SunOpta sheds U.S. Midwest organic corn, soy business

Pipeline Foods buys five of Canadian firm's facilities

sunopta soybeans
Cracked soybeans enter a SunOpta soymilk processing plant at Modesto, California. (Video screengrab from SunOpta.com via YouTube)

Organic food firm SunOpta Inc. has stepped out of the U.S. organic corn and soybean business in a $66.5 million deal with Minnesota-based organic startup Pipeline Foods.

Mississauga-based SunOpta announced Monday it closed a deal with Pipeline last Friday for the Canadian firm’s organic and “specialty” soy and corn operations, which include five plants in the U.S. Midwest.

Of those, three are in southeastern Minnesota, at Hope, Ellendale and Blooming Prairie; one is at Cresco, Iowa, about 120 km southeast of Blooming Prairie; the other is at Moorhead, Minn., just across the Red River from Fargo, N.D.

The deal also includes a “multi-year” supply agreement in which Pipeline will provide “certain ingredients used in SunOpta’s consumer products business.”

SunOpta, meanwhile, said it will still own and run its other North American-based sourcing and supply operations, as well as Tradin Organic, its European-based international sourcing and supply operation, which deals in organic nuts, seeds, cocoa and coconut.

SunOpta’s remaining North American sourcing and supply business consists of sunflower and roasting operations, including its roasted snacks plant at Crookston, Minn., acquired when it bought sunflower processor Dahlgren and Co. in 2010.

The SunOpta corn and soy business “has a long history of supplying high-quality specialty, non-GMO and organic ingredients to the food industry,” John Ruelle, the company’s senior vice-president of raw material sourcing and supply, said in a release.

“We believe Pipeline Foods is well positioned in this space, which should serve the industry well and be positive for our transitioning employees.”

Minneapolis-based Pipeline launched in the fall of 2017 with plans to invest US$300 million to $500 million in the organic and non-GMO food and feed sector over the following three to five years.

To that end, the company has since set up regional offices in Winnipeg, St. Louis and Buenos Aires. It also bought grain elevators at Wapella and Gull Lake in southern Saskatchewan shortly after its launch.

Pipeline later in 2017 bought elevators at Altantic, Iowa and Lignite, N.D., the latter about 50 km southeast of Estevan, Sask. The company also started work that fall on a new grain storage and handling facility at Bowbells, N.D., about 30 km east of Lignite, and opened that terminal for business last October.

Pipeline CEO Eric Jackson, in Monday’s release, hailed the SunOpta deal as an “incredible opportunity to grow our business and expand the accessibility of organic and specialty grains in the U.S.”

Through the deal, he said, Pipeline is “merging the newest team in the sustainable agriculture supply chain business with the most tenured and respected team in the business, and creating something even better.”

SunOpta said it expects to provide more details and “expanded commentary” on the financial impact of the deal with Pipeline when it releases its fourth-quarter results on Tuesday. — Glacier FarmMedia Network

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