JV of Marfrig and ADM, PlantPlus dribbles the decrease urge for food for plant-based
- July 28, 2022
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Plant protein products company plans to invest in plants in North America
Almost two years after being created by the Brazilian Marfrig and the American ADM, the joint venture PlantPlus Foods is going through the hangover of the once promising plant-based market without losing its appetite. The company, which is 70% owned by Marfrig and 30% owned by the global agribusiness giant, debuted in North America with the acquisition of Canadian Sol Cuisine and American Hilary’s – M&As that cost it US$ 140 million – and is considering building new factories in United States.
“We have major investments planned for the second half of the year in North America, including building production capabilities,” PlantPlus CEO John Pinto told Pipeline. Headquartered in Chicago, an important innovation center for the global food industry, PlantPlus currently has a factory in Kansas, another in Toronto and, in Brazil, it took advantage of the facilities of a large meatpacking plant that Marfrig has in Várzea Grande, Mato Grosso. Thick.
By concentrating the productive structure in the Americas, the Costa Rican executive intends to capture the region with one of the greatest potential for these industries. In internal projections, the region should be responsible for 40% of global plant-based consumption in the coming years.
The market for processed vegetable protein has fallen into disbelief among investors and industries after venture capital funds poured tons of money into companies like Beyond Meat and Impossible Foods and then saw the difficulty of turning so much technology and marketing into cash generation. The industry’s perception is that the consumer wants the product and advocates for it, but higher costs than animal protein, for example, end up restricting consumption. If inflation skyrockets, as is the case, then plant-based is really off the list.
Despite the macroeconomic effects and the blow to the startup universe, the Costa Rican executive argues that the fledgling industry is here to stay and tends to strengthen over time. “We have seen the category experience the same difficulties, with market pressures. Yes, consumption is lower than what was seen as potential, but it is still very attractive”, said Pinto.
Based on research carried out by ADM, the joint venture projects that the global plant-based market will be worth US$ 30 billion in 2030, a potential still interesting. The total market is currently estimated to be $4 billion.
In some product categories, PlantPlus grows by double digits, said the executive without detailing the billing data. As for profitability, he admits that the joint venture still does not generate net cash, but suggests that even the Brazilian market is showing good signs. Here, the company has doubled in size and is preparing to launch new products by August, which includes a plant-based product that refers to the Tuscan sausage. The category has already had launches from the Brazilian Fazenda Futuro, with ham sausage.
In Brazil, the plant-based market is led by Incrível, a brand owned by Seara (JBS).
Source: Value Pipeline