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Martin Bernard, an executive vice-president at Les Industries Bernard & Fils LTÉE, says that the company is 'attracting the interest of big players and that’s good news for everyone involved.'Renaud Philippe/The Globe and Mail

One of Canada’s most storied maple syrup companies has been taken over by U.S. private equity giant Bain Capital BCSF-N, in a sign the amber-coloured sweetener is increasingly drawing attention from well-capitalized investors.

Industries Bernard & Fils Ltée, of St-Victor, Que. – a major bottler and distributor of maple syrup that supplies Walmart and Loblaws, among others – has been bought by Bain-owned Valeo Foods Group for an undisclosed sum, according to a news release published by the parties Wednesday. Bernard sells syrup under its own name and also prepares cans, bottles and jugs sold under retail private labels.

Montreal-based private equity firm Phoenix Partners controlled Bernard, together with the bottler’s founding Bernard family. Phoenix is now cashing out after a five-year partnership, during which the maple syrup company doubled its revenue to more than $100-million annually. The family, which is staying invested in the business, is betting Valeo can accelerate Bernard’s growth even faster in the years ahead, both in North America and overseas.

“We’re attracting the interest of big players and that’s good news for everyone involved,” said Martin Bernard, an executive vice-president at Bernard whose grandfather launched the business out of a small building in 1966. “It means the market is becoming more and more mature and that we’re able to make the product known to more people.”

With the purchase of Bernard, Bain becomes the second big-name company to buy into Canada’s maple syrup processing industry, after Rogers Sugar Inc. bought privately held Quebec bottler and distributor L.B. Maple Treat for $160-million in 2017. Demand for the syrup is rising internationally as shoppers seek out food and drink made from natural ingredients.

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The world’s maple syrup industry is concentrated in a narrow geographic band, which stretches along the northeast portion of Canada and the United States. Quebec alone accounted for about 73 per cent of global output as of 2020. The province’s estimated 8,000 producers are largely independently owned. They harvested about 133 million pounds of syrup last year (the industry measures its output in pounds). Vermont, New York, New Brunswick and Ontario are among the other big syrup-producing jurisdictions.

A government-sanctioned cartel known as the Quebec Maple Syrup Producers controls commercialization of the breakfast staple in the province. The group sets a floor on pricing, locks in production quotas and stores much of Quebec’s output at a massive warehouse in Laurierville. Producers voted in a referendum in 1989 to work together to sell their syrup.

The idea behind the storage stockpile, known as the “strategic reserve,” is that it offers a guaranteed supply of quality-certified syrup that commands a minimum price and spurs further demand. This allows producers to escape the volatility that comes when unsuitable weather results in lower syrup volumes. Last fall, the Maple Syrup Producers said they would drain nearly 50 million pounds of syrup from the reserve to compensate for lower yields.

Quebec’s maple industry is in a boom period. Sales and exports have both increased 20 per cent over the past two years, Maple Syrup Producers president Serge Beaulieu said in a recent message to members. The cartel is working to boost output to take advantage of strong pricing.

A 45-gallon barrel of maple syrup is currently going for about $1,950 (or about US$1,530), according to Mr. Bernard. By 2024, another 1,300 production enterprises are expected to join the association, bringing the number of maple-tree taps being used in Quebec to 57 million.

Bernard, which buys its maple syrup from producers, is one of three main syrup bottlers and distributors in the province. The other two are Citadelle, a co-operative of producers, and L.B. Maple. There are about a dozen other smaller bottlers, including Appalaches Nature Inc.

Valeo, which is based in Dublin, Ireland, controls several well-known food names that are popular with consumers in Britain, including Rowse honey, Jacob’s biscuits and Matthew Walker pudding. The company also owns the Kettle potato chip brand in Europe.

“Valeo Foods is the best possible acquirer for Bernard for many reasons,” said François Fauteux, managing partner of Phoenix. The company has been importing and distributing Bernard’s maple syrup into the British market for more than a decade.

Valeo can leverage its distribution network and major food retailer relationships to help Bernard grow in Europe and elsewhere, and Bernard gives Valeo a beachhead in North America, Mr. Fauteux said.

The Bernard family will continue to have a strong hand in running the business, and the company’s operations and work force will remain in Quebec, parties to the sales agreement said in the news release. Valeo is acquiring 100 per cent of Bernard, but the Bernard family and the bottler’s management will be shareholders in Valeo, Mr. Fauteux said.

Bain’s objective is to boost Valeo’s revenue to €6-billion a year (Valeo tallied net sales of about €1.1-billion over 12 months to the end of March, 2021) and then take it public, Mr. Fauteux said. “So the guys in St-Victor de Beauce will exit along with Bain Capital in an IPO in a few years. Okay, it’s not automatic. But Bain is a premier fund and I’m sure they’re going to do great.”

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