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The Regina-based CEO’s focus on plant-based proteins has opened Canada up to a $10.8-billion market

Aaron Fong/The Globe and Mail

In the early days of the pandemic, when toilet paper and hand sanitizer were hastily hoarded and meat suddenly in short supply, grocery store shelves continued, nonetheless, to groan with bags of lentils, cans of chickpeas, and jars of black beans. Cheap, versatile and shelf-stable, beans were the perfect food for our emergency moment, and there seemed to be no shortage of them. At my house, our COVID cooking went in a related but somewhat different direction. We started regularly experimenting with Beyond Beef crumbles, a veggie ground meat that, it turns out, is a fine replacement for hamburger in tacos, bolognese and shepherd’s pie. Its chief ingredients? Yet more legumes—peas and mung beans, to be precise.

Watching all this with interest, from his perch in the Prairies, was Murad Al-Katib, the CEO of AGT Food and Ingredients. Regina-based AGT is one of the world’s largest suppliers of pulses in the world, with 2,000 employees and manufacturing facilities in Western Canada and Quebec, the U.S., Turkey, South Africa and Australia. It supplies the peas that go into the popular Beyond Meat burger, as well as the products that make up Taman, Loblaws’s large line of Middle Eastern foods. But like everyone, Al-Katib was horrified by the loss and devastation wrought by the pandemic, and he was particularly concerned about what it meant for the global food supply. Suddenly, supply chains—rail, shipping—were gripped by delays. Where it would normally take a courier an hour to get payment to a bank, with everyone abruptly working from home, those payments now took days. Imminent product launches were shelved. Al-Katib had to temporarily lay off 75 employees at his head office. COVID-19 cases popped up at AGT plants in Alberta and Quebec. Especially in the confusing, ever-shifting spring, the future was uncertain.

But since founding AGT in 2007, Al-Katib has made it his mission to make Canadian agriculture more resilient, nimble and sustainable. And, it turns out, even in the face of an unprecedented health crisis, it more or less was. The feds deemed agriculture essential and, after some initial hiccups, food kept moving. Restaurant orders dried up during the lockdown, but AGT had spent the past four years strengthening its ties to retailers, and global retail demand for those products boomed. “We essentially sold out the crop this year,” Al-Katib says. “The pandemic soaked up our available pulses, durum wheat, milling wheat and canola.”

AGT was able to meet that demand in the spring, but by summer’s end, things started to get very tight. It was, for Al-Katib, a good problem to have. “What we’re seeing now,” he says, “is very good performance for the agriculture sector in Western Canada this fall. When supply depletes, prices go up and farmers plant more. And, ultimately, markets re-regulate. That’s the way the world works.”

Indeed, even when the pandemic finally passes, and life returns to some form of normalcy, pantries will still be packed with pulses. Current global demand for protein is expected to double, to 943.5 million metric tons, by 2054, with the market for alternative proteins, including plant-based ones, anticipated to grow by 14 per cent annually by 2024. Just two years from now, the plant-based protein market alone is expected to reach US$10.8-billion. When the federal government launched its supercluster industry development program in 2018, one of the five programs was dedicated to plant-based proteins.

“Murad has been a real beacon,” says Frank Hart, the chair of Protein Industries Canada. “In many ways, the supercluster concept, in how it applies to plant proteins, was his vision.” The technology and techniques the industry developed in recent years, he adds, “have elevated Canada’s agriculture brand internationally.” This past June, along with the likes of Suncor’s Mark Little, Al-Katib was named to the federal government’s Industry Strategy Council, designed to guide the economy out of the long shadows of the pandemic.

In the early days of his company’s success, Al-Katib was routinely dubbed “The Lentil King.” It was a cute nickname, but it didn’t fully capture the scope of AGT’s operations or, indeed, Al-Katib’s ultimate ambition. “This is a trend Canada has not only been participating in but driving,” he says of the explosion in the industry. “If this is the century of agriculture, and many people believe it is, this is Canada’s century.”

Aaron Fong/The Globe and Mail

The Lentil King was born in 1972 in Davidson, Sask., a hamlet exactly halfway between Regina and Saskatoon. Davidson had about 1,200 people then, and it has about 1,200 people now. Al-Katib’s father, Fatih, was a doctor in England and decided to emigrate to Canada—sight unseen—lured only by a name, Meadow Lake, Sask., that he’d seen in a medical journal. (“It sounded like paradise on Earth,” Murad says.) But Meadow Lake was in northern Saskatchewan, not exactly the paradise he’d anticipated, and after a year, the family moved south, to Davidson. They stayed for 34 years, with Fatih the town doctor and Murad’s mother, Feyhan—who didn’t speak English when she arrived in Canada—becoming first a municipal councillor and then the town’s mayor.

