By Will Novosedlik
When one in every four French fries on the planet comes from a single brand, that brand can unequivocally say it owns fries, hands down.
It shouldn’t be difficult to guess which fryopoly we’re talking about. McCain Foods makes more classic uncoated, battered and coated, seasoned and flavoured, wedges, patties, cubes, shoestrings, hash browns, tots, juliennes, waffles, crispies, crinkle-cuts, skin-ons and thin fries than anyone else, anywhere.
In a world where “plant-based” is one of the hottest dietary trends, McCain can claim to have been there all along. But the world does not live on potatoes alone, so it makes sense that the New Brunswick-based spud master is looking to other plant-based food producers for future growth.
Enter Strong Roots, another leading plant-based frozen food company, which recently announced a strategic partnership that will see McCain Foods invest US$55 million for a minority stake in the business. The Irish brand’s range of cauliflower hash browns, mixed root vegetable fries, bites and burgers, have become a favourite of people in Ireland, the U.K. and the U.S. who want a convenient plant-based option.
Observing that the consumption of frozen foods rose sharply during the pandemic, Strong Roots asked itself how it could “fix the freezer aisle” by bringing in a wider array of vegetables in formats that people are familiar with, but in an environmentally friendly way. McCain’s investment is going to help them pursue that goal.
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The Strong Roots investment is the latest in McCain’s quest for diversification since 2019. The others include Nuggs, a New York-based company that makes a chicken nugget alternative using specialized pea protein; GoodLeaf Farms, a Canadian vertical farm company that grows micro-greens and baby greens leafy produce; The Simple Root, a U.K. company with IP developed and owned by McCain that uses root vegetables to create the taste and texture of dairy products; and Simulate, a plant-based chicken and meat alternative.
Clearly there’s a pattern here.
“These are all attempts to participate, in a planet-friendly way, where we know consumer needs are,” says Peter Dawe, McCain’s chief growth and strategy officer. “We’ve gathered over 150,000 consumer inputs globally over the course of the pandemic to understand consumption. There are a few need spaces that we think are really important and these have been prioritized. Within those spaces, we’ve tried to come up with a very high-definition view of the emotional, functional and technical needs that are driving choice.”
One of the key drivers of choice in this space is sustainability. McCain is the only food and beverage company in Canada — and one of only 33 in the world — to be verified by Science Based Targets, a joint initiative of the United Nations and the World Wildlife Fund that helps companies set ambitious science-based emissions reduction targets in accordance with the 1.5° limit in temperature rise set by the Paris conference on global warming. Strong Roots, a Certified B-Corp, shares a similar commitment.
McCain’s commitment to sustainability requires the company to take a holistic view of its operations, its supply chain and its distribution. “It’s across the entire business,” says Dawe. “It starts with our farming practices. How do we use less fertilizer? Less pesticides? How are we thinking about running our own plants? How do we get our products to market? How do we package them? It’s increasingly becoming a point of conversation with our customers.”
For large corporations like McCain, sustainability requires change, and change requires innovation – which is why the CPG is investing in smaller companies. “Frankly… they are more committed to innovation than lots of larger companies. They have the flexibility to experiment,” says Dawes.
“Take a company like Simulate, which approaches product development more like a tech company. Products are constantly iterated and reformulated via live conversations with customers on social media until there is product-market fit,” he says. “Our investment gives us an opportunity to benefit from an innovation process that is more difficult for large food companies to pursue themselves.”
One of the biggest challenges with innovation is its ability to scale, but that is exactly what a company like McCain, with its global reach, can do for a company like Strong Roots. “A big reason we want to be in these businesses is that we think some of them are going to grow and become big brands,” says Dawe. “Along the way, we’re going to learn as much from them as we’ll give to them.”
