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A shining example of collaborative leadership in a family business

4.5 min read

Led by brothers Fabien, Donald and Alexandre Fontaine, Préval AG is a shining example of forward-thinking, collaborative leadership. The company has become one of North America’s leading veal producers and the second-largest lamb processor. Located in Saint-Hyacinthe in Montérégie, Quebec, the family business oversees 42 subsidiaries encompassing all operations in the production chain, from calf, beef and lamb to transportation and processing. It also produces field crops and vegetables and processes grains.

The group, which is behind the Famille Fontaine brand in Canada and Catelli Brothers in the United States, employs 1,600 people and has consolidated sales of $750 million.

From farm to fork

Vertical integration is a strategy in which one company takes control of multiple stages of the production process and supply chain.

The eldest, Fabien, decided to start raising calves in 1989 by starting Délimax, and Donald joined him shortly after. In the late 90s, seeing that the vertical integration of their activities would give them a competitive strategic advantage, the two brothers combined the niches of breeding, food and processing. Vertical integration is a strategy in which one company takes control of multiple stages of the production process and supply chain rather than relying on external contractors or suppliers. In 2004, Alexandre, the youngest, who until then had been working as an engineer in the United States, joined as well.

Over the years, the trio has consistently grown the family business through alliances and strategic acquisitions, including that of Montpak International, which enabled them to create Délimax-Montpak in 2015. In 2021, they consolidated the activities of the various companies they manage into a parent company, Préval AG.

“With the founding of Préval AG, we are strengthening our leading position in the food industry. In this way, it is easier for our customers to find their way around and for our employees from different divisions to recognize themselves in the network. We continue to be guided by the vision we have aspired to since the beginning, which is to achieve a fully vertically integrated business from farm to fork,” Fabien says.

Growth and diversification

Each brother’s work complements the work of his siblings in the company, and each leads the sector that highlights his strengths. Fabien chairs the entire group and manages animal production, field crops and herd feed. Donald oversees transportation and vegetable production while wearing the hat of “opportunity detector.” As for Alexandre, he is responsible for meat processing and marketing meat products.

The leadership of each division is distinct, but the Fontaine brothers collaborate and confide in each other, seeing themselves as part of the same unit. Despite being in different locations, they make sure to exchange information and ideas on an almost daily basis. “Although each sector has its own realities, being a family business makes it possible to find and adapt the best operating methods for each link in the value chain,” Alexandre says.

As President and CEO, Fabien sits on the board of directors of all divisions, and each board is made up of an executive committee that holds ad hoc meetings. In addition, the three brothers work closely with the managers of each division, whose mandate includes fostering synergy between the various teams.

Innovation and sustainable development

“If Préval AG is able to ensure sustainability and maintain its competitive advantage on the North American scene, it is because we have always been able to innovate and reinvest profits wisely in the company while maintaining a long-term vision,” Fabien says. “And obviously, our success is due to our passion and hard work, values that are deeply rooted in the Fontaine family,” adds Alexandre.

Each year, Préval AG has a budget of more than $2 million for its research and development team to support actions that promote animal welfare and meet the principles of sustainable development while preserving profitability. With this in mind, several innovations have been implemented in agricultural and food production, such as the use of whey from local cheese factories for feeding calves, the establishment of a grain processing plant for better digestibility of animal feed and a second plant that recycles nutrient-rich straw for calves. The company also regulates the daily use of propane and has installed solar walls and windows on farm buildings.

In terms of slaughter and meat processing, considerable sustainability efforts are also being made, including the use of packaging with a lower environmental impact, the recovery of residual materials, systematic recycling and the reduction of energy consumption.

Family spirit

Recognized in 2021 as one of Canada’s Best Managed Companies for its organizational purpose and commitment to the health and well-being of its people, Préval AG has always valued the family aspect of its business. It cultivates a sense of belonging and ownership for those who participate in its management. “They are more invested in the company’s performance and feel empowered to do their best,” Alexandre says. What’s more, five of the Fontaine brothers’ children are already employees of the group.

Among other forward-thinking management practices, the Fontaine brothers designed a system that offers high-performing executives the opportunity to become partners by making them shareholders in the company. These executives have access to financial indicators, participate in strategic decision-making and play an active role in the company’s growth.

“The associated executives form a close relationship with us, feel a greater sense of belonging and definitely feel more invested,” Fabien says. In addition, the regular presence of Fabien, Donald and Alexandre on the floor in the company allows employees to have direct access to the CEOs.

Vision for the future

The Fontaine brothers’ key to achieving vertical integration has been the ongoing optimization of their business strategy, within and across various stages of production and distribution, throughout the entire value chain. With its business model that effectively meets the ever-increasing demands of the market, Préval AG continues to think big for its future.

From an AgriSuccess article as told to Mélanie Legacé.

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