While its overall third-quarter financial results were good and its traditional meat business was "exceptional," Maple Leaf Foods was disappointed in its plant-based proteins and has begun a strategic review of the business.
In reporting his company's quarterly results, Pres/CEO Michael McCain noted, "We are seeing a marked slowdown in the plant-based protein category performance which may suggest systemic change in the extremely high growth rates expected by the industry…. We have always been prepared to re-examine that investment thesis if circumstances change. Given current category performance, such a review is underway which will either affirm or adjust our strategies and investment thesis going forward."
Total company sales grew 12.4% to $1.189 billion, with an earnings margin of 9.7%, up from 7.8% last year. Company-wide sales through nine months were $3.4 billion, up 7%.
The Meat Protein Group grew 13.4% to $1.150 billion, "driven by higher fresh pork and poultry prices and a favourable mix-shift towards branded products and sustainable meats."
But Plant Protein Group sales declined by 6.6% to $48 million, and they're down 12% through nine months, to $139 million. Brands include Lightlife, which was acquired in 2017, and Field Roast. Both are part of Maple Leaf's Greenleaf subsidiary.
Maple Leaf appears to be going through with the purchase and renovation of a shuttered Indianapolis food plant to produce fermented soy product tempeh. That project spelled the end of plans, announced in mid-2019, to build what the company claimed would be "North America’s largest plant-based protein facility" in nearby Shelbyville, Ind.
