Kyran Rei, co-founder of Sustainable Foods, holds a vegan burger at the plan*t stall during a food show at the Auckland Showgrounds.
Kyran Rei, co-founder of Sustainable Foods, holds a vegan burger at the plan*t stall during a food show at the Auckland Showgrounds.
A plant-based food manufacturer, whose shareholders include All Black TJ Perenara and media company Stuff, has gone into voluntary administration, blaming tough market conditions.
Sustainable Foods Ltd (SFL) chief executive Justin Lemmens confirmed the company’s directors had appointed administrators on Friday after it struggled to raise new capital. It wasaiming to raise between $500,000 and $1 million to enable it to continue trading in 2025.
“SFL has been caught in a perfect storm,” he said.
Tough economic conditions had caused consumers and retailers to retrench just as it was investing to develop a new food product, Lemmens added.
“Sustainable Foods will continue to trade while working through possible restructure solutions alongside other options.”
According to the company’s crowdfunding campaign, the business had projected strong revenue growth from “$1.5m in FY22 to $20.6m in FY25″.
The project drew famous support, with All-Black TJ Perenara becoming a brand ambassador, partner and investor in the business. Media company Stuff also invested in the start-up.
The business received a $1.25m loan from the Government’s Regional Strategic Partnership Fund in 2022, administrated by the Kānoa unit within the Ministry of Business, Innovation and Employment (MBIE).
The loan was given to the company “to purchase and install additional manufacturing equipment/machinery to enable the scale-up in production capacity at the Sustainable Foods facility”.
Former Regional Development Minister Stuart Nash said at the time the investment in Sustainable Foods was “part of a wider government strategy to develop a low-emissions, highly skilled economy that responds to global demands”.
The business also received critical acclaim, being awarded Business of the Year at the 2023 Electra Business & Innovation Awards.
Sustainable Foods chief executive Justin Lemmens with the coveted supreme award. Photo / Captured by Friday
Relocation problems
The business’ relocation from Kāpiti to Ashburton at the beginning of 2024 was highlighted as a challenge, alongside strained sales in supermarkets due to stocking issues.
Production using the company’s “High Moisture Extruder”, the largest and only commercial machine of its kind in New Zealand, was too expensive for the business to scale up, impacting its cash reserves.
Lemmens also said the cost of living crisis led supermarkets to focus on supplying high-volume meat products to maintain customer traffic, crowding out shelf space Sustainable Foods could have filled.
The company had revenue of $2.4m per annum before being placed into administration and employed over 60 people.
Richard Nacey and Malcolm Hollis of PwC have been appointed administrators, and their first report is expected soon.
Who owns Sustainable Foods?
Venray Trustees – ultimately owned by Lemmens – is the largest shareholder in Sustainable Foods, owning 36.59%. The second-largest shareholders are Morag and Paul Thompson, who own 33.13%, while Snowball Nominees has an 11.29% stake.
Stuff Ltd has a 1.91% shareholding, while Geomak Holdings – owned by Thomas Tekanapu Rawakata Perenara, also known as TJ Perenara - has 0.22%.
The directors are Lemmens, Morag McCay and Suzanne Snively.
Second business to go under
Before starting Sustainable Foods, Lemmens founded another food manufacturer, Rosa Foods, which operated between 2000 and 2023.
That business was placed into voluntary administration and, eventually, liquidation in 2023, suffering from under-capitalisation, according to the final liquidator’s report.
Rosa had similar issues to Sustainable Foods, including a lack of investment in its labour-intensive manufacturing process, cash flow constraints caused by moving its factory, and shortfalls in meeting demand by 25% due to lack of quality machinery.
The company had debt to Inland Revenue of $725,000 and 62 unsecured creditors made claims totalling $1.28m.
The company manufactured ready-to-eat meals under four different brands, supplying its products to the major New Zealand supermarkets.
Tom Raynel is a business reporter who covers the small business and retail sectors.
