McCain invests $55M in plant-based frozen brand Strong Roots


Dive Brief:

  • McCain Foods invested $55 million in Irish frozen plant-based food company Strong Roots, with the global potato giant taking a minority stake in the business.
  • Through this partnership, Strong Roots will use McCain’s global network to grow and increase distribution. McCain gains a healthy and on-trend brand to increase its reach in better-for-you and plant-based categories. Strong Roots, which will continue to be run independently, will gain foodservice exposure through McCain’s existing partnerships. 
  • This is the latest partnership between McCain and smaller companies in the plant-based space. McCain also has invested in plant-based chicken maker Simulate and Canadian indoor vertical farming company GoodLeaf.

Dive Insight:

As big food companies look to diversify their options and seek healthy and on-trend items, plant-based companies with potential stand out. Strong Roots, which was founded in Ireland in 2015, is a relatively unique plant-based brand.

Its main focus is making plant ingredients into new items that can be found in the frozen section. Strong Roots’ Cauliflower Hash Browns, veggie burgers made from kale and quinoa or beet and bean, and Mixed Root Vegetable Fries look more like plant-based options from 20 years ago than the newer generation of plant-based meat and dairy analogs that have dominated recent product launches.

McCain executives said Strong Roots fills a distinct need for today’s consumers.

“That’s why we’re so excited to be partnering with Strong Roots, a company that not only aligns with our innovative approach to creating food, but also helps us grow our portfolio of healthier food that meets changing consumer demands in a sustainable way,” Max Koeune, McCain’s president and CEO, said in a statement. 

Strong Roots launched in the United States in 2019. Its foothold was bolstered by an expansion into 2,000 Walmart stores last year. The company says its products are available in more than 8,000 stores worldwide in Ireland, the U.K., the U.S., Singapore, Iceland, the United Arab Emirates, Bahrain and Qatar.

This new investment fits well into McCain’s portfolio in the plant-based space, which includes several options that don’t compete with one another.

McCain is the primary manufacturer for Simulate’s plant-based chicken products. This fall, McCain announced it was launching The Simple Root, a U.K.-based brand of vegan dips and sauces utilizing proprietary technology to create a dairy-like experience from root vegetables. And GoodLeaf, in which McCain invested more than $65 million earlier this year, is the largest commercial vertical farming operation in McCain’s home country of Canada. 

But this investment may actually be shoring up bigger problems for Strong Roots.

Private equity firm Goode Partners led the $18.3 million Series A fundraising for Strong Roots in 2019, taking a 38% stake in the company. Earlier this year, however, that relationship began to sour. In a lawsuit filed in Irish Commercial Court, Goode Partners claimed Strong Roots was missing its targets and was in danger of running out of cash.

The McCain deal provides a “successful exit” for Goode Partners, which is selling its share in Strong Roots and leaving its board, the release stated. There are no details about how much Goode Partners is receiving, though Dennigan told The Irish Times that Strong Roots had been looking for a new partner to help with the next phase of its growth.

Source link

Leave a reply

Please enter your comment!
Please enter your name here