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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Plant-Based Alternatives to Meat are not Generating Profitability

04/05/2022

Michael McCainIn a letter to shareholders, Michael H. McCain, President and CEO of Maple Leaf Foods conceded that the company investment in plant-based foods was non-profitable.  CHICK-NEWS has previously reviewed the relative financial performance of the Meat and Plant-protein segments of the company, highlighting declining sales, growing losses and an evident inability to achieve lower unit costs despite expanding production.

 

To his credit, McCain is the first CEO to clearly express the problems facing plant-based meat substitutes.  In his letter to shareholders, he alludes to difficulties including "product taste, the level of processing and appeal to the whole family".  CHICK-NEWS maintains that the high initial growth rate for meat substitutes was driven by a curiosity factor.  Although sixty percent of North American households have at some time tried plant-based meat alternatives, quality issues and price clearly mitigate against continued purchases.  Only a small affluent demographic is willing to pay extra for plant-based meat alternatives that wear the halo of ‘sustainability’. Projections of annual growth of 10 to15 percent for the ‘fake meat” category is considered to be unachievable.

 

Chick-News

 

Industry observers point to the relatively unsuccessful trials of plant-based burgers conducted by QSRs with some chains introducing then dropping plant-based menu options.  Losses as documented in the quarterly reports of Beyond Meat (BYND) and the restructuring of the management of Impossible Foods suggest that early venture capital investors in plant-based meat alternatives are reevaluating their expectations.


 
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