Do you think it's the case? And I've heard it said that Canadians travel internationally well. Do you think because we, we as just from our background, we fit into, we talk about culture, but we also talk about other business operating cultures? Do you think there's an element of that as well?
Lyne Castonguay 33:57
Well, perhaps, but I'm again, I'm biased, obviously, being Cana-, being Canadian. I do think that it's, it's important. I mean, I look, I see it, I see it in the US as well. I do think that it's, it's the people that if you if you culturally fit and you choose people for fit, and make sure that you embrace the culture and the values of a company and you move along in that direction, I think it makes a difference. And I see the passion here and the entrepreneurial spirit from the team that has been here for a long time. And I remember in the US, we, we grew, you know, we acquired a business and then we grew the, the cheese side more organically. And I would say that, you know, I do see that, that has been really well welcomed, and the team is very welcoming.
Lyne Castonguay 34:41
And we also, one of the great things that we do is we actually export and exchange talent, right. So, for example, I have some teammates that work on the US team, on the leadership team that come from Canada and I have you know, our, our CFO comes from Argentina from one of our divisions. And so, we work together on exchanging talents, we actually have one of our SVPs of HR that we just exported to, to Australia. So, that's the beauty of the Saputo model is that we have an opportunity to learn from one another, we're open to that, we exchanged frequently. And that's, that's important. You know, you don't want to reinvent everything all the time. And we're all in the same sector. So, what can we learn from our acquisitions acro-, around the globe, and vice versa? So, that's, that's actually something that we, is welcomed here. And that's, that's really neat.
Sylvain Charlebois 35:37
Tell us more about what lies ahead for you. What are some of the projects that you're, you're going to be looking at for the next 12 months to 24 months now?
Lyne Castonguay 35:49
Look, I mean, the reason I joined Saputo is because of the potential and the growth potential in the USA, you know, I grew up and I lived in Montreal, so I drove by a Saputo plant to go to work every day. And so, Saputo is more of a household name in Canada than it is in the US. So, I joined the company, because I saw just so much growth and so much potential. Absolutely.
Lyne Castonguay 36:11
So, yes, the, the dairy market, and the dairy products in the US continue to grow strong. You know, there's, there's some real growth, and we're excited about it. And we're excited about our new platforms as well in dairy alternatives. We're focused, and we've shared publicly that we have a strategic growth plan that has five core pillars, we are really laser focused on strengthening our core business, optimizing our category portfolio, you know, my you know, my strength has been in building brands and in retail, and you know, being laser focused on the customer. And so, we're focusing in that area on customer and consumer analytics, analytics and solutions.
Lyne Castonguay 36:51
We're obviously accelerating our product innovation, we've talked about our cultivating our dairy alternatives. We did another acquisition that was in an, for an ingredient played in the dairy ingredient. That's really an area that we want to continue to focus on, which is increasing the value of our ingredients and, and maximizing the value of our ingredients.
Lyne Castonguay 37:14
We're also focused on optimizing and enhancing our operations. We have a great manufacturing network of I said 29 manufacturing facilities, we want to continue to focus on the manufacturing network and optimizing it more specifically just focusing on automation. It's important, it's critical, it's needed. Improving our supply chain, and our logistics, obviously, is also something that we're focused on. And then we want to drive efficiencies to fuel our investments and to really help us realize the value of, of the US business and our businesses across the globe, quite frankly.
Lyne Castonguay 37:51
A huge opportunity ahead of us. We have a really strong team. Again, as I said, you know, the results of we've seen in the US business are not where we want them to be. And it's not reflective of the efforts of the team. But we're turning the corner we feel pretty good about it. You talked about foodservice coming back, we're excited about that. It's a large penetration of our portfolio. So, we're focused, we're ready. We're really excited about, we're about to start our new fiscal year, next week. And so, it's like, we're, (crossover talk) we're the getting ready. It's Happy New Year for the team.
Sylvain Charlebois 38:26
That’s, right.
Lyne Castonguay 38:26
And we're ready to go?
Michael LeBlanc 38:28
Well, Lyne, thanks so much for joining us on The Food Professor podcast. I can't imagine a better leader to, to take the Saputo business in America to where it is going to be once demand comes back. And you've you're matching that with great product and innovation and culture and, and wow, what a great interview. It's thanks so much for joining us. It's a real treat to speak with you and we wish you much and behalf of Sylvain and I wish you much, much continued success.
Lyne Castonguay 38:55
Well, thank you, thank you so much. I'm it's a pleasure for me to be here and to represent this great company, this great Canadian company. It's really fun to be able to work for a Canadian company in the US and so I'm very proud.
