Odd Burger/ODD

There's something "odd" showing up on the shelves of 21 locations of the Calgary Co-op, which has been serving fresh farm-to-table foods to Calgarians since 1956.

The five frozen retail products include the Crispy ChickUn Fillet, the Chickpea Burger, the Smash Burger, ChickUn Pretenders, and Breakfast Sausage. All are products of a Canadian franchised vegan fast food restaurant chain and food technology company called Odd Burger Corp.

The "odd" stands for doing things differently, according to James McInnes, the co-founder, chief executive officer, interim chief financial officer, and chairman of the board for the company.

"We're going to create change in the world," McInnes told Streetwise Reports. "The idea that something is odd doesn't mean it's bad or good; it just means it's fundamentally different."

The company's proprietary line of plant-based protein and dairy alternatives are distributed to Odd Burger restaurant locations through its foodservice line and also sold at grocery retailers through its consumer-packaged goods line.

Odd Burger restaurants operate as smart kitchens, which use state-of-the art cooking technology and automation solutions "customers craving healthier and more sustainable fast food," the company said.

Stores have small footprints optimized for delivery and takeout, advanced cooking technology, competitive pricing, a vertically integrated supply chain, and healthier ingredients, "creating guilt-free fast food," the company said.

"We are proud to support a Canadian-owned and operated business like Odd Burger," Calgary Co-op Meat Category Director James Lelond said. "We see tremendous potential for the Odd Burger line with our customers and we are thrilled to make them available at our retail locations."

'Huge Opportunity' for Tasty Technology

Odd Burger has 20 operational units in four provinces, including six corporate-owned restaurants, 12 franchised restaurants, and two franchised mobile units, producing an average annual revenue per restaurant of nearly CA$500,000. The company said it has 136 locations in the pipeline in Canada and the United States.

"This technology is in the early stages," McInnes said. "No one really has really done a good job commercializing (these products) yet, but there's a huge opportunity (for) … products that don't use animals but are utilizing the state-of-the-art cultivated food technology that's going to be part of the future."

Using chickpeas, wheat, oats, and beans, the company said it produces 11 plant-based proteins and eight dairy-free sauces and dressing "that pair with restaurant cooking technology." It also recently launched plant-based pizza at its Canadian restaurants, including one called "Plant-Meat Lovers."

Its frozen products are currently listed in more than 40 retailers, including Whole Foods Market, Goodness Me, and Sobeys, Odd Burger said.

Disrupting Decades-Old Industry

The company said it reported record revenue of CA$3.24 million in FY 2023, which ended last September 30, compared to CA$2.95 million in 2022, and saw its fourth consecutive year of growth in operational units and revenue.

Odd Burger locations are also highly automated that they can operate with a staff as small as one, which McInnes said leaves more time for "connecting with people more than just flipping burgers."

"The fast-food industry has been doing things the same way for the past 50 years," he said. "So, we are changing not only the food but also the technology that is utilized at the restaurants."

Its system also is more sustainable since it features "on-demand cooking" capable of cooking a burger patty in about one minute. The company also has a stated goal on its investor presentation to build "the first fully automated and sustainable restaurant of the future."

In addition to the planned openings of new locations, the company is launching four of its frozen products at 7-Eleven locations in two months. McInnes said the company is expected to hit more than CA$1 million on that account this year.

More People Adopting Vegan Lifestyles

According to a report by Grand View Research, the global market size for meat substitutes was valued at US$18.78 billion in 2023 and is expected to grow at a large compound annual growth rate (CAGR) of 42.4% from 2024 to 2030.

"Diets that reduce or eliminate animal products are gaining popularity, which is expected to fuel the growth of the market," the report said. "More people are adopting vegan lifestyles, driven by increased awareness of the health risks associated with meat consumption, as well as concerns about the ethical and environmental impacts of animal agriculture."

Grand View said a 2023 study by Soylent found that 68.1% of those who choose veganism are motivated by animal welfare, 17.4% by health reasons, and 9.7% by environmental and sustainability concerns.

Additionally, the fear of increasing animal-borne diseases has heightened health concerns, leading to a decline in animal product consumption. As awareness of meat substitutes grows, more consumers are turning to these alternatives, recognizing their potential health benefits, including the prevention of non-communicable diseases, digestive issues, and obesity.

"Intensive animal farming has faced criticism due to its environmental impact and ethical concerns, leading companies to offer meat substitutes" like Odd Burger's products, the report said.

"The substantial growth in the meat alternatives market is fueled by a combination of consumer concerns and manufacturers' ability to create products with superior texture, flavor, and mouthfeel," Grand View noted. "This demand is particularly driven by Gen Z and Millennials, who are motivated by concerns about health, climate change, and animal welfare."

According to Grand View, "The rising demand for plant-based alternatives, coupled with significant investments in innovative products, is expected to continue creating profitable opportunities for market expansion."

Craving is for 'Protein, Good Fat, Salt'

Popular meat substitute brands the company is competing with include MorningStar Farms, Beyond Meat, and Impossible. Fast food restaurants like KFC, Burger King, and Taco Bell have limited plant-based options, like Burger King's Impossible Whopper.

Global meat consumption is expected to see double-digit growth through 2023, according to the Organization for Economic Co-operation and Development.

On a Euronews Business podcast on January 29, Tom Goodwin talked to Lukas Böni, co-founder of the company Planted, specializing in meat alternative products. Some, like Böni, believe the tide will turn in favor of vegan alternatives.

"In some years from now, our steaks are going to be better in taste and quality. ... The Sunday roast will not be an animal roast, but a Planted roast," Böni told Euronews. 

The plant-based products market will grow due to environmental necessities and the availability of tasty, quality alternatives to meat products, he said.

"Meat has a craving, but your craving is not for dead animals, it is for protein, good fat and salt," he said. "So, in the future, microbes will cater for your cravings."

Analyst Devin Schilling of Ventum Capital Markets, noted while initiating coverage of a comparable company, Happy Belly Food Group Inc., that there is "a void in the marketplace" for consolidating emerging food brands in the QSR (quick-service restaurant) industry. The company's stock has nearly doubled since last fall.

"The company's focus is on acquiring and scaling emerging food brands enabling it to capitalize on evolving consumer preferences," Schilling wrote on December 17, 2024. "This strategic focus allows Happy Belly to tap into niche markets with significant growth potential."

Ownership and Share Structure

According to Odd Burger, about 62% of the company is owned by insiders, about 10% by those close to management, and less than 1% is owned by institutions. The rest is retail.

Top shareholders include co-founders James and Vasiliki McInnes, who both hold 23.74%, BoxOne Ventures Inc. with 14.2%, board member Francois Arbor with 2.23%, and board member Utsang Desai with 0.37%, Reuters reported.

The company said it has 92.7 million shares outstanding. Its market cap is CA$30.46 million and it trades in a 52-week range of CA$0.11 and CA$0.38.