Plant-Based Meats Down for the Count? (Sector Roundup: Week 16)

Sector Review

According to SPINS, a wellness-focused data technology company, in the four weeks prior to October 3, 2021, sales of vegan meat substitutes dropped 1.8% compared to 2020. This can be attributed to a variety of reasons including many dining restrictions being lifted. By the end of April 2020, sales in the food serviced and drinks subsector fell 61.3% from pre-pandemic levels observed by Statistics Canada in February 2020.

However, sales grew steadily as restrictions were eased throughout the Spring and Summer of 2020. Additionally, in 2020 roughly 19.4% of food services and drink establishments made 30% or more of their total sales online, representing more than double the proportion that did in 2019. Furthermore, a small proportion of food services and drink establishments saw their revenue increase 6.7% in 2020 compared to 2019.

With this in mind, Canadian retail grocery sales dropped 0.6% to $55.8 billion in July with more people returning to restaurants and patios. In particular, Sales at food and beverage stores were down 3.4% as sales at supermarkets and other grocery stores fell 3.4%. Even U.S. online grocery sales, despite remaining elevated compared to pre-pandemic levels, have declined. In fact, the U.S. Online Grocery Market totaled $7 billion in May 2021, down 16.7%. Year-over-year, May 2021 online grocery sales decreased 15.7% from $8.3 billion in May 2020.

What does this have to do with plant-based meat sales? In the last few years, plant-based meat has become easier to purchase, with industry titans like Impossible Foods and Beyond Meat listing their products at grocery stores. In 2019, plant-based meat sales were worth more than $939 million, however, the pandemic has accelerated this growth. In particular, in the four months ended June 20, 2020, refrigerated plant-based meat sales rose 218.6%.

However, as COVID-19 restrictions are raised, plant-based meats are paying the price. Take Beyond Meat for example. On November 30, 2021, the company’s stock was down by over 5% following the publication of an analyst note. Aside from the analyst note, Beyond Meat’s Q3 Financial Results were far from impressive. The Company missed on both the top and bottom lines and its revenue was lower than it was in the previous quarter.

Sure, plant-based meat sales may have fallen, but what about the other plant-based alternatives out there, including coffee, cheese, and candy? In this week’s Plant-Based Sector Roundup, we will be focusing on a few companies that offer unique plant-based products such as Organic Garage Ltd. (OG.V), NEXE Innovations Ltd. (NEXE.V), Nabati Foods Global Inc. (MEAL.C), and a company I haven’t covered before, Yumy Bear Goods Inc. (YUMY.C).

Yumy Bear Goods Inc.

$76.967M Market Capitalization

Yumy Bear Goods Inc. (YUMY.C) is an affordable health-conscious, low-sugar, plant-based confectionery company based in Vancouver, British Columbia. The Company has developed a portfolio of healthier gelatine-free candies made from non-GMO ingredients with its proprietary recipes. Furthermore, all of Yumy’s products are free of gelatin, soy, gluten, nuts, dairy, eggs, sugar, alcohols, artificial sweeteners, and GMOs. In addition to being 100% plant-based, every pack contributes to supporting local community initiatives, charities, and animal rescue centers.

Yumy Bear has also partnered with the Northern Lights Wildlife Society whose mission is to provide young, injured, and orphaned wildlife with a safe and healthy environment. Be still my beating heart. If that wasn’t enough, the Company has donated to The Bloom Group, aiding the organization in providing women and children with a stable and secure place to stay.

Through The Bloom Group, women retain their autonomy and cultivate resiliency, skills, and strength needed to overcome their challenges. Yumy Bear also donated a portion of its proceeds to Egale Canada, an organization working to inform public policy, inspire cultural change, and promote human rights and inclusion.

What has Yumy Bear been up to lately? Most recently, on November 26, 2021, the Company announced that it has received its initial purchase order for its low sugar “Better for Your” confectionary at one of Canada’s largest pharmacy chains. With over 800 stores across the country, this chain is one of Canada’s leading independent pharmacy and drugstore retailers.

“To date, this is our company’s largest retailer placement and accomplishment. This is a game changing vendor and will help take Yumy Bear to the next level. Rolling out into one of the nation’s largest chains shows that there is an active gap in the confectionary space that we are filling…

We expect to have high sell throughs and with this added store presence, be able to add more significant vendors to our company. We are very proud at the progress we have made in a short period, but we expect much more in the coming months,” states CEO and Founder, Erica Williams.

