Maple Leaf Plant Protein products -- photo credit to Maple Leaf

By Dori Modney

Maple Leaf re-evaluating plant proteins in light of Q3 sales

Nov 9, 2021 | 2:27 PM

LETHBRIDGE, AB. — A year and a half after Maple Leaf Foods announced a plan to expand its plant protein capacity, expected growth at it wholly-owned subsidiary, Greenleaf Foods, appears to have stalled.

On January 11, 2021, Maple Leaf Foods announced Greenleaf Foods, SPC, a leader in plant protein products, was advancing plans to increase tempeh production capacity through the acquisition and planned build-out of a food processing plant in Indianapolis, Indiana.

However, by the second quarter total of 2021, company sales of plant protein producers were up just 5.9% to $1,158.9 million, similar to the performance in the first quarter.

At the time, Maple Leap President and CEO, Michael H. McCain, had an explanation and expected the situation to turn around.

“As we anticipated, our second quarter faced material market headwinds and a difficult year-over-year comparable quarter due to COVID-19 effects, and yet our business delivered excellent results – in Meat Protein, performance was impressive with sales growth of 7.4% and Adjusted EBITDA margins of 11.6%. We expect our margins to fully recover beginning in the third quarter.”

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Unfortunately, the numbers that came in by the third quarter, were not positive.

While the Q3 Meat Protein Group saw sales grow 14.4 per cent to $1.150 billion, it was thanks to higher fresh pork and poultry price, as well as branded products and sustainable meats.

Meantime, the Plant Protein Group experienced a 6.6 per cent decline in sales and is down 1.2 per cent.

The Maple Leaf Q3 report indicated that, “Driven largely by the lower than expected growth in the plant protein category, the Company does not expect to meet its Plant Protein Group sales growth target for the second half of 2021 and will not likely have a further view on near term sales growth targets until it has completed its reassessment of the category.“

McCain conceded they were 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.

“While our overall focus to create long-term value for all stakeholders remains unchanged, and investments to date have been well calculated, well executed and have delivered underlying value, 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.”