Protein plants bode well for province's future

To the average person it was not clear just what to make of the announcement a couple of years ago that a French company called Roquette would spend $400 million building a pea protein plant in Portage la Prairie.

Somehow or other it was understood that pea protein was an ingredient used in niche health foods and/or nutritional supplements but the level of comprehension of the strategic importance of the investment was minimal.

Since then, Roquette re-jigged the plans so that its capacity has been expanded. When it is to be completed at the end of the year, Roquette will be the largest producer of pea protein in the world and the only company with production facilities in Europe and North America.

While the rest of us might have been applauding the influx of capital and the job creation spin off, the wise folks at Roquette believed they had the chance to really get out in front of a demand curve that they saw coming better than most.

In Manitoba it was just another food processing venture in a province that has a great track record in that space that includes mundane but economically crucial ventures like canola crushing, frozen french fry manufacturing and meat packing.

But even before Roquette finished construction a second plant protein facility started construction in the province — which has also been altered to almost double the capacity of the original design — by a brand new home-grown company called Merit Functional Foods. Recently both of them became part of the international business news cycle in less than a week.

All of a sudden plant-based protein manufacturing has become one of the fastest growing economic sub-sectors in the province.

Early last week Ulf Mark Schneider, the CEO of global food giant Nestlé, told a CNBC interviewer at the World Economic Forum in Davos, Switzerland, that plant-based foods was the most exciting innovation for the coming year and that it will be an important sector for the next 10-to-30 years.

A couple of days later the company announced a collaboration with Merit and its partner, Burcon NutraScience, (a company that is based in Vancouver but started in Winnipeg and maintains an important research lab here) referring to them as "two key players in the development and production of high-quality plant proteins."

The week before, Beyond Meat, the California company that has made veggie burgers so trendy that fast food chains are tripping over each other introducing new offerings, announced an open-ended supply agreement with Roquette with the general assumption being that a good amount of its yellow pea protein ingredient will be coming from Roquette's Portage plant.

It's clear something big is happening. There will be skeptics out there who will insist that plant-based meat alternatives is just a fad. Those people may or may not also be climate change deniers.

Johann Tergesen, the founder and CEO of Burcon, which has been fine tuning its protein extraction technology for close to 20 years, said the stunning success of the initial public offering of shares of Beyond Meat in May has caused the global marketplace to finally take notice.

Things are moving fast. Just before Schneider's declaration that 2020 would be the beginning of the plant-based protein era, Nestlé launched plant-based sausages in Europe and North America noting the environmental impact — compared to a pork-based sausage, a soy-based sausage can account for roughly 90 percent less CO2, 90 percent less water and 80 percent less land use.

An IT executive whose company operates in a sector that works to decrease green house gas emissions, recently said that there are serious investors who are getting impatient at the incremental advances that clean tech is having on climate change and are looking for a "moon shot."

The most obvious characteristic of Manitoba’s economy is its overall predictability. There is such little likelihood of there ever being a "bust" because of the breadth of activity. But it’s just as unlikely there will be a "boom" because of the relative lack of depth in many sectors.

Not to say it will knock the province out of its traditional economic trajectory but the current intense demand for plant-based protein has created an unusual growth opportunity in Manitoba and it has the potential over time to become one more economic driver that will ensure stability — if not prosperity — in the province.

Roquette and Merit did not decide to build in Manitoba because of government support, but both companies are being appropriately encouraged — Merit just received close to $10 million from the federal government's innovation supercluster, Protein Industries Canada.

Dietary change may be among the easiest lifestyle alterations required if climate change rages unchecked. The fact that Manitoba has become a production centre for plant proteins may be more important than anyone can yet realize.

Published by Winnipeg Free Press

Written by Martin Cash