Additionally, on November 24, 2021, Yumy Bear announced that it had begun selling its “Better for Your” candy at London Drugs, which has over 78 retail locations throughout the provinces of British Columbia, Alberta, Saskatchewan, and Manitoba. Based in Richmond, British Columbia, London Drugs offers electronics, housewares, cosmetics, and a limited selection of grocery items.

On November 22, 2021, Yumy Bear announced that it had rolled out its “Better for You” gummies at Choices Market, a store that caters to a variety of diets including, gluten-free, vegetarian, and vegan. Keep in mind, Choices Market operates more than 160 stores under the banners of Nesters Markets, Meinhardt Fine Foods, and Buy-Low Foods. Cumulatively, the umbrella company’s annual sales total more than $10 billion across 25 separate divisions.

Lastly, on November 19, 2021, Yumy Bear announced that it had received its initial purchase order from Purity Life Distributor, Canada’s leading distributor of health products. Purity Life boasts over 7,000 vendor locations and has become the leading supplier for many health foods and confectionery companies, now including Yumy Bear. Purity Life is also responsible for helping establish many popular brands, including Smart Sweets which was recently acquired for $360 million.

Yumy’s share price opened at $2.85 and closed at $2.80 on December 1, 2021.

Organic Garage Ltd.

$31.672M Market Capitalization

Organic Garage Ltd. (OG.V) is an organic retail food business with over 14 years of operating history in the GTA and is committed to providing consumers with the highest-quality organic products without sacrificing affordability. The Company offers more than 9,000 SKUs covering all product categories in order to create a one-stop-shop for customers.

These categories include, produce, grocery, meat, bakery, vitamins, health, and beauty. Through unique branding, customer incentives, and quality products, Organic Garage is working towards establishing long-term customer relationships and promoting brand loyalty. With four stores located in Ontario, Organic Garage hopes to take advantage of Canada’s organic retail market, which was valued at $5.4 billion in 2019, ranking sixth in the world.

What has Organic Garage been up to lately? Most recently, on December 1, 2021, the Company announced that, in accordance with the terms and conditions of the convertible debenture issued on October 25, 2019, it has agreed to issue 156,594 common shares as settlement of payments of interest equal to $71,250.00 accrued between August 1, 2021, to October 31, 2021.

Now for something a little more interesting. On November 30, 2021, Organic Garage announced that its plant-based food company, Future of Cheese Inc., has launched its naturally ripened plant-based brie to retailers in Ontario. The brie is made using all-natural, organic, non-GMO ingredients and is ripened using traditional aging processes developed by Future of Cheese’s Co-Founder, Afrim Pristine.

Made using only five ingredients, without the use of fillers, gums, or starches, the Company’s plant-based brie will retail in Canada at a manufacturer’s suggested retail price (MSRP) of $13.99. In addition to launching its plant-based brie, Organic Garage announced on November 23, 2021, that it has updated its logo in anticipation of the Company’s planned store expansion strategy.

“We felt that it was important for us to refine how we communicate to potential new customers and, as the logo is the first thing customers see, we wanted something that would reinforce our value statement,” commented Matt Lurie, President & CEO of Organic Garage.

Personally, I prefer Organic Garage’s old logo, but who am I to judge, I can hardly use MS Paint. The new logo is intended to help convey the Company’s value proposition while also being easy to create and apply to new stores. Organic Garage will start to update the logo on its existing stores, media assets, and flyers over the next six months.

Organic Garage’s share price opened at $0.49 and closed at $0.53 on December 1, 2021.

NEXE Innovations Inc.

$74.488M Market Capitalization

NEXE Innovations Inc. (NEXE.V) is a leader in plant-based compostable technology and an advanced materials manufacturer based in British Columbia, Canada. In order to combat this plastic predicament, NEXE has developed one of the only patented, fully-compostable, plant-based, single-serve coffee pods for use in leading single-serve coffee machines, including Keurig coffee makers. The Company’s proprietary pods are designed to reduce the significant environmental impact caused by single-serve pods.

With this in mind, NEXE has raised over $60 million from equity and government funding. Additionally, the Company has more than six years of R&D experience. As a result, the Company is well-positioned to capitalize on the lucrative Global Coffee Market, which was valued at USD$102.15 billion in 2019. Fueled by caffeine addicts like myself, this market is expected to reach a valuation of USD$155.64 billion by 2026, expanding at a compound annual growth rate (CAGR) of 6.2% between 2020 and 2026. If you’re looking for a closer look at NEXE, feel free to check out this article.

