“With our refreshed strategic Blueprint announced today, we are sharpening our execution focus… aligning the talents of our team to leverage the strength of our portfolio of leading brands, leadership in sustainability and world-class assets,” said Curtis Frank, president and CEO of Maple Leaf Foods Inc., in a news release.

Maple Leaf released its fourth quarter financial results on Feb. 22. Over 2023, its meat protein group’s sales increased about three per cent to $4.74 billion.

However, in Q4, sales didn’t meet expectations “as a result of global pork market dislocations that have persisted longer and deeper than we anticipated, and a challenging consumer demand environment,” Frank said in the news release.

“Plus we still have a short distance to go to bring home the full benefits from our London Poultry and Bacon Centre of Excellence projects,” he said.

At the end of 2023, the meat protein group had an adjusted EBITDA of $463 million, up 22.3 per cent from 2022.

The plant protein group saw sales of $147 million, down just over 13 per cent from 2022.

“The sales decline was driven by lower volumes in retail and foodservice products, partially offset by pricing action implemented in prior quarters to mitigate inflation,” Maple Leaf said in its 2023 annual report.

The plant division’s end-of-year EBITDA was a loss of $32.9 million compared with a $105.4 million loss in 2022. The company said this improvement came on reduction of startup expenses, higher pricing and “operational improvements.”

In an emailed statement, a spokesperson for Maple Leaf said the plant-based business had performed well in Q4, posting a positive adjusted EBITDA of $0.1 million ($100,000).

Meat processors struggled in 2023, with Olymel dialing back hog production in Alberta and Saskatchewan early in the year, and closing processing plants in Ontario and Quebec.

“Over the past two years it is well documented that Olymel has experienced significant losses in the processing of fresh pork as a result of limited market access globally,” Olymel CEO Yanick Gervais said May 2023.

“Now, coupled with stubbornly high feed costs, resulting in unprecedent losses in the hog sector, we have little choice but to retract and position ourselves for success in the future when conditions improve.”

Manitoba-based Hylife Foods shuttered its Windom, Minnesota plant at the beginning of June, and laid off a handful of mainly administrative workers in Manitoba, citing “current global condition.”

In the plant protein space, Nourish Marketing noted in its 2024 trend report that while consumer curiosity drove the first wave of plant-based meat analogues, most consumers “will not pay a price comparable to meat for a product they view as a disappointing alternative to the real thing” while vegans and vegetarians drive only a small portion of sales.

Nourish predicted a consolidation of products in that space and a turn toward more plant-forward options.

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So why aren’t more producers planting them? The biggest reason is the risk of root rot, a disease of peas that can infect the soil for years.

But what if root rot wasn’t a problem? That’s what a group of Prairie researchers intend to find out. They want to build a pea that’s root rot resistant and drought tolerant. The big picture goal is to encourage more producers to give peas a chance.

“Nitrous oxide from nitrogen fertilizers is a major greenhouse gas that is 300 times more potent than carbon dioxide at trapping heat,” wrote Marcus Samuel, a professor with the University of Calgary, in a news release.

“Peas belong to the legume family and require little external nitrogen, making them exceptionally climate-efficient. They really are the perfect crop for this research.”

Genomic research on peas has been missing in recent years, wrote Sateesh Kagale with the National Research Council of Canada.

The project teams the University of Calgary with NRC as leaders of the four-year research effort.

“With fewer genomics resources invested in pea breeding, farmers are struggling with low yields caused by root rot and drought,” wrote Kagale. “This project has immense potential to significantly enhance pea genetic and genomic resources, laying the foundation for transformative varietal development.”

From a marketing perspective, the high price of meat in recent years is causing peas and other legumes to carve a niche in consumers’ protein consumption, said Samuel.

“The demand is going up like crazy. The demand for pea protein in the U.S. went up 64 per cent in the last five or six years.

“In a world where meat is expensive, consumers from all over the world are looking at peas to help meet their protein demands.”

From a climate standpoint, peas’ nitrogen-fixing benefits are more than even the most optimistic scientist would guess. According to the Pulse Canada website, just under nine million acres of pulses eliminate 3.6 million tonnes of carbon dioxide per year, the equivalent of 1.1 million passenger vehicles taken off the road annually.

“If we get double that equivalent under peas, it will be equal to the energy required to power every single household in Calgary,” said Samuel.

The project will start with researchers and partners getting their hands on pea germplasm from all over the globe.

“India might be growing a root rot resistant pea that we haven’t had access to before, so we are collecting about 2,000 germplasm (lines) from across the world,” he said.

