Red River Co-Op 2020 Annual Report
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2020 A UAL REPORT LOCALLY IN VESTED | COMMUNITY MINDED | LIFETIME MEMB ERSHIP BENEFITS CONTENTS Our Mission To capture the hearts and minds of our PRESIDENT’S MESSAGE 5 employees, members and communities to CEO’S MESSAGE 6 grow our co-operative while returning profits MINUTES OF THE 82ND ANNUAL GENERAL MEETING 8 to our member-owners. BOARD REPORTS 13 Board of Directors' Report 14 Audit Committee Report 16 Our Vision Nominations Committee Report 16 To be our members’ preferred brand along Governance and Compensation Committee Report 17 life’s journey. FINANCIAL STATEMENTS 19 DIVISION REPORTS 39 Our Values About Us 40 INTEGRITY…be honest and trustworthy in Food Division 42 everything we do! Energy Division 44 Human Resources Division 46 TEAMWORK…we see the value in working SUSTAINABILITY REPORT 49 together and always striving to do our best. Community Investment 48 RESPECT…for our co-workers, members Environmental Sustainability 51 and communities. STATEMENT OF CO-OP IDENTITY 52 CODE OF ETHICAL STANDARDS FOR CO-OPERATIVES 53 RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 3 SUSTAINABILITY PILLARS PRESIDENT’S MESSAGE Red River Co-op is a different kind of business, he role of the Board of Directors is to steward the (at Seasons of Tuxedo) under resources of the organization and report on the state of construction We have also and we operate our business with five guiding pillars our co-operative This is my fourth year as President of completely renovated our the Red River Co-op Board of Directors and I have been original city store locations honored to work with our current Board to grow our The renovation at St Vital Tco-operative for the benefit of our many members was completed in December and we are very proud of the The pandemic and the subsequent restrictions imposed by look and feel of the store We encourage you to experience it for government to protect us all created huge challenges for you, yourself We continue to look for new opportunities to grow our our members, but it also drastically reduced the consumption food and energy offering to better serve our members, where a of fuel at our assets in Winnipeg and surrounding area It was an business case can be supported unprecedented situation and the Board met with management very early in the process to chart a new plan that took into We continue to invest in our energy business across our network account what was a dramatically changed business environment We are in the midst of a multi-year plan to improve our older for both food and energy assets so that they are consistent with the offering we want to see across the co-operative retailing system The dramatic fall in Your Board, and indeed the whole organization, takes its demand driven by the pandemic led us to defer much of the repair responsibility to members very seriously and while the year was and maintenance planned in fiscal 2020 and this will delay the different than anything we had experienced before, we continued completion of the plan by at least a year to work diligently to advance our co-operative and its competitive position, facilitating the sustainable growth of Red River Co-op I am proud of what we have accomplished during the past 80 years However, longevity is not an indicator of success It is important to tell our story – a story that was started in and not something we can take for granted We must remain the city of Winnipeg and surrounding communities more than relevant, competitive and flexible to meet the changing needs 80 years ago Not only do we keep profits local and invest in of our members local economies, we are involved and personally give where we live and work In order to accomplish this, we are taking a more strategic approach to co-operative governance This approach is made more We are a different kind of business A business built on the idea of important due to the increasing size of our retail and the increasing being truly local and a promise to stay that way A business that pace of change – requiring our Board to look five or ten years into cares For people and about people For communities and about the future to ensure we are meeting the needs of our members communities A business that is centered on the customer Where and communities customers can become members, and members are owners A business that shares its profits with its members We have benefited from bringing corporate performance management into all key areas at our co-operative This is a In today’s economy, competition remains a challenge to our process to provide insight into business decisions, alignment business We continue to observe competitors who are interested of resources and accountability It is important that we remain in entering the market Technology continues to change focused on our members and communities and leverage our behaviour; therefore, we must think about how our co-operative co-operative advantage The Board works with our Executive conducts its business and reaches both its members as well as Leadership Team, assessing potential challenges and developing non-member customers the strategic direction to lead us through the ever-changing business landscape We have a distinct advantage over our competition as our business model balances economic and social interests Investing in our Members’ support in the past and into the future is a cornerstone local communities and meeting the needs of our more than of our continued success, along with our alignment in values, 312,000 members is essential to who we are as a business vision and purpose In the years to come, we will continue to build on our strengths to advance our vision to “Be our members’ We have been challenged by our members to expand our preferred brand along life’s journey ” food offering in and around the city of Winnipeg and we have responded We entered the food business with four locations in Ward Weisensel 2014 and today we have eight locations operating with a ninth President of the Board CO-OPERATIVE LEADERSHIP CO-OPERATIVE COMMUNITY INVESTMENT FISCAL RESPONSIBILITY FISCAL SUSTAINABILITY ENVIRONMENTAL ENGAGEMENT EMPLOYEE RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 5 CEO'S MESSAGE he 2020 fiscal year was one of the most challenging years faced by our co-op The combination of the labour disruption at the Co-op Refinery Complex in Regina and the impacts associated with the pandemic took their toll on our operating results What was Tchallenging for us is that both of these occurrences were external conditions thrust upon us which we had no control over Despite these challenges your Red River Co-op was able to deliver a financial result very close to what we had budgeted, however significantly less earnings than what were achieved from last year’s strong results By far the most significant disruptor in the marketplace was the effects of the lockdown measures implemented to control the spread of the COVID-19 virus As governments initiated lockdowns, we saw early into our fiscal year the potential impact which could have been devasting to our financial performance The pandemic has had a global impact and at one point we saw world crude futures selling at negative prices The impact of this unprecedented event resulted in a major decline in profitability at the Co-op Refinery Complex and resulted in reduced patronage allocations from our wholesale, Federated Co-operatives Limited (FCL) At the initial onset of the pandemic, we began to implement appropriate safety protocols to protect our customers and employees My appreciation goes out to our members for your acceptance of these measures and as a result we experienced limited push back Our Executive Leadership Team also began the process of forecasting what the pandemic’s impact “could” have on our operations and determined it would be significant I am proud of the efforts of our management and their buy-in of changes initiated to mitigate the risks we saw coming As a result of the decisions made, we were able to limit the impact to our employees, however some did experience lay-offs for a brief period As financial pressures mounted, so did associated costs of implementing safety protocols at our facilities As lockdowns were imposed, we saw volumes at our gas bars decline To counteract the declining revenues, an aggressive expense control campaign was implemented which included delaying some major projects Continued on page 8 6 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT and elimination of a number of major repairs planned As a result planned for phase two We are also working with FCL to explore For the past couple of years, we have looked inward reviewing of the measures taken, we were able to achieve earnings at the other fuel alternatives such as hydrogen, E-85 and natural gas programs and policies to ensure we provide competitive working local level in excess of our budget, however, not enough to offset that could be introduced to the market conditions and a supportive and inclusive environment for our the decline in patronage from FCL As stated, the pandemic’s team members In 2020 we wanted to see how we stacked up impact to FCL’s refining operations was significant, and overall, The pandemic consumed our lives in 2020 and continues to do against other Canadian and Manitoban employers and submitted all retail co-ops experienced a decline in energy allocations As a so in 2021, however the risks it presented to us also provided us our first application for recognition as a Top Employer I am result, our net earnings were slightly less than our budget which with a look