Fatih came from a long line of doctors, and it was expected that his sons (Murad has an older brother, Omer) would follow suit. Or, if not doctors, then farmers. After moving to Davidson, Fatih started buying up land and, by the 1980s, the family had about 2,800 acres. It was a tough time to be a farmer, though—a boom-and-bust economy and historically high interest rates threw the industry into a long, deep recession. And Murad had his sights on other ventures anyway. When he was just four, he started his first business, reselling the bubble gum he picked up on family vacations to Turkey.

Murad loved Davidson and never really wanted to leave. And when he did finally go—first to the University of Saskatchewan and then for an MBA at the Thunderbird School of Global Management at Arizona State—he wasn’t gone for long. While on contract at the Canadian embassy in Washington, he wrote a letter to Roy Romanow, then premier of Saskatchewan. The province was in an economic slump, and Al-Katib, all of 23 years old, knew how to fix it. Emerging markets were the future of Canada, he told Romanow, with consumption in those markets poised to dramatically outpace traditional one. Those emerging markets needed, indeed demanded, the natural resources Saskatchewan had—the potash, the uranium, the oil and gas, and the agricultural products. All the province needed was an active and deliberate strategy to develop those markets. Frank Hart, then Romanow’s deputy minister of trade and economic development, was impressed. “There was a real move afoot to galvanize the private sector and figure out what we could do differently,” Hart says. “Then Murad came along with a good idea, and a lot of passion and dedication. I found it really refreshing to see someone with that vision and energy.” Hart hired Al-Katib, putting him in a new public-private partnership, the Saskatchewan Trade and Export Partnership.

At the same time, agriculture in the province was in the midst of its own transformation. For decades, Saskatchewan farmers primarily grew oilseed and cereal crops. But canola strips micronutrients from the soil, and traditionally, after every season, the soil needs both rest and great quantities of nitrogen fertilizer. On the other hand, legumes—peas, lentils, chickpeas—naturally add nitrogen to the soil. Rotating in legumes allowed farmers to “continuous crop,” growing three crops in three years rather than two crops. Not surprisingly, this no-till agriculture took off, and suddenly Saskatchewan was growing a lot of legumes. The only question was, Who was going to buy them?

Al-Katib’s answer was, as usual, emerging markets. Turkey wasn’t just a place to buy exotic bubble gum. It was also a country that consumed a lot of lentils and chickpeas. Plenty of other countries did the same. And with the populations of those countries growing, the only healthy, sustainable way to feed them was through plant-based protein. (Animal-based foods are more resource-intensive than plant-based ones, with beef, for example, requiring 20 times more land and emitting 20 times more greenhouse gases per gram of edible protein than beans, peas and lentils.) The world was on the cusp of “a vegetable protein revolution,” Al-Katib says. “You couldn’t ignore it.”

Canada also had the water and land these countries didn’t and, increasingly, because of climate change, a longer growing season, too. It could be a bigger supplier of food to the world. But getting the world to buy Canadian pulses required a fundamental change. Our lentil production was growing, but the lentils we shipped were dirty, unprocessed, undesirable. Processing them here first would make them easier to ship and more versatile. And if nobody in Canada was doing that processing, Al-Katib thought, maybe he could do it himself.

Armed with what he calls his “Davidson Turkish,” Al-Katib approached the Arslan family, then one of the largest importers of pulses in the world and owners of the Arbella pasta company, and convinced them to bankroll a pulse-processing company in Regina. In 2001, with his wife, Michelle, six months pregnant with twins, Al-Katib quit his job. Two years later, that first plant opened under the name SaskCan. With agriculture giants like Cargill just starting to explore such crops, Al-Katib quickly criss-crossed the province, signing up suppliers and building acreage. In similar fashion, he scoured the globe, forging relationships in markets like Cairo, Dubai, Karachi and Mumbai, and links between what he calls “the Canadian protein highway and the Silk Road in Asia.”

Two years after the initial plant opened, the company had 100 employees and was exporting $40-million worth of product. By 2009, it had $300-million in revenue. Many name changes later, SaskCan became AGT in 2014. Along the way, the company grew bigger than Arbella, the Turkish company that had given AGT its start, and it bought Arbella out. “The car was full of gas,” Al-Katib says, describing the industry in the early days. “It had a heavy engine and a lot of horsepower. But there was no driver. So I jumped in the driver’s seat and I started to drive.”

Al-Katib and I spoke over Zoom in early October, he at his Regina headquarters, me in Toronto. In person, he’s a mountain of a man, balding, with a ready, reflexive smile. On Zoom—well, everyone’s about the same size on Zoom, but nonetheless, Al-Katib still seemed larger than life. For an hour and a half, he spoke quickly and almost without interruption, recounting his basement-to-billions origin story, one he’s told a thousand times, with surprising zest. When he talks about pulses, he does so with an enthusiasm most people reserve for their favourite pop songs.