The samples will be tested under field conditions for root rot resistance and drought tolerance. The genomes of the top 50 or 60 most promising lines will then be sequenced to see if they have particular traits that resist root rot or mitigate the effects of drought.

“And then we’ll actually move that trait into elite Canadian varieties,” said Samuel.

Gene editing will be used to remove the genetic material that causes root rot.

“Part of the project is to ‘knock out’ certain genes that cause root rot,” he said.

Don’t go looking for these improved varieties at the local seed supplier any time soon. Samuel doesn’t promise that lines will be available at the end of the project.

“At the end of four years we are confident that we will add some lines that are ready for breeding purposes. And hopefully we can see something in the field in eight to 10 years.”

The $7 million PeaCE (Pea Climate-Efficient) project is funded by Genome Canada as part of its $30 million, nine-project initiative to drive genomics research and innovation and help reduce the carbon footprint of Canada’s food production systems.

Aside from U of C and NRC, project partners include a who’s who of research and ag institutions across Western Canada, including – among others – AAFC Lacombe and Western Grains Research Foundation.

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After announcing last month it would submit a bid for the next-to-new Merit assets, Vancouver-based plant protein firm Burcon NutraScience said Monday it’s now “participating in a bid” for Merit in co-operation with “an industry plant protein company.”

Burcon didn’t identify the other party in its release Monday. It did say that if their joint bid is successful, the two parties “intend to restart the facility and together, strive to reach profitability.”

Burcon CEO Kip Underwood said it “firmly believe(s) that Burcon’s technologies and process expertise are fundamental to the Merit facility’s future profitability.”

Having just opened for business in early 2021, with major shareholders also including U.S. agrifood firm Bunge and former executives of Hemp Oil Canada, Merit was placed into receivership March 1.

Court-appointed receiver PricewaterhouseCoopers (PwC), in its first report filed March 31 with Court of King’s Bench in Winnipeg, said it had set a deadline of last Friday (April 21) for formal bids on the Merit assets, and expects to “determine the accepted offer” by Friday this week.

PwC hasn’t yet said how many formal bids it got for the Merit assets by the deadline. In its March 31 report, it said it had already conducted 14 visits to Merit’s Winnipeg plant site with potential buyers and scheduled five more, “with several interested parties traveling from overseas and other parts of North America.”

Burcon, in its release Monday, reiterated it “expects there to be competing bids (and) there is no assurance that the bid will be accepted by the receiver.”

PwC had said in its report that it expects to have reached a “definitive agreement” with a bidder no later than May 12 and to formally close a deal by the end of May at the latest.

If the Merit plant does reopen, it would then need to reconnect its supply chains with farmers in its catchment area.

Daryl Domitruk, executive director with Manitoba Pulse and Soybean Growers, last week told the Manitoba Co-operator that, to his knowledge, growers who’d contracted with Merit for this year have been released from those agreements.

“Then the question is, do I continue to grow peas or do I switch to another crop,” he said. “That’s a decision that the growers have probably made by now.” — Glacier FarmMedia Network

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Merit, whose major shareholders include Vancouver plant-based protein firm Burcon NutraScience, U.S. agrifood firm Bunge and former executives of Hemp Oil Canada, was placed into receivership March 1.

According to the first report from receiver PricewaterhouseCoopers (PwC), filed last Friday with Court of King’s Bench in Winnipeg, a “data room” has already been set up and an information brochure circulated to some prospective buyers. PwC said it also “may continue to identify and initiate contact with other such parties.”

PwC, in its report, said it will accept “qualified offers” for Merit’s assets until 4 p.m. CT on April 21, and expects to “determine the accepted offer” by April 28.

A “definitive agreement” would then be reached by no later than May 12, court approval granted by May 26, and a deal closed by “not later than May 31.”

Burcon, which has a 31.6 per cent stake in Merit, has already announced it will bid on the Merit assets.

In a separate release Thursday, Burcon said it’s since been in discussions with the receiver, “continues to conduct due diligence and is furthering its efforts to put forth a compelling bid” to PwC for the Merit assets.

However, Burcon added, it “expects there to be other competing bids” and “there is no assurance that Burcon’s bid will be accepted by the receiver.”

Merit’s secured creditors include Export Development Canada (EDC), owed $58.6 million plus interest, fees and other costs; Farm Credit Canada (FCC), owed $36.4 million plus similar costs; and CIBC, owed $5 million plus costs. Unsecured debts owed to trades and other creditors as of March 1 were estimated at $2.4 million.

