Federated Co-operatives Limited (FCL) held its annual limited meeting on Feb. 28, where CEO Scott Banda reported that the co-operative recorded revenue of nearly $9.1 billion in 2021, up from $7.9 billion in 2020.
FCL is based in Saskatoon and provides more than 160 local Co-ops across Western Canada with strategy, leadership, wholesaling, manufacturing, logistics, operational, and marketing support.
Co-operatives are businesses that are democratically owned by their members. FCL and the local co-operatives it serves form the Co-operative Retailing System (CRS).
Although they use the services and branding of the CRS, stores such as Moose Jaw Co-op Food Store are independently owned by their members. They are administered by an elected board of directors.
Sharon Alford, president and chair of the FCL board, said during her remarks that her first experiences as a co-op member were head-scratching.
“To my recollection, my university business classes made no mention of co-ops,” Alford said. In co-ops, she continued, “owners were members with shares, and every member had the same number of shares – and one vote.”
Alford said that at the beginning of her career, her corporate training was centred on sales, and on maximizing profit for shareholders “who knows where.” She contrasted the outflow of money from customers to anonymous shareholders with the co-operative model of business, in which profits are redistributed to members.
She related an early experience where she observed a newly hired general manager working behind a deli counter during a rush. Alford said that that kind of teamwork makes the difference at co-ops.
FCL CEO Scott Banda reported on corporate performance. Banda has been the CEO for 12 years and announced his retirement in January. Banda is set to retire effective May 6.
Banda said that while 2021 had been severely affected by the COVID-19 pandemic and by severe weather events such as drought, the organization had proved resilient.
“These events impacted our lives and our businesses,” Banda said. “However, the diversity of our co-op portfolio, the creativity of our people, and cooperative commitment to our communities once again demonstrated the resiliency of our federation.”
Banda reported that sales in 2021 were $9.1 billion, compared to $7.9 billion in 2020. Earnings were $494 million in 2021 versus $177 million in 2020.
FCL will return $353 million of those earnings to local co-ops across Western Canada.
Banda added that the federation had also achieved record sales in 2021 in the sectors of fertilizers, crop supplies, and home and building solutions. FCL saw strong earnings in the food and energy sectors.
“All of that created a significant turnaround for us in 2021,” Banda said.
Other highlights for FCL in 2021 included a new energy roadmap, carbon capture use and storage projects, an integrated agriculture complex with a renewable diesel plant, and a canola crushing plant.
In November, FCL finalized its largest-ever retail acquisition by buying 181 Husky retail fuel sites. FCL spent $264 million on the deal. Once the transfers are complete, the sites will be transferred to independent local co-ops.
In reflecting on his 12 years as CEO and his upcoming retirement, Banda said he was proud of the changes he had been part of.
“We spent a fair bit of time at the start trying to convince everybody that we needed to change,” Banda told the audience, “to move to an organization of leaders and not managers, to focus on co-op principles (and) values, and to be a purpose-driven organization.”
Banda said the proof of their people-first philosophy and community ownership was the uniquely stable organization they had built, and encouraged members to continue believing in the co-op model.
