Retiring CEO sees bright future for Gay Lea co-op

Michael Barrett, CEO of Gay Lea Foods, will retire early next year and he predicts bright futures both for the producer co-operative and the Canadian dairy sector.

Barrett’s successor beginning to ease into her role as the CEO of the 1,400 member dairy producer co-operative on Oct. 31.

“I’m not only confident there’s a future for Gay Lea, I am very excited about dairy as well,” Barrett told Farmtario in a recent interview. “In dairy, I believe we’re only held back by our lack of imagination about what we can deliver.”

Why it matters: With roughly a quarter of Ontario dairy producers among the member-owners of Gay Lea, the cooperative plays a crucial role in the province’s dairy sector.

In his nine years since taking over from Andy MacGillivray as CEO, Barrett delivered. A recently completed deal to buy Manitoba-based Bothwell Cheese marks 10 acquisitions since he stepped into the top role. In August of this year the company achieved $2 billion in annual sales for the first time ever – a goal, Barrett said, that he strove to achieve prior to retirement.

“Since I became president and CEO, we’ve doubled our top line,” he noted.

Barrett first joined the co-op in 1999 as director of human resources and, after progressing through other leadership roles, took over from MacGillivray on April 1, 2014. A news release from the time quoted then chair of the board Paul Vickers saying Barrett “has demonstrated exceptional leadership skills, has been instrumental in our success and we are excited about continuing to build with his vision and guidance.”

Barrett, though, gives MacGillivray much of the credit for transforming the co-op, founded in 1958, from a mid-sized processor focused on protecting its own turf into a growing, innovating, future-thinking company dedicated to sustaining rural economies and securing markets for its members’ products.

“I always felt Gay Lea was not reaching its full potential, that it didn’t quite have the vision of greatness, and didn’t really celebrate its cooperative heritage,” Barrett recalled. MacGillivray came on board in 2002. “When we hired Andy, life started to change in terms of developing that vision.”

He sees the milestones achieved by Gay Lea during his tenure – including not only the 10 acquisitions and revenue increases but also the welcoming of member-owners from a new commodity (goat milk) and another province (Manitoba) – as extensions of what MacGillivray started.

“We worked very closely together . . . He’s a different leader than I am. I’m a different person than Andy is. But we very much shared a common vision, common values, common ethics.”

Gay Lea’s current board of directors’ chair says Barrett sells himself short by passing the credit on to his predecessor. Rob Goodwill, who farms near Owen Sound, has known Barrett since 1999 and his progression from delegate-to-director-to-board chair through the co-op’s governance structure mirrored Barrett’s progression through staff leadership roles.

He agrees MacGillivary introduced an environment of openness and good communication to Gay Lea but it was Barrett who truly changed the “culture” by making member-owners care about taking part in decision-making and supporting the co-op’s rural economic vision.

Goodwill describes Barrett as having a “larger than life” personality when meeting with farmers and staff, expressing a high level of support and compassion that inspires others to respond in kind. “Mike is a true co-operative person. He really believes in the co-operative model.”

And his biggest legacy, Goodwill believes, will a belief within the co-op “that we can do anything; that we can lead the industry.”

Asked for a select few things he’s proud about, Barrett cites Gay Lea’s industry-leading positions in employee and governance training, and its commitment to charitable causes both in Canada and abroad. But he agrees growth is definitely another feather in his cap. 

“We’re not seen as an organization that’s staid and conservative. I’m proud of that.” He’s quick to add, though, that it has never been just about growth. “I’m also proud that we’ve been able to maintain our cooperative values while that growth happened.”

“We haven’t forgotten where we came from.”

Dividends have increased

Co-op members, meanwhile, have benefitted by the fact that, since Barrett has been with the company, the annual patronage dividend went from about $500,000 distributed between approximately 1,200 members to this year’s projected dividend of $20 million distributed amongst approximately 1,400 members.

“I believe a co-operative is a socio-economic model that has more relevance now that it ever has,” he said. “That (patronage) money goes back to the farm, it gets spent on improvements or it gets spent in the community and in building the local economy.”

It hasn’t, of course, always been smooth sailing. Barrett was at the helm during the tumultuous COVID-19 pandemic. Before that came intense lobbying as the federal government progressively opened the door on threats to supply management through international and North American trade deals.

Although Gay Lea joined others in the sector expressing its dismay with trade deal concessions, Barrett is confident dairy in Canada can survive such threats. But key to this is bringing together a united voice from the sector including both producers and processors, and both privately owned and cooperatively owned players. He said this is something he tried to promote throughout his time at the co-op’s helm.  

Another key will be a willingness in the industry – both among processors and on the farm – to accept changes if they’re needed. “We’ve got to relook at our systems in a completely different way” to adapt to future consumer demands and other possible uses for dairy products. That’s something he believes Gay Lea did when it invested $140 million in 2018 in a nutraceutical-grade dairy ingredients facility.

Support from government would, of course, also be nice. “As an industry, we still need to be able to invest in processing in Canada,” he stressed. “The industry, along with Gay Lea Foods, needs to be able to innovate.”

Getting away from the corporate boardrooms and Ottawa conference halls and moving out to Ontario’s farms, he recalls the difficult discussions that eventually led to Gay Lea purchasing Hagersville’s Hewitt’s Dairy – with both its cow and goat milk products.

“If you think about consumers wanting products out of a basket of goods, it absolutely made sense for us to get in goats,” Barrett said. “But if you think about it in terms of who our farmers might want to partner with, it was a very unconventional strategy.”

There’s only one other dairy co-op in the world that has both bovine and goat members – in Norway. It wasn’t lost on Gay Lea’s member-owners that they were being asked to consider an extremely out-of-the-box idea. “Were the goat guys suspicious of us? Absolutely. Were our guys suspicious of the goat guys? Absolutely.”

But he recalls offering his take on why he thought the co-op should take the leap. “It’s all about that rural sustainability, about maintaining economic viability in our communities and on our family-owned farms,” Barrett explained. “It doesn’t make sense for one farm to be reaping the benefits of our co-operative when the next farm is struggling.

“It’s about inviting our neighbour to share in the good fortune.”

He says he fell just shy of a goal to turn Gay Lea into “a successful, independent, national co-operative.” It does sell its products all across Canada but its membership is limited to two provinces and it has production employees now in Quebec, Ontario, Manitoba, Alberta and British Columbia. He jokes that, given that the newly-acquired Bothwell Cheese has a processing facility in British Columbia, the co-op is now coast-to-coast – “it’s just that our east coast is the coast of Lake Ontario.”

“I didn’t quite get (to expanding into Atlantic Canada) but I still think we did pretty well.” 

Taking over from Barrett is Suzanna Dalrymple, who most recently led the Canadian unit for Mars Pet Nutrition after spending almost two decades at Procter & Gamble Canada.