Taking Care of Business

What started as a small egg-grading operation in the basement of a
farmhouse in Palmyra, Ont., 75 years ago has flourished into one of the
largest and most successful egg-grading and -packing companies in
Canada.

What started as a small egg-grading operation in the basement of a farmhouse in Palmyra, Ont., 75 years ago has flourished into one of the largest and most successful egg-grading and -packing companies in Canada.

Seventy-five Years To celebrate L.H. Gray and Son Ltd.’s 75th anniversary, President Bill Gray (left) was presented with a crystal vase at the Gray Ridge golf tournament held on June 23. He is pictured here with Scott Brookshaw, vice-president Processing, and Mike Walsh, vice-president Sales and Marketing. Advertisement

Having no desire to become a farmer and fisherman like his father, Lyle Gray opted to take a chance on egg grading. With his father’s help, he started his egg-grading business in the basement of his parents’ house. Soon afterwards he met and married his wife, Ina, and in 1934 they moved the business to nearby Ridgetown.

The couple purchased a modest facility that included a creamery, feed business and live poultry sales. As one of five graders in a thriving agricultural community, competition was stiff, but that didn’t deter the Grays. It wasn’t long before they decided that eggs were it – and they focused their energies on expanding egg-farming operations and ceased the other businesses.

Lyle was “the visionary,” says his only child, son Bill, who has “virtually run the company” since 1965. The business has always been a family-run operation. Ina was “totally involved in the business” right up until her death in 1978, and Lyle focused on sales and the purchase of egg farms, says Bill.

Although Bill has been president of the company since 1968, “I didn’t start at the top,” he said. All of his training was on the job. He began grading eggs at the age of 10, and started driving a delivery truck for the company at 16. “Getting my driver’s licence was huge for me,” he says. “It allowed me to be more involved.”

Bill says he enjoyed the work and always wanted to be involved with the company, scheduling his duties around school.  Although he wonders if he could have benefited from post-secondary education at the University of Guelph, he joined his parents full time after finishing high school. By 1969, L.H. Gray and Son Ltd. was the only grader operating in Ridgetown.

L.H. Gray & Son has become one of the country’s leading egg-grading and -packing businesses with plants in Strathroy (its head office) and Listowel, Ontario. Both egg-grading plants are HACCP certified.

Throughout the 1970s, the company expanded its operations, purchasing two Gaylea Foods plants in Strathroy and Seaforth and “others along the way,” says Bill. The Ridgetown plant was moved to Strathroy and the Seaforth operation was closed.  The company opened a second grading operation in Listowel and expanded its own farming operations in Moorefield, Strathroy and Winchester.

Bill’s approach was to progress slowly and to “make sure that we have a firm foundation,” he says. Part of the company’s expansion during the 1970s was assisted by the development of supply management. “In the early stages, we struggled with it,” says Gray. It took several years for supply management to come into play and to work out the “kinks.” “But once a direction for supply management became evident, we were able to structure our business plan.”

Gray recognizes that the business has been “fortunate.” “We haven’t suffered any major hardships, and we’ve been offered a lot of opportunities with respect to acquisitions and mergers.” The company’s solid foundation and respect from growers and other companies meant that often they were called when others chose to exit the egg business.

Many of the producers providing eggs to L.H. Gray have been long term – one family has produced for the company since its inception – and the company is served by approximately 40 per cent of egg farmers in the province, the majority located in southwestern Ontario. The company has a wide distribution network throughout Ontario, servicing all areas except the extreme Northwest. The eggs are marketed under the Gray Ridge Farms brand.

Today, the company grades 1.6 million dozen eggs per week at its grading plants and another 1.5 million dozen per week with joint ventures, including two grading plants in British Columbia and Quebec, a breaking plant in Elmira, Ont., and a further processing plant in Toronto.

L.H. Gray and Son Ltd. is also a founding partner in National Egg, an alliance of six Canadian egg suppliers created in 2003  that provides specialty eggs and egg products to national buyers under the GoldEgg/JauneDoré brand.

Also key to Gray’s success is innovation and meeting evolving consumer needs. “I’ve always believed in having up-to-date technology,” says Bill. “It is what allows us to be a low-cost provider.” He also recognized the importance of food safety, becoming the first major grader/breaker to become HACCP certified. 

With respect to the consumer, Gray says flexibility is essential.  “Customers are very demanding today,” he says, and meeting consumer needs has been top priority. These needs are driven back to the company by the retailer, and L.H. Gray and Son Ltd. not only monitors customer requirements on the retail food and food service end (market trends), but also pays close attention to consumer trends. 

Until the 1980s, table eggs came in two simple forms: white or brown shelled. Although some development was made on the brown shelled eggs, it wasn’t until bad press on eggs and cholesterol in the 1980s that the company began producing specialty products, taking the egg much further than thought possible when Lyle and Ina first started the company.

To combat consumer concerns over cholesterol, the company launched a vitamin enhanced, all grain-fed, egg that had lower cholesterol than their regular eggs, says Gray. As functional foods gained popularity, the company began producing Omega-3 and lutein-enriched eggs and also offers a “premium” egg, which is laid at the peak of lay for a stronger shell and firmer yolk. 

As ethical concerns among consumers gained momentum, the company also started offering free-range and organic lines. 

New product development is key, says Gray. He’s interested in the development of extended shelf life and cooked products, where he sees “some potential.” His Vice-President of Sales and Marketing, Mike Walsh, works closely with the Guelph Food Technology Centre on product development and research.

Gray says they often look to the U.S. to see the potential for new products. “If it won’t work in the U.S., it won’t work here.” However, the company had what Gray called a “learning experience” when they followed Jimmy Dean’s ready-to-eat omelette idea, which flopped with Canadian consumers.

Although Gray didn’t foresee the company growing to its current size (“as long as we kept ahead, I was happy,” he says), it has always remained committed to price, quality and service.  The company has “very qualified” people and many have been long-term employees, says Gray.

He says many of his employees focus their time on meeting the demands of customers. Retailers have stiff competition and the focus is on sales and working with retailers on marketing plans.

Gray prefers to work on a five-year business plan (“10 years is too long,” he says), but his philosophy of “keep growing, keep building and operate as if you will go on forever” will likely see the company continue to succeed for many more years to come.