Canada’s Maple Leaf Foods is planning to relaunch its Field Roast and Lightlife brands after seeing sales from its meat-free division slow.
Speaking to analysts after Maple Leaf published its 2020 financial results, the company’s CEO, Michael McCain, said: “The biggest disappointment was a slowdown in the back half of the year in our plant protein revenue growth rate.”
In 2020, Maple Leaf’s plant protein division recorded sales of CAD210.8m (US166.1m), 19.5% up on the previous year’s total but 10.5% lower than the company’s target. In the fourth quarter, the division saw sales rise 5.5%. McCain said: “There are a lot of reasons for this, and we are acutely, acutely aware of each one of them.”
The company's COO, Curtis Frank, added: "We are closing in and nearing the completion of the renovation and relaunch of two of North America's best-known and most-loved plant-based protein brands in Lightlife, which focuses on clean and simple ingredients, and in Field Roast, which is doubling down on its commitment to delivering bold and adventurous taste. Paralleling the success of our brand renovation in meat protein, we believe these brand strategies offer focus points of differentiation that are backed by significant consumer research."
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Outlining the issues the division has faced, McCain said: "In addition to the supply chain challenges that we had, Covid contributed to category deceleration, impacted our ability to commercialise our innovation pipeline in the year and limited foodservice channel growth. Additionally, there was a new retail channel entrant which drove competitive activity in one of our many sub-segments.
"Of course, these things are always concerning in the short term. But they don't change our conviction to the long-term thesis."
McCain said the supply chain obstacles are "being sorted out" and insisted Maple Leaf has a "very robust innovation pipeline" to support its growth ambitions.
He said: "As an investor in Maple Leaf, I can appreciate that this is a challenging period, one which could test conviction around our investments in plant-based businesses.
"I am certainly fortunate in that I have the ability to see first-hand the pace of innovation, the vibrancy of the market and draw parallels between the investment and transformation that we've made in the past in our meat protein business and what we're doing now in plant protein, that our relentless focus in food innovation, brand renovation and the pursuit of operational excellence will pay off as evidenced by our success with the same playbook and the resulting exceptionally strong year we've had in meat protein."
He added: "We unequivocally believe that the investments we're making in this business will be rewarded, albeit causing valuation dislocations in the short term. We believe that staying the course with our investments is the right course of action. The reasons for our disappointing revenue growth rate in the back half of 2020 are certainly well understood, and we're acting on them."