Sol Cuisine Raises $10M to Push Further Into U.S.

Canadian frozen food brand Sol Cuisine announced last week the close of a $10 million funding round as the plant-based brand looks to expand its U.S. distribution footprint, while also investing in new marketing efforts and product innovation.

The round was led by BDC Capital’s Industrial Innovation Venture Fund along with existing investors including EDC, New Acres, InvestEco and Planted Power. As part of the deal, Jonathan Goodkey, Principal at the Industrial Innovation Venture Fund, has joined the brand’s board of directors. This is the fourth round of funding for the brand, which launched in 1996, most recently closing $13 million in 2018. While previous financing was used largely for increasing manufacturing capabilities, this round is “all about growth,” according to CEO John Flanagan.

Sol Cuisine, which markets frozen plant-based burgers, entrees and appetizers, is currently available in 4,000 stores across North America, with approximately half of those locations in U.S. retailers, including Whole Foods, Albertsons and Target.

Some of the funding will go towards ramping up marketing efforts to support the new distribution. Last year, the company updated its branding, changing its logo and adding product photography to its packaging, which Flanagan said helped catch consumers’ attention in the frozen case and better position it as a “gourmet” food brand. To build on this consumer awareness, the brand will be adding to its marketing team and focusing heavily on social media, including launching targeted influencer campaigns.

As the brand looks to deepen its footprint in the U.S., it will find itself competing against an increasingly crowded category. But, Flanagen said, its product line stands out by offering a wide range of products, while many other plant-based products stick to one protein source (ie beef, chicken or fish), and avoiding “me-too products.” And although plant-based meat is a “pillar of strength,” for the brand, he said, it also has a strong focus on “veg-forward” items, balancing different consumer preferences.

“We see the market and the consumer needs expanding beyond summer burger seasons into year-round consumption and other eating locations and other day parts as well,” Flanagan said. “We’re really just rounding out our product portfolio so that we’ve got a robust set of product offerings for any eating occasion that they would have.”

To tap into these different consumer needs and eating occasions, the brand has expanded into appetizers this year with the launch of Spicy Black Bean Bites, Spinach Chickpea Bites and Crispy Chik’n Bites, and also launched a new entree, Crispy Tempura Fillets. Two of the appetizers launched in Target stores across the U.S. in May, and this week its Spinach Chickpea Bites hit Costco stores across Western Canada.

The brand is taking a multi-channel approach to U.S. expansion, with an eye towards expansion into foodservice. While it has yet to tap into the channel in the U.S., foodservice accounts for approximately a third of the brand’s Canadian business. Though Flanagan said this foodservice business has been “hit hard” during COVID-19, its retail business has experienced significant growth, helping even out any losses.

“The balance of being in multiple channels means that you can capture the consumer sale as they start to change their eating behaviors and their buying patterns,” Flanagan said.

The brand will also invest in equipment and technology to support the development of further innovations as it seeks to expand into different sections of the store. While its products are currently only sold in the frozen section, Sol Cuisine is developing a “next gen” set of refrigerated products which will likely launch next year that Flanagan said will ideally be sold in retailers’ the fresh meat sections.

While Sol Cuisine, which first began with tofu before expanding into other plant-based categories, has been in business for over 20 years, Flanagan noted the plant-based space has experienced a “seismic shift,” over the last two to three years, with a rapid increase in innovation and consumer awareness. He said he believes this rise in plant-based products’ popularity is “not a fad” and expects it to continue long term due to their focus on nutrition and sustainability.

“If you look at plant-based foods, they’re definitely leading the charge of growth categories,” Flanagan said. “It’s an exciting place to be and the pie, so to speak, just keeps getting bigger. We’re just finding and exploiting our positioning in the market to get a fair share of that larger pie.”