The Canadian Grain Commission is also running an audit to see if CGC-licensed Merit still has any “outstanding liabilities” owing to farmers who delivered crops to the plant, PwC said.

However, PwC added in its report, according to Merit’s records, no farmers are owed for any crops that Merit “has purchased and are in its possession.”

PwC last month laid off 77 Merit employees; kept on 23 “key” staff under agreements running mostly to the end of this month at the latest; and retained three former managers on an “independent contractor” basis.

Three of the “key” staff have since quit, while others continue to maintain the plant, handle product sales and accounts receivable and help in the sale process, PwC said.

PwC said last Friday that as of March 1, Merit had about $3.8 million worth of inventory — about $2.7 million of which has since been invoiced awaiting payment before delivery. About $231,000, or half of Merit’s other outstanding receivables, has also since been collected.

Built starting in 2019, Merit’s 94,000-square-foot plant opened in early 2021 and began accepting canola and yellow peas to process product lines such as Puratein canola proteins, Peazac pea proteins, and MeritPro protein blends using Burcon’s protein extraction technology.

In 2021 Merit had projected it would be able to eventually expand to take up to 100,000 tonnes of canola and peas per year.

EDC, FCC and CIBC were members of a consortium of lenders — also including Agriculture and Agri-Food Canada — who altogether had provided Merit with $95 million in debt financing starting in 2020. AAFC’s contribution came in the form of a 10-year, interest-free $10 million loan from the department’s AgriInnovate program.

Merit in 2020 had also picked up $9.5 million in support from the Protein Industries Canada supercluster to back product development.

EDC and FCC filed Feb. 24 for a receivership order, saying Merit was “suffering significant cash flow shortages” during the first three quarters of 2022.

The two Crown-owned lenders said in their filing that they expected Merit to run out of operating cash by around March 3 or 4 and it would then “no longer be able (to) operate its business as a going concern.” — Glacier FarmMedia Network

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PricewaterhouseCoopers (PwC) on Wednesday announced it’s the receiver for both Merit Functional Foods Corp. and the numbered company that owns Merit’s processing plant and property in Winnipeg’s CentrePort industrial park, following an order granted Wednesday in Court of King’s Bench in Winnipeg.

Federal lending agencies Export Development Canada (EDC) and Farm Credit Canada (FCC) filed Feb. 24 for the order, citing principal and interest owed to them at about $58.5 million and $36.5 million respectively.

The two lenders, in their filing, said they expect Merit to run out of operating cash by around Friday or Saturday this week, at which time it would “no longer be able (to) operate its business as a going concern.”

A joint-venture firm with major shareholders including Vancouver plant-based protein firm Burcon NutraScience, major U.S. agrifood firm Bunge and former executives of Hemp Oil Canada, Merit “began suffering significant cash flow shortages” between January and September last year, EDC and FCC said.

Since September, the two lenders said, Merit has been conducting an out-of-court sales process aiming to sell both its business and the Winnipeg plant — but that process “did not generate any formal offers” for the lenders’ consideration.

Burcon, which holds a 31.6 per cent stake in Merit, in a separate statement Tuesday had disclosed EDC and FCC’s plans to seek a receiver. Burcon also said it “intends to continue its discussions with Merit’s lenders… in order to seek a potential funding solution for Merit’s business.”

Burcon CEO Kip Underwood, in a Feb. 8 letter to that company’s shareholders, said Merit’s stakeholders in September had put up loans of $3 million to “address Merit’s anticipated liquidity requirements as it continued to ramp up its production and sales.”

Merit late last year sought “to identify a new strategic investor for its business,” he wrote, adding that “to date, no funding has been received from a new investor.”

Merit, for the past six months, “has made significant progress,” he wrote, improving daily production performance and increasing its year-over-year sales, while customers say Merit’s products are “best-in-class.”

However, he added, “unfortunately, the overall financial performance of the business has fallen short of expectations and led to the current cash flow concerns.”

Burcon, he wrote Feb. 8, had been “exploring interim financing for Merit while working on a more specific, longer-term funding solution” and was “prepared to fund ongoing operating expenses and debottlenecking capital with support from our largest Burcon shareholder to back the overall project.”

Burcon on Feb. 14 released results for its third quarter ending Dec. 31, showing Merit’s total revenue for the quarter at $3 million, up 146 per cent from the year-earlier period. Burcon for the quarter booked impairment charges of $12.3 million related to its investment in, and loan to, Merit.