His outsize personality has served him well. Eric Bartsch, who has been with AGT since the beginning and now runs its global food ingredients division, describes with some awe Al-Katib’s continued connection to his customers. “Typically, when a CEO comes to a food show, it’s basically a photo op,” Bartsch says. “But when Murad comes in, he’ll stand at the booth, greeting customers—from students to CEOs—talking with them about pulse crops, asking questions, trying to understand what the trends are. I think that helps him understand and shape the direction the company should go in.”

Al-Katib’s plan was always to find non-traditional uses for his products, even as traditional uses continued to expand. Growing up, he was the only kid with hummus in his lunch box, but he happily watched as societal tastes changed, and an enormous market for healthier, high-protein, high-fibre foods emerged. He describes his own daughter, 18-year-old Serra, as “a model consumer” for AGT—intelligent, socially conscious, concerned about the environment. “She wants to know right now where her food came from and its impact on the world,” he says, “and she wants to feel good about consuming that product.”

To reach such customers, Al-Katib launched an R&D program and food development centre in 2013, and found a Turkish food scientist in North Dakota to run it. They built a $15-million “deflavouring” system that uses heat and cold to remove the beany taste of their pulses. That meant the flours, proteins and fibre derived from them could be used in pasta, cookies, artificial and analogue meats, and even a gluten-free, pea-based “bread crumbs.” “We wanted to make, or contribute to making, foods that kids want to eat and moms want to buy,” Al-Katib says. “If you could do that, ultimately, you’d be successful.”

Meanwhile, other companies, like Beyond Meat, Maple Leaf Foods and Ripple, found similar success with their extremely popular faux meat and dairy alternatives, all launched around the same time and all also using processed peas from AGT. With Loblaw, the company manufactured a line of children’s vegetable pasta and recently struck a 20-year agreement to collaborate on the grocery chain’s Middle Eastern foods brand, Taman. (“Taman” means excellent or amazing in Turkish and several other languages.) “Murad’s been a great partner for Loblaw,” says Loblaw president Sarah Davis. “He’s very dynamic, very innovative, very ambitious.”

Like any startup, however, AGT encountered its share of setbacks. The company went public in 2007, just in time for the Great Recession. The convulsions of the Arab Spring made, for a couple of years, some of AGT’s key territories—the Middle East and North Africa—extremely challenging markets to do business in. In the wake of Trump’s election, there was, in Al-Katib’s words, a “whole nationalist, protectionist sentiment going on around the world.” India, with a protein-deficient market that AGT had really started to target, increased its import duties on pulses. In May 2016, AGT stock was trading at $42.05, but by the following year, it had plummeted, and its third-quarter earnings in 2017 were its worst in five years.

That same quarter, however, the company’s balance sheet received a noteworthy shot in the arm: Fairfax Financial purchased $190 million of preferred shares in the company. “You don’t have to be a genius to know that when someone’s created a $2-billion company from scratch, there’s something special there,” says Prem Watsa, Fairfax’s founder and CEO. “When you examine his track record, you see that he thinks outside the box.” Watsa was similarly enthusiastic about Al-Katib’s successful bid in 2019 to reprivatize, with Fairfax and Point North Capital, another substantial investor, retaining their equity positions in the company. “The big advantage of being private is you don’t have to worry about short-term consequences,” Watsa says. “You’re building a company for the long term.”

The long term has been on Al-Katib’s mind a lot lately. He turned 48 in October, and while talking to a friend recently, he realized that in 17 years, they’d both be 65. Seventeen years earlier, they’d been 31. They were no longer at the beginning of their careers, but looking toward the end. And yet, there was still so much to do. Al-Katib likes to talk about a reimagined “agriculture 2.0,” where innovation and technology will dominate. Where, instead of blanket chemical spraying, farmers use drones, cameras and AI to scan fields for weeds, and apply microdroplets of herbicides. Where blockchain technology improves food safety by tracing ingredients right back to individual farms. “Current agricultural production in Canada is in the tens of billions of dollars,” Al-Katib says. “But reimagined, it could be hundreds of billions.”

Reimagined, as the pandemic showed, it could also feed the world more efficiently. Despite its obstacles, India, for example, holds considerable promise. Though it consumes the greatest amount of pulses in the world, with Canada as its second-largest supplier, Indian diets remain extraordinarily deficient in protein. What if they consumed pulse-based foods, like the ones AGT had developed, with twice the protein content? “The ultimate benefit of our innovation,” Al-Katib says, “is to close the protein gap in the world. As we move toward a population of 10 billion, with water and land scarce, we’ll need to more efficiently produce each unit of protein required. We always talk about energy—oil and gas, renewable energy,” Al-Katib says, grinning with his own customary wattage. “We have to remember that protein is human energy.”

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