Sector News

Nestle teams up with Canadian plant-based ingredient makers

January 28, 2020
Food & Drink

Food company Nestle SA said on Friday it has teamed up with small Canadian plant-based food ingredient makers Burcon and Merit Functional Foods, the second such supply agreement this month that targets Canadian crops.

Meat substitutes from plants in burgers, nuggets and many other foods are a fast-growing industry, driving up demand for crops that produce them.

Canada is among the world’s largest growers of peas and the biggest producer of canola, crops high in protein that technology companies like Burcon can separate and isolate for use in foods and beverages.

The agreement with Nestle is long-term, with no expiry, Burcon Chief Executive Johann Tergesen said in an interview. Nestle will buy pea and canola proteins from a 20,000-tonne-per-year Merit plant to be built by the end of this year in Winnipeg, Manitoba.

Merit will process the proteins using Burcon technology under a licensing agreement.

“It’s a little bit like Christmas morning for those of us who have been doing this for 20 years,” Tergesen said.

“In the early days, I had to explain to people what protein was. Now it has been a wild ride.”

Burcon stock jumped 36% in Toronto to C$1.89 per share, touching its highest price in nearly three years. Nestle stock rose 0.9% in Switzerland.

With the deal, Burcon expects to report its first-ever commercial revenue and profit in 2021. Terms were not released.

Nestle launched soy and wheat protein-based “Incredible Burgers” in Europe last year. The deal gives the company access to a range of ingredients for its foods and beverages, using the “unique expertise” of Burcon and Merit, Nestle Chief Technology Officer Stefan Palzer said.

It comes after Beyond Meat Inc (BYND.O) this month struck a similar supply agreement with France-based Roquette, which is also building a pea protein plant in Manitoba.

The new commercial demand “provides a real sense of optimism for the future,” said Gord Bacon of Pulse Canada, an industry group representing pulse farmers and processors.

“To have a diversified market base is what every group producing commodities or ingredients in Canada would hope for.”

With so much of Canada’s peas exported raw, finding enough supply to satisfy the Nestle deal will not be a challenge, said Ryan Bracken, Merit’s co-CEO. The company is already planning to expand the Winnipeg plant under construction to more than double production.

By Rod Nickel and Silke Koltrowitz

Source: Reuters

comments closed

Related News

May 21, 2022

Cécile Béliot becomes Bel Group CEO

Food & Drink

Cécile Béliot has assumed the role of Bel Group chief executive officer, following the decision to separate the roles of chairman and CEO. The separation of the functions will enable Bel Group to develop in three areas of healthy snacking. Meanwhile, the company’s former CEO, Antoine Fiévet, has had his mandate renewed as chairman of the board.

May 21, 2022

“Corporate greed and dereliction of duty”: FDA commissioner slammed over infant formula shortage

Food & Drink

US Food and Drug Administration (FDA) Commissioner Dr. Robert Califf was grilled by lawmakers during a House Appropriations subcommittee hearing, where he was slammed over the agency’s handling of the escalating infant formula shortage.

May 21, 2022

Sweegen hails antioxidants and bitter blocking tech a turning point for sugar reduction and healthy aging

Food & Drink

Sweegen is ramping up its efforts to reduce sugar across F&B applications while simultaneously tapping into the benefits of using antioxidants and bitter blocking technology. Speaking to FoodIngredientsFirst, Casey McCormick, vice president of global innovation at Sweegen, says product developers can find a broad range of solutions in Sweegen’s nature-based sweetener systems as brands elevate better-for-you foods.