By Andrew Snook
Upstart Canadian product of plant-based cheese products using leading-edge thermoform packaging technology to grow market share and customer base
As people get older, lifestyle changes are not unusual. Most of us want to live long lives in good health. But sometimes it’s one major event in our lives that really opens our eyes to the need for profound serious change. For VEGCHEESE founder and president Lori Sroujian, it was a scary moment involving her father.
“This was never supposed to be a business. I was working in digital marketing for 10-plus years for various corporations, the last six years in pharmaceutical marketing,” she says. “But then my father had a stroke. Like all stroke cases, it was very unexpected. Thank God he survived and is doing well now.”
After her father’s stroke, Sroujian took a hard look at her family’s diet and decided they needed some major changes in their lifestyles.
“When this happened, we needed to make a shift in our diets, which was mainly meat- and dairy-based, and we wanted to see what it would be like to remove those animal-made products from our diets,” she says.
With the family all being big cheese lovers, they initially struggled with the idea of giving it up.
“We had such a hard time giving up cheese,” she recalls. “At the time no one loved the plant-based products out there enough to give up on dairy cheese.
“Many of them were many were nut-based, and with my family being Armenian, nut-based cheese felt more like hummus,” Sroujian says.
Since her family couldn’t find a plant-based cheese that appealed to them, she began experimenting in the kitchen at her condo, trying to figure out how to make her own plant-based cheeses.
“It was taking up my evenings and weekends. I’d go to work during the week and then spend the rest of my time experimenting,” Sroujian recalls.
After a few months of experimenting, she came up with a plant-based product that melted and tasted like cheese, and could also be placed on a cheese board, replacing the family’s traditional mozzarella.
“Friends and colleagues tried it and loved it,” Sroujian says. That’s really how it all started [and] soon after I decided to start this as a side hustle.
As she relates, “We signed up to a local Vegfest in Mississauga over three years ago. “From there we went right into a commercial kitchen.
“We got our logo, built our website and made our cheeses. We went to the show and started selling.
“We sold out during that one day. We sold over 300 cheeses, came home and said, ‘Okay this is a business.’
“Then it snowballed into what it is today after three-and-a-half years.”
Currently, VEGCHEESE products are being supplied to a wide variety of local retailers. The company offers four different retail products: Fresh Mozz, Garlic & Chive, Italian Black Truffle and Curds (plant-based cheese curds), as well as two food-service SKUs (stock-keeping units) comprising plant-based curds and mozzarella.
“We are now in over 100 retail stores,” Sroujian, “and food service is another big component for us.
“For example, we work with Scotiabank Arena in Toronto, where they use our cheese curds for live events,” she says.
“We are speaking with some major retailers,” Sroujian acknowledges, “but I can’t disclose what’s happening there right now. Hopefully we will be at major retailers in the next six months.”
Near the end of 2021, the company moved into its first production plant in Mississauga, Ont.
Commissioning of the plant was completed by early January and production was in full swing for the company comprised of four very close staff members.
“It’s all my family. My father is running our plant. My brother quit his full-time job in appraisal management to come work here full-time. My mom works part-time as an artist and part-time as a cheese maker,” Sroujian says.
“Once things settle down [post-COVID-19], we’ll bring in some hired help into the kitchen, because it is getting very busy.”
With an annual production in the thousands of kilograms, and demand continuing to increase, the new production plant was necessary to keep up with orders for the family’s popular cheeses.
It was outfitted with brand-new mixers on the production side of the operation, which Sroujian was able to purchase with confidence.
For the packaging side of the business, she knew the decision would require significant research.
“Our growth was really getting stalled because of the lack of equipment,” she says. “I don’t have a technical background, so I had to ask around.”
Part of her research involved attending trade shows to check out the various options available to enhance her packaging operation.
That’s exactly how Sroujian met Jeff Kennedy, sales representative for Reiser (Canada) Ltd. in Burlington, Ont.
“I met Lori with her parents at the PACKEX Toronto exhibition three years ago,” Kennedy recalls. “She didn’t know what kind of packaging equipment she was looking for.
“She was really new to the processing industry, so she was just walking the show to see what kind of flavors were out there,” he says.
Although Sroujian was searching for packaging options to enhance production at the plant, that wasn’t her only motivation for embracing new packaging technologies.
Because manual packaging of vacuum packs requires a significant amount of physical labor, and with her parents overseeing the packaging department, she wanted to make things easier for them, Kennedy recalls.
Eventually, Sroujian ended up opting for Reiser’s high-end Variovac Optimus thermoform packaging system.
“This was my probably favorite sale,” Kennedy says, “because this machine made a real difference to their lives.”
