THE BEAN BUTCHERS: Vegan meat makers in Victoria are leading the global trend

James Davison and Mitchell Scott of The Very Good Butchers like to talk about the total number of “beans butchered” for their range of popular vegan meat products — 26 million and counting.



By CINDA CHAVICH


You could call them Victoria’s most accomplished bean counters.

Partners James Davison and Mitchell Scott of The Very Good Butchers like to talk about the total number of “beans butchered” for their range of popular vegan meat products — 26.5 million black beans in 2020 for Very Good Burgers alone, or a total of two billion beans on the chopping block last year.

It’s a cheeky way to look at a business that’s growing like a magic beanstalk and, like a modern day fairy tale, turning beans, and other plant foods, into golden profits.

“It is kind of crazy,” admits Scott, recalling the company’s rapid rise, from a burger and banger recipe in Davison’s Denman Island kitchen and farm market sales in 2016 to the stock market valuation of more than $500 million today.

“I think what investors are seeing is there’s a ton of growth in the space, and we’re really well positioned to capitalize on that growth.”

In fact, the now public company (TSXV: VERY) has recently been rebranded The Very Good Food Company (VGF), with a new 45,000-square-foot facility in Vancouver that will increase production by a projected 2,690% this year.

"Bringing the Rupert (Vancouver) facility online is a major milestone for our business," says Scott, VERY’s CEO.

"Once we are fully operational, we will be able to substantially scale our food production in order to meet consumer demand.”


VERY GOOD TIMING

Demand has long been the operative word for this successful start up. The story of the Very Good Butchers is one of perseverance and perfect timing, a new line of plant-based proteins launched in a city hungry for tasty vegan meats.

When Davison, a British-born chef with experience in top vegan restaurants in Vancouver, brought his artisan bean and wheat-gluten based burgers to market in Victoria in 2017, the small shop sold out in the first few hours, with 1,000 customers lining up for a taste.

Demand for their products has been so strong since the outset, the partners have been playing catch up to fill growing orders ever since.

“It was hard fought for awhile — there have been ups and downs,” says Scott, “but people have been enjoying the product and we’ve been growing each year.”

That may be a modest portrayal of the expansion that saw the company launch its IPO on the TSX Venture Exchange in mid-2020 with an initial stock price of $0.25. By April 2021, the stock was hovering around $5.25, and the company had just announced its best sales month ever, $1 million in March of this year.

In December, investment website The Motley Fool reported Very Good sales were up 582%, year over year, dubbing it “one of Canada’s hottest stocks” and one of the most successful crowd-funded companies in the country.

But raising capital was not always easy for the Victoria-based business partners.

After opening western Canada’s first vegan butcher shop in early 2017, they turned to a Kickstarter campaign to raise $50,000 for expansion. A year later, with $1 million in sales behind them, the pair appeared on the CBC’s Dragon’s Den looking for $500,000 to boost production to meet the demand for their products. That deal was never inked, but with an equity crowd funding campaign through FrontFundr, they raised $600,000 from 250 retail investors, enough to repurpose a former Victoria bakery and begin automating the vegan meat-making process.

“We’ve been very production limited since the beginning, but the big catalyst was when we went public,” says Scott.

“That really opened the flood gates. Having easy access to capital means we are able to expand, and hire and retain great talent.”


VEGAN VISIONARIES

From the beginning, company founders Scott and Davison split duties — the former overseeing the business and marketing side, the latter in charge of product and menu development. Today Scott is the company’s CEO with Davison overseeing production and a team of research and development scientists. Earlier this year, Ana Silva was appointed the new company president. Silva spent five years as CFO for Vancouver-based Daiya Foods, a company specializing in plant-based dairy alternatives available in more than 25,000 stores across North AmericaDaiya, which was recently purchased by Japan’s Otsuka Pharmaceuticals for $405 million, expanded into a 400,000 square-foot facility in Burnaby last year, with VGF moving into their former production plant.

