Goodfood gets CCAA protection as liquidity squeeze pushes Québec meal-kit company toward sale process

Goodfood Market Corp., a Montréal-based meal-kit company, obtained protection under the Companies’ Creditors Arrangement Act on August 5, 2026, as the company confronts shrinking revenue, mounting liquidity pressure and approaching payments on approximately $43 million of convertible debentures.

Founded in 2015 and publicly traded on the Toronto Stock Exchange since June 2017, Goodfood provides meal kits and ready-to-eat meals through facilities in Montréal, Calgary and Mississauga. It has approximately 233 employees, including about 165 in Montreal, 52 in Calgary and 16 in Mississauga. Goodfood also owns three subsidiaries, although none are applicants in the CCAA proceeding. One subsidiary, 16423132 Canada Inc., holds an 81% interest in Genuine Tea Inc.

The filing follows a steep reversal from Goodfood’s pandemic-era expansion. Revenue reached approximately $379 million in fiscal 2021 as demand for delivered food surged, but fell to approximately $121 million in fiscal 2025. Active subscribers declined from almost 250,000 as of August 31, 2021 to approximately 48,000 by June 6, 2026. Goodfood also expanded into on-demand grocery delivery in November 2021, increasing its product assortment from approximately 50 stock keeping units to more than 1,000 and requiring significant capital investment. The division was abandoned in October 2023 after failing to achieve profitability.

Goodfood attributed its deterioration to the normalization of consumer behaviour after the pandemic, customers returning to restaurants and traditional grocery stores, increased competition and higher costs for food, labour, packaging, rent and delivery. Its Montréal operations suffered another setback when the Canadian Food Inspection Agency suspended the facility’s licence from December 30, 2025 through January 8, 2026, preventing shipments outside Québec from the site and causing cancellations and additional operating costs. Net sales for the first nine months of fiscal 2026 were approximately $66.1 million, while Goodfood recorded a net loss of approximately $9.7 million over that period.

The balance sheet leaves little room to absorb further losses. As of June 5, Goodfood reported approximately $25.5 million of assets against approximately $62.3 million of liabilities and a working-capital deficit of approximately $4 million. Approximately $4.7 million of liquidity was available at August 4.

The most immediate pressure comes from two unsecured convertible debenture issues. Approximately $29 million of 5.75% debentures remain outstanding and mature March 31, 2027, with an approximately $836,000 interest payment scheduled for September 30. Goodfood also has $12.675 million of 12.5% debentures maturing February 6, 2028. An approximately $950,000 interest payment on that issue was due August 6, one day after the initial order was granted. Goodfood told the Court it could not make further payments on either series without jeopardizing its operations. Investissement Québec holds $10 million of the 2028 debentures.

Management had already launched a turnaround before seeking CCAA protection. Measures since March included eliminating approximately 122 positions, cutting advertising spending by approximately 80%, raising prices, increasing portions and protein content, reducing customer promotions and introducing delivery fees and paid membership programs. Adjusted EBITDA improved to approximately $3.6 million in the third quarter of fiscal 2026, but the improvement was insufficient to address Goodfood’s financing obligations and near-term liquidity needs.

Goodfood plans to continue operating while pursuing a broader restructuring that could include renegotiating or disclaiming contracts and leases, further operational rationalization and a sale or investment transaction. The company said it intends to seek approval of a sale and investment solicitation process at the comeback hearing.

Raymond Chabot is the monitor. Counsel includes Fasken for Goodfood and Stikeman Elliott for the monitor.