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July 17, 2020

Canada’s The Very Good Food Co. plans to enter US after raising new capital

The Very Good Food Co., a meat-alternative start-up in Canada, has raised additional funding just weeks after going public.

By Dean Best

The Very Good Food Co., a meat-alternative start-up in Canada, has raised CAD8.5m (US$6.2m) weeks after going public to fund expansion into the US market and for possible acquisitions.

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The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
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The capital-raising exercise was conducted via a so-called bought deal offering, whereby the business sold 5.7 million shares to Toronto-headquartered investment bank Canaccord Genuity Corp., which will sell on the shares to investors.

A spokesperson for The Very Good Food Co. told just-food the investment amount could change due to an over-allotment option, but the company’s founders will still retain 34% of the business.

Founded in 2016 by CEO Mitchell Scott and James Davison, who is chief research and development officer, British Columbia-based The Very Good Food Co. manufactures plant-based products under its Very Good Butchers brand, sold in retail and foodservice channels in Canada.

The company has a listing in Whole Foods Market for its Very Good Burger, the Smokin’ Burger, British and Smokin’ Bangers, and a Taco Stuffer. Two new products are about to hit the market in Canada – Very Good Pepperoni and Very Good Dogs.

It raised CAD4m from its recent initial public share offering and is listed on the Canadian Securities Exchange. The Very Good Food Co. is also building a second facility in Vancouver, also in British Columbia. 

The company said in a statement announcing the capital raise: “The company intends to use the proceeds from the offering to pursue an expansion to the United States, for continued investment in its product portfolio through research and development and potential accretive acquisitions within the plant-based sector, and for general corporate purposes.”

The Very Good Food Co. is currently present across North America via its e-commerce channel but the spokesperson was unable to pinpoint the exact timing of when it will enter the US.

The bought-deal offering is expected to close around 12 August subject to approval from Canada’s regulatory authorities and the Canadian Securities Exchange.   

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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