News
Beyond Meat, Impossible Foods, and Oatly are restructuring amid falling sales and one plant-based brand, Tatooed Chef, is considering adding meat to a new range to boost profits. Is there light at the end of the tunnel for plant-based meat and dairy alternatives? Following weak third-quarter results, Oatly’s shift to a “hybrid” manufacturing model and a reduced headcount, mirroring the actions of Beyond Meat, which a week prior cut 19% of its staff.Meanwhile, San Franciso-based Impossible Foods is ferrous gluconate safelaid off 6% of its workforce in October last year following the appointment of Peter McGuinness as CEO in April.Discussing the firm’s plans, Toni Petersson, Oatly’s CEO, said it would involve striking deals with iron(ii) lactate hydratemanufacturing partners to create a more hybrid production network across certain geographies.Other actions include a focus on investing in its proprietary oat-based technology and capacity.Petersson revealed that the firm was to carry out an overhead and headcount reduction impacting up to 25% of the costs in the EMEA region.“By doing this, the company expects annual savings up to $25m (€23m) from the reorganisation, which will take effect starting in the first quarter 2023,” he said in a statement.“The company has identified incremental opportunities in the rest of the organisation, from which it expects up to $25m (€23m) in additional annual savings in the first half of 2023.”© AdobeStock/MaddieRedPhotographyThe plant-based category seen increased competition in recent years but is also suffering the effects of high inflation and higher operating costs.MorningStar Farms, a division of the Kellogg Company that produces vegan and vegetarian food, also reported a double-digit decline in revenue throughout most of 2022.The snack and convenience food giant had announceferro folic acidd in June it intended to spin off and potentially sell MorningStar Farms.Other firms within thiferric pyrophosphate prices space include Tattooed Chef, a publicly traded food company once valued at $1.7bn (€1.6bn), which is now considering adding real meat to a new product line in order to boost profits. Most plferrous bisglycinate vs ferric pyrophosphateant-based meat companies have been struggling in the past year, especially when it comes to cash flow, said John Baumgartner, Mizhuo Group agribusiness senior analyst, cited in Forbes.He explained that, as Tattooed Chef’s plant-based products had not been generating enough, it may make sense to temporarily pivot and wait for the market to regroup. However, this could risk alienating loyal customers.“If it’s still not working and they have to come out with animal protein, it contradicts the core principles of these companies,” Baumgartner added. “Does it turn off part of the market because they’re not considered pure anymore or committed to the cause of plant-based? Maybe.”While sales of many alternative protein brands have been disappointing of late, others such as NotCo is reporting growth. © AdobeStock/steheapMeanwhile McDonalds’ vegan burger, the McPlant, is posting healthy sales in Europe although demand has somewhat stalled in the US.A Boston Consulting Group report backs up the potential of the alternative protein space, highlighting an investment boost from $1 bn in 2019 to $5bn in 2021. The group believes alternative proteins will command 11% of global retail sales of meat, eggs and dairy in 2035 — a rise from 2% currently.“It’s still very early in the game,” said Po Bronson, managing director of investment firm IndieBio. “Alternative meats are poised for incredible improvements — better textures and flavours, whole-cut products and far more scalability. “There are still tremendous economic gains and efficiencies to be had from growing this sector.”
What do falling sales and disappointing profits mean for the plant-based category?
