A leaner Olymel in the works

Few heads of major Canadian food manufacturers can match the pedigree, experience, and energy of Yanick Gervais, president and CEO of Olymel.

A one-time elite amateur athlete and a licensed chartered accountant who grew up working in his family’s sausage business—a business he bought into right out of university and ran for a decade before selling it to and joining Olymel in 2016—Gervais, a 43-year-old husband and father of three teenage girls, manages to stay lean and fit while running the fortunes of Canada’s largest pork and poultry processor.

“I work out and play golf and hockey once a week in an Olymel garage league,” said Gervais. “It’s important for me to exercise regularly to stay in shape and perform at the highest possible level. My workouts are in my agenda the same way as my kids’ games or recitals and my other meetings.”

Who better then to lead a new strategy that aims to trim fat and make operations leaner in a company with nearly 15,000 employees making food products at 30 plants in five Canadian provinces for both domestic and export markets.

Yanick Gervais

Earlier this year, Olymel announced it will permanently close two pork processing plants in the Montreal area, eliminating 170 jobs. The company made a similar move in November 2022, when it announced the definitive closure of its pork processing plant in the Quebec farming hub of St-Hyacinthe on February 17, 2023, killing 107 jobs. The announcement came on the heels of news in October 2022 that Olymel, the largest division of the Sollio Co-operative Group, was eliminating 177 management positions, most of them in Quebec.

In a sit-down interview with Food in Canada at Sollio’s annual winter meeting in Quebec City in late February 2023, Gervais said the 454 jobs cut over the past five months are part of a major re-organization of Olymel’s workforce in the fresh pork sector.

“Our goal and strategy is to optimize and consolidate,” said Gervais.  “We need to better leverage our brand with less assets and less costs. That’s what we’re trying to achieve.”

A perfect storm

According to Gervais, the operational challenges facing Olymel are the result of a perfect storm of elements that were brewing for years and finally came to a head due to the pandemic.

Chicken processing only accounts for 25 per cent of Olymel’s business.

Chief among them was a need to mesh and streamline the jumble of assets that Olymel had accumulated since 2005 through its acquisitions of large companies and household brand names like Lafleur, Flamingo, Pinty’s, Tour Eiffel, F. Ménard and La Fernadière. The latter was a sausage maker in Trois-Rivières that was  founded by Gervais’s grandfather and was Olymel’s biggest retail competitor when it was acquired in 2016. 

Gervais, who became co-owner and  CEO of his family’s business right out of university in 2005, first joined Olymel as vice-president of La Fernadière. In 2018, after a six-month leave of absence to spend time with his family and ponder his future, he returned to Olymel as VP of operations.

“I love this industry, I love eating,” said Gervais. “I’ve done sales. I’ve done everything, but I’m really more of an operations guy. I like optimizing. I like production lines.”

He spent the next three years working closely with the company’s late president, Réjean Nadeau, who died just weeks after falling ill in October 2021. Gervais was immediately tapped to replace him.

“I was lucky enough to be part of all the decisions and to see him act,” Gervais said of his predecessor. “Réjean was very human as a leader and close to the people at Olymel. And he was the one who built the company with all the growth.”

When he took over as president and general manager of Olymel 18 months ago, Gervais said the restructuring plan was already in place to help deal with the many impacts that the pandemic had wrought on the pork industry. They ranged from an acute labour shortage and market and supply chain disruptions to raw material price inflation and global economic conditions.

The Chinese angle

“There was a big spike in 2020 when the China market was crazy,” said Gervais. “They didn’t have access to hogs anymore because of African swine fever, so they had slaughtering but not a lot of deboning and processed food capacity. They needed raw material and were on the hunt and buying everything from everywhere on the planet.”

At the same time, he added, the pandemic made it tough for Olymel, which relies on pork for 75 per cent of its business (the roughly 1 million chickens it processes every week accounts for the other 25 per cent), to find workers for its processing and packaging plants.

Against all odds, Gervais said China managed to rebuild its pork farm system by 2021, resulting in a sudden, enduring glut in world pork markets.

“That was the beginning of all the craziness in the pork sector,” said Gervais. “There was too much supply, and everything crashed regarding fresh pork prices. And we still didn’t have access to workers at the time because the programs for foreign workers were inactive.”

“It was kind of a reset,” he added. “There’s kind of a shrink right now as far as pork production is concerned. And it’s not just us here. In Britain, they’re down 20 per cent in hog producing and slaughtering, and it’s same thing in Spain and Denmark.”

At Sollio’s annual meeting in February, the Co-op’s president Ghislain Gervais (no relation to Olymel’s president) blamed the group’s staggering loss of $338 million in 2021-2022 on its fresh pork operations.

“We had to change the way we look at and do things, so that we can consolidate and optimize our operations,” said Gervais. “That’s why you’re seeing some blending flows in different segments (such as fresh, bacon and hot dogs).”

Hard decisions

He said Olymel’s recent plant closures and job cuts, though painful, are necessary evils.

“We have some expert sites that are able to do things better,” he said. For example, the production of hams at the two facilities in Blainville and Laval, which are a 10-minute drive apart and slated to close on April 28, will be transferred to what Gervais calls Olymel’s “top-notch facility doing hams” near Quebec City.

Similarly, the operations at the now-shuttered pork processing plant in St- Hyacinthe, which ended its packaging and deboning activities last summer, have been absorbed by other facilities.

Half of the plant’s workforce has also been relocated, said Gervais, and efforts are ongoing to retain all other workers whose jobs have been eliminated. He added that Olymel has increased salaries and benefits to help meet its staff needs. The company is also relying more on foreign workers, who already account for about 15 per cent of the company’s workforce.

“We’re always looking for opportunities to better serve our customers and do it more efficiently,” he said. “Nothing is off the table. As a team, we have to look at things. Not necessarily plant closures, but at least try to optimize the model again, do something else in another plant to try to be better at we do.”