The decision for the two plant-based foods companies to join forces was a natural one, said Above Food CEO and co-founder Lionel Kambeitz, evident from the first few meetings Above Food had with Douglas Hines, Atlantic Natural Foods’ (ANF) current chairman, who will lead Above Food's new plant-based seafood division as part of the acquisition deal.
"We looked at each other one day and realized we have whole value chain sitting right here in the Zoom call," Kambeitz told FoodNavigator-USA.
Above Food, which owns its entire supply chain of specialty plant-based ingredients (fava, chickpeas, soy, and oat) as well as a number of plant-based food brands including recently-acquired Only Oats and Culcherd, spotted an opportunity to expand its plant-based set to offer more shelf-stable meal solutions for consumers, an area where ANF has years of expertise and knowledge.
ANF currently manufacturers several products including plant-based meal starters under its Loma Linda brand, TUNO plant-based tuna alternative, and its shelf-stable Neat egg replacement products.
For ANF, the appeal of moving under Above Food's umbrella was that the company could now have direct access to plant-based ingredients through Above Food's well-developed "seed-to-fork" supply chain which includes an extensive supplier network in the Northern Plains region of Southern Canada, where ANF plans to begin sourcing most of the soy protein and other plant-based ingredients used in its product formulations.
"In order to be able to succeed long term, you have to have a relationship with the grounds. Atlantic Natural Foods and Above Foods is the first case of a CPG entity that has that particular current core competency," Hines told FoodNavigator-USA.
While much of the excitement and R&D efforts may be in chilled and frozen plant-based foods, Above Food and ANF believe the broader market opportunity is in shelf-stable, plant-based foods category.
"The real growing market is shelf stable. And we have the competitive advantage to be able to have the lowest unit economics in an area that needs low unit economics in order to sell," said Kambeitz.
"When we bring our unit economics down we then reach more than the 2 billion people in the world that have, we're able to reach the people who really need good plant based protein."
According to SPINS data for the 52 weeks ended June 13, 2021, ANF had six of the top 10 performing SKUs in the shelf-stable plant-based category in the natural retail channel.
"It's a great foundation to work from, it's already working in retail and the sales data illustrates just that," added Above Food president and co-founder Martin Williams.
"From an innovation standpoint we're going to really be able to supercharge that growth," said Williams, adding that the Loma Linda, TUNO, and Neat will soon be available on Above Food's direct-to-consumer site in addition to the 19,000 retail outlets the products are already available.
Plant-based seafood: 'It's still pure white space'
Hines, who has spent his career working in the seafood business, noted that plant-based seafood is still very much a novel concept for most consumers who have yet to try products such as the company's TUNO plant-based tuna alternative packaged in shelf-stable pouches and cans.
"I don't think many people have tasted [plant-based seafood] yet. Most of the products that have been created are still in the infancy phase -- It’s still pure white space as we see it," Hines said.
According to Hines, despite some supply chain setbacks and losing a major retail account last year, the TUNO brand still managed to grow revenues by 26% between 2020 and 2021.
"We're also intent on having a healthy product," said Hines, adding that its plant-based tuna alternative provides a dose of healthy fats from algal oil.
With the acquisition of ANF and its shelf-stable, plant-based seafood capabilities, Above Food can now enter a market where there's currently not a clear leader, noted Kambeitz.
"There have been a few champions in meat analogues with Impossible and Beyond and there are few champions in the dairy analogues space with Oatly and Chobani. But here now there's an opportunity for a champion in the plant-based seafood category, and that's really one of the motivating aspects of our new relationship [with ANF]," added Kambeitz.