JSE-listed food producer Tiger Brands' Venture Capital (VC) Fund has made its first investment in a plant-based and vegan products manufacturer – Herbivore Earthfoods.
The fund is now a minority stakeholder alongside co-investor and early-stage impact investment private equity firm Secha Capital.
The global market for plant-based foods is forecast to grow to more than $162-billion by 2030. The African plant protein market, of which South Africa represents 57%, is estimated to grow at a compound annual growth rate of 6.5% to $560.62-million by 2023.
“In line with global trends, consumers in South Africa and across the continent are driving increased interest and desire for a range of plant-based products. Herbivore’s innovative and tasty meat and dairy alternatives have gained significant traction, with scope to scale and drive further penetration.
"This is a compelling opportunity in which we are proud to back innovative entrepreneurs and are inspired by the team’s underlying desire to improve eating habits and change the current food system for the better,” says Tiger Brands VC Fund director Barati Mahloele.
“Our partnership with the Herbivore team will involve leveraging each other’s combined strengths to achieve their growth strategy and to push the boundaries to provide an affordable and healthy alternative product offering to consumers,” she adds.
“At Secha, we believe that sustainability is a current and future driver of the economy and that plant-based foods are not a trend but a permanent category growing in every aisle and food service restaurant globally,” says Secha Capital principal Kuhle Mnisi.
“We are proud to invest in the Herbivore team because they have been persistent early innovators in the category and their success has shone through in their product range and market adoption. We’re equally proud of the impact the business has by being seven-times more water-efficient and producing 90% fewer greenhouse-gas emissions than animal-based products,” she adds.
The product line of Herbivore Earthfoods, founded in 2014 by Chanel Grantham with the aim of making healthy, plant-based foods accessible and affordable in South Africa, includes dairy-free milk alternatives and desserts, confectionery and protein alternatives.
“At Herbivore, we see plant-based as the future of food and we pride ourselves as being at the forefront of plant-based food innovation in South Africa. More consumers are realising the benefits of a plant-based diet. Our goal is to give our consumers more plant-based options that are tasty and affordable,” says Grantham.
Tiger Brands and Secha Capital will use their experience in the food and beverage sector to help grow and scale Herbivore Earthfoods, with one of its objectives being to make plant-based foods more accessible and affordable for the South African consumer.
“In drawing on the knowledge and experience of strategic partners Tiger Brands and Secha Capital, we will be able to capitalise on current and future trends in the plant-based food and food technology space,” adds Herbivore Earthfoods director Davey du Plessis.
The Tiger Brands VC Fund will be actively involved in supporting Herbivore’s growth ambitions through improved governance and strategic guidance, as well as leveraging the Tiger Brands group’s route-to-market and research and development expertise, the company said in a statement.
Further, Secha Capital brings considerable expertise in the fast-moving consumer goods market, investing in established small and medium-sized enterprises across Africa. Tiger Brands recognised the added value the company would help to unlock in Herbivore.