The traditional Romanian diet is a tapestry of culinary heritage that draws on influences from diverse cultures and history. With traces rooted in the ancient traditions of Ottoman, Hungarian, and Eastern European cuisines, the Romanian diet offers a variety of flavours and dishes that have withstood the test of time. Locally sourced fresh ingredients that reflect the nation’s strong agricultural heritage are central to the Romanian diet.
Amid ongoing global crises, Romania and surrounding regions are witnessing shifts in dietary patterns and food choices1. Romania’s culinary landscape hasn’t been immune to these dynamics as market instability has influenced traditional cuisine2. While growing awareness of mindful consumption is driving trends like plant-based diets and veganism, this reshaping of dietary preferences has encouraged the emergence of innovative businesses that focus on alternatives to the typical offerings in Eastern European diets.
As a global impact investment management company, AGC steps in to bolster the growth and sustainability of this innovation by providing financing to small businesses.
During an insightful visit in the spring of 2023, AGC’s Co-CEO Sudha Bharadia observed the production process of plant-based food business, Filgud. Founded in 2019, Filgud spotlighted the crucial role of cashflow support from AGC’s partner.
“Actually, we started with milk – almond milk, but we couldn’t stabilize it back then and the shelf life was only three days, so we couldn’t get it to supermarkets,” shared Andrei Rosu, founder of Filgud. Formerly a member of the 90s Romanian band, “Gaz pe Foc,” Andrei later embarked on a sixteen-year career in the finance industry while nurturing his growing family. Balancing roles as a husband and father of two, Andrei’s determination to embrace a healthy way of living led him to become a long-distance runner. His achievements include being the first person to complete seven ultramarathons on seven continents. Also, a five-time TEDx speaker, Andrei used the platform to share strategies for living a better life. In 2011, he gave up eating meat for good.
With the mission to provide 100% plant-based options as alternatives to animal products, Filgud officially started business in 2020 — a time when global lockdowns encouraged experimentation with sustainable lifestyles and the world became more critical of consumer habits. ‘’So, this is how we got the idea of solving a problem. People are eating, especially in Romania, too much cheese and it’s not sustainable,’’ Andrei tells Sudha. ‘’People could not believe our spreads and cheese products are not made from milk or fish…’’ he adds. Despite being one of the smallest sectors in Europe, Romanian plant-based food production has exhibited substantial growth, registering a steady 23% increase in food sales in 20223.
Although these innovative SMEs are vital to the Romanian economy, barriers to funding for small businesses and start-ups continue to be one of the main obstacles inhibiting their growth. ‘’Because as a startup, of course, our figures against volume don’t look spectacular to banks in Romania so they aren’t happy to support small businesses,’’ Andrei reveals. However, AGC’s partner helped pave a reliable pathway for Filgud to achieve growth — in contrast to the often-limited financing available from traditional funders. ‘’They saved us,’’ Andrei expresses about AGC’s partner. ‘’We had cashflow problems because, at the beginning, we were covering our own resources and investments. But as the business had grown, it was harder and harder because we’d collect from our receivables in thirty to forty-five days from supermarkets and other key accounts while still paying everything upfront. The cashews, the jars… everything. So, we had this gap increasing and we couldn’t develop our company more. In that moment we found out about AGC’s partner, started an instant collaboration and are very grateful,’’ Andrei further shares.
Beyond providing alternatives to dairy and animal products, funding for Filgud has enabled them to offer an array of localised foods crafted from ingredients like seaweed extract and soybeans. Filgud has maintained their staff retention rate, with all 8 employees staying dedicated to their roles in the production, finance, and sales teams over the entirety of the three years since the company’s inception. Although the market for plant-based eating in Romania is still emerging, the growing trend and customer demand has been acknowledged through reports to Andrei by food delivery courier workers.
“The market is still evolving [for] this alternative but it’s growing impressively every year,” Andrei shares. “For instance, the milk and dairy market in Romania is €1.4 billion and the alternative [product] is around €35 million,” he adds. Filgud has mapped out a 10 year ambition to gain at least 5% of the alternative dairy product market share as they now have their product available in over 100 stores. With belief in the attainability of their objectives, the persistent challenge of financing is being met head-on, buoyed by AGC’s funding.
Our funding not only propels growth for small businesses but also empowers them to conquer obstacles and participate among the innovation occurring within their evolving sectors. AGC’s factoring partner and support for Filgud exemplifies this approach, offering financial support to secure a more prominent foothold within the plant-based food market.