Times are tough in the ready-to-cook and meal box industry. In order to be able to continue its activities, Cook it is sheltered from its creditors with the aim of being bought by the British-Columbian Fresh Prep Foods. Creditors of the Quebec company – including the Mouvement Desjardins and the Fonds de solidarité FTQ – could leave large sums on the table.
This proposed transaction must be presented to the Superior Court of Quebec, as part of a hearing scheduled for next Monday, in order to be formalized. It remains to be seen whether lenders and suppliers will object to what is on the table.
“Food inflation has increased the price of boxed meals, combined with the fact that Quebecers must absorb an increase in their food expenses with a tighter budget,” explains the president and co-founder of Cook it, Judigh Fetzer. , in interview with The Press. We worked miracles to put together meals with the cost of ingredients. »
It’s a notable change in trajectory for the company and its founder – named female entrepreneur of the year by the publications Canadian Business and MacLean’s in 2020. The previous year, Cook it swallowed up its rival MissFresh by buying the stake of 70 % that the grocer Metro held in this company. In December 2022, the company became the majority shareholder of Menu Extra, a specialist in ready-to-cook meals. Eight years after her first appearance on the show Dans l’oeil du dragon, when she was an entrepreneur, Mme Fetzer had returned to the set, this time as a “guest dragon and investor”.
According to the notice of intention to make a proposal under the Bankruptcy and Insolvency Law Sent to court on January 29, the young company had liabilities of around 22 million. Guaranteed debts total 3 million. The Fonds de solidarité FTQ (7.7 million) and Desjardins (7.4 million) are the largest unsecured creditors. Mme Fetzer is the main shareholder of Cook it, ahead of an Alberta venture capital fund and a company controlled by Alain Bouchard, co-founder and chairman of the board of directors of Alimentation Couche-Tard.
The planned transaction should allow Cook it to continue its activities within a new entity. Mme Fetzer would not reveal the price. Fresh Prep Foods proposes to maintain the activities of the Quebec company, to retain its approximately 150 employees – there were around 400 a year ago – and to honor “all expenses paid upfront, gift cards and customer credits. The benefits associated with the rewards and loyalty program must be maintained, we promise. Mme Fetzer will lead Fresh Prep Foods’ Quebec operations, she explained.
“I won’t hide from you that the last 18 months have been difficult for Cook it,” she said. Coming out of the pandemic has been a sort of perfect storm for many businesses. Inflation, labor shortages, drastic changes in consumer habits, all had repercussions on Cook it. »
Mme Fetzer says the company has been exploring “strategic options” for some time. The businesswoman claims to have chosen a solution that “allows us to maintain jobs in Quebec and to invest”. With debts of 22 million, it is a safe bet that it would have been difficult to find a buyer. This is what prompted Cook it to opt for a judicial restructuring. Its president recognizes that there will be a “loss of investment” for certain creditors.
Not the only one
Cook it is not the only one to experience difficulties in the ready-to-cook niche, very popular during the pandemic confinements when restaurant dining rooms were closed.
Last year, Marché Goodfood had to turn to Investissement Québec to help replenish its coffers. The financial arm of the Quebec state had contributed 10 million as part of a round of financing of 12.7 million. In 2023, Goodfood’s stock had plunged 45% on the Toronto Stock Exchange. The trend has continued since the start of the year, with a decline of 5.4%. The stock is worth 26 cents, which gives the Quebec company a market value of 20 million. After a two-year lethargy, it was finally able to show quarter-over-quarter growth in active customers.
At McGill University, economist and agronomist Pascal Thériault is not surprised by the difficulties this sector is experiencing.
“The consumer has choices to make,” says the expert. Do I pay more for my groceries? Yes. Do we continue paying more for boxed meals? The answer is often no. It’s not an easy sector. There is a need to always reinvent yourself. When I talk to people who try this product, often the reason they give up is because they have looked at the recipes. »
Based in Vancouver, Fresh Prep Foods is not present in the Quebec market. The geographic presence of this specialist in ready-to-cook meal boxes and ready-to-eat meals is limited to British Columbia and the Alberta cities of Calgary, Edmonton and Red Deer. Mme Fetzer says he has known the management team for “eight years” and that the two entities share “similar values.”
“Their model is similar to ours, but with a few differences,” she explains. 100% of their customers have zero waste meal boxes. We were not yet at the same level. All this means that their innovations, which they have worked very hard on in recent years, will change the customer experience. »
Mme Fetzer affirms that his potential buyer is counting on a more “loyal” customer base who “orders every week”. This is not a guarantee of success, but Mr. Thériault believes that consolidation, in this still young industry, is not “necessarily bad news”.
Cook it in brief:
Year of foundation: 2014
Head office: Montreal
President: Judith Fetzer
Markets: Ontario, Quebec and Maritimes
Acquisitions: Kuisto (2017), Miss Fresh (2019), Loccal (2021) and Menu Extra (2022)
- Number of Quebec producers with whom Cook it says it does business.