Major Woolies, Coles food supplier collapses

A Queensland-based supplier of plant-based and meat-free products to Woolworths and Coles has collapsed, with fears of product shortages.

A major Australian supplier of plant-based and meat-free products to supermarket giants Woolworths and Coles has collapsed with fears that customer could have faced product shortages.

The Queensland-based company called Fenn Foods went into liquidation on October 9. It employed 32 staff.

Launched in 2015, Fenn Foods claimed on the its website it was the first certified carbon neutral, plant-based food producer in Australia.

It was founded by Michelin star chef Alejandro Cancino who led the company’s recipe development, as well as his wife.

Fenn Foods merged with competitor All G Foods’ plant-based division in 2023, with its Veef and Lovebuds brands stocked by Woolworths and Coles.

The meat free sector has been hit by falling sales and an inability to find investment in recent years.

Fenn Foods co-founders Alejandro Cancino and Paola Moro. Picture: Supplied

Ken Whittingham and Mark Robinson of Fort Restructuring were appointed to oversee the liquidation.

“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 shutdowns impacted important wholesale and restaurant channels for producers,” said Mr Whinttingham.

Fort Restructuring have now secured a buyer for the company’s major assets.

Gold Coast-based Smart Foods has entered into an agreement to purchase plant and equipment, stock, Veef and Love Buds brand names, registered IPs, and other intellectual property related to the producer of meat-free alternatives.

“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,” said Mr Whittingham.

“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.”

Liquidators were concerned about perishable food. Picture: Supplied

Smart Foods could offer new roles to up to half of the 32 employees from the collapsed company.

Mr Whittingham added in the liquidator’s experience it was not unusual for “pioneers in a young and growing sector to face challenges” but they were “pleased that through this transaction the IP and innovation around meat alternative products developed in Australia won’t be lost.”

Liquidators are also working on payouts for creditors and employee entitlements out of the remaining assets.

Smart Foods CEO Raghu Reddy said the focus would be on expanding 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,” he said.

Alejandro Cancinoand his wife Paola run plant-based product company, Fenn Foods.

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

Another major Australian food supplier The Essential Ingredient, which had been operating for 34 years, collapsed in September.

It was one of Australia’s most recognised speciality food brands, but it blamed “economic headwinds” for not enabling it to realise the expectation of returning to pre covid profitability.

Three days earlier South Australian dairy company Beston Global Food Company, which employed 160 people, went under.

It blamed exceptionally high operating costs, an avalanche of cheap dairy imports, soaring energy prices and government regulation for its demise.

Originally published as Major Woolies, Coles food supplier collapses