Nestle teams up with Canadian plant-based ingredient makers (updated)

Burcon NutraScience

24/01/2020 16:48

(Updates with interviews with Burcon, Merit)
    By Rod Nickel and Silke Koltrowitz
    WINNIPEG, Manitoba/ZURICH, Jan 24 (Reuters) - Food group
Nestle SA  NESN.S  said on Friday it has teamed up with small
Canadian plant-based food ingredient makers Burcon  BU.TO  and
Merit Functional Foods, the second such supply agreement this
month that targets Canadian crops. 
    Meat substitutes from plants in burgers, nuggets and many
other foods are a fast-growing industry, driving up demand for
crops that produce them.
    Canada is among the world's largest growers of peas and the
biggest producer of canola, crops high in protein that
technology companies like Burcon can separate and isolate for
use in foods and beverages.
    The agreement with Nestle is long-term, with no expiry,
Burcon Chief Executive Johann Tergesen said in an interview.
Nestle will buy pea and canola proteins from a 20,000-tonne per
year Merit plant to be built by the end of this year in
Winnipeg, Manitoba.
    Merit will process the proteins using Burcon technology
under a licensing agreement. 
    "It's a little bit like Christmas morning for those of us
who have been doing this for 20 years," Tergesen said.
    "In the early days, I had to explain to people what protein
was. Now it has been a wild ride."
    Burcon stock jumped 36% in Toronto to C$1.89 per share,
touching its highest price in nearly three years. Nestle stock
rose 0.9% in Switzerland.
    With the deal, Burcon expects to report its first-ever
commercial revenue and profit in 2021. Terms were not released.
    Nestle launched soy and wheat protein-based "Incredible
Burgers" in Europe last year. The deal gives the company access
to a range of ingredients for its foods and beverages, using the
"unique expertise" of Burcon and Merit, Nestle Chief Technology
Officer Stefan Palzer said.
    It comes after Beyond Meat Inc  BYND.O  this month struck a
similar supply agreement with France-based Roquette, which is
also building a pea protein plant in Manitoba.  urn:newsml:reuters.com:*:nFWN29K0B3
    With so much of Canada's peas exported raw, finding enough
supply to satisfy the Nestle deal will not be a challenge, said
Ryan Bracken, Merit's co-CEO. The company is already planning to
expand the Winnipeg plant under construction to more than double
production.
    

 (Reporting by Rod Nickel in Winnipeg, Manitoba and Silke
Koltrowitz in Zurich; Editing by Michael Shields and Nick
Macfie)
 ((silke.koltrowitz@thomsonreuters.com; +41 58 306 7454; Reuters
Messaging: silke.koltrowitz.thomsonreuters.com@reuters.net))