In what could be a sign of weakening consumer interest in plant-based foods, Canada-based food conglomerate Maple Leaf Foods said it is reviewing whether it will continue investing its plant-based protein division.
In its third-quarter report issued last week, the CAD 4.3 billion ($3.4 billion/€2.9 billion) protein giant, said it is seeing a slowdown in the overall plant-based protein category that could suggest what it called a "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," said Michael McCain, president and CEO of Maple Leaf Foods.
"Given current category performance, such a review is underway which will either affirm or adjust our strategies and investment thesis going forward."
Through the first three quarters, sales of its plant-based foods slipped 12.4 percent from a year ago to CAD 138.6 million ($117.3 million/€96 million).
The company posted a loss of CAD 39.6 million ($31.8 million/€27.4 million) in adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for its plant-based foods division during the same period.
Maple Leaf operates two plant-based food manufacturing facilities in Indiana.
Slowing sales, calls for labeling
US retail sales of refrigerated plant-based meat alternatives were down 3.1 percent in the third quarter of this year compared with the same period in 2020, but were still up 74 percent compared to the same period in 2019, according to IRI data for the 13 weeks to Sept. 26.
"Gains are decelerating," said Anne-Marie Roerink, president of market analyst group 210 Analytics.
In the first quarter of 2021, gains were 156.5 percent versus the first quarter of 2019. Growth dropped to 115.7 percent in the second quarter and 74 percent in the third.
Industry concerns still abound
The US seafood sector has raised concern about what it says is the misleading labeling of alternative seafood products made from plant ingredients.
In October, the National Fisheries Institute (NFI), the largest seafood trade group in the United States, stepped up calls to prevent plant-based seafood manufacturers from labeling their products as seafood and gaining an "unfair marketing advantage."
The indications are that plant-based seafood manufacturers will continue to label their products with the term "seafood" until they are told they cannot do otherwise, NFI President John Connelly said.
In November, Brazilian seafood processors association ABIPESCA has filed lawsuit against that country's health regulatory agency, Anvisa, for allowing plant-based seafood manufacturers to label their products as healthy.
Still, sales of plant-based seafood climbed 23 percent in 2020 to $12 million (€10 million), Michael Robbins of the Plant Based Foods Association told IntraFish.
In 2019, The Good Food Institute (GFI) reported plant-based seafood accounted for $9.5 million (€8 million) of total plant-based meat dollar sales, tiny in comparison to the more than $100 billion (€86 billion) of seafood sold in the United States annually.