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June 6, 2022

GreenSpace Brands looks to “strategic alternatives” for loss-making Canadian food business

GreenSpace continued to post losses in the first nine months of its new fiscal year.

By Simon Harvey

GreenSpace Brands, the loss-making Canadian food business, has launched a review into “strategic alternatives”.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

A year after rolling out the Project Fit cost-savings programme on the heels of two divestitures – Kiju organic juices and the Rolling Meadow Dairy brand – Toronto-listed GreenSpace said it is seeking to “enhance shareholder value” by looking into a “range of potential strategic alternatives”.

Revealing Project Fit in May last year, the company said it planned to reduce the SKU count across the business by around 60% during the course of 2021 to focus on products with “strong consumer demand” in order to boost gross margins.

“Reducing portfolio complexity will result in scale advantages with our supplier base, lower inventory holding costs, reduce waste and improve retail visibility and retail replenishment of our best-selling SKUs across customer channels,” GreenSpace, which owns the Central Roast snack brand, said at the time.

Now the business has hired financial advisors to assist in the review after reporting a CAD20.8m (US$16.5m) loss in the year to 31 March 2021.

“There can be no assurances that the exploration of strategic alternatives will result in any transaction,” the Go Veggie plant-based cheese maker said in a statement on 2 June.

It added: “GreenSpace does not intend to discuss or disclose developments with respect to the process unless and until it is otherwise determined that further disclosure is appropriate or required by regulation or law. No formalised timetable has been established for the completion of the strategic review.”

GreenSpace’s losses in its last full financial year narrowed from CAD33.7m in fiscal 2020. It posted revenues of CAD29.4m in 2021, down from CAD49.1m a year earlier.

Revenues have continued to decline in the new fiscal year, falling to CAD14.2m in the nine months to 31 December, from CAD24.5m. GreenSpace posted a loss for the period of CAD4.9m versus a CAD6.9m loss a year earlier.

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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