“The possibilities in the plant-based food industry are endless, and I believe the plant-based movement will secure our long term global food supply,” says Silva, who will oversee the company’s ongoing expansion plans.

Beyond the 45,000-square-foot production facility in Vancouver, there’s a new Vancouver head office with space for R&D and retail in Mount Pleasant, and plans to open a 50,000-square-foot production plant in Patterson, California by November this year.

“Victoria has been a great city to start a plant-based business and will always be our spiritual home,” says Davison, who will maintain offices and production in Victoria as well. “Victoria really is a great incubator.”

Daiya, which was recently purchased by Japan’s Otsuka Pharmaceuticals for $405 million, expanded into a 400,000 square-foot facility in Burnaby last year, with VGF moving into their former production plant.


GROWTH AND GROWING PAINS

Another successful vegan food company in Victoria is The Cultured Nut. It’s a “tree nut creamery,” making dairy-free cheeses and plant-based butter with nuts, products that are found on many retail shelves and restaurant menus.

VGF recently acquired The Cultured Nut for $3 million and will rebrand it as Very Good Cheese this year.

“We helped The Cultured Nut get started with production space,” says Scott. “We sell a ton of their cheese in our shop and online, and we think its one of the tastiest vegan cheeses on the market in the artisan category. It’s a high quality product with good ingredients so it was a natural fit.”

Though Victoria has been a good place to launch and grow Very Good Foods, Scott says there are logistical limitations. There’s not a lot of purpose-build space for large-scale food production on the island. All of their raw materials arrive in Vancouver and all of their e-commerce orders, still the bulk of their business, require an extra day in transit when shipped out of Victoria.

“At a certain point you’re just adding time and complexity by being on the island,” he says. “Its easier and cheaper to expand on the mainland. Vancouver has a lot of talent and plant-based food production infrastructure.”

But the company is in expansion mode in Victoria, too.

Scott says the vegan cheese will continue to be produced in the Victoria facility and “we’re putting in new equipment and hiring more people and really scaling it up for a cross-Canada launch.”

While the company has shifted production of its higher volume vegan meats, including burgers and sausages, to the Vancouver plant, 50 of its now 150 employees will keep the smaller Victoria production facility humming.

“In Victoria we’ll focus on the more specialty items — the steaks, the ribs, the pepperoni and deli meats — while we continue to grow in Vancouver,” says Scott.


WEST COAST VEGAN

Like Very Good Butchers and The Cultured Nut, other vegan food entrepreneurs are starting up on the island, too.

Save Da Sea Foods makes vegan salmon lox in the Victoria Public Market, using shaved carrots and Vancouver Island seaweed. When owner Aki Kaltenbach first created the product, she was inspired to replace the salmon in the sushi rolls in her parents’ Japanese restaurant, and now has other vegan seafood products in her sights.

“Our next product, now in development, is a canned tuna analogue,” says Kaltenbach, who has added a food scientist on to her local R&D team. “Again, unlike some of the other vegan fish on the market, it will be made with whole foods and simple ingredients.”

Kaltenbach originally planned to distribute her vegan smoked salmon through food service but the pandemic forced her to switch gears and focus on retail sales. Save Da Sea carrot lox can now be found at 50 retail outlets in Western Canada with an Ontario launch planned for later this year. And a recent win in the new product category at the Canadian Health Food Association awards (including 20K in free advertising), promises to boost the brand further.

“BC is a very good place to launch, with a high proportion of vegetarians and vegans,” she says, “and Victoria has so many fantastic independent grocers that are very open to working with local vendors.”

Lauren Isherwood and Nick Baingo moved their Vumami Foods business to Sidney from Osoyoos, BC, last year and now make their line of vegan Umami Bomb condiments in a commercial kitchen in Brentwood Bay. The bold and spicy shiitake chili sauce adds a savoury umami boost to vegetarian and non-vegetarian meals alike.

