South Africa’s Tiger Brands is co-investing in plant-based food company Herbivore Earthfoods with private equity firm Secha Capital, one of its directors said on Monday, as the food producer forays into the fast-growing plant protein sector.
Demand for plant-based meal replacements has risen in recent years, with much of the demand being led by millennial and young adult consumers as they become more conscious about what they eat.
Tiger Brands, like many of its peers, is tapping into the emerging consumer trends and is plugging holes in its portfolio by diversifying into health, nutrition and plant-based meat products.
South Africa’s largest food producer, citing a report, said the African plant protein market, of which the country represents 57%, is estimated to grow at a compound annual growth rate of 6.5% to $560 million by 2023.
The company’s investment in the Cape Town-based manufacturer of plant-based and vegan products, such as dairy-free cheddar slices and pea protein burger patties, is through the group’s recently launched venture capital fund.
Together with co-investor Secha Capital, the fund took a minority shareholding in the business, the fund’s director Barati Mahloele told journalists and investors at an event in Cape Town. She did not give the investment amount.
The fund will be actively involved in supporting Herbivore’s growth ambitions “through improved governance and strategic guidance, as well as leveraging the group’s route-to-market and research and development expertise,” she added.
The investors also want to help Herbivore make plant-based foods more accessible and affordable for the South African consumer, Tiger Brands group Chief Executive Officer Noel Doyle.
“At Herbivore we see plant-based as the future of food. More consumers are realising the benefits of a plant-based diet,” Herbivore founder Chanel Grantham said.
Within a few months of launching, Tiger Brands’ investment vehicle received more than 500 expressions of interest from eligible businesses operating within the food tech and agri-tech sector, and in November it said it was assessing nine opportunities.
Doyle told Reuters that the fund hopes to “spend some more money” in the next six to nine months.