Investment and innovation on the menu for Canada’s plant-based food industry

Sales have slumped but investment in and innovation by Canada’s plant-based food and alternative proteins industry continues, backed by strong federal government support, speakers said at the first international Plant Forward conference.

“If you take a snapshot [of the industry] today, we’re maybe a bit lower than the snapshot from last year. But it’s not a snapshot, it’s a story,” said Dror Balshine, founder and president of Sol Cuisine, a plant-based food manufacturer in Mississauga, Ont.

“If we want to feed the world, which we can do, we have to have a long-term view of this,” Balshine said. “I really do feel that the future is extremely bright for us.”

The Nov. 1 and 2 conference in Toronto, presented by the Protein Industries Canada global innovation cluster, industry association Pulse Canada, and Plant-Based Foods of Canada (a division of Food, Health & Consumer Products of Canada), welcomed 250 delegates from 11 countries.

The plant-based food industry is facing some challenges but “companies carry on investing and we haven’t seen a significant decrease in investments,” said Thierry Duvanel, director of innovation for multinational processing equipment manufacturer Buhler Group.

Ryan Bracken, co-CEO of Merit Functional Foods, said the plant-based food and beverage industry is growing so fast, some companies and brands have forgotten the challenge of ensuring quality in taste, texture, and nutrition.

“I think the challenge with the whole industry is that consumers will try anything once, but they vote with their second purchase,” he said.

“That’s what has really challenged the market overall,” Bracken added. “The intent to trial [a new product] is great, but the intent to repurchase is not necessarily there.”

Conference speakers said a huge plus for Canada’s industry is that the federal government has recognized the importance of plant-based food, beverages, and alternative proteins to the nation’s economy and food security.

“We hear international companies and investors comment on the fact that Canada is so fortunate to have a government and a broad range of organizations focused on the potential of alternative proteins,” said Shelley King, CEO of Natural Products Canada, which supports Canadian bio-based innovation.

Canada is well-positioned to support the sector, given the country is the world’s largest exporter of pulse crops and among the top five exporters of grains such as wheat, barley, oats and rye, said Joyce Boye, director general of the science and technology branch at Agriculture and Agri-Food Canada.

The federal government supports the sector through a range of policies, investment, programs and partnerships, she said, including:

• The $3-billion Canadian Agricultural Partnership that brings together the federal government and the provinces and territories. It will be replaced by the Sustainable Canadian Agricultural Partnership at the fiscal year end in 2023.
• Natural Climate Solutions Fund, a $4-billion investment managed by Natural Resources Canada, Environment and Climate Change Canada, and Agriculture and Agri-Food Canada. It includes the $200-million Living Labs Initiative and the $185-million On-Farm Climate Action Fund supporting environment, sustainability and resilience.
• Protein Industries Canada. Since the innovation cluster was created in 2017, nearly half a billion dollars have been invested in accelerating innovation in Canada’s plant-based food and ingredients sector.
• Programs such as AgriInnovate to move research to adoption and commercialization and AgriMarketing to boost marketing and trade.

Balshine said Sol Cuisine, whose products are available in more than 11,000 retail stores in Canada and the U.S., received support from Export Development Canada, the Business Development Bank of Canada, and Protein Industries Canada.

Companies innovating across Canada

Canada has seen explosive growth in plant-based food and ingredients, with hundreds of millions of dollars invested in processing infrastructure in Canada in the past five years. Food processors are now working to incorporate those ingredients into new products.

Fei Luo, co-founder and CEO of Mississauga-based Liven Proteins, said her company is developing animal-free collagen using microbial fermentation and genes that code for making collagen, known for its joint and anti-aging benefits.

“Essentially, through the same process as brewing beer, we grow animal-free collagen ingredients, including collagen and gelatin,” Luo said.

Vancouver-based Lumi Foods partnered with Summerland, B.C.-based Crush Dynamics, which has developed flavour-enhancing ingredients from byproducts of the wine industry, to develop plant-based cheeses with textures and tastes to rival dairy-based cheeses.

Wamame Foods in Vancouver, in a $10.8-million project with Merit Functional Foods in Winnipeg, developed and is marketing a plant-based, non-soy alternative to pork and Waygu beef.

In Manitoba, Roquette Canada Ltd. and Prairie Fava collaborated to develop fava bean-based tofu, of which 15 million units annually will be produced by Vancouver-based Big Mountains Foods.

Jim Millington, CEO of Ontario-based Canada Protein Ingredients Ltd., said his company has developed a technology at commercial scale that uses an environmentally friendly process for solvent extraction, which produces soy protein and isolate without employing the hydrocarbon hexane.

“Hexane is a neurotoxin, and there has to be an alternative process to produce soy protein that doesn’t have any residues [in food products], Millington said. “This gives us unique marketing position to make clean label claims in soy protein ingredients for the food industry.”

Protein Industries Canada, along with Canada Protein Ingredients and several other companies, have partnered on a $27.3-million project to produce clean-label protein ingredients from Canadian-grown proteins, with a first-of-its-kind production facility to be built within two years.

Regulatory regime needs to be modernized

When it comes to challenges, several speakers pointed to the need to modernize Canada’s regulatory regime and approval processes for plant-based products.

“It doesn’t make any sense that we have to add vitamins and minerals that are expensive and don’t taste good to products we sell in Toronto, and if we sell [the same products] in Buffalo, we don’t,” said Balshine of Sol Cuisine.

Some Canadian manufacturers won’t sell their products in Canada because of such restrictive regulations, but instead make the products here and then ship them for sale in the U.S., he said.

Canada’s current regulations, dating back to 1979, also are outdated when it comes to how companies are allowed to describe their plant-based products, Balshine noted. “If it’s a veggie burger, we should be able to use ‘burger.’ If it’s a nut cheese, we should be able to use ‘cheese.’”

Protein Industries Canada has partnered with Pulse Canada, Plant-Based Foods of Canada, and Loblaw Companies Limited to establish a virtual regulatory centre of excellence with a repository of regulatory knowledge and experience available to companies.

The partners will invest in studies directed toward regulatory change. They’ll also engage with government to prioritize consumer health and safety, while helping to inform regulatory modernization on protein labelling claims, food naming conventions, fortifying plant-based products with nutrients, and development of in vitro methods to evaluate protein digestibility.

Another challenge for the industry is restrictions on producing and transporting products from province to province, said Murad Al-Katib, president and CEO of Regina-based AGT Food and Ingredients, one of the largest pulse-processing companies in the world.

“If Canada doesn’t eliminate our interprovincial trade barriers, how can we be expected to be advocates of free trade around the world, when we don’t do it in our own country?” Al-Katib said.

Protein Industries Canada and industry players expect the plant-based food sector will contribute $25 billion annually to Canada’s economy by 2035, supported by 17,000 jobs.

R$