‘Very special’ food product drives massive growth in Edmonton company
You might think it’s a slam dunk success to be Edmonton’s fastest growing company, as well as the 55th fastest growing company in all of Canada, according to Canadian Business Magazine.
In the last five years, BioNeutra’s revenues have grown 1,378 per cent.
The company is also about to open a new Edmonton factory to produce its main product, the organic sweetener VitaFiber, a low-calorie, prebiotic fiber derived from starch from peas, tapioca and root vegetables.
In essence, we’ve got near miraculous growth here and an amazing-sounding product.
But when I end my interview with BioNeutra president and CEO Jianhua Zhu by congratulating him on his success, Zhu said, “If you think it’s a success, maybe. But I don’t think it’s a success. We still have a long way to go. We need to push harder for the market and we have a lot of work to do to confirm the health benefit.”
I can see Zhu’s point. Nothing is certain for him or for his company, and the progress already made is the result of a lifetime of struggle, one that speaks to how an individual can rise up even in the face of the worst kind of oppression.
Zhu was born in 1960 into a prosperous family in the city of Guangzhou in southeast China, his grandfather a successful businessmen in herbal remedies and his father a physician. But when Zhou was a boy, the Marxist dictatorship of Mao Zedong brought in the Cultural Revolution, the violent oppression of the country’s educated and business classes. The communists confiscated Zhu’s family property and sent his parents to a forced labour camp in the countryside. Educating the children of the former elite was also discouraged.
“It was a very difficult time for my family,” said Zhu, who was sent to live with relatives.
Zhu found a way to academic success through diligent hard work and the sympathy of some teachers. When the ban on university education for children from the business class was lifted, Zhu got into university. He earned a doctorate in chemical engineering, then worked as a professor in China and Japan before coming to the University of Alberta in 1998.
From his research work in China, Zhu held the non-China rights for the organic sweetener that goes by the name of Isomaltooligosaccharide (IMO), or as BioNeutra markets it, VitaFiber.
Zhu decided it would be best to start his own company to see if he could sell IMO in North America.
The product had originally been developed in China and Japan in the 1930s when food scientists set out to find the chemical compound in starchy plants that aided in the production of good gut bacteria and sound digestion in humans. Zhu’s research developed and patented a better process to get a purer grade of IMO.
“The idea is to use natural processes and natural resources to make a healthy nutritional ingredient,” he says.
“Right now you have a lot of artificial sweeteners. Very, very sweet. But with three properties in this one product, this (VitaFiber) is very special. It is a low-calorie sweetener, prebiotic and dietary fiber function.”
To create his business, Zhu had to draw on loans from friends and colleagues and Alberta government grants. It took from 2003 to 2012 and $13 million to get the necessary approvals from Health Canada and other national food regulators to use VitaFiber in foods. Proving its positive health impacts in the lab is still ongoing, Zhu said.
“Financially, it was very hard to run,” Zhu said of BioNeutra. “In the first 10 years approximately, we had no income … We can’t promise anything to investors. That is very, very hard.”
BioNeutra has 15,000 tonnes of VitaFiber per year produced in plants in Indonesia and China, with the Edmonton plant to produce 5,000 tonnes per year when it opens in November.
BioNeutra chairman Bill Smith, Edmonton’s former mayor, said the next plan is to expand to the United States, the product’s main market, with mostly middle-class consumers worried about weight gain and their health buying it.
VitaFiber is now used in 200 products, from a sweetener for power bars to syrup for pancakes.
Zhu has it in his coffee every morning. “It tastes like honey, a very good taste,” he said.
I tried it myself after making hot chocolate with milk, cocoa and VitaFiber.
The result? The drink is as tasty as mixing in sugar or using Chipits, and all the more tasty knowing it isn’t making me so fat and might even make me feel healthier. So I’ll stick to calling this enterprise a success.