eResearch | The plant-based food industry is continuing to disrupt traditional food products and processes, as consumers change behaviors towards veganism and healthier food options, while incidences of intolerance for animal proteins increase.
In the U.S., the plant-based food industry surged in investor activity last year, when Beyond Meat (NASDAQ: BYND), a leader in the industry with products in over 3,500 stores and 27,000 restaurants, became the first plant-based food manufacturer to list on a public stock exchange.
Beyond Meat is expanding to China, as it announced this month, an agreement with Jiaxing Economic & Technological Development Zone, to open manufacturing facilities for plant-based meat products. This makes Beyond Meat the first multinational company focused solely on plant-based meat to build a production facility in China.
In Canada, The Very Good Food Company (CSE: VERY), a plant-based food company with over 150 retail and restaurant customers, recently became the first Canadian plant-based meat company to list publicly, previously reported on eResearch’s article on June 26: Three Canadian Public Plant-based Protein Companies with Little Revenue but Big Potential
Modern Meat
Modern Meat Holdings (CSE: MEAT) is a Canadian plant-based meat company focused on developing products that are soy, gluten, nut, and GMO-free. In July, Modern Meat started trading on the Canadian Stock Exchange (“CSE”), making it the second Canadian plant-based meat manufacturer to list publicly.
Last week, Modern Meat announced that it sold out of its products, while production was at maximum capacity for the past 12 consecutive weeks, due to high demand from retailers and consumers.
To increase production capacity, Modern Meat announced last month, the acquisition of a new facility in British Columbia, which is expected to more than quadruple Modern Meat’s manufacturing capabilities. Modern Meat is also expected to use the new facility to test new products and advance existing products.
Modern Meat also recently announced the acquisition of two of three Victoria’s Health & Organic Bar retail stores in British Columbia, for C$1.4 million in stock. Modern Meat received an option for five years to buy the remaining third store for C$3 million in cash. Last year’s revenues for all three retail stores totaled approximately C$4.3 million
In Modern Meat’s most recent quarter, for the three months ended May 31, 2020, it reported Revenue of C$0.02 million with a Net Loss of C$0.19 million.
Modern Meat’s stock price is currently trading at C$2.65 per share, a 27% increase since listing publicly on the stock exchange. Modern Meat has a market cap of C$76 million.
Burcon NutraScience
Burcon NutraScience (TSX: BU) is a Canadian plant-based technology company with over 285 issued patents for developing protein products using pea, canola, hemp, and flax. Burcon expects to produce its own proteins through Merit Functional Foods, a joint venture set up by Burcon with three veteran food industry executives.
This past quarter, Burcon raised funds from various sources to support the manufacturing of Merit’s 94,000 square foot plant-based production facility in Winnipeg, Manitoba, which they expect to be completed by the end of the year.
Last month, Merit announced a C$30 million investment from Bunge (NYSE: BG), a U.S. agribusiness and food company, to support the construction of Merit’s facility. The transaction resulted in Bunge becoming a 25% shareholder in Merit.
Merit also recently raised C$85 million in debt financing from a syndicate of lenders including Export Development Canada, Farm Credit Canada, and the Canadian Imperial Bank of Commerce (TSX: CM).
In addition, Merit secured a C$10 million debt financing deal, in the form of a 10-year interest-free loan from Agriculture and Agri-Food Canada, under the AgriInnovate Program.
For the three months ended June 30, 2020, Burcon reported little to no Revenue with a Net Loss of C$1.4 million versus C$1.3 million in the prior year’s comparable quarter.
Burcon’s stock is currently trading at C$2.80 per share, a 186% increase this year, and a 54% increase in the past twelve months. Burcon has a market cap of C$275 million.
Better Plant Sciences
Better Plant Sciences (CSE: PLNT), previously known as Yield Growth, is a diversified phytoceutical and consumer package goods company focused on developing and acquiring plant-based products and therapeutics. Better Plant currently has 50 products registered with Health Canada and 14 U.S. patents pending.
Better Plant recently announced a change to its name from Yield Growth, to reflect its strategic focus on plant-based food and beverage formulas, health supplements, therapeutic formulas, and skincare formulas.
Better Plant operates through various subsidiaries, including:
- NeonMind Biosciences, a legal psilocybin product company.
- Urban Juve Provisions, a plant-based skincare product company.
- UJ Beverages, a CBD-infused wellness beverage company.
- W & W Manufacturing, a hemp and CBD wellness product company.
- Wright & Well Essentials, a THC-infused product company.
- Yield Botanicals, a plant-based extraction technology company.
Last month, Better Plant announced a C$2.25 million acquisition of JUSU brand’s plant-based assets, including JUSU Bar, JUSU Life, and JUSU CBD. The acquisition included all inventory, packaging, raw ingredients, and intellectual property of 300 JUSU-branded plant-based products.
Better Plant recently received Health Canada cosmetic notification numbers for 23 of its proprietary plant-based products, including its plant-based eye creams, face & eye cleansers, face & body mists, nail cuticle oils, deodorants, shaving creams, beard oils, and roll-ons.
To improve online sales, Better Plant’s subsidiary, Urban Juve, recently announced the launch of an e-commerce website driven by Shopify (TSX: SHOP). In addition, Better Plant announced that eight of Urban Juve’s products were available for sale on Amazon.ca.
In FQ2/2020, for the three months ended May 31, 2020, Better Plant reported Revenue of C$0.16 million versus C$1.1 million in the prior year’s comparable quarter, which included a one-time licensing transaction of C$1 million. Better Plant had a Net Loss of C$2.5 million versus C$4.2 million in the prior year’s comparable quarter.
Better Plant’s stock is currently trading at C$0.08 per share, a 60% decrease this year, and a 70% decrease in the past twelve months. Better Plant has a market cap of C$12 million.
Plant-based Food Industry
The plant-based food industry is quickly expanding as more companies start to list on public stock exchanges to raise money, focusing on scaling production facilities to meet increasing demands.
According to Meticulous Research, the plant-based food market is expected to reach $74 billion by 2027, growing at a CAGR of 12% from this year.
CHART 1: S&P 500 vs BU (orange), MEAT (yellow), and PLNT (blue) – 1 Year Chart
