Maple Leaf Foods posts Q2 sales up 12.5%, fuelled by plant-based protein
The firm's chief executive says its meat protein business delivered excellent profit growth even with difficult market conditions
MISSISSAUGA, Ont.—Maple Leaf Foods Inc.’s second-quarter sales rose by 12.5%, fuelled in part by growing demand for plant-based protein products.
The company said Thursday its revenue grew to $1.02 billion, up from $909.2 million a year ago, driven by acquisitions, its value-added product portfolio and continued double-digit growth in plant-based protein.
The company has heavily invested in plant-based protein, acquiring two brands—Field Roast Grain Meat and Lightlife.
Maple Leaf Foods chief executive Michael McCain says its meat protein business delivered excellent profit growth even with difficult market conditions, and it is well-positioned to capitalize on the growing demand for plant-based protein.
“We have materially stepped up our game as a leader in the plant-based protein market, positioning us to win in this high-growth business,” he said in a statement.
The trend toward plant-based protein is shaking up the food industry and has some traditional meat producers worried, while others, like Maple Leaf are hopping into the game themselves.
Maple Leaf plans to pursue aggressive growth in the plant-based protein space, targeting 2020 sales of more than $280 million.
Shares in competitor and market leader Beyond Meat have risen more than 600% since it went public in May as it reported revenue of more than $67 million that blew past analysts’ expectations and raised its outlook for the year.
Restaurants across Canada are jumping into the market, with Tim Hortons and A&W offering Beyond Meat burgers. Kelsey’s Original Roadhouse started to serve a bourbon BBQ meatless burger from Maple Leaf’s Lightlife brand in June.
When A&W Food Services of Canada Inc. started selling Beyond Meat burgers, the chain temporarily ran out of stock.
Maple Leaf has said it believes Lightlife’s veggie burger will be more broadly distributed than the Beyond Meat burger, though the company has lost some market share to its competitor.
The other major player in the plant-based protein space is Impossible Foods, which is ramping up production to meet demand from customers, including big chains like White Castle and Burger King.
U.S. sales of meat alternatives have grown an average of eight per cent per year for the last five years, according to Nielsen. Meat sales were flat in the same time period.
Despite the growth of the plant-based protein segment, Maple Leaf posted a net loss of $6.3 million or five cents per share during the three months ended June 30 due to $60.7 million of non-cash fair value changes on balance sheet items.
On an adjusted basis, Maple Leaf reported operating earnings of $65.2 million, or 33 cents per share.
Analysts had expected quarterly revenue of $1 billion and earnings per share of 31 cents, according to financial markets data firm Refinitiv.