Maple Leaf Foods, a Canadian consumer-packaged meats company, experienced a decline in its shares on Thursday. The company missed its third-quarter targets and announced a tempered outlook for its struggling plant protein group.
Despite generating revenue of C$1.25 billion, which exceeded last year’s $1.23 billion, Maple Leaf Foods fell short of expectations of reaching C$1.31 billion. This disappointing performance caused the stock to decline by 8.9%, reaching 25.06 Canadian dollars ($18.09) at 12:11 p.m. ET.
Decline in Plant Protein Group
Maple Leaf Foods witnessed a decrease in revenue for its plant protein group, which dipped from C$43.6 million to C$36.4 million compared to the same period last year. As a result, the company revised its targets and now forecasts neutral adjusted earnings before interest, taxes, depreciation, and amortization for the latter half of 2023.
Evolving Market Landscape
During the company’s annual shareholders meeting in 2016, former CEO Michael McCain highlighted the North American market’s potential for alternative protein, projecting an annual growth rate of 5% to 8%. This growth was anticipated due to rising health and environmental concerns.
In 2018, Maple Leaf Foods established Greenleaf Foods with the aim of capitalizing on the U.S. plant-based food sector. The company initially expressed commitment to expanding this category, emphasizing the importance of plant-based foods for a healthy lifestyle and positive environmental impact.
However, based on Maple Leaf Foods’ recent evaluation, the company no longer expects the same level of growth in this market segment.
Overall, Maple Leaf Foods faces challenges in its plant protein group and will need to adapt its strategy to navigate the changing dynamics of the alternative protein industry.