The plant-based protein sector is working to create supply chains that are sustainable, both from an economic and environmental perspective.
That requires closer connections with farmers and with end-users.
The plant protein sector was seen as a growing engine of Canadian agri-food, but leveling of demand for plant replacements for meat has created the need for a reset.
That includes being intentional about the supply chain. The plant-based protein sector is characterized by having ingredients companies, such as Roquette, between farmers and end-product manufacturers.
Roquette, a provider of plant-based ingredients, strategically built its Manitoba pea protein processing facility — the largest in the world — in the heart of where peas and faba beans are grown. Richard LaBonte, Roquette’s head of marketing for the Americas, estimates the median distance between its growers and the facility is 150 kilometres.
“We’re right in the middle of it,” he said.
“The value chain for us starts at seed selection,” LaBonte told attendees at Plant-Based Foods of Canada’s fourth annual general meeting and conference, held recently in Vaughan.
“Our role is to really take crop production and scale it into functional, sustainable ingredients for brands.”
Building consistency
Roquette’s focus on growers, agronomics and quality protocols provides consistency and creates space to anticipate rotation cycles and opportunity costs.
“It is a math problem. We have downstream customers that want consistent, reliable, nutritious, high-quality ingredients — we’re buying for 12 to 18 months down the road,” said LaBonte. “We have to understand what the price is down the road. It is a very complex game, but that’s the game.”
Margaret Hughes, Avena Foods’ vice-president of sales and marketing, agreed, but said balancing grower profitability with the manufacturer’s need for consistent, competitively priced, high-quality ingredients is a challenge.
As a specialty miller producing whole-oat and pulse ingredients for food and beverage manufacturers, Avena works with commercial customers to develop products while linking them directly to growers.
“People used to talk about Canada, about how it was the breadbasket of the world. I’d like to say it’s the peapod of the world,” said Hughes. “We want to actually be putting good food into people’s mouths.”
Long-term contracts
Avena’s solution? Long-term contracts with food manufacturers that are tied back to the growers to help create stability that supports grower commitment.
“If I can say to you, ‘You’ll have the same pricing on this raw material for three years,’ you’d be quite pleased, or at least if you knew what those numbers were,” she explained.
Additionally, she said, companies like Danone, which is under a 2,000-acre contract, are willing to pay growers to develop regenerative practices.
“That is a payment that’s outside of the bushel per acre that a grower might be getting, “she said. “We’re trying to come up with more creative ways to encourage growers to grow long-term the commodities that we need: the oats, the peas, the beans, the chickpeas and the lentils.”
That kind of investment provides certainty for the processor, manufacturer and growers, which is priceless in such an unstable world, she said.
Hughes said pre-competitive investment and collaboration with organizations like Protein Industries Canada are also key to the development, processing and manufacturing of value-added products, increasing Canada’s commodity values.
Aamir Malkani, Plant Up founder and CEO, took a different tack, saying he values a “well-oiled value chain” where there is “constant data flow up and down the street.”
Malkani said living in several countries before immigrating to Canada several years ago gives him insight into the breadth of potential Canada offers for scaling plant-based businesses like his, which produces high-protein, functional, plant-based snacks and frozen appetizers.
Investment to scale
“One thing that Canada has to offer is ease of doing business. It’s phenomenal,” he said. “Secondly, it is the access (of) CPG (consumer packaged goods) companies to ingredients.”
Access to quality ingredients, supplies and processors within Canada protects against global disruptions, he stated, unlike relying on imported ingredients.
That said, there are friction points in scaling the business, mostly related to Canada’s population, estimated at 41.5 million, compared with the 342 million living south of the border.
“I look at it as — we incubate here, but we accelerate in the USA,” Malkani said. “Because we will find scale, but south of the border.”
The other challenge is accessing capital to scale because investors are focused on tech-driven investments; however, he was heartened by another panel earlier in the day that addressed that issue.
“They were awesome. Maybe I’ve knocked on the wrong doors,” he said.
LaBonte said Malkani is living proof of how valuable the “Made in Canada” maple leaf is in brand building that elevates not only the product but also how Canada does things right.
“(It) is such a fantastic thing,” LaBonte said, turning to Malkani. “And you’re living that — it’s pretty incredible, actually.”
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