“SunOpta Divests Ingredients Division to Focus on Growth in Plant-Based Foods Sector”
SunOpta’s ingredients division reported net sales of $488 million for the 12 months ending September 26. However, the Canada-based company has chosen to divest this revenue stream to prioritize growth in the plant-based food sector. Joseph D. Ennen, CEO of SunOpta, stated in the company’s announcement that they will concentrate on investment opportunities and pursue acquisitions to enhance their plant-based platform. Although specific details about the types of plant-based products SunOpta will seek were not disclosed, investing in this sector aligns with their mission of “helping make the planet and its people healthier through plant-based foods & beverages, organic ingredients, and organic foods & beverages.”
Prior to the sale of its global ingredients division, SunOpta had already divested its Opta Minerals segment for around $6.2 million and its organic soy and corn business to Pipeline Foods. In exchange, SunOpta has expanded its portfolio of fruit snacks, frozen fruits, and organic oils. In its third-quarter earnings report, the plant-based foods and beverages segment generated $99 million in revenue, marking a 7.9% increase from $91.8 million in the same quarter last year. While organic fruits and vegetables play a significant role in its business, the company recognizes that its future growth lies within the plant-based foods segment.
Manufacturers like Impossible Foods, Beyond Meat, and Nestlé’s Sweet Earth are dedicated to creating meat alternatives that closely resemble the taste, texture, and appearance of animal-based proteins. These companies heavily depend on specialty ingredient suppliers to source sustainable plant-based meat products, including soy, pulse products, and mushrooms. SunOpta already markets soybase, oatbase, and hempbase for use in plant-based alternatives like creamers, yogurts, and cheese. It also provides powders that serve as plant-based sources of fiber and protein for beverages, baked goods, and snacks. By catering to customers looking to develop meat analogues, SunOpta could position itself as a significant player in this rapidly growing market.
Investment firm UBS anticipates that the market for plant-based protein and meat alternatives will expand from $4.6 billion in 2018 to $85 billion by 2030. Companies like Archer Daniels Midland are innovating plant-based meat through unique ingredient combinations that emulate the qualities of animal protein. Likewise, Kerry introduced 13 new plant-based ingredients this summer to assist manufacturers in creating plant-based protein options. Recently, Ingredion acquired Verdient Foods, a producer of pulse-based concentrates and flours derived from peas, lentils, and fava beans.
With nearly $400 million in additional cash, SunOpta is well-positioned to explore and expand its ventures within the plant-based industry. The company may choose to innovate internally or accelerate its growth by acquiring firms that already produce ingredients sought after by plant-based food and beverage manufacturers. Among these ingredients, calcium citrate and vitamin D3 are gaining traction as valuable components for enhancing the nutritional profile of plant-based products. By incorporating such elements, SunOpta can further solidify its role in this evolving market while meeting the demand for healthier options.
