SunOpta Continues to Invest in Plant Based Drinks, Fruit Snacks | 2021-11-11

MINNEAPOLIS – SunOpta, Inc. continued to invest in increasing its plant-based beverage production capacity during its third quarter, but faced labor and capacity shortages make full use of its current capacity.

“Our strategies, priorities, capital deployment and expansion plans are all topical,” said Joseph D. Ennen, CEO, in a conference call Nov. 10 to discuss quarterly results. “Demand has been exceptionally strong, especially in areas such as oat base, oat milk and fruit snacks, which once again underscores the alignment of our priorities and investments with the market dynamics.

“Second, we have seen very strong demand for plant-based products, especially oats, as oat revenues have tripled from the previous year. Sales increased 16% year over year, reaching our highest level in the third quarter at the factory. And without the challenges related to raw materials and labor, we would have had growth of around 20%. The supply of additional raw materials and extra labor above plan has proven difficult and disrupting our operations. “

For the quarter ended October 2, SunOpta incurred a loss of $ 3.8 million, compared to the previous year when the company reported a loss of $ 2.8 million. Expenses related to the acquisitions of the Dream and WestSoy brands contributed to the loss, according to the company.

Sales for the quarter reached $ 198.5 million from $ 191.7 million the previous year.

Sales of SunOpta’s Plant-Based Foods and Beverages business unit were $ 114.9 million. Segment operating profit was $ 18.7 million.

“New customers / new business accounted for 34% of our plant-based growth, with a significant portion attributable to our own brands, Dream, WestSoy and Sown,” said Mr. Ennen. “Beyond our brands, we also signed a new two-year contract with a major catering customer to supply chai tea, and we extended our manufacturing agreement for an additional two years with an existing milk customer. oats, which is one of the leading brands in retail. oat milk. “

The expansion of the company’s Allentown, Pa. Plant, which is used for aseptic beverage processing, will be completed this year, according to the company. An expansion of the plant in Modesto, California, and a new “mega-plant” in Texas are also expected to be operational in 2022.

“Collectively, these initiatives combined with our investments in 2020 provide a doubling of our factory capacity, enabling significant growth as well as reduced supply chain risk through geographic diversification, improved network redundancy and optimization, ”Mr. Ennen said.

SunOpta’s fruit food and beverage segment achieved sales of $ 83.6 million in the third quarter of 2021, down 9.7% from $ 92.6 million in the third quarter of 2020. Lower frozen fruit retail volumes were the main reason for lower revenues. , with a planned rationalization of SKUs and customers, according to the company.

“The decline in frozen products was partially offset by fruit snacks, which increased 21%, fueled by growth in both CPG co-clients and private label retail clients,” said Mr. Ennen . “We are seeing a very high demand for fruit snacks across the board and see this as a growth driver for the future. In addition, we have successfully launched smoothie ball products, which will be marketed through co-manufacture, private labels and our own brand platform. “

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