While it's hard to glean whether the closure is the result of challenges with the Sweet Earth brand or a move, as Nestlé says, to streamline production, it's the latest blemish for the plant-based meat sector. In a statement, Nestlé noted Sweet Earth "remains an important part of our foods portfolio."
But there are reports that the slowdown in plant-based meat growth is more abrupt than many expected, leading to questions about the future of a category that serves a consumer choice rather than a broader societal need.
Ethan Brown, Beyond Meat's CEO, told analysts last month that the company showed negative growth and high net losses during its most recent quarter. "The key question is whether this reduced growth rate is an aberration or a harbinger of things to come," he said.
Similar problems were reported by Maple Leaf Foods, which posted a sales decline of 3.7% for its Greenleaf Foods division, which includes plant-based meat brands Lightlife and Field Roast, during its fourth quarter. CEO Michael McCain said that as a result, Maple Leaf is reallocating the amount of capital and space in the supply chain to be consistent with a much smaller growth rate than anticipated.
Nestlé acquired Sweet Earth, a manufacturer of plant-based beef, chicken, deli slices, hot dogs and other offerings, in 2017. The closure in California marks a shift of late for Nestlé. Recently, it has been expanding or building new facilities to meet an increase in demand for many of its products.
Earlier this week, Nestlé said it would spend $675 million on a factory in Arizona to make creamers. The new facility will create more than 350 jobs. Last year, Nestlé announced it would invest $100 million to expand its frozen foods factory in South Carolina that manufactures brands such as Stouffer’s and Lean Cuisine. In 2020, it spent $100 million to build a Hot Pockets line at a facility in Arkansas.
Nestlé's growth mirrors other expansion efforts throughout the food and beverage landscape that are expected to continue as trends like snacking, eating at home and better-for-you offerings continue to gain momentum.
Mondelēz International, for example, said in November it will invest $122.5 million over three years to boost capacity at a Virginia facility where it makes Oreos. And J.M. Smucker said that same month it is spending $1.1 billion to build a new manufacturing facility and distribution center in Alabama to produce its Smucker's Uncrustables sandwiches. The plant will create up to 750 jobs.
Despite the noticeable shift toward adding jobs, CPGs have also not been reluctant to cut them in response to shifts in demand or to boost efficiencies.
Mondelēz announced in 2021 the closure of two plants, one in Georgia and the other in New Jersey, that would impact 1,000 workers. The company said the locations were no longer geographically strategic and the facilities were facing operational challenges, including aging infrastructure. And Coca-Cola announced in late 2020 it would cut 2,200 jobs globally through buyouts and layoffs as part of a restructuring plan accelerated by the ongoing pandemic.
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The group dedicated June to educating consumers about the dangers of what it called “synbio dairy” — using genetically modified cells to create proteins identical to those in cow-produced milk.
The beverage giant said new offerings attract younger consumers to its portfolio of brands before they transition into adult-targeted products like Coca-Cola Zero Sugar and Diet Coke.
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Topics covered: manufacturing, packaging, new products, R&D, and much more.
The group dedicated June to educating consumers about the dangers of what it called “synbio dairy” — using genetically modified cells to create proteins identical to those in cow-produced milk.
The beverage giant said new offerings attract younger consumers to its portfolio of brands before they transition into adult-targeted products like Coca-Cola Zero Sugar and Diet Coke.
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Topics covered: manufacturing, packaging, new products, R&D, and much more.