Toronto-based Zoglo’s Incredible Food Corp. (CSE: ZOG, FSE:7UT) has agreed to acquire a 51% interest in London-based Monday Swiss UK, a leading European-based developer and manufacturer of innovative plant-based food alternatives. Zoglo’s had first signed a memorandum to buy a 50.5% interest in Monday Swiss earlier this year on 3 August.
Who are Zoglo’s Incredible Food Corp?
Monday Swiss products are sold under the Veggie Day and Monday Swiss brands. Monday Swiss has invested more than $3m in R&D over the past five years, developing leading-edge whole-muscle plant-based technology, which aims to develop products that give consumers the exact experience of eating real meat and poultry.
Monday Swiss’ new manufacturing facility is certified BRC, Kosher OU, Halal, ISF and SMETA, so it is able to meet a wide range of consumer needs around the world. It has four production lines, which can produce frozen, chilled and ready-to-eat plant-based products and deliver complete packaging solutions.
Monday Swiss has a well-developed distribution network in place, with a blue chip clientele that includes Tesco, Co-Op, Holland & Barrett and online grocery retailer Ocado.
Why is the deal important?
Zoglo’s expects the deal will enable it to leverage Monday Swiss’ technology and experience in new product development to continue the development of Zoglo’s product portfolio and to be a market leader in the category. The proposed deal is expected to increase Zoglo’s annual sales by up to CAD $6m, and boost Zoglo’s capacity for global expansion.
Anthony Morello, CEO of Zoglo’s, said: “This acquisition creates a strong business and synergies for Zoglo’s in Europe and the UK, in conjunction with its current evolving business in Canada and the US.”
Alon Cahn, founder and chief executive of Monday Swiss, added: “With a production capacity of over 500,000 kilograms per month, and the ability to double our capacity by 2023, I believe Zoglo’s is poised to become one of the leading plant-based meat alternative companies globally.”
To meet an expected growth in demand in Europe for its products, Zoglo’s common shares, as well as being listed on the Canadian Securities Exchange in Toronto, can also now be traded on the Frankfurt Stock Exchange, as of today (4 November). The company is also applying to have its common shares posted for trading on the OTCQB Venture Market, a United States trading platform that is operated by the OTC Markets Group in New York.
Under the terms of the deal, Zoglo’s will pay CAD $1,7m in three tranches by April, 2022, and make a loan to Monday Swiss of $1.1m to fund the development of Monday Swiss’ business.
Winds of change
The market for meat substitute products is set for significant growth, after more than 100 world leaders attending the COP26 climate summit on 2 November pledged to end deforestation and cut emissions of methane by 30% from 2020 levels, as part of a global strategy to curb global warming.
As part of this pledge, governments are committed to reduce livestock farming, dubbed the ‘summit villain’ for the methane emissions of cattle, and to find ways to reduce the consumption of meat. It is against this backdrop of government action that we expect to see a change in eating habits away from meat and more towards plant-based meat alternatives, boosting the sales of companies such as Zoglo’s over the coming years.