Sylvain Charlebois 39:09
That's super cool by chance,
Lyne Castonguay 39:11
Bien merci, (inaudible) bonjour, bye, bye,
Michael LeBlanc 39:15
And let's talk about a couple things. Last, to bring us home. There's been some talk about grocers removing Russian products from grocery shelves and you asked the question, I asked the question, are there really a lot of Russian products on grocery shelves? How big initiative is that, but you made the point which is interesting is there's probably some Russian wheat in the bread that we consume? And because of the way the world works talk about that a little bit and, and I guess that was a surprise to me. But then I thought about it, (crossover talk), -
Sylvain Charlebois 39:43
Well actually so there's, there's no Russian bread, or we don't import, I, I, I'm not aware that we're importing wheat from Russia, or bread from, from other countries to be honest. Most of the bread that we consume in Canada is made in Canada. However, what I, what I argued is, well, what is a Russian product? And are you looking at by-products or ingredients as well. And when you start looking at ingredients, things can get pretty complicated with pasta, crackers, anything you import from Italy from Europe, perhaps there may be some Russian wheat, there's no way, there's no way to know. So, I, I, I think grocers are, are, are well intentioned. And so, and, and I think that really something that is often underappreciated is the fact that the AG Commodity Market is quite globalized. And so, and, and both the Ukraine and, and Russia would export a lot of grains to different manufacturers around the world.
Michael LeBlanc 39:44
I hadn't thought of that, you know, you're right, if you're buying Italian or Swiss crackers, you know, they could be, that could be Baltic. You know, Ukranian or Russian wheat, (crossover talk), -
Sylvain Charlebois 40:59
But so, I would say that probably you will need to remove many, many other products on shelves, but, -
Michael LeBlanc 41:05
If you could figure that out. I mean, if you, -
Sylvain Charlebois 41:07
Yeah, exactly. But it's, it's the symbolism.
Michael LeBlanc 41:10
I guess, the last thing we'll, we'll leave on, just since we're speaking about the Ukraine, as you're worried about famine. I guess we've talked about this before but is there anything you'd like to add in terms of you know, as you think of it today, now we're heading towards April, we've been watching what's been planted or what's not been planting. If you, let me put it this way, if your level of concern was at a, you know, on a scale of one to 10 was, you know, let's say it was a, it was an eight before, is it an 8? Or is it an 11? Now, is it gone up, down or sideways, as, as events have transpired?
Sylvain Charlebois 41:42
It's gone up, it's gone up for sure. Just because of the numbers that we're seeing, The World Food Program will be in a deficit, that region is so critical for the Middle East, for Northeast Africa, for parts of Europe, as well. And so, and the Wall Street Journal, actually, yesterday had a pretty good article pointing at North America. I actually think that, that all eyes now are, are on North America to deliver, to produce. So, there's more pressure, and I'm not sure Canadians actually realize that but there's more pressure.
Sylvain Charlebois 42:18
And, and the one thing we haven't discussed on this podcast yet, beyond the fertilizer issue, fiscal measures we can implement to help farmers, and things like that. There's also this, this food to fuel debate that really was raging back in 2007/2008. Remember when oil was at 147 US dollars, and people started to think about ethanol and bio-diesel? And well, the legacy of that is that 40% of corn produced in North America is for ethanol, -
Michael LeBlanc 42:55
Really?
Sylvain Charlebois 42:56
40, yeah.
Michael LeBlanc 42:57
I had no idea.
Sylvain Charlebois 42:58
40%. And so, you got to wonder, well, because of global food security challenges that we're all going to be facing this year, are, shouldn't we not look at that ratio a little bit more seriously now. And, and I do think that perhaps, of course, it's time to, to, to kind of think about this very differently. But of course, the reason why ethanol exists and, and, and these policies are in place is because we want to get green, we want a greener economy. And, and so there's, there's a lot of dilemmas that we are facing, and it's going to be interesting to see how Canada reacts. I don't think there will be famine in North America at all. I think we'll see higher food prices. But we should feel lucky, in the grand scheme of things to actually have something to buy at the grocery store. But, but this, I think I am expecting this food to fuel debate to, to come up again, over the next little while, for sure.
Michael LeBlanc 44:01
Well, and, and you know, such an interesting podcast. I mean, I learned so much doing this with you. So, once again, I'll go back to where we started. And, and it's great to be here and doing a podcast with you. And we got one more episode.
Sylvain Charlebois 44:15
I think we one more episode before SIAL, right?
Michael LeBlanc 44:18
That's right, we have one more episode before SIAL. And then in SIAL, we're going to do our episode together, some bonus stuff. So, tune in for that. And if you're going to SIAL, please reach out. We'd love to talk to you, sit down with us, and we'll be talking to folks there and so we're just going to have just a big pile of fun. So, thanks again to the folks from SIAL.
And so, let's wrap up this episode. I'm Michael LeBlanc, the President of M. E LeBlanc & Company and a bunch of other stuff including traveling to Vegas.
Sylvain Charlebois 44:48
Las Vegas,
Michael LeBlanc 44:49
Las Vegas, baby.
Sylvain Charlebois 44:51
And I'm Sylvain Charlebois, The Food Professor and I don't have an alligator song for Florida, yet.
Michael LeBlanc 44:59
Well, you're going to have to come up with one pretty soon.
Sylvain Charlebois 45:00
That's right.
Michael LeBlanc 45:01
All right everyone, thanks for tuning in to The Food Professor podcast we'll be back again with another episode another great interview and back with Trying Stuff, next episode
SUMMARY KEYWORDS
people, manufacturing facilities, dairy, crossover, Canada, acquisition, Sylvain, product, food, prices, years, talk, podcast, company, business, manufacturing, plant, focused, operate