Meatpacker JBS to close U.S. plant-based foods business (updated)

Maple Leaf Foods

03/10/2022 21:51

(Adds quote, background)
    By Tom Polansek
       CHICAGO, Oct 3 (Reuters) - Brazilian meatpacker JBS SA
 JBSS3.SA  is closing its U.S. plant-based foods business,
Planterra Foods, after about two years, the company said on
Monday.
    The closure signals increasing troubles in the plant-based
protein sector, where U.S. sales are flattening.  urn:newsml:reuters.com:*:nL1N2Y81SH
    Colorado-based Planterra sold fake meat under the Ozo brand,
but JBS will now focus on its plant-based operations in Brazil
and Europe, said Nikki Richardson, spokesperson for JBS USA.
European and Brazilian operations "continue to gain market share
and expand their respective customer bases," she said.
    The sector has come under pressure because meat alternatives
do not taste good enough and prices are too high, said Gary
Stibel, chief executive of the New England Consulting Group,
which works on consumer products. He said JBS made a good
decision to shut Planterra.
        "Everybody and her sister thinks they can make money in
this business and they can't," Stibel said. "Eventually it will
be a good business for a few players. Today, it is a sinkhole
for many folks that are throwing good money after bad, chasing
too little demand with way too much supply."
  
        This summer, Beyond Meat Inc  BYND.O  lowered its
revenue forecast for the year and announced job cuts as rising
inflation hurt efforts to make its pricier plant-based meat more
affordable.  urn:newsml:reuters.com:*:nL4N2ZG4DK
  
        Separately, Canadian pork processor Maple Leaf Foods
 MFI.TO  has reduced the size of its plant-based business,
Greenleaf Foods, by 25%.
  
        The value of all meat alternatives sold in the United
States - including fresh and fully cooked products and faux
seafood – rose by 1.1% in the year ending Aug. 27 to about $963
million, NielsenIQ said. That compared to growth of 8.1% over
the same period in 2021 and 44.8% in that period in 2020.
  
        For fresh meat alternatives, U.S. sales dropped by 6.8%
in the year ending Aug. 27 to about $254 million, compared to a
year earlier, NielsenIQ said. Sales in the category climbed
28.9% over that same period from 2020 to 2021.
  
 (Reporting by Tom Polansek in Chicago; editing by Jonathan
Oatis and David Gregorio)
 ((Thomas.Polansek@thomsonreuters.com; https://twitter.com/tpolansek))