Canada needs a lot more of Couche-Tard’s bold risk-taking
People shop at a 7-Eleven convenience store in New York, on March 19.Ted Shaffrey/The Associated Press
Alain Bouchard’s relentless ambition transformed Alimentation Couche-Tard from a single convenience store in the Montreal suburbs into one of the largest companies in the country and among the most successful Canadian firms to ever expand abroad.
On Monday, Couche-Tard’s bid to buy 7-Eleven, the Japanese convenience store heavyweight, came to light. Two previous forays had been rebuffed but this time Couche-Tard has the heft to pull off the challenging deal, which would make it the world’s largest convenience-store company.
This is the type of Canadian story we read of too rarely. Mr. Bouchard and his co-founders saw an opportunity in a highly competitive business and built their company by being better than others at selling gasoline and cigarettes. Innovation is a key part of the strategy: these days, Couche-Tarde is forging the future of convenience around EVs and food.
Success in Canada led to success internationally.
It’s often said by naysayers that our economy is too small to build companies that go on to succeed beyond the country’s borders. But Canada has the 10th largest economy in the world; the problem is that there’s not nearly enough of Mr. Bouchard’s gusto.
Canada’s economy is defined by oligopolies in banking, telecoms, railways and pipelines. Such companies represent eight of the top 15 most valuable names on the Toronto Stock Exchange. Royal Bank and TD, founded in the 19th century, top the list. Banks are of course central to any thriving economy but banks focused on domestic lending should not represent an economy’s apogee. Look at the United States: the top companies – Apple, Microsoft, Nvidia, Amazon, Facebook and Google – define the modern world.
Canada has its success stories. Murray Edwards turned Canadian Natural Resources from a tiny oil company in 1989, when business in Calgary was dominated by foreigners, into the country’s leading producer. Shopify redefined internet retail, and clothing brands such as Lululemon have become household names. Then there’s Nortel and BlackBerry, who were global leaders before mismanagement led to failure.
But the list of breakthrough companies is too short. The history of the Canadian economy is resource extraction and branch plants. Selling out is all too common. The historic mistake of watching mining companies Inco, Falconbridge and Alcan sold to outsiders in the mid-2000s haunts Canada’s weakened efforts to become a player in critical minerals.
Australia did the opposite and its mining industry thrives, led by BHP and Rio Tinto. Australian investors have poured money into Australian companies. In Quebec, the Caisse de dépôt et placement has long supported Couche-Tard’s ambitions; the company’s stock is up 10 times in 12 years.
The one big time Canada said no to a foreign takeover, when Ottawa in 2010 rejected BHP’s hostile bid for Potash Corp., led to the merger of Potash and Agrium to become Nutrien, a global leader in fertilizer. And BHP still invested, building a potash mine in Saskatchewan.
The branch-plant mentality continues to reign. In tech, startup Wattpad dreamed of being the next Disney but in 2021 instead sold to a South Korean company. In biotech, Hamilton’s Fusion sold to Britain’s AstraZeneca this March.
Growing alone is the riskier move, and there appears to be a lack of risk-taking in Canada. Look at renewable energy in Alberta. Many fossil fuel companies include “energy” in their corporate name but don’t stray beyond oil and gas. The biggest solar farm in Canada, near Calgary, was funded by Danish money and backed by Amazon. Consider Eavor Technologies, a Calgary geothermal company that has drawn major investors from outside of Canada, including BP and Chevron, but at home couldn’t drum up interest, beyond public funding from Ottawa.
Last winter, this space published a series of editorials on Canada’s prosperity problem – and how to build a better future. It focussed on issues such as intellectual property, regulations, internal trade barriers and a reliance on cheap labour. There is obvious urgency: Canada’s GDP per capita is stuck where it was seven years ago. And the answer isn’t more oil. Alberta’s GDP per capita, in decline for a decade, is at a level it first reached two decades ago.
Couche-Tard and Mr. Bouchard have the missing intangible: bold, risk-taking ambition. The desire to be the biggest, the best, to succeed at home and around the world. It’s a lesson for all of Canada.