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  • By Lynda Kiernan-Stone, Global AgInvesting Media

Pipeline Foods Expands Canadian Organic and Non-GMO Grain Supply Chain

GAI News first reported on the birth of Pipeline Foods in February of this year, when AMERRA Capital Management and Pipeline Opportunity Partners announced their partnership to launch the company, which is dedicated to developing sustainable global supply chains to meet the demand for organic and non-GMO ingredients and grains.

Sales of organic and non-GMO foods in 2014 topped $200 billion, according to the report, “Non-GMO Foods, U.S. and Global Market Perspective, Second Edition” compiled by Packaged Facts, and are expected to climb to a value of $330 billion by 2019, reports Food Business News.

Indeed, a consumer survey conducted by Packaged Facts in 2015 found that 39 percent of respondents stated that they buy groceries with non-GMO labeling, and 35 percent stated that they bought organic products as a way to avoid GMOs.

In response to consumer demand, major players have been increasing their sourcing of organic and non-GMO ingredients, or have been making changes to their product lines, according to Civil Eats, which reports that Chipotle has eliminated GMOs from its menu items and Ben & Jerry’s is transitioning to non-GMO ingredients in its ice cream. Other major food companies making the switch include Gerber, which introduced a non-GMO infant formula in May 2016; Sabra Hummus, which has begun shifting GMOs out of its product line; Campbell’s, which has launched multiple organic and non-GMO soups, while also launching goldfish crackers made with organic wheat; Chobani, which has pledged to work toward ensuring organic and non-GMO feed for the dairy cows supplying the milk for its products; and Post, which has removed GMOs from its Grape Nuts cereal and has secured Non-GMO Project certification.

However, while demand dynamics have been changing, large scale supply chain models have not kept pace. Minneapolis-based Pipeline Foods plans to fill this gap, and provide a complete solution to these and other food companies that are expanding their organic and non-GMO business through a procurement strategy that secures a transparent, long-term, socially responsible, and sustainable supply of ingredients.

On September 6 of this year, Pipeline Foods announced the official launching of its global operations, and its plans to invest between $300 million and $500 million over the next three to five years in assets to support its growth.

"Pipeline Foods is eager to invest in supply chain solutions that bring value to the organic and non-GMO grain and oilseed industry," said Eric Jackson, CEO of Pipeline Foods in a company release. "We will put more profits back into the hands of the farmers, create dependability and transparency for food companies, and offer unique investment opportunities for financial partners."

Toward this end, Pipeline has established additional regional headquarters in Winnipeg, Canada and Buenos Aires, Argentina - giving the company a presence in three of the world’s top grain producing regions.

Within weeks, Pipeline announced the acquisition of two grain elevator facilities in Wapella and Gull Lake, Saskatchewan, Canada.

“These investments help Pipeline Foods move quickly toward our vision of building a more sustainable organic supply chain in agriculture," said Jackson. "The Wapella and Gull Lake grain elevators place us right in the heart of Canadian organic grain production, provide a new channel for farmers to do business, and allow us to connect this grain supply with food companies and manufacturers across the U.S."

The Wapella facility, which has a capacity of 3.500 tons, and the Gull Lake facility, which has a 4,000 ton capacity, are both certified organic through Pro-Cert, and will act as key collection points, or hubs, for organic grain and ingredient sourcing in their regions (southeast and southwest). The sites will store, screen, and blend organic barley, corn, rye, flax, lentils, oats, peas, soybeans, and wheat.

"Our expansion through these two facilities will enable Pipeline Foods to cultivate closer relationships with producers, ensure a clean and transparent supply, and ultimately offer better value for our customers," Jackson said.

Both sites are located on the Trans-Canada Highway and the Canadian Pacific Railway, and both have an inbound and outbound truck and rail availability and service. Collectively, the two facilities are expected to see a throughput of 25,000 tons of products in 2018, and even higher capacity once initial capital investments are made by Pipeline this year.

"I recently had an opportunity to tour the Pipeline Foods Facility and was impressed with the current operations and planned upgrades," said Gull Lake Mayor Blake Campbell. "Our local businesses keep our community strong, and we are very pleased to welcome Pipeline Foods to Gull Lake."

Growing Organic is Growing

Organic agricultural production in Canada’s Western prairies continues to expand. The report - Growing Organic in the Prairies issued in May 2016 by the Canadian Organic Trade Association (COTA) found that the provinces of Alberta, Saskatchewan, and Manitoba all saw an increase in the number of organic farms between 2012 and 2014, with Saskatchewan seeing the greatest increase - adding 78 organic operations over the time period.

These three Canadian provinces account for 59 percent of the organic acreage in the country; 89 percent of the country’s total output of organic wheat and oats; 85 percent of the country’s organic rye; and are the third biggest producer of organic pulses behind France and Spain.

In addition, The Organic Value Chain Roundtable (OVCRT) - a Canadian industry-led partnership that works with Canadian government bodies for the advancement of the county’s organic capacity and the advancement of innovative research to support the sector- has set a strategic priority to increase domestic organic retail sales from 1.7 percent of to 5 percent by 2018 through greater economies of scale.

Pipeline Foods’ supply chain solutions focused exclusively on organic and non-GMO will serve to not only fill a gap in the ability to meet consumer demand for these products but also will be a key part of helping Canada to meet the strategic goals of the OVCRT.

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