JBS shuts down its US alternative meat operation as market cools

Meat titan JBS is abandoning its plant-based business in the US just two years after entering the alternative meat market in the country with Planterra Foods and its OZO brand.

The nation’s plant-based sector is showing some signs of a crisis of faith as the general market experiences a bear market taking a toll on nascent, still growing businesses.

JBS does not disclose the separate income of its plant-based operation Planterra, however in 2020 it did reveal a growth of 300% on sales of its OZO products. The company’s u-turn on plant-based has come as a surprise as the business announced partnerships with foodservice players two-weeks ago. 

Plant-based appetites waning?

As companies move their focus toward controlling inflation, mostly through rising interest rates, expanding businesses are losing access to cheap money that has aided them since their inception.

Beyond Meat is burning through its cash reserves. The company ended Q2 2022 with S$455-million in its vaults, compared to $733-million at the end of last year. At this rate the company might be forced to raise capital to survive.

Beyond Meat has lost 77.5% of it stock value this year. Furthermore, the company’s partnership with McDonald’s has raised more doubts than hopes, as the fast food business concluded this summer its test trials of McPlant Burger’s in US locations without releasing any plan to bring the plant-based offering nationwide.

Earlier, in August the company revealed revenues for this year will increase 1% to 12%, compared to initial forecasts of 21% to 33%. The company lost 1.6% in Q2 compared to the same period last year.

Canadian Maple Leaf Foods announced also this August it is reducing 25% of its Greenleaf Food plant-based protein division. This comes after its revenue going down 18% year over year, according to its Q2 results.

“We’re confident in the long-term hypothesis of 10% to 15% growth rates once the conditions normalise, the consumers normalize, the inflationary and the extreme inflationary environment is sort of passed,” underscored Michael McCain Maple Leaf CEO.

Planterra short run

The US business started in 2020 and commercialised meatballs and burgers made from a blend of pea, rice protein and mycelia – fermented roots – of Shiitake mushrooms.

JBS will keep its plant-based business in Europe, where plant-based is faring better than in the US.

According to Innova Market Insights, meat substitute launches are booming in Europe after the pandemic, doubling NPD launches in Q1-22 compared to 2019, remaining strong in Q2 with over two-thirds more launches. 

Efforts in other regions are still building up as countries like China bet that plant-based success might materialise in the long run.

Public Chinese government records reviewed by the Good Food Institute APAC reveal that significant funds are being allocated to help the nascent alternative protein sector optimise and scale up – as was previously done for the nation’s development of solar panels, lithium-ion batteries and electric vehicles.

Source: FoodIngredientsFirst.com