Plant-based proteins hamper Maple Leaf's business
Maple Leaf lost $190.9 million by writing down the value of its plant-based protein products.
Maple Leaf Foods reported a loss of $229.5 million in the third quarter, primarily related to the write-off of its plant-based protein products.
The decrease of the non-cash point value of shares in Maple Leaf's Plant Protein Products segment resulted in a loss of $190.9 million in the third quarter.
This may include s explained by the decline in sales of the Plant Protein Group between 2021 and 2022.
Sales for the third quarter of 2022 fell 9.1% to $43.6 million from $48 million a year earlier, the company's quarterly results show. .
Excluding the impact of foreign exchange, sales declined 12.3%, driven by lower retail and foodservice product volumes. However, this decline more than offset the pricing measures implemented to mitigate rising inflation and structural cost increases.
For comparison, Animal Protein Group third quarter 2022 sales increased 3.8% to $1,194.5 million from $1,150.3 million a year ago.
< p class="e-p">Maple Leaf's Plant Protein Group includes chilled and frozen plant-based protein products, grain-based plant-based protein products and vegan cheese products sold to retail, foodservice and industry.
In its press release explaining its financial results, Maple Leaf explains that the growth prospects for the vegetable protein sector have changed in recent years.
Results to date confirm that the very high growth rates previously predicted by many industry experts are unlikely to be achieved given current customer feedback, experience, purchase rates and household penetration.
The company had therefore already announced at the end of 2021 its intention to reassess its outlook for this group.
< p class="e-p">A year later, she believes the category will continue to grow at more modest, but still attractive, rates.
The trend is already affecting another major player middle. On October 14, Beyond Meat, a Los Angeles-based producer of plant-based meat substitutes, lowered its revenue projections for the second time this year and announced the loss of 200 jobs, or 19% of its total workforce.
The company said at the time that it was facing a slowdown in demand for plant-based meat, as consumers seek more economical solutions to deal with rising prices.