Gold Coast-based food manufacturer, Smart Foods, has acquired The Aussie Plant Based Co., eight days after it went into liquidation. Operations have already restarted.
Smart Foods CEO, Raghu Reddy told Food & Drink Business that despite the recent challenges for the plant-based company, he recognised its “immense potential”.
Fort Restructuring partner, Ken Whittingham said Smart Foods entered an agreement to purchase plant and equipment, stock, vEEF and LOVE BUDS brand names, registered IPs, and other intellectual property related to the producer of meat-free alternatives.
“As one of the largest suppliers of plant-based and meat free products to major supermarkets in Australia, there was a very real risk that consumers could have faced product shortages,” Whittingham said.
“This combined with the fact we are dealing with stocks of perishable goods meant that we needed to move quickly to ensure the best possible outcome – with this transaction being completed within seven days of our appointment as liquidators, after discussions with several potential buyers.”
The Aussie Plant Based Co. was launched last year to create a larger player in the plant-based meat market.
“I am incredibly excited to lead The Aussie Plant Based Co. into this new era,” Reddy said. “While the company has faced recent challenges, I believe in its strong foundation and the dedication of its team.
“By streamlining operations, fostering key partnerships, and focusing on innovation, we will solidify its position as a leader in the Australian plant-based market.”
Whittingham said the asset sale would enable around half of the company’s 32 employees to be retained.
Fënn Foods was founded by Michelin Star chef, Alejandro Cancino, and Paola Moro in 2015. Based on the Sunshine Coast in Queensland, Cancino and Moro had invested heavily in R&D and advanced manufacturing equipment. In 2021, it was the first to launch a certified Carbon Neutral Plant-Based Mince under its vEEF brand and named on the 2021 Australian Financial Review’s Fast 100.
All G Foods launched in 2021 after a $15.5 million seed funding raise, announcing its precision fermentation project to create cow-free dairy and retail product, Love Buds.
In forming the new business, All G Foods demerged its retail arm, Love Buds, to focus on its precision fermentation business.
Reddy said The Aussie Plant Based Co. was known for its commitment to high-quality, sustainable, and delicious plant-based alternatives.
“It went into liquidation last week due to cash flow challenges stemming from raising prices, rapid expansion, and supply chain disruptions.
“This highlights the complexities of establishing a thriving plant-based industry in Australia, where long-term success requires significant investment and strategic planning,” he said.
Whittingham said they were also working towards secured creditors and employee entitlements being paid out of remaining company assets, with Fënn Foods, ceasing to operate as an entity.
Reddy acquired Smart Foods in 2022 (it launched in 2005) and manufactures ready meals and other food products predominantly for the foodservice sector, as well as its own retail brand.
He said that when you consider 79 per cent of Australians are actively trying to reduce their meat consumption, with many turning to plant-based alternatives, he couldn’t ignore the opportunity to revive the business.
“The Aussie Plant Based Co. will continue to provide a wide range of plant-based products for both food service and retail channels.
“Plans for the future include expanding distribution to ensure nationwide availability, with a focus on securing shelf space in all major retail giants, including Woolworths, Coles, Costco, Aldi, and IGA stores,” Reddy said.
Whittingham added, “The meat free and plant-based sector has gone through somewhat of a boom and then consolidation phase in recent years and there’s no doubt that Covid shut-downs impacted important wholesale and restaurant channels for producers.
“However, in our experience it’s not unusual for pioneers in a young and growing sector to face challenges and we’re pleased that through this transaction the IP and innovation around meat alternative products developed in Australia won’t be lost.”
Production has already resumed at its Sunshine Coast facility, with distribution discussions also underway.
