(Bloomberg) -- Faux meat seems have lost its sizzle for Maple Leaf Foods Inc.
The company is reviewing its strategy of expanding into plant-based foods after seeing cooling demand for such products, Canada’s largest food processor said Thursday in its quarterly earnings statement.
“We are seeing a marked slowdown in the plant-based protein category performance, which may suggest systemic change in the extremely high growth rates expected by the industry,” CEO Michael McCain said in the statement.
Maple Leaf said it doesn’t expect to meet sales growth targets for its plant-protein group for the second half after third-quarter sales in the division fell 6.6% from a year earlier. Meat sales, in comparison, jumped more than 13%. The company entered the faux-meat fray about four years ago, joining Tyson Foods Inc. and others in offering plant-based meat substitutes. Maple Leaf’s plant protein unit accounted for about 4% of sales this year.
In 2019, the Mississauga, Ontario-based processor articulated its goal of achieving C$3 billion ($2.4 billion) in sales in its plant-protein group by 2029 based on a market size of about C$25 billion.
“We have always been prepared to re-examine that investment thesis if circumstances change,” McCain said. “Given current category performance, such a review is underway, which will either affirm or adjust our strategies and investment thesis going forward.”
Maple Leaf’s review comes after Beyond Meat Inc. reduced its revenue guidance for the third quarter, citing a decline in retail orders. Major meat companies invested in plant-based protein as consumer demand rose amid concerns about the environmental impact of the livestock industry, animal welfare and maintaining a healthy diet.
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