What has NEXE been up to lately? Most recently, on November 30, 2021, NEXE announced that both its XOMA Superfoods and NEXE Coffee beverages will be available for sale on ECSCofee.com in December 2021. With two retail locations, an in-house service and repair center in Burlington, Ontario, and a website serving all of Canada, ECS offers coffee and espresso brewing gear as well as coffee.

Moreover, the company represents most major coffee brands in Canada, distributing to national and local retailers. It is also worth noting that ECS has been awarded multiple National, Regional, and Local Service awards. With this in mind, NEXE’s latest distribution partnership with ECS will enable the Company to have additional exposure to online consumers across Canada.

“Working with distribution partners such as ECS Coffee is an excellent opportunity for NEXE to continue to introduce our products to new customers seeking convenience and high-quality coffee beverages while reducing single-serve waste This promotion will serve to complement our direct-to-consumer efforts and growing list of retail offerings on the horizon,” said Ash Guglani, President of NEXE.

Speaking of NEXE’s XOMA Superfoods beverages, on November 22, 2021, the Company announced that its XOMA Superfoods product line is now approved for listing with Canada’s leading eCommerce retailer, Walmart.ca. Keep in mind, Walmart’s eCommerce presence has grown substantially following the onset of COVID-19. In fact, during the pandemic, Walmart’s eCommerce sales increased by 74%, surpassing eBay in retail eCommerce sales by 0.6%.

According to Walmart’s Q3 2022 Financial Results, the company reported total revenue of $140.5 billion, up 4.3%. In particular, Walmart’s eCommerce sales grew 8% for the quarter and 87% on a two-year stack. It’s not just Walmart. According to Digital Commerce 360, US eCommerce sales increased 6.8% in Q3 2021. More specifically, online sales hit an impressive $204.62 billion in the third quarter, up 6.8% from $191.57 billion year-over-year (YOY).

NEXE’s share price opened at $0.75 and closed at $0.77 on December 1, 2021.

Nabati Foods Global Inc.

$23.16M Market Capitalization

Nabati Foods Global (MEAL.C) is a food technology company focused on designing, developing, manufacturing, and distributing a variety of plant-based products. The Company offers consumers a wide range of whole, natural, plant-based, gluten-free, and soy-free foods through its four signature product lines, including dairy-free cheesecakes, cheese alternatives, plant-based egg alternatives, and plant-based meats.

Nabati products are currently sold in more than 700 independent stores across North America, including major retailers like Sobeys, Metro, Safeway, Whole Foods, and Loblaws, to name just a few. Additionally, the Company’s Nabati Cheeze products are used by major food brands such as Cobs Bread, Mucho Burrito, and Quesava. Currently, Nabati Cheeze shreds are available in mozzarella or cheddar and are made without casein, lactose, and dairy.

What has Nabati been up to lately? Most recently, on November 24, 2021, the Company announced that Plant X is now carrying Nabati Plant Eggz™ and Nabati Cheeze shreds on its platform. While traditional eggs offer approximately 9.56 grams of protein per 76 grams, the Company’s Plant Eggz™ offers a comparable 6 grams of protein per 76 grams.

Furthermore, Plant Eggz™ products are designed to mimic the same consistency, taste, and texture as traditional eggs by utilizing lupin and pea protein. Moreover, in addition to having only 100 calories per serving, Plant Eggz™ contain no cholesterol, whereas regular eggs contain roughly 321 milligrams or 107% of the recommended daily value.

“With more and more consumers opting for the convenience of online shopping, especially in the wake of the COVID-19 pandemic, Nabati Foods is pleased to be joining the Plant X marketplace to reach its broad customer audience…

Nabati Foods was founded to lead the evolution of food, and that means innovating but also listening to consumers and becoming a part of the evolution of how we ship to customers. A robust digital presence is key for the ultimate convenience and exposure,” commented Nabati Foods’ CEO Ahmad Yehya.

For context, Plant X is one of Canada’s leading eCommerce retailers, offering more than 5,000 plant-based products including food, beverages, cosmetics, and food delivery. Furthermore, Plant X works directly with multiple external websites, such as Walmart.com, to distribute its products. With this in mind, Plant X offers a variety of popular plant-based brands through its platform, including Beyond Meat, Oatly, Daiya, and Just Egg.

Aside from its expansive selection of products, Plant X offers personalized web pages featuring PlantX Ambassadors, including Venus Williams, Rémy Métailler, Nick McNutt, Justin Fields, and Megan Roup. In total, Nabati’s products are sold globally on three continents via grocery, foodservice, industrial, and eCommerce channels.