“We are both vegans but missed that savoury umami you get from meats,” says Isherwood who developed the product with Baingo in their home kitchen. “We spent a long time trying to replicate that taste in a vegan condiment that we could use to liven up veggies, noodles, sandwiches and wraps.”

Umami Bomb was launched at farmers markets, but its now available at a variety of independent grocers and online via PlantCurious.com and SPUD.ca.


PLANT-BASED BOOM

They’re all cashing in on a segment of the food industry that’s growing in the double digits as consumers adopt more plant-based proteins.

A study by market researchers Mintel found that 53 per cent of Canadian consumers surveyed eat plant-based meats, 18 per cent “a few times a week.” And though only five per cent of Canadians identify as vegetarian, and two percent are vegan, 21 percent of those surveyed “think meat alternatives are healthier than meat.”

The vegan burger boom is leading the way, with mega brands like Beyond Meat and Impossible burgers using vegetables, soy, legumes and grains to mimic meat. In the first nine months of 2020, Nielsen reported sales of plant-based meats were up 129%.

It’s also drawing giant animal meat producers into the vegan meat mix, including brands like Raised and Rooted by Tyson Foods, and OZO plant-based meats from Planterra, a subsidiary of JBS, the world’s largest meat company.

When Greenleaf Foods (a wholly-owned subsidiary of Canada’s Maple Leaf Foods) acquired Seattle-based Field Roast in 2018, it announced plans to build North America’s largest plant-based protein manufacturing facility, banking on a very vegan future.

“While burgers are fueling category growth, all refrigerated products are forecasted to deliver double-digit growth for the next twenty years,” the company forecast.

And with Vancouver ranked as one of the world’s most popular cities for vegans, its not surprising BC’s vegan business is booming.


TO INFINITY AND BEYOND

Conquering the world is next on Scott and Davison’s to do list.

The first Very Good Butchers flagship retail shop and cafe will open in downtown Victoria this summer, a template for similar corporate stores the founders say will represent their brand.

“The main focus this year is on North America but we want to be a global brand so we’re looking at Europe and Asia next year as well,” says Scott, noting Vancouver and Montreal shops are in the works now. “We’d love to see 20 of these stores, as flagship stores — in London, in Tokyo — around the world.”

While the majority of the company’s growth to date has been from online sales, Scott says VGF will continue to expand to more wholesale and food service accounts.

This year they inked a distribution deal with Quality Foods, owned by the Jim Pattison Group, that includes distribution through its other major retailers, Sobeys Inc. and Safeway across Canada. A new US distributor will expand sales south of the border.

From plant-based burgers and sausages, to pulled BBQ jackfruit (akin to pulled pork) and Very Good Ribz, even VG Steak, VGB has focused on red meat alternatives based on beans and wheat gluten for its product line, but there’s also a new gluten-free line in the works.

“Our burgers and sausages, our original products, are what people love the most,” says Scott, “the ones James first made in his Denman Island Kitchen.”

And Davison is busy with more ideas.

“Anything you can think of in your fridge or pantry, we want to replace it with a healthier, better tasting, plant-based alternative,” he says. “The mayonnaise, the sauces, the fish, the cheeses – you name it, if it comes from an animal, we want to have a product to replace it.”

Even with thousands of burgers now tumbling off their Willy Wonka-esque automated line in Vancouver, the ingredient list is still relatively simple, Davison says, and the goal to produce healthy vegan foods remains a priority.

“It’s exactly the same product, just made a lot faster, in a lot bigger cooking kettles, bigger burger presses and faster sausage stuffers,” he says.

The company is maintaining its philosophy of sourcing organic ingredients, direct from farmers, and “trying to stay true to our roots.”

“I think it’s the quality of the ingredients, having that always at the forefront of our minds when making our products,” he says, “the most nutritious, the one that’s best for you, not just the most profitable.”

The west coast has definitely been the best coast for aspiring vegan chefs and food companies.

Davison says they’re up to “a bajillion beans” and counting. That’s a lot of plant-powered love.


This feature was first published in Douglas Magazine