July 20, 2020

By Lynda Kiernan, Global AgInvesting Media

Leading Canadian plant-based meat company The Very Good Food Company (VGF) went public in June, announcing a successful C$4 million (US$3 million) IPO.

Common shares were listed on the Canadian Securities Exchange on June 16 under the symbol VERY, selling 16,100,000 shares at a price of $0.25 per share, earning gross proceeds of C$4,025.000. 

This marks the second plant-based meat company to go public following Beyond Meat’s IPO in May 2019, which led to a market cap exceeding $12 billion for the company.  

“We are thrilled to see The Very Good Food Company, another major plant-based IPO, mirroring the success of Beyond Meat,” said Patrick Morris, CEO of Eat Beyond Global Holdings, a global investor that identifies and invests in innovative food products including meat, seafood, egg, and dairy alternatives. “There is clearly extraordinary confidence in this market, and enormous demand for plant-based products. We are excited to continue investing in this growing sector and continuing to be a part of more success stories like this one.”

Under its core product line brand – The Very Good Butchers – VGF is an emerging plant-based meat company that develops, produces, and distributes meat alternatives sold through e-commerce subscription boxes, retail grocery stores, and its own butcher shops.

Only three years old, the startup produces minimally processed vegan meat alternatives in British Columbia from whole foods such as grains, beans, vegetables, herbs, and spices. Its product line includes burgers, bangers (sausages), taco filling, hot dogs, pepperoni, steak, ribs, BBQ  pulled jackfruit, bacon, and roast “beast”.

The current plant-based meat market is reminiscent of the early stages of the plant-based milk market, according to The Good Food Institute, that finds that plant-based meat accounts for 2 percent of all dollar sales for retail packaged meat, and 1 percent of all dollar sales for total retail meat.

The momentum of this rapid growth is not set to cool. The institute stated that sales of plant-based meats increased 18 percent over the past year, and by 38 percent over the past two years, bringing its market value to $939 million. And at an expected CAGR of 15 percent, Markets and Markets contends that the plant-based meat market will reach a value of US$27.9 billion by 2027. 

The capital gained through the IPO will be used by the company to accelerate the aggressive scaling of its business into a market leader, and to fund R&D initiatives for new products as a means of increasing market share.

And scale it did.  Within days of its IPO, VGF announced a sizable expansion of its distribution network. 

Effective July 1, a new distribution agreement with Nesters Market and Buy-Low Foods added 25 stores to its network, and on July 15 another agreement with Sobey’s initially included distribution in 30 Thrifty Foods stores across British Columbia and Alberta – for a total of 55 new stores, increasing points of distribution from 150 to more than 200.

“The Thrifty Foods agreement represents a particularly exciting milestone for the Company, as it opens up the potential for significant expansion across the 1500 store network operated by Sobeys. We are thrilled to have the support from one of North America’s largest grocery chains as we look to rapidly scale from coast to coast,” said Mitchell Scott, CEO, VGF.

The company also added two new products, Very Good Pepperoni and Very Good Dogs to its lineup, and announced the addition of Olga Millman as the company’s new director of process & engineering operations. 

However, the fundraising was not over. In mid-July, one month after its IPO, VGF announced that it had entered into an agreement with Canaccord Genuity Corp. for the purchase of 4 million units (each consisting of one common share and one-half of one common share purchase warrant) at C$1.30 (US$.096) per unit for a total bought deal of $5.2 million.

With this additional capital, (which is scheduled to close on August 12) the company stated it is planning an expansion into the U.S. market, which is forecast by Global Market Insights to hit a value of $4.15 billion on its own by 2026.

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.