Maple Leaf, a leading Canadian food processor, reported a 12.7% YoY dip in revenue (down 6.4% YoY excluding the forex impact) to CAD 184.1 million (~USD 144.0 million) in FY2021 for its plant-based meat segment, Plant Protein Group. The segment, which includes the Lightlife and Field Roast brands, was hampered by lower retail product volumes as well as the impact of an extra week in the fourth quarter of 2020, partially offset by growth in food service volumes and pricing action implemented in 3Q2021.

Plant Protein Group’s gross profit for FY2021 was in the red at a negative CAD 12.8 million (~USD 10.0 million) vs gross profit of CAD18.3 million (~USD 14.3 million) a year ago, translating to a margin of -7.0% (vs 8.7% for FY2020). Lower sales volumes and increased overhead and transitory costs due to strategic investments in capacity to build for anticipated demand as well as inflationary pressures on distribution and other input costs negatively impacted the business segment’s gross profit.

The company believes that given the current consumer feedback, experience, buy rates, and home penetration, the high category growth rates originally forecast by many industry experts are unlikely to be attained. However, Maple Leaf expects its plant-based food segment to grow at a modest yet attractive pace with current estimates suggesting an annual average rate of 10%–15%, making a CAD 6 billion to CAD 10 billion market by 2030. As a result, the company is pivoting its Plant Protein Group strategy and investment thesis, with a new aim of delivering neutral or better adjusted EBITDA over the next 18 months. The plan to support this shift is still ongoing and the company will make revisions to its investment thesis to match with the market opportunity.