REGINA, Saskatchewan, Feb. 08, 2022 (GLOBE NEWSWIRE) -- Today Protein Industries Canada announced a project to address the challenges related to raising deployable capital in Canada’s plant-based food sector, making it easier for plant-based food and ingredient processors to access such funds. This increased access to capital will help support the scale-up of small- and medium-sized businesses across the country.
“Plant-based food production is an important and fast-growing industry in Canada. Through the support of the Protein Industries Supercluster and its partners, this fund will play a critical role in attracting investments to the agrifood sector. It will also help small- and medium-sized businesses grow and seize opportunities by transforming quality ingredients into value-added products for the Canadian and international markets,” the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, said.
"The plant-protein sector is innovative and growing. These funds will help Canadian SMEs in this sector to continue to grow. The resulting additional capital, reinvestments and innovation will bring more products to market and will ultimately strengthen the Canadian food supply chain," the Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food, said.
Led by Bellwood Partners and Champlin Advisory, alongside other industry stakeholders, the consortium will work with an advisory board to identify and break down barriers to raising capital for the next generation of plant-based food and ingredient processors, with the ultimate goal to build a pool of capital specifically for the domestic ingredient processing sector. It is estimated that upwards of $27 billion will need to be invested globally to secure value chains and processing capacity to meet the growing demand for plant-based foods in the next 10 years. To remain relevant and lead the world in this growing global market, Canada will need to attract and deploy a significant amount of that capital.
“Canada is on the cusp of an incredible opportunity when it comes to plant-based foods. The global market is expected to surpass $250 billion by 2035. We believe Canada has the opportunity to capture 10 per cent of that market — which would result in the creation of a new $25 billion sector for Canada,” CEO of Protein Industries Canada Bill Greuel said. “We have a growing ecosystem of innovative companies who are putting Canada on the map, but one of the biggest constraints to growth is the lack of available capital to help build scaled-up processing facilities. This project will help change that by increasing awareness and building a fund of deployable capital.”
Constructing processing facilities can require up to $100 million worth of capital investment. This substantial equity component required to fund these new businesses, combined with the longer wait for financial returns and the overall lack of awareness of the scope of the opportunity within Canada's investment community, makes attracting capital very difficult for Canadian agrifood businesses.
“Canadian plant-protein processors face an uphill battle raising capital –investors are challenged in underwriting these investments despite the growing opportunities in the sector,” CEO of Bellwoods Partners Kyle Scott said. “There isn’t an appropriate pool of capital to support these entrepreneurs – the cheques are large, the individual project and technology risk is real, and there is no such thing as off-take agreements in the industry to help backstop an investment. A potential answer to these challenges is taking a portfolio approach, where a pool of capital is aggregated and spread across different Canadian processors, essentially underwriting Canada’s ability to compete in the plant-protein space.”
“The challenges and opportunities these plant-based businesses face each day do not fit traditional investment theses used by Canadian firms,” President of Champlin Advisory Blair Knippel said. “However, when you examine what’s really at stake for Canada over the next five to 10 years, it becomes easier to look beyond addressing the impediments to investment. Investing in the sector can create natural hedges against the future cost of inflation within Canada’s food supply chains, jobs in rural Canada, and opportunities for economic reconciliation with Indigenous peoples.”
Included in the consortium’s objectives is the creation of a fund that will raise $200 million in equity capital, with a focus on securing investments from Canadian institutions and other key stakeholder groups. An advisory board consisting of subject matter experts, industry representatives and Indigenous leadership will help lead the fund. By increasing the amount of deployable capital, the fund will support the creation of jobs and the adoption of more sustainable processing techniques, contribute to economic reconciliation to Indigenous groups, and provide security within Canada’s food supply chain.
Overall, it is expected that $2.4 million will be invested between Protein Industries Canada and the partners to support the execution of this project. The majority, $1.8 million, will come from Protein Industries Canada, with the remainder coming from the consortium partners.
This is Protein Industries 33rd project announcement. In total, Protein Industries Canada and its partners have invested more than $451 million into Canada’s plant-based food, feed, and ingredient ecosystem.
Media may contact:
Tiffany Stephenson
Regina, SK
306-519-8202
tiffany@proteinsupercluster.ca
About Bellwood Partners
Bellwoods Partners is a family office focused on early-stage investments for Canadian companies building technology in both the real physical and software worlds. The firm focuses on identifying top founders and bringing its network and expertise to help them rapidly scale their business.
About Champlin Advisory
Champlin Advisory is a Saskatchewan-based private family office managed by Blair Knippel. The firm specializes in finance and operation innovation with a focus on bringing new technologies and ideas to the marketplace.