Underwood, in his letter Feb. 8, said Burcon has “real concerns about Merit’s financial situation and viability” and “recognize(s) the news of Merit Functional Foods’ situation may be a surprise.”

However, he stressed, if its funding plans for Merit are successful, “Burcon could have, for the first time in its history, a chance to own its destiny… While there is risk in our current path, we believe this also presents Burcon with a significant opportunity.”

Built starting in 2019, Merit’s 94,000-square-foot plant opened in early 2021 and began accepting canola and yellow peas to process product lines such as Puratein canola proteins, Peazac pea proteins, and MeritPro protein blends using Burcon’s protein extraction technology.

In 2021 Merit projected it would be able to eventually expand to take up to 100,000 tonnes of canola and peas per year.

Its more recent products have included Peazazz C, a pea protein with a “smooth, grit-free texture” for ready-to-drink beverages, launched last July, and Organic Peazazz C 850, a certified organic version, last December for use in beverages, protein powders and protein bars.

EDC and FCC were members of a consortium of lenders including Agricultural and Agri-Food Canada and CIBC providing Merit with $95 million in debt financing starting in 2020. AAFC’s contribution came in the form of a 10-year, interest-free $10 million loan from the department’s AgriInnovate program.

Merit that year also picked up $9.5 million in support from the Protein Industries Canada supercluster to back product development. — Glacier FarmMedia Network

CORRECTION, March 2, 2023: The notice of motion filed Feb. 24 by EDC and FCC states Merit was expected to run out of operating cash “on or around March 3-4, 2023.” An earlier version of this article incorrectly referred to those dates as “Thursday or Friday.”

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The closure signals increasing troubles in the plant-based protein sector, where U.S. sales are flattening.

Colorado-based Planterra sold fake meat under the Ozo brand, but JBS will now focus on its plant-based operations in Brazil and Europe, said Nikki Richardson, spokesperson for JBS USA. European and Brazilian operations “continue to gain market share and expand their respective customer bases,” she said.

The sector has come under pressure because meat alternatives do not taste good enough and prices are too high, said Gary Stibel, chief executive of the New England Consulting Group, which works on consumer products. He said JBS made a good decision to shut Planterra.

“Everybody and her sister thinks they can make money in this business and they can’t,” Stibel said. “Eventually it will be a good business for a few players. Today, it is a sinkhole for many folks that are throwing good money after bad, chasing too little demand with way too much supply.”

This summer, Beyond Meat lowered its revenue forecast for the year and announced job cuts as rising inflation hurt efforts to make its pricier plant-based meat more affordable.

Separately, Canadian pork processor Maple Leaf Foods has reduced the size of its plant-based business, Greenleaf Foods, by 25 per cent.

The value of all meat alternatives sold in the U.S. — including fresh and fully cooked products and faux seafood — rose by 1.1 per cent in the year ending Aug. 27 to about $963 million, NielsenIQ said (all figures US$). That compared to growth of 8.1 per cent over the same period in 2021 and 44.8 per cent in that period in 2020.

For fresh meat alternatives, U.S. sales dropped by 6.8 per cent in the year ending Aug. 27 to about $254 million, compared to a year earlier, NielsenIQ said. Sales in the category climbed 28.9 per cent over that same period from 2020 to 2021.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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“Beyond Meat and McDonald’s co-created the plant-based patty which will be available as part of their McPlant platform,” a Beyond Meat spokesperson said in an email.

After McDonald’s announced its McPlant line earlier in the day, shares of plant-based meat maker Beyond Meat fell eight per cent.

Beyond Meat was the front runner for a contract as it had conducted tests of a so-called “P.L.T.” burger at nearly 100 McDonald’s locations in Ontario earlier this year.

McDonald’s reported market-beating profit and revenue for its third quarter on Monday.

“Plant-based products are an ongoing consumer trend. It’s not a matter of if McDonald’s will get into plant-based, it’s a matter of when,” McDonald’s CEO Chris Kempczinski said on a call with analysts.

Analysts, rival fast food companies and plant-based protein producers have been closely watching McDonald’s plans as it is one of the few national chains yet to sell plant-based meat burgers on a permanent basis.

While other chains have started offering plant-based meat options, including Restaurant Brands International’s Burger King, White Castle and Dunkin’ Brands, a McDonald’s contract could be the biggest and would put the plant-based meat movement front and centre in mainstream America.

McDonald’s said under its McPlant line, it could offer products including burgers, chicken substitutes and breakfast sandwiches, which it expects to test in some markets in 2021.

