MEATLESS DOMINATION
Companies across the Prairies beef up their ambitious plans for plant-based protein fare
The centrepiece of Canada’s innovation strategy is the $950-million “supercluster” initiative. The goal, according to the federal government, is for companies of all sizes, academia and the non-profit sector to collaborate on new technologies, to spur economic growth and create jobs. As part of the Innovation Nation series, the Financial Post is taking an in-depth look at each of the five regional projects, and will provide continuing coverage of their progress.
CALGARY It looks like beef. It tastes like beef. It even bleeds like beef, thanks to the beet juice extract.
If not for the distinctive aroma — fast-food chain A&W’s Beyond Meat burger gives off a scent more like a casserole than a burger patty — the plant-based protein puck would fool even the most red-blooded carnivores.
It’s a tasty concoction made from protein isolated from peas, rice and mung beans as well as canola and coconut oils. More important, it’s a product that plant-based protein companies across the Prairies believe consumers around the world will buy in increasing quantities.
Entrepreneurs and the federal government don’t just want Canada’s three Prairie provinces to sell more proteins derived from plants to a growing global population, the express goal is world domination.
“That presents enormous potential for us,” said Innovation, Science and Economic Development Minister Navdeep Bains, whose ministry established the Protein Industries Supercluster in Regina this year and is seeding it with $153 million.
To access the funding, companies would need to match the contributions from the federal government on new facilities, Bains said in an interview, adding that funding announcements are coming “in as little as a matter of weeks.”
James Szarko, the president and CEO of Calgary-based Botaneco Inc., which uses a proprietary method to extract valuable oils, proteins and fibres from canola, safflower, sunflower and hemp, is one of a growing number of companies in the West expanding its facilities.
“We could truly dominate,” said Szarko, noting the abundance of farm land in Alberta, Saskatchewan and Manitoba as well as plentiful water and suitable crops.
But the industry has a classic Canadian problem. Canada is once again playing the role of drawers of water and hewers of wood, exporting raw produce to other countries that add value and ship it back to us at higher costs. The missing ingredient is innovative processing methods and facilities to turn the crops and seeds from the Prairies into value-added protein products such as hemp-based protein powder or canola-based supplements.
The protein supercluster aims to create 4,500 new jobs and contribute $4.5 billion to the country ’s GDP in 10 years.
The cluster’s interim board of directors includes executives from companies across the three provinces, including AGT Food and Ingredients Inc., Emerging Ag Inc., Enns Brothers Ltd., and Ag-West Bio Inc. “It’s bigger than one company and bigger than one province,” Bains said.
The federal government has committed funding to five superclusters focused on a range of sectors, but Bains says the protein hub on the Prairies is kicking off with some existing momentum.
In September of last year, Roquette, the France-based global leader in innovative plant-based food ingredients, broke ground on a $400-million manufacturing facility in Portage la Prairie, Man., that will derive proteins from peas, showing that investors see an opening in the domestic protein sector.
Even established players in the meat industry, such as Maple Leaf Foods Inc., intend to participate in the supercluster and are building a presence in the space. Over the past two years the Mississauga, Ont.-based Maple Leaf has purchased Washington-based Field Roast Grain Meat Co. for US$120 million as well as Massachusettsbased Lightlife Foods Inc., which makes plant-based tempeh, an Indonesian dish using deep-fried fermented soya beans, hotdogs, breakfast foods and burgers, for US$140 million.
“We feel that we’ve entered this space at a very good time. We’ll see how quickly it goes,” said Rory McAlpine, Maple Leaf senior vicepresident, government and industry relations.
Other companies, such as Innisfail, Alta.-based WA Grains & Pulse Solutions, are building or expanding processing facilities to capture growing opportunities in the market.
“Unlike other superclusters, this one is not aspirational,” said Carlo Dade, Canada West Foundation director of trade and investment policy. “Our goal is total world domination,” he said, noting that Alberta, Saskatchewan and Manitoba could collectively corner the global market for plant-based protein.
Still unclear, however, is whether governments in Ottawa, Alberta, Saskatchewan and Manitoba are willing to work together to support the nascent industry’s growth.
“I’m not as convinced on the political level,” Dade said. “It’s an indictment of government in general.”
Saskatchewan says it’s committed to “a collaborative effort” and is communicating regularly with Alberta and Manitoba on research.
“We need to share our intellectual and physical resources to be successful in this highly competitive global area,” Saskatchewan’s agriculture ministry said in a statement, adding the provinces could better co-operate on developing new technologies and market commercialization.
Similarly, Alberta said it’s willing to share research. “There’s always been collaboration on research and sharing technology,” Alberta Agriculture Minister Oneil Carlier said. “Alberta is well positioned to be able to supply some research know-how.”
The Manitoba government did not respond to a request for comment.
The cluster effect is already under way as the Prairies’ agriculture industry is tapping into at least 19 crops and research and development in the region — a nexus of universities, government incubators and the private sector.
Combined, the three provinces are already some of the world’s biggest producers of high-protein pulses like peas and lentils, in addition to being major exporters of wheat, canola, barley, beef and other agricultural products.
Saskatchewan, the largest agriculture and agri-foods exporting province, reported $13.6 billion in exports in those categories in 2017, slightly below $14.4 billion in exports a year earlier. Alberta broke its own record with $11 billion in agriculture exports last year, and Manitoba recorded $4.3 billion in ag-based exports, which was roughly flat from the year before.
Those figures could get a boost as global demand for plant-based proteins, valued at US$8 billion in 2017, is projected to grow at an annual rate of 5.9 per cent to US$14.8 billion by 2023, according to a study by the Canada West Foundation. The report found that plant-based proteins will make up a third of the global protein market by 2054.
The surge is largely a function of a growing global middle class driving demand for protein. Data shows 160 million people are expected to join the middle class every year for the next five years.
Still, there was some disappointment in the Prairies as the plantbased proteins supercluster beat out another “precision farming ” supercluster proposal, focused on cattle and livestock ranchers.
Dennis Laycraft, executive vicepresident of the Canadian Cattlemen’s Association, said his group, which represents beef producers, was disappointed that its proposal — aimed at reducing water and chemical usage in meat products — didn’t receive funding. But it was pleased for the plant-based proteins supercluster. “It was important that agriculture did achieve one of the clusters,” Laycraft said.
As for meatless burgers, he rejects the idea that they are more sustainable than the meat version.
“There are a number of people trying to create the perception that livestock agriculture isn’t good for the environment,” Laycraft said. “Canada is one of the best environmental stories in the world when it comes to livestock production.”
But the budding plant-based industry faces rising competition from the United States and Europe.
CWF’s Dade says businesses in the U.S. have already established an advantage in the production of protein derived from soy beans, eliminating one potential strain of proteins for Canadian businesses to compete.
Europe, which has less farmland for crops than Canada, has been investing in processing centres for other forms of plant-based protein.
Botaneco’s Szarko acknowledges the competition, but notes Canada has an advantage over its competitors thanks to recently signed free trade deals with Europe, the United States and the Asia-Pacific countries that provide domestic agriculture producers low-cost access to a global consumer base.
“I do think the Protein Industries (Supercluster) is an incredible catalyst,” Szarko said. “The timing couldn’t be sooner.”