Maple Leaf Foods Inc. defended its new vegetarian burger as competitor Beyond Meat’s shares soared during its first day of trading.
“Our ambition is universal,” said CEO Michael McCain during a conference call with analysts Thursday after the company released its first-quarter earnings.
The company has heavily invested in plant-based protein, acquiring two brands — Field Roast Grain Meat and Lightlife — that give it higher distribution than any other brand in the U.S., said McCain, pegging the figure at about 90 per cent.
Maple Leaf anticipates Lightlife’s veggie burger will be more broadly distributed than the Beyond Meat burger, he said — though the company has lost some market share to its competitor.
“That’s the harsh reality,” he said.
Beyond Meat, which also makes other plant-based products, raised about US$240 million in its initial public offering, selling 9.6 million shares at $25 each. Its shares jumped more than 160 per cent to over $65 Thursday during its stock market debut, and the competitor dominated much of analysts’ questions for the Maple Leaf CEO