BCI Foods used an Export Development Canada (EDC) loan guarantee as the catalyst to help expand its productivity, diversify its Canada-only market, achieve double-digit year-over-year growth and resolve supply chain issues. Read how the company did it and how you can use EDC to plan your company’s international expansion, get better connected and fuel your growth.
If you’ve enjoyed a hot bowl of Aylmer or Primo soups on a cold winter day, then you’re already acquainted with BCI Foods. Besides making soups, the agri-food business based in St. Hyacinthe, QC, is also the “brand behind the brand,” crafting quality canned soups for grocers across Canada to sell under their own private labels.
In 2018, Fonds de solidarité FTQ, Fondaction, and Investissement Québec bought the Scottish-owned Baxters Canada Inc. soup plant and partnered with a group of private investors under the Champlain Financial Corporation, led by Daniel Cousineau.
The purchase made the business, renamed BCI Foods, 100% Canadian-owned. “As one of the largest soup manufacturers in Canada, BCI Foods already had the makings of a successful company baked right into its DNA,” says Cousineau, BCI’s CEO. “But the company first needed to be re-energized, and we needed support to do that.”
That re-energization plan included an ambitious list of ingredients. The company, recognized by its customers for quality products, speed of response and innovation, needed to address challenges faced by nearly all manufacturing companies today. These included modernizing its equipment, increasing productivity, finding new buyers, and dealing with supply chain uncertainty.
The people at EDC…don’t have a one-size, cookie-cutter answer for everybody; they listen to you and understand that each company has its own reality. So, for us, when making those decisions to acquire more equipment, it was very reassuring to have a financial partner, like EDC, to accelerate our growth.
One of BCI’s most important objectives was to diversify its client base beyond Canada.
“We needed to expand beyond the Canadian market and find new opportunities to pursue our expansion,” says Cousineau. “Given our proximity to the U.S. market and similarities in consumption habits, our choice was fairly obvious. Americans spend over $7 billion buying soup annually.”
But first, BCI needed to increase its production capacity, and that meant getting the required capital to expand and modernize its soup-making and canning equipment. EDC was an obvious choice to assist BCI in putting together the right financial structure to support that growth.
One of the first things Cousineau noticed about working with EDC was a feeling of reassurance. “The people at EDC are exceedingly supportive. They don’t have a one-size, cookie-cutter answer for everybody; they listen to you and understand that each company has its own reality. So, for us, when making those decisions to acquire more equipment, it was very reassuring to have a financial partner, like EDC, to accelerate our growth.”
To ensure BCI could get the optimum amount of capital to scale up its production capacity, EDC worked with BCI’s bank, providing them with a guarantee for 50% of the required loan.
As we grow outside of Canada, we’re very thankful for EDC’s help, and their commercial flexibility in crafting the appropriate financial assistance.
The company entered the U.S. market as planned and worked hard to generate awareness among American retailers. “We went from having 100% of our sales in Canada in 2018 to having 30% of our sales in the United States today, thanks to the increased capacity and EDC’s loan guarantee,” says Cousineau.
3 ways to get the EDC advantage
EDC is Canada’s credit agency, dedicated to helping Canadian companies of all sizes succeed in global markets. In 2019 alone, EDC worked with Canadian companies to generate about $64 billion in Canadian exports, direct investment abroad and domestic business.
“Many business CEOS, CFOs, and executives aren’t fully aware of EDC and the three major ways their company can benefit from contacting us,” explains Karen Trujillo, a commercial account director at EDC. “First, EDC’s people are constantly out there researching and gathering information about global markets, risks, opportunities, trends, best practices, changing regulations—you name it. And we share that global expertise, market intelligence and resources with Canadian companies—for free—and help them to build their business plans and better inform their decisions. Through EDC, you can find out how to scale your business, what new markets to enter, your best bets for where and how to get financing, becoming ESG compliant, finding new buyers, and more.
“Second, as you can imagine, gathering all that knowledge means EDC’s people connect with a range of subject matter experts across Canada and around the globe. We’ve built an extensive global network, and we can help you connect with the right people, resources, government programs and services you need—again, no charge. We have deeply established relationships with all major financial institutions across Canada and with offices in some 20 markets worldwide, we can provide on-the-ground knowledge and can often connect you to new buyers and suppliers,” Trujillo says.
“And third, you can cost-effectively use EDC’s financing and insurance solutions to get the capital you need for financing your expansion. With the Export Guarantee Program (EGP), for example, we can work directly with your financial institution to provide guarantees of up to US$10 million on your loan or line of credit. Companies across Canada are taking advantage of that to manage their operating costs, enter new markets, buy equipment, set up a foreign affiliate and more. Another example, the Account Performance Security Guarantee (APSG), enables businesses to issue letters of guarantee without having to tie up their line of credit.”
Increasing appetite for growth with EDC
With the initial company expansion a success, BCI saw more new opportunities but needed to increase its production capacity and operational efficiency, including an additional dosage line waiting to be installed. These objectives would require additional financing, and the team also wanted to improve its overall debt facility.
“Since the acquisition, BCI’s shareholders have injected nearly $60 million into the company. They had the production tools, the dedicated management, the market, and they were very well controlled,” explains Karen Trujillo. “So, we worked with BCI’s new financial institution to support them in order to secure a larger line of credit and provided an additional guarantee on that.”
Cooking up new plans for the future
For BCI, increasing production capacity to achieve their U.S. market goal was just the beginning. “We’ve doubled the size of the company and continue to pursue opportunities across America in that segment,” Cousineau says.
And he expects more growth on the horizon. “We’re very focused on private label, which continues to represent a significant strategy for retailers across America. We’re also considering further product diversification as we continue to put forward our culinary skills. As we grow outside of Canada, we’re very thankful for EDC’s help, and their commercial flexibility in crafting the appropriate financial assistance.”
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