USA News Group – Food security was one of the main topics of conversation in US President Joe Biden’s emergency meeting with NATO leaders, the EU, and the G7. Biden’s alarm over food shortages highlighted how Russia and Ukraine account for around 25% of world wheat exports and 16% of world corn exports. “It’s going to be real,” said Biden. “Because both Russia and Ukraine have been the breadbasket of Europe in terms of wheat, for example.” As these grains are used in much of the world’s livestock production, surging prices of staple crops will likely lead to surging prices in proteins as well. Coupled with the anticipated supply shocks of what the UN’s predicted climate crisis, it’s expected there will be major changes on how we eat and what we eat for the foreseeable future. The market’s already acting through innovation, with responses coming from a variety of food companies such as Nepra Foods (CSE:NPRA) (OTC:NPRFF), Calavo Growers, Inc. (NASDAQ:CVGW), SunOpta Inc. (NASDAQ:STKL) (TSX:SOY), The Simply Good Foods Company (NASDAQ:SMPL), and Utz Brands, Inc. (NYSE:UTZ).
Instead of leaning into more common plant-based proteins such as soy or peas, food innovators Nepra Foods (CSE:NPRA) (OTC:NPRFF) have focused their work on hemp. The company’s developed a flagship asset known as Textured Hemp ProteinTM (THP), designed to provide ingredients to food giants with hemp-based products.
Consistent with a new report published by Allied Market Research, the global texturized vegetable protein (TVP) market size was valued at $987.9 million in 2019 and is projected to reach $2.14 billion by 2027, registering a CAGR of 9.2% from 2021 to 2027.
Being an excellent source of plant-based protein, Nepra’s use of hemp protein is strategic. The company uses hemp to manufacture nutritious plant-based and allergen-free products that are lean, rich in amino acids, a good source of iron, magnesium and manganese, and may even prevent cardiovascular disease and cancer.
During what was dubbed the “worst drought in over a century”, supply shocks in both North and South America hit pea protein suppliers, as well as impacting 50% of the world’s soybean supply. Whereas, there’s another type of plant-protein that’s less likely to be hit as hard because it’s a hearty, drought-resistant crop, is hemp. Anecdotal reports from late 2021 had American hemp farmers seeing a 12.5% drop in production.
At its Colorado facility, Nepra announced earlier this year the full operations of its first dedicated extrusion line from its new extruder equipment. The company believes this addition will exponentially increase ingredient output and boost overall sales revenue.
"Having our own textured protein equipment is key to our plan of being vertically integrated,” said Nepra CEO David Wood. “While most everyone in this space is using pea, soy, gluten, and faba bean, our texturized hemp protein has superior flavor, texture, and, most importantly, nutrition. It will be the first like it on the market."
This specialized equipment can produce Texturized Hemp Protein, THP™ (800,000 lbs./year) that is used in plant-based meat analogues such as vegan meatballs and chunk chicken, used in Nepra’s product lines with additional capacity sold wholesale to other food producers.
Nepra’s wholesale THP™ sales alone are expected to boost company revenue by up to US$3.5 million annually.
Another plant-based food shock has come in the form of a US suspension on imports of avocadoes from Mexico. Now it’s expected that prices are set to spike for avocados, which provide a source of heart-healthy fats.
California-based avocado giants, Calavo Growers, Inc. (NASDAQ:CVGW) have capitalized on the opportunity accordingly, by beginning to pick crops earlier this year than other years.
“The early shipments have definitely taken the edge off the marketing situation for summer,” said Rob Wedin, Executive VP of Calavo Growers, who stated the peak of the season could come in late April.
The company reported total revenue of $274.1 million in Q1 2022, a 24% increase from the same period year-over-year. Sales in Calavo’s Fresh business segment were a big driver of that increase, hitting $162.6 million, up nearly 41% from Q1 2021’s $115.5 million.
In general, avocado prices were 64% higher year-over-year, partially offset by 12% lower volume due to lower available market supply.
Diversifying its offerings, SunOpta Inc. (NASDAQ:STKL) (TSX:SOY) has presented multiple new products so far in 2022, including its reimagining of its plant-based beverage brands Dream™ and Westsoy, to be now known as West Life™.
The company has also received the designation of Upcycled Certified™ for its nutrient-rich oat protein powder for use in baked goods, savory snacks, dips and spreads, dubbed OatGold™.
Upcycled Certified™ is the world’s only third-party certification program for upcycled food ingredients and products.
“We divert insoluble solids from the oatbase manufacturing process to create a reimagined ingredient that is nutrient-dense and delicious,” said Lauren McNamara, Vice President and Assistant GM, SunOpta. “Upcycling is elevating all food to its highest and best use by transforming surplus ingredients into new, high-quality products like OatGold.”
Not every plant-based food company is benefitting from the current shocks. Salty snack company Utz Brands, Inc. (NYSE:UTZ) has reported the company’s struggles with supply issues.
While company sales and profits increased in its first full year as a public company, supply chain issues kept a lid on profitability, according to executives.
“If costs continue to rise beyond what we are seeing in the market today, we will continue to take pricing actions accordingly,” said Ajay Kataria, CFO of Utz Brands.
In December, Utz Brands completed the acquisition of some assets from RW Garcia, including two manufacturing plants in Nevada and North Carolina.
Plant-based protein bar makers The Simply Good Foods Company (NASDAQ:SMPL) successfully raised another $8.5 million to fuel its North American expansion for its SimplyProtein brand.
SimplyProtein offers a range of gluten-free, reduced-sugar snack bars, energy bites and more formulated with plant-based protein. The company’s products are available online and in select retailers throughout the United States and Canada. Early projections of Q1 2022 sales for Simply Good Foods’ products are estimated to potentially top $275 million.
“Plant-based protein continues to skyrocket in popularity with consumers,” said Michael Lines, founder and CEO of Wellness Natural Inc. “We have some ambitious growth goals, and the first step to achieving them is continuing to build a solid distribution foundation, allowing SimplyProtein products to be easily accessible across North America.”
Article Source: https://usanewsgroup.com/2021/09/05/the-plant-based-food-revolution-is-here/
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