Goodfood, Canada’s once-soaring meal-kit company, hit with a federal licence suspension

Canadian food inspectors have suspended a federal licence for Goodfood, a Montreal-founded meal-kit company once valued at more than $1 billion before its market value fell sharply in recent years.

The Canadian Food Inspection Agency (CFIA) said it suspended Goodfood’s Safe Food for Canadians licence on Dec. 30 at the company’s Montreal facility.

The CFIA said there is no food recall but the company may not carry out activities covered by the licence, like assembling meal kits, while the suspension is in effect, though the company says its Calgary facility remains “fully operational,” so customers across Canada should continue to receive deliveries.

The decision was made under the Safe Food for Canadians Regulations, the CFIA added, which allows a licence to be suspended when a company fails to meet required standards. The non-compliances for Goodfood related to preventive controls.

In a statement, Goodfood said that “there are no food safety issues,” at the Montreal facility, adding that the suspension relates mostly to procedural matters, such as the review of complaints.

“The decision to suspend the licence came from the National Director’s office in Toronto on the basis of perceived non-compliances, which are largely procedural in nature. Again, there are no food safety issues,” the company emphasized.

Founded in 2014 by Jonathan Ferrari and Neil Cuggy in Montreal, Goodfood describes itself as Canada’s largest meal-kit company, offering subscription meal kits, ready-to-cook meals and grocery products delivered weekly to customers’ homes.

Expanding quickly, the company went public in 2017 on the Toronto Stock Exchange, raising $21 million. As the pandemic changed daily habits and fuelled a boom in online food delivery, its shares then climbed above $12 in 2020 and put the company at a valuation of more than $1 billion.

But since then, the stock has fallen sharply. On Friday, Goodfood traded at about 33 cents a share, with a market capitalization of just over $30 million.

In its statement, Goodfood said it was “disappointed” by the licence suspension but that it was confident the situation would be resolved quickly.

“We expect this suspension to be short-lived. … we are confident that any gaps that are perceived to exist would be closed in the coming hours or days.”

hnorth@postmedia.com

Related