— Reporting for Reuters by Uday Sampath in Bangalore and Hilary Russ in New York; writing by Siddharth Cavale.

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Known for Maggi soups and bouillon cubes, Nestle has been investing in plant-based food to make its prepared dishes unit trendier and more appealing to consumers wishing to lower their meat intake.

Made with pea protein, the new “Garden Gourmet” near-tuna — or “vuna,” as Nestle bills it — will be available in glass jars in the chilled aisle of Swiss supermarkets and can be used in salads, sandwiches and pizzas. Ready-to-eat sandwiches will also be sold in some stores, Nestle said.

Developed within nine months by Nestle’s Swiss research facilities, the tuna is the group’s first plant-based seafood product to hit the market. Soy-based burgers, mince meat, sausages and chicken nuggets are already available.

Nestle said last month that increased at-home consumption during the COVID-19 pandemic boosted demand for its Garden Gourmet plant-based products in the first half of 2020.

The group’s sales of plant-based meat alternatives reached around 200 million Swiss francs (C$289.5 million) last year.

Nestle in January announced an open-ended deal with Canadian plant-based ingredient makers Burcon and Merit Functional Foods for supplies of those companies’ pea- and canola-based plant protein products.

— Reporting for Reuters by Silke Koltrowitz. Includes files from Glacier FarmMedia Network staff.

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Already a major player in meat protein, with assets including two major Canadian packing plants processing up to 6,000 head of cattle per day, Minneapolis-based Cargill said Monday it will launch private-label plant-based patties and ground products in early April.

Brian Sikes, head of Cargill’s global protein business, said in a release Monday the company’s customers are looking to it for plant-based solutions.

“We need to keep all protein options on the table,” he said. “Whether you are eating alternative or animal protein, Cargill will be at the centre of the plate.”

A company spokesperson confirmed via email that the new patties and ground products are pea- and soy-based and are to be made at a Cargill facility at Waco, Tex.

The company’s “alternative protein” products are to be made on processing lines separate from its animal proteins. Cargill is “committed to meeting the needs of vegan and vegetarian consumers in our production systems,” the spokesperson said.

The spring launch throws one of the world’s biggest agribusinesses into a market built up by new firms such as Beyond Meat and Impossible Foods.

The upstart U.S. companies in the past couple of years have made public splashes with their bids to simulate beef burgers and ground beef much more closely in taste and texture. Several major quick-service chains have already launched new burger options using those companies’ wares.

Cargill’s spokesperson said Monday that some crops going into the new products are grown in Canada but didn’t offer specifics on whether those products would come from Cargill’s primary elevator network or third-party suppliers.

Crops suited to Canadian climates are already used in Cargill’s existing plant-based protein ingredient lines, such as its soybean and corn protein flours. It also already partners with another Minneapolis processor, Puris, to make proteins from yellow peas.

Privately-held Cargill also already has bench strength in various ingredients and binders needed to make viable plant-based faux-meats.

Other processors and developers of “meat analogues” already use Cargill’s Satiagel carageenan, SimPure starches and Prosante textured soy flour (TSF) to help mimic meat products’ texture, viscosity and structure, the company has said previously.

“Producing plant-based products across our global supply chain is the logical next step to expanding our ability to meet consumer needs and bring new value to this category,” Elizabeth Gutschenritter, managing director of Cargill’s alternative protein team, said in Monday’s release. — Glacier FarmMedia Network

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Toronto-based Pizza Pizza on Monday launched its Super Plant Pizza, billed as “the first plant-based protein topping recipe available on the menu.”

The company said it partnered with Yves Veggie Cuisine and Greenleaf Foods’ Field Roast Grain Meat Co. to provide it with plant-based pepperoni and plant-based chorizo crumble respectively.

The chain launched a gluten-free vegan cauliflower crust option in July last year, having already added dairy-free vegan cheese, made by Greek processor Violife, to its menu items in early 2017.

“Most people personalize their pizza and consumers want options; that’s something we’ve continually offered consumers,” Alyssa Huggins, the chain’s vice-president for marketing, said in a release.

“With the launch of the Super Plant Pizza and the plant-based protein options we are responding to our customers’ ever-changing needs, namely the flexitarian movement, but also growth in consumers identifying as vegan or vegetarian.”

Paul Goddard, the chain’s CEO, said it “will continue to create flexible options to suit all dietary preferences as we look to the future.”

Pizza Pizza’s royalty pool at the end of March included 660 Pizza Pizza restaurants and 112 Pizza 73 restaurants across the country. — Glacier FarmMedia Network

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