Processing and the need for capital investment

The plant-protein ecosystem is wider than many people tend to assume. There are those with their hands right in the bags of peas: the farmers growing protein-rich crops and the processors turning commodities into ingredients. There are those whose hands aren’t in the bags but are nearby: the researchers developing new crop varieties, innovators coming up with new technologies and marketers selling products to global customers.

Then there’s an entirely different group, those you often must remind yourself play a role: the businesses and investors who may not even see the bags, but who invest in plant-protein projects because they believe Canada’s plant-protein sector has the potential to become a global leader as an ingredient supplier.

These investments, however, are necessary for the development of Canada’s processing sector.

“In Verdient Foods’ case, the marriage of foreign direct investment and domestic capital created the foundation to build something amazing,” Verdient Foods Inc.’s Senior Advisor Blair Knippel said. “The FDI brought with it both the human and financial capital to create a successful, scalable, sustainable world-class business. Both were needed and without one, the other would not have come to the table.”

When working to raise enough capital to build its plant in Vanscoy, Sask., Verdient Foods began through seed capital provided by a foreign investor. This led to attracting domestic investment from a Saskatchewan family office and a Canadian financial institution in the facility’s earlier years. Ultimately, both were necessary to obtain additional FDI when Verdient expanded in 2018.

Ingredion Inc., also located in west of Saskatoon at Vanscoy’s Plant Protein Innovation Park, experienced a similar capital attraction path. The processor sourced its own FDI before focusing on domestic investment, eventually launching their processing plant in 2020.

Having sought investment for a Saskatchewan-based path a few years later than Verdient may have made finding capital slightly easier.

“Western Canada, and Saskatchewan in particular, were not the hub of food processing that it is today. In fact, often the question was, ‘Where is Saskatchewan?’ ” Knippel said. “Over time, what first appeared to be diamonds in the rough—for example, Saskatchewan Food Industry Development Centre—took their rightful place in the spotlight, and it was easier to show that Saskatchewan-based businesses and technologies were actually already shining on the global stage along with other world-class organizations.”

Today, both Verdient and Ingredion process a variety of pulses at their plants, including peas, lentils, faba beans and chickpeas—commodities chosen because of their health benefits, environmental sustainability and consumer appeal. Much of this processing will occur as part of a partnership between Ingredion, Ingredion Plant Based Protein Specialties (Canada) Inc., Verdient, T Base 4 Investments and O.M.D. Food Products, with a co-investment from Protein Industries Canada, in a project to improve the functionality of pulse-based ingredients.

“Providing our global customers with a broad range of high-quality, pulse-based ingredients is important to ensure we can meet the taste, texture, environmental and nutritional requirements for today’s consumers,” said Beth Tormey, Ingredion’s vice president of plant-based proteins.

In addition to helping increase the plant-protein based options available to consumers, the expansion of Canada’s processing sector also helps strengthen the country’s economy. From the building of the facilities to their everyday workings, they create jobs, bring in revenue and drive innovation.

“Converting pulses to ingredients in Canada is a highly sustainable way to further support the economic growth of the entire agri-food sector,” concluded Tormey.

Knippel agreed, adding that “growing the domestic plant-protein food processing sector provides additional opportunities for local producers to sell their crops at a premium, develop innovative techniques to produce crops and manufacture ingredients designed specifically for global food processors and create a hub of crop-to-finished product expertise that will eventually rival many other jurisdictions.”

It's these benefits along the value chain that make investing in processing facilities such an attractive idea. And it’s only by pairing such investments with processing opportunities that the plant-protein sector will continue to grow, creating a stronger, better economy for all Canadians and positioning Canada as a global leader in plant protein.