Hey there, time traveller!
This article was published 5/5/2020 (264 days ago), so information in it may no longer be current.
No one wants to crow about how well they’re doing in the midst of unprecedented business disruption, but the plant-based protein industry is about to have a moment.
Analysts are anticipating a strong showing from Beyond Meats’ first-quarter results, to be released today, and Bloomberg has reported that competitor Impossible Foods may be looking to raise even more money after there was significantly more demand for its $500-million debt offering in March.
Among other things, it means Manitoba is amazingly well-positioned to enjoy the strong market for plant-based protein with two production plants scheduled to come on stream by the end of the year.
In an interview with the Free Press prior to the coronavirus outbreak, the CEO of French company Roquette, Jean-Marc Gilson, said the growing interest in meat-alternatives was not a surprise to the company.
Fifteen years ago, the company converted a former potato starch plant northeast of Paris into a pea protein plant and over the years the company has committed to becoming the world leader.
Roquette has seen this sort of pattern before where a product grows slowly over the years and no one really takes notice.
"Then suddenly there’s a 30 per cent growth and it goes over a threshold and then you start seeing, wow, it is pretty big… and if it continues to grow at 30 per cent then it will be very big," he said. "That is what happened with this one."
Roquette’s $400-million pea protein plant which is in the final stages of construction in Portage la Prairie, will be the largest in the world. And it is going to have a competitor in the field — Merit Functional Foods Corp., a new private company in partnership with Burcon NutraScience, is building a state-of-the art pea and canola protein plant in CentrePort.
Gilson said he welcomes another player in the field focusing attention, as it will, on the region as the premier manufacturing centre of a significant piece of a rapidly growing global supply chain.
Earlier this year, Roquette signed a new supply agreement with Beyond Meats agreeing to a significant increase in the pea protein Roquette will ship to the U.S. alternative-meat manufacturer. Roquette has been supplying Beyond Meat for many years.
So even before production begins, Roquette will have most of the production spoken for.
"It means we will have time to think about the future and what comes after," he said. "We don’t have to spend time beating the bushes trying to find the next customer to fill it up."
The plant’s footprint has plenty of room for expansion, something that the company was mindful of from the start, shifting to a larger design early on which delayed its completion.
Dominique Baumann, president of Roquette Canada Ltd., said while the focus is on getting the plant up and running, future expansion will be considered.
"We certainly see a booming global demand for plant-based proteins, and as the global leader in this sector, we are committed to respond to that demand," he said. "This could imply future expansions, which we would assess in due time."
While the success of Beyond Meat and the consumer market in general was a confirmation that Roquette’s bet on pea protein was correct, it is also feeling good about betting on Manitoba with its abundance of cheap hydroelectricity and good water supplies.
"We have had tremendous help (from the province and the rural municipality) in terms of bringing whatever was needed to the right level," he said.
For instance, a few months ago there were bottleneck problems on the service road leading to the construction site and the province was quick in helping to widen that road.
The fact that the Canadian Prairie is one of the prime regions in the world for growing peas provides an obvious advantage for building pea protein extraction facilities.
It was not lost on Merit Functional Foods Corp., which is also in the final stages of construction of a smaller, 94,000-square-foot, plant in Winnipeg that will make pea and canola proteins.
Merit and its partner, Burcon NutraScience, just finalized a debt-financing package of up to $85 million.
Ryan Bracken, co-CEO of Merit, said the COVID-related closures of meat-packing plants in North America is bound to make consumers that much more aware of where their food is coming from. Meanwhile, demand for meat alternatives has been spiking drastically — some reports as much as 200 to 300 per cent — since last year at this time.
"What we see is that plant-based (protein) is here for the long term," he said. "All things ‘food’ have been heightened as far as supply chain needs over the past couple of months."
Merit, which has its own development agreement with Nestle, believes that its technology will allow food processors to develop better-tasting foods using plant proteins, which Bracken believes is crucial for the sustained success of plant-based proteins as food ingredients. That, coupled with the recent highlights of animal welfare and the vulnerability of the meat supply chain, creates excellent conditions for consumer acceptance.
"That will obviously play itself well to the plant based movement." Bracken said. "As long as people have the choice to move into food that actually tastes good."
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.