Says Sroujian: “The quality of the products that Reiser makes is incredible [and] the price point made sense, given what we needed.
“We needed the dies to change quite easily because we have different sizes for retail sale,” she explains. “Products like cheese curds needed different dies, food-service needs different dies,” Sroujian says, adding that being able to source locally available part was an important consideration.
“Parts coming from the U.S. or elsewhere can take quite a bit of time to arrive, and we just wanted to know that as the business is growing, if something were to break down, we could immediately have a solution,” she says.
“Also, the technical support and the service offered by Reiser was incredible.”
“They treated me like I owned a massive business,” she says, “even though they knew I was running a small operation that would take some time to grow.
“They never made me feel small. They treated me incredibly well and the follow-up service was excellent,” Sroujian extols.
By purchasing the Variovac Optimus thermoformer, Kennedy says VEGCHEESE is investing in flexibility for significant future growth.
“She bought a machine that is taking eight hours of packaging down to 45 minutes,” he says. “She understands that if she doubled or tripled her business, it would be no trouble at all.”
The Variovac Optimus machine is built with a solid stainless-steel frame and a washdown design that offers the highest hygiene standards.
It features an intuitive operating system with a seven-inch touchscreen display that can program and save up to 40 individualized machine recipes with multiple language options.
The thermoformer provides superior sealing, vacuum, MAP (modified atmosphere packaging), skin-pack, steam and shrink-packaging capabilities.
Moreover, Reiser’s financing options were also very important for the upstart company.
“Reiser has a great financing program to support small food producers,” Sroujian says. “It would have been impossible to purchase a machine like this upfront: I don’t have investor angels,” she points out.
“My life savings have gone into this business to buy equipment, ingredients, packaging, and everything else required to scale our production.”
The production process involves a special mixing process of base ingredients that include organic soy milk, organic refined coconut oil, organic tapioca flour, organic apple cider vinegar, kappa carrageenan and sea salt.
The cheeses are then poured into individual moulds and left to set. Once it’s ready, the product is placed to run through the Variovac Optimus thermoformer for packaging, after which it is boxed and placed inside fridges.
Currently the labels are being applied manually, but Sroujian notes that one of the things she likes about the Variovac Optimus thermoformer is its flexibility.
“The machine does have options for add-ons. Another thing I love is that the machine grows as you grow, so I can add different components to it.
“But for the time being, it’s fast and does everything that we need,” she says.
As a small producer, Sroujian says finding a location to produce VEGCHEESE products was a challenge.
“A lot of small food producers start in a kitchen or commercial kitchen then go to a co-packer,” Sroujian reflects.
“But our process is very finicky, so I did a lot of research on finding a co-packer that can make our products for us, but we had a great deal of difficulty.
“I also wanted to have control of the quality of the products and the supply chain of the products,” she adds, “and so I made the decision as a self-funded small food business to build the plant.”
Finding a solid financial solution for renovating the plant took some time as well, as there weren’t a lot of options available, Sroujian points out.
Adding an extra layer of complexity, the company needed to navigate the many challenges unleashed by the COVID-19 pandemic, including supply chain disruptions, price increases and labor shortages.
To try and combat some of the lost food-service business during the pandemic, VEGCHEESE turned to more aggressive direct e-commerce sales.
While it helped with the sales, it also presented its own set of logistics challenges, with the product requiring the use of ice-packs and overnight shipping.
“There’s been a lot of things that have been challenging for us,” Sroujian says. “Our customers in food service were suffering and struggling, and that affects us in trying to find the right balance of growing the business during the pandemic and keeping at it.”
One major goal for VEGCHEESE is expanding its reach and distribution.
While they love working with local retailers, Sroujian says she’d like to also work with larger retailers for increased accessibly to a wider market across Canada and then into the U.S.
Finding partnerships with other companies that could incorporate her plant-based cheeses as ingredients in their products is another major goal.
“Our products are great in meals,” Sroujian says, “so that’s something that will be big for us in the future.”
For Sroujian, the best part of running her own business has been seeing it evolve.
“Building something out of nothing and seeing it grow and mature at different stages is a very special experience,” she says. “Seeing my family work with me, seeing what the product does for the customers, getting that positive reinforcement and feedback: I live for it.”
Sroujian says she is excited about the future prospects for her company’s innovative products that uses only the best ingredients it can find.
“They are soy-based cheeses made with the finest-quality organic ingredients,” she says. “I make what our family eats, and our family eats our products daily.
“If I’m not going to feed it to my family,” she concludes, “I’m not going to feed it to my customers. We will always stand behind the quality of the products we create.”