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Innovation in Canada: How homegrown companies are blazing a trail in the plant-based food space

Editor’s note: From November 19-30, Yahoo Finance Canada will be highlighting the best of Canadian innovation in a series called The Future Is Now. We’ll be bringing into the spotlight some of the companies and individuals that aren’t just pushing the limits, they’re creating new ones, for themselves and investors alike. We’ll be shining the spotlight on homegrown talent in the fields of satellite technology, autonomous vehicles, wearable tech and more. Check out our hub page for even more coverage and let us know in the comments: Which companies do you think represent the best of Canada looking toward the future?

The Beyond Meat Burger drew lots of attention from Canadians this summer as a plant-based alternative to meat protein. (CNW Group/A&W Food Services of Canada Inc.)

When A&W launched the Beyond Meat Burger in Canada back in June, the plant-based burger was so popular that people couldn’t even buy it for a couple of weeks after its debut.

“It was beyond our expectations, I guess you could say,” says Susan Senecal, A&W President & Chief Executive Offer, who also assures that supply issues are resolved and the Beyond Meat Burger is now a permanent part of the chain’s menu. “We thought it was delicious, and we thought our guests would think so too. That forecast was certainly borne out by what happened in the marketplace.”

The demand for a new fast-food product in the plant-based foods space isn’t the only sign of Canadians’ interest in this growing trend. According to a study from Dalhousie University earlier this year, there are now 2.3 million vegetarians in Canada (compared to 900,000 15 years ago) and 850,000 Canadians who identify as vegan, totaling about 10 per cent of the Canadian population. Even more people are opting to go ‘flexitarian,’ eliminating meat from their diet on a day or two of the week.

‘Plant-based foods’ was even flagged as the hottest food trend going into 2018.

As the demand for more alternatives to meat and dairy grows, it’s a space where lots of new companies are springing up. Margaret Coons, creator of the Nuts for Cheese brand, had been a vegan for most of her adult live when she decided to launch her cashew-based cheese product.

A selection of cashew-based, dairy-free cheeses produced by Nuts for Cheese. (Margaret Coons)

While working on her undergraduate degree at Western University, Coons worked at a vegan restaurant where she developed the cheese, and it was one of the most popular items on the menu. When she left the restaurant, she began producing the cheese in different varieties and selling it at farmer’s markets.

Three years later, it’s now sold in about 600 stores across Canada.

“A lot of people are very used to vegan cheese being plasticy, sticky, kind of unappealing,” says Coons. “Once they get past that idea they have in their heads and try the product, we get really, really great feedback…We actually get a lot of people that are not vegan at all who eat the product, so I think that’s really positive.”

Coons says her core market for her product hasn’t changed too much since expansion, resonating with female consumers age 20 to 40, but she has seen a broader range of people interested, such as those told to avoid dairy by their doctor or those who are lactose intolerant.

The broader reasons for looking to plant-based foods has meant Coons has seen a shift in how her product is viewed, and in turn, how retailers are treating it.

“As we’re starting to get into the larger grocery stores, a lot of them are developing new categories of where they put products, because there are more and more products that are available,” says Coons. “Some of the bigger stores, we’re in the dairy cheese bunker with all the gourmet dairy cheeses, and then in some stores we’re with the tofu.”

Coons says she’s excited to be involved in the plant-based food industry right now, as she’s watching countless other vegan food producers and stores pop up, notably visible on social media like Instagram.

Packaged products from Nuts for Cheese are on display. (Margaret Coons)

With more companies entering the space, the need for oversight and established standards is also growing. This past September, a trade association was formed to begin addressing this need, the Plant-Based Foods of Canada (PBFA) (a division of Food & Consumer Products of Canada).

“There’s been an increase in the consumption of plant-based foods and we’re seeing that through comparative sales data and purchase behaviour,” says Leslie Ewing, consultant with PBFA. “It’s becoming more widely adopted as a result of products that are addressing changing demographics and ethnic consumers. They’re looking for products that offer health and environmental benefits, as well as more variety to their diet. All indications are that we are going to see a rapid increase in the consumption of plant-based foods over the next several years.”

The industry was bolstered this past February when the Canadian government identified plant-based protein development as one of five “superclusters.” The government has committed $950 million to the development of this industry, with over 120 participants involved in research and development, overseen by Protein Industries Canada. Canada is already the top lentil producer in the world, making expansion of the plant-based foods industry a strong investment choice for the country.

“As the interest continues to grow in the mainstream, we felt that it was important to have a collective voice to represent it,” says Ewing. Ten companies are currently members of PBFA, including Greenspace Brands, which got into the plant-based foods sector about a year ago through the acquisition of a U.S. company.

Aaron Skelton, Chief Operating Officer for Greenspace Brands, says he became interested in joining the trade association to ensure that the right voice was being heard from within the industry, and to see that consumers could get education and insight into making smart choices about plant-based foods.

“The really exciting thing for us is seeing the expansion from just being dairy and meat alternatives, expanding past that into different use cases,” says Skelton. “The most exciting aspect for us has been what we see as a move away from complete exclusion to one of more inclusion. Consumers are looking for ways to increase their consumption of plant-based, but not doing so on such a restrictive set of parameters.”

Skelton says that one of the biggest segments of consumers he’s seeing is the “flexitarian” crowd, those who are interested in reducing meat and dairy in their diet some of the time. These consumers are looking for ways to introduce more plant-based foods into their diet through lots of means, including via condiments, beverages and snacks.

“There’s so many novel ways now to introduce more plant-based ingredients into the snacking category,” says Skelton. “You can take more traditional, familiar products from today’s conventional market — you can take a chip, per se, that traditionally may not have focused on being plant-based,  and now using some novel technologies that can take a pea protein, or a more traditional grain protein and use that in the manufacturing process. There’s a lot more familiarity in the products that are being delivered. You can use a very different ingredient base to get a similar sensory experience.”

The market for plant-based foods runs along a continuum, Skelton says: consumers who are staunch and dedicated vegans, all the way to those who aren’t bothered about the ethical components, and just want something that tastes good. Regardless of where the consumer falls, Skelton says it is critical for companies to come from a place of authenticity, and take a genuine interest in educating consumers about the products. The industry is still relatively new, and there’s a lot of education to be done.

“There’s clearly an appetite for growth within food,” says Skelton. “Because of that, I think there’s probably more companies than we’re aware of who are entertaining and reviewing opportunities in plant based.

“It’s very much in the bottom of the first inning, and the game’s just getting started.”

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