Plant-based meat company Fenn Foods saved from liquidation by local rival

Fenn Foods, a Sunshine Coast-based alternative meat company with products stocked in major retailers such as Woolworths (ASX: WOW) and Coles (ASX: COL), has been given a second shot at success after being acquired by rival Smart Foods almost two weeks after entering liquidation.

Founded in 2015 by Michelin star chef Alejandro Cancino, Fenn Foods - which is known for its signature product vEEF - joined forces with Love BUDS in late 2023 to form a new company known as The Aussie Plant Based Co. The deal came as biotech All G Foods, which initially launched Love BUDS in 2020, was looking to divest the brand to focus on its precision fermentation options.  

Mark Robinson and Ken Whittingham of Fort Restructuring Partners secured the latest sale, under which Smart Foods will purchase the plant, equipment, stock, vEEF and Love BUDS brand names, registered IPs, and other related intellectual property. The liquidators are also working to pay out creditors and employee entitlements from the remaining assets.

Roughly half of Fenn Food’s 32 employees will be offered new roles at Smart Foods, with production to continue at the Sunshine Coast facility.

“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 news comes less than two months since administrators from Sydney-based ProForm, known for the MEET brand of meat alternatives in addition to Protein Plate and Bad Hunter, were unable to restructure the company, resulting in it getting voluntarily wound up.

A recent report published by the independent think tank Food Frontier also found that domestic plant protein manufacturing saw a decrease in the first half of 2023. This decline stemmed from difficulties in securing funding from private investors and government grant programs, alongside a sharp increase in manufacturing and labour costs and reduced consumer expenditure. One example provided was the closure of v2food’s Wodonga manufacturing facility in early 2023.

The industry estimates that Australia will need at least 10 processing facilities to meet the projected global demand for plant proteins and could support even more facilities with the right settings in place.

“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,” Whittingham said.

“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.”

Based on the Gold Coast, Smart Foods has been operating for close to 20 years and provides ready-made meals, in addition to healthy vending and catering options.

Smart Foods CEO Raghu Reddy said the focus would be on expanding the distribution of Fenn Foods' former brands in food service and retail channels.

“While the company has faced recent challenges, I believe in its strong foundation and the dedication of its team,” Reddy said.

“By streamlining operations, fostering key partnerships, and focusing on innovation, we will solidify its position as a leader in the Australian plant-based market.”