Two Canadian dairy co-operatives, Amalgamated Dairies Limited and Gay Lea Foods, are to work together in areas including procurement, R&D and distribution.

The companies have announced a “co-operative dairy alliance” that will see them “collaborate on market distribution, delegate and leadership training, research and development and procurement”.

Asked what prompted the co-operatives to decide to work together, Jim Bradley, ADL’s CEO and general manager, said: “Customers are always expecting more from their suppliers. These demands range from increased product diversity, a larger more efficient distribution network, to greater depth of product research and development.”

Amalgamated Dairies Limited, which is based in the eastern Canadian province of Prince Edward Island, supplies retail and foodservice operators in Canada. It markets products under the ADL brand but also manufactures own-label products. The company exports to the US, the Caribbean and Asia. It has six processing and distribution sites.

Gay Lea Foods, which is based in Ontario, manufactures products including butter, sour cream and lactose-free milk, supplying to domestic and export customers. It has 11 production and distribution sites across Ontario and Quebec.

Bradley said the co-operatives would jointly use their distribution facilities, would have “a wider platform to better utilise research and development” and have greater access to “diversified product portfolios”.

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He added: “We are confident that through combined volume purchasing, single desk purchase negotiations and the wider use of purchasing best practices that savings will be realised.”

Michael Barrett, the president and CEO of Gay Lea Foods, said: “We look forward to advancing one dairy voice, through the alliance, with our co-operative partner to ensure growth and prosperity of the Canadian dairy industry.”