SunOpta Inc., the organic and non-GMO food company based in Toronto but largely run out of its U.S. office in Edina, announced this week the firing of its chief executive and the sale of its corn and soy businesses to Fridley-based Pipeline Foods.
SunOpta, which sells both raw materials and finished consumer foods, sold its specialty soy and corn business for $66.5 million to Pipeline, a two-year-old company that is trying to build a network of storage elevators exclusively for organic and specialty agriculture commodities.
SunOpta is struggling to improve profitability despite operating in on-trend areas of the food industry with high consumer demand — like organic, non-GMO ingredients and fruits, beverages and nut butters. In recent years, the company has been in a constant state of change as it attempts to overhaul its operations by closing facilities, selling businesses and simplifying its supply chain.
The company also announced the termination of David Colo, who had been chief executive for two years. In the last year, SunOpta's stock has fallen 62 percent.
SunOpta did not respond to requests for comment.
Pipeline Foods, a private-equity-backed grain trader, is in a period of expansion as it tries to build out an infrastructure for organic and regenerative food and feed ingredients. It has been acquiring or building grain elevators across the Midwest and Canada in hopes of becoming a convenient and competitive buyer of raw materials from farmers who use alternative growing methods.
"Our goal is to increase the bushels of organic grains grown in the U.S. and one of the reasons it isn't growing quicker is farmers don't have a place to bring their grains," said Eric Jackson, chief executive of Pipeline. "We are not trying to be a behemoth, we are just trying to do what's rational for the market."
Overnight, the company went from six to 11 storage and processing facilities and doubled Pipeline's workforce, offering jobs to all of SunOpta's employees in the soy and corn businesses. Through the acquisition, Pipeline gains four SunOpta facilities in Minnesota — in Hope, Blooming Prairie, Moorhead and Ellendale — and a facility in Cresco, Iowa.
The acquisition also expands Pipeline's processing capabilities. It will now be able to sell food-grade organic and non-GMO soy and corn in both whole or milled form, as well as nonfood grade ingredients for livestock feed. Pipeline currently sells food-grade and livestock-feed ingredients of organic small and ancient whole grains.
"There's virtually no redundancy between these two businesses," Jackson said. "We have some product overlap, but it's quite impressive how cleanly these two businesses fit together. This is almost like a zipper."