The consortium, led by Bellwood Partners and Champlin Advisory, ultimately aims to build a pool of capital exclusively for the domestic processing sector, says Protein Industries Canada (PIC). To achieve that, the group will first consult an advisory board to identify major barriers to raising capital for plant-based processing.
PIC and its partners are expected to contribute $2.4 million to the equity fund, with the larger consortium program contributing an additional $1.8 million.
Plant-based protein is a massive economic opportunity for Canada, said PIC, and the country needs to spend significantly more capital to stay relevant in this rapidly growing industry. It’s estimated at least $27 billion will be required to meet global demand for plant-based processing and supply chains in the coming years, according to the company.
PIC also noted that the large amounts of capital required to open processing facilities (typically $100 million) coupled with a longer wait for financial returns, presents an ongoing challenge for attracting agrifood investment in Canada.
A portfolio approach
“Canadian plant-protein processors face an uphill battle raising capital –investors are challenged in underwriting these investments despite the growing opportunities in the sector,” says Kyle Scott, CEO of Bellwoods Partners. “A potential answer to these challenges is taking a portfolio approach, where a pool of capital is aggregated and spread across different Canadian processors, essentially underwriting Canada’s ability to compete in the plant-protein space.”
With the consortium’s efforts, Bill Greuel, CEO of PIC, is highly optimistic about the future of Canada’s plant-based food industry.
“The global market is expected to surpass $250 billion by 2035. We believe Canada has the opportunity to capture 10 per cent of the market — which would result in the creation of a new $25 billion sector for Canada,” he says.