PowerPoint Presentation

International Economic Forum of the Americas1The Global Food CrisisCourses of Action for a Food Manufacturer

June 7, 20112LASSONDE INDUSTRIES INC.

Distinctive Food Products3

4Product Lines

Lassonde Industries Inc. develops, manufactures, and markets distinctive food products.2010 Sales: $536 million

Lassonde Industries Inc.The Canadian leader in the development, manufacture, and marketing of fruit juices and fruit drinks. A. Lassonde Inc.Develops, manufactures, and markets specialty food products.

Lassonde Specialties Inc.Specializes in marketing wines in innovative, ecofriendly Vinopaks.

Arista Wines

45Our MissionThe mission of Lassonde Industries Inc. is to be the Canadian leader in the production and marketing throughout Canada of food products that by their quality and variety contribute to the enjoyment and wellness of consumers.Our OperationsNine (9) plants located close to consumers or fruit producers.56What Characterizes UsInnovation / Speed of Execution

Focus on consumer needsDifferentiated products Unique packaging Development and protection of expertiseSpecialized in R&D, Marketing, and SalesQualified personnel Competitive compensation FlexibilitySpeedMultiple packaging choices, multiple processes, and multiple brands PartnershipsStrategic alliancesCommon objectives with key suppliers VisionLong-term strategic vision (plant today to harvest tomorrow). The next quarter is not the priority, just a step.6Consolidation of clientele

Changing consumers

Labour shortages

Increase Canadian per capita consumption of fruit juices and fruit drinks

Consolidation of suppliers

Consumers spoiled by low prices

The overall increase in the price of foodstuffsThe Main Issues7To develop a strategy, we must be able to adapt.

8Having Vision Means:Deciding our future.

Controlling our future before others control it.

9The global food crisis =

The overall increase in the price of foodstuffs10The global food crisis is an unprecedented increase in the price of numerous foodstuffs. The cost of raw materials has increased 5.7% and, during this time, the cost of a barrel of oil has increased 16%.

11The Global Food CrisisUpwardly spiralling demands from countries such as China, India, and South America, countries that are improving their standards of living.

The price of foodstuffs such as coffee has increased (for example, Starbucks has increased the price of its coffee by 17%).

Institutional hedge fund investors have become major players in food commodities, speculating by building positions and thus pushing prices upwards.

12Some crops are replaced by crops connected to oil or other more expensive forms of energy (sugar, corn).

The global food crisis is made worse by a sharp increase in prices caused by the weakness of the U.S. dollar.

The global food crisis is also the result of rich countries doing little to encourage poor countries to develop their agriculture, this so as to maintain high food prices.

13What Can a Food Manufacturer Do?14Yesterdays SolutionsOffer product lines at the same price = product line marketing. (But what happens when the cost of every raw material increases?)

Reduce product size (always very popular).

Change recipes while keeping the product taste the same.

Increase prices (beware of the impact on consumption and sales volumes).

Innovate.15Current SolutionsRely more than ever on innovation.

Buy land and pay food producers on a contract basis.

Build on positioning with food producers in emerging countries (sustainable development).

16A. InnovationDefinition:

Innovation is the ability to make a connection between various variables so as to translate ideas into a new product; or it is a new way of making an existing product. 17R&D at LassondeLassonde invests close to 1% of its sales in R&D.33% of sales attributable to new products launched over the past three years.An experienced team of 11 food industry specialists.Innovate, set yourself apart, act quickly.Flexible R&D, and being ready to respond to threats or challenges.Launch 2025 new products a year.Focus on developing juices that are good for your health and that taste good.

18InnovationOasis Health Break 10 fruits, with probiotics and antioxia2007 Winner: Grand PrixCategory: Non-carbonated beverage

19InnovationDefinition:Two Examples:Apple juice: Same product but different technologies

20InnovationOrange juice:Frommade from concentrate to not made from concentrate

21InnovationInnovation spurs capital investment.

Innovation creates expertise.

Innovation keeps our headquarters here.

Innovation gives us new market segments (nutraceuticals).

22InnovationInnovation creates quality jobs and a company that is good to be with.Training and development of competencies in the workplace- 735 employees received 12,326 hours of training.

Advancement in the workplace- 40% of our white-collar workers have supervisory positions through internal promotion.

23InnovationDecrease in absenteeism- Absenteeism rate of 3.5% (below the Canadian average of 6%)

A 12% decrease in disability costs

Better labour relations- Collective agreement of 4 to 6 years- No arbitration in 7 years- 22 continuous improvement committees- Personnel turnover of less than 5%

24B. Buy Land / Lease LandIf a food manufacturer wants to secure the supply of a foodstuff for its specialized plants, it should buy or lease land from food producers.

(Some countries search the world for land.)25C. Build on Positioning with Food Producers in Emerging Countries (Sustainable Development)Partnerships with producers of new or existing crops in emerging countries.

Help emerging countries to invest in agriculture and to find expertise.Exchange expertise.Give a P.O. for financingGet raw materials at competitive prices for a set period.262. Work with local growers on good crops (Kent & Keith mangos).

3. Make sure that the money goes to the food producers (have proof).Partnerships with producers of new or existing crops in emerging countries. (contd.)27By enabling emerging countries to improve their crops, we help to stabilize world prices and help the rest of the planet.28Food is the basis of everything.

Consumers from rich countries have become used to prices for certain foodstuffs.

Poor countries want to improve their lot.

29Instead of giving fisherman enough fish to feed them for a day, let us show them how to fish, and we will have helped them to feed themselves for the rest of their lives. ...

and we will be able to feed ourselves for the rest of our lives.

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