Plant burgers bring home the bacon for Maple Leaf Foods
Why Canada’s king of pork and poultry became prince of plant protein in America.
Adria Vasil, Corporate Knights Magazine
via The Hamilton Spectator (Canada) - July 8, 2019
It's just after noon inside the belly of Maple Leaf Foods' glassy headquarters in the hinterlands of a Toronto suburb. Beyond rooms featuring simulated home and restaurant kitchens and a faux marketplace deli counter, the titan of Canadian pork and poultry sits in a large dining room gesturing for me to try his newest burger. This is no rebrand of meat on a bun. At an intimate lunch with his people and mine, CEO Michael McCain is unveiling a vegan patty cooked up to take a bite out of the skyrocketing plant-based protein market.
When this soy-free, non-GMO, beet-tinted, split pea-based Lightlife-branded burger debuts in grocery store fridges across the continent this barbeque season, McCain will have muscled his way into the food fight to crown a new wave of plant burger kings that look, cook and taste more like ground beef than ever before.
In the past two years, the meat maven has invested three-quarters of a billion dollars (about 40 per cent of its new investments) to become top dog in the U.S. vegan protein scene. It's a bit like an oil company betting big on green power. People get excited when an oil heavyweight like Shell announces that it's putting up to 10 per cent of its new investments in cleaner energy. Meanwhile, Maple Leaf just bet quadruple that on a sector with one of the cleanest revenue streams and leanest carbon footprints around.
Like other meat majors, Maple Leaf had been keeping a watchful eye on the steady growth in plant-based foods. In 2016, American meat giant Tyson (with $40 billion (U.S.) in annual revenue) coughed up $13 million in venture capital for a 5 per cent ownership stake in Beyond Meat, the much-hyped vegan startup. A few months later, Maple Leaf announced that it wasn't just dipping a toe in the sector, it was going whole hog after the U.S. alternative protein market, dishing out $140 million for a veteran of American veggie dogs, Massachusetts-based Lightlife Foods.
Buying Lightlife – a respected 40-year-old tempeh and tofu hotdog maker – was a solid play for Canada's largest pork producer and chicken processor, which used some of the cash from selling off its bakery division at a time when North Americans have been shunning white bread and trying plant protein in record numbers. With four decades in the game, Lightlife had already cornered 38 per cent of the refrigerated plant-protein market when Maple Leaf bought it out in early 2017.
Later that year, the Canadian meat maven behind the Schneiders, Shopsy's and Prime brands forked over $120 million for another leading heritage vegan brand, Field Roast Grain Meat, a 20-year-old Seattle-based company famous for its artisan vegan sausages and "celebration" roasts (you know, the kind you can serve up at family holidays). Within 12 months, Maple Leaf Foods had bought itself a 50 per cent U.S. market share in the rapidly growing refrigerated plant-protein business.
And just like that, the king of Canadian pork and poultry became the new prince of plant protein in the U.S.
"It's the only thing I've had in my entire life that is 50 per cent of anything in the U.S.," says McCain with a quiet chuckle. "So, I'm glad to have that position that's in high growth."
While pork prices have taken a beating in global trade wars, McCain assured analysts in a February conference call that the plant-protein sector is delivering the returns shareholders are looking for. The North American refrigerated plant protein market is currently small, pegged at $240 million in annual sales, but it grew by a staggering 40 per cent in 2018, with Maple Leaf maintaining at least its share of growth, according to the company.
With two leading veggie brands in his shopping cart, McCain and his team set up a wholly-owned independent subsidiary, Greenleaf Foods, to create, as its president Dan Curtin put it, a "halo" for Lightlife and Field Roast and grow their leadership. If that leadership was ever in question, by spring 2019 McCain and Curtin (a former partner at Boca Burger, another veggie burger pioneer) dropped the mic. They announced they would be spending $310 million to build the single largest plant-protein manufacturing facility in all of North America (in Shelbyville, Indiana), doubling the company's production capacity to meet "surging consumer demand."
THE QUEST FOR THE MEATIEST PLANT BURGER
For now, McCain and Greenleaf own half of the American plant protein market. But competition is growing stiffer by the minute, as new-wave beef simulators sweep the nation. The celebrity-endorsed Beyond Burger is already in 10,000 grocery stores in the U.S. and is hitting 3,000 Canadian supermarkets this summer, boosted by the fact that every Canadian A&W, and now Tim Hortons, outlet in the country promotes the heck out their Beyond products. Beyond's main competitor to date, the Impossible Burger, will also be turning up in U.S. grocery stores later this year (backed by all the marketing heft that comes with being crowned Burger King's new "Impossible Whopper").
Maple Leaf won't just be duking it out with Silicon Valley startups new to the food biz. Tyson actually sold its stake in Beyond this spring to focus on rolling out its own alternative protein product (in mid-June, Tyson launched its first blended protein burgers made from a mix of beef and pea protein). And by the fall, Nestlé, the world's biggest food company, will be gunning for a piece of the action with its yet-to-be-released "Awesome Burger" (or "Incredible Burger," as Europeans will be calling it).
If Maple Leaf's newly acquired Lightlife wanted to maintain its No. 1 spot in the refrigerated plant-protein scene, the company had to up its game and shed its frumpy Smart Patty branding. Curtin says Lightlife collaborated with Maple Leaf's team of meat scientists to develop its own beefy beet-dyed raw-until-you-cook-it pea burger, which took six months from concept to production. With the new recipe, Maple Leaf was putting a dog in the fight – one that happens to look a lot like the Beyond. And like its rival, the Lightlife-branded burger will be merchandised right alongside fresh burger patties in the meat aisle.
Except Lightlife and Field Roast already happen to be in over 20,000 grocery stores to begin with, giving them a leg up. And as their products fan out north of the border, they have the distribution muscle and resources of one of Canada's largest meat companies behind them. That helps explain why the new burger managed to secure fridge space in thousands of Loblaws, Sobeys, Metro and Longo's locations as well as a spot on Kelseys' menus before Canadians even sampled the burger. And as of June 24, Pizza Pizzas across Canada are serving up a new "Super Plant Pizza" featuring Field Roast's Mexican chipotle sausage.
That lengthy experience in the food industry, along with the company's sustainability vision, is also what compelled Field Roast's vegan founder and former president, David Lee, to sell to Maple Leaf in the first place. "Impossible and Beyond Meat are focused on the investor frenzy and there's a lot of money swirling around them but it's all based on a promise, a what-if scenario," Lee says.
"Versus Maple Leaf, which is run by a food guy that's been running that company for 25 years. They know how to sell meat – and I think Field Roast is a meat company, we put meat in its name," explains Lee. "Maple Leaf has the infrastructure, the connections, the process. They're not losing money." Adds Lee, "Selling to Maple Leaf just means the proliferation of more vegan food."
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