Vegan Food Group’s founders on building ‘the vegan Unilever’

Veganuary founder Matthew Glover can still remember his first taste of the vegan fried chicken at the Source restaurant in York. “When it came, it was boiling hot, just freshly deep fried,” he recalls. “There was sriracha in it and it came with chips and you know, it was just delicious.”

It was delicious enough for Glover to keep coming back to Source, which fast became his favourite restaurant. Soon, a business idea was born. Glover spoke to Adam Lyons, the chef behind the vegan fried chicken, about turning his menu item into a brand that could help solve the problem of factory farming.

For Lyons, the ethos behind veganism was all new. “I had no real concept of it. In fact, you have your blinkers on most of the time with these types of things,” he explains. However, once he saw inside a factory farm, “it just changed my perspective on the entire food system. I said to my wife: ‘That’s it, we’re going vegan.’”

And so the pair established the Vegan Fried Chicken (VFC) brand in 2020. Since then, the operation has grown exponentially. It has branched out beyond chicken to other meat alternatives, pies and tofu, prompting a rebrand to become The Vegan Food Group (VFG) earlier this year. Now, what began as a challenger alt-chicken brand has its sights set on becoming “the vegan Unilever”.

Not that its growth journey over the past four years has been straightforward. When now-CEO Dave Sparrow came on board in the early stages, he was shocked by the makeshift production line at its restaurant-turned-manufacturing-facility in York. He remembers thinking, “these guys are jokers”.

But Sparrow quickly helped to whip the operation into shape. So much so that VFG has brought three significant brands on board in the past 12 months: the crisis-hit Meatless Farm, Clive’s Pies and German tofu company Tofu Town.

More such ventures are planned for the coming months. However, Lyons stresses the business doesn’t have an acquisitions target nor an “unlimited budget”. It’s keen to avoid cannibalising itself or becoming a VC, as Sparrow points out.

“We have limited bandwidth to achieve what we want to, and if we took on too much, we’d drop the ball somewhere,” he says. “We’d just get swamped and dysfunctional.”

Rather than overstretching itself, VFG aims to play into the inevitable consolidation in the vegan market. Its “portfolio of different brands and capabilities feeds into retailer strategies more than most of our competitors”, says Sparrow.

“Are we ever going to stop the meat industry? No, but we have to make a significant change within factory farming”

Certainly, VFG has a clear vision for a category that is suffering from an overarching decline in innovation, investment and sales. Sparrow believes the supermarkets will increasingly look to offer a good/better/best model on their shelves. As such, the business hopes to leverage brands and own label, “so we’re supporting retailers with own-label development but, ultimately, they support our brands at the same time”. It’s a strategy that it says means “everybody wins”.

Glover is equally optimistic about the ability of VFG to lead the category’s development. He points to the Tofu Town deal – which came through a WhatsApp connection – as evidence of how the business can bring various players together. “I’m not sure many other, more traditional businesses are as well networked within the plant-based movement as we are,” he says.

For Sparrow, VFG is unique in that it has an “entrepreneurial spirit” with an unusually secure setup. VFG is mostly backed by Veg Capital, a vegan investment fund, where Glover is also a director. This is in turn funded by the Ahimsa Foundation, a US charitable foundation. There is a commitment from Veg Capital and Ahimsa Foundation to donate all future profits to animal and diet change charities and advocacy efforts from their majority stake in VFG.

Read more:

• My Alternative CV: VFC’s Adam Lyons on racing, heights and chicken lives saved

• Plant-based players plan to ‘refocus and collaborate’ in bid to revive sales

• Is Veganuary too challenging for shoppers?

The advantages are manifold, says Lyons. The VFG team has a backer that understands its mission to support better food systems, it only has to talk to one person about strategy and it doesn’t have to fundraise. For Lyons, the latter is particularly beneficial because fundraising “takes so much time, you have to kiss so many frogs and travel the world continuously”.

Instead, “if there are opportunities that make sense we can do it”, says Glover. “Whereas a lot of competitors are either the old school like Quorn, or they’re other startups with a complex cap table with lots of investors, which makes it difficult to make decisions.”

Ultra-processed concerns

Not that VFG’s growth is coming solely from acquisitions. Its original VFC brand nearly tripled in value in retail last year, according to The Grocer Top Products Survey. That meant it significantly outperformed the wider meat alternatives category, which fell 6.5% in value [NIQ 52 w/e 9 September 2023].

That category-wide decline has been attributed to the cost of living crisis and arguably a more worrying factor: growing concerns over ultra-processed foods. However, the VFG team is not overly worried. “I personally don’t understand what ultra-processed actually means, and I don’t think many consumers do either,” says Sparrow. He believes the vegan market is suffering from “an unfair narrative” led by the meat industry.

“We want to be the vegan Unilever”

Glover is keen to tackle suggestions that vegan food is somehow unhealthy, or unnatural. “How do we debunk some of this misinformation coming out?” he says. “And how do we work together to get us out of this decline and get these categories back into growth?”

For the VFG team, this question is about more than restoring sales – rather, it’s about restoring trust in the food industry. “Our food system is broken. We can’t trust it,” says Lyons. “Are we ever going to stop the meat industry? No, but we have to make a significant change within factory farming.”

Sparrow insists VFG’s priority will always be trying to “make the food business better. But what that looks like, who knows?”

Showing what goes on in the meat industry and amplifying its key messaging are certainly high on the agenda for now. Having taken on the role of chief mission officer at the start of the year, Glover wants the company to return to high levels of activism.

“It’s a David and Goliath struggle we’ve got,” he says. “I like to think the stone that will beat Goliath is the truth. We just don’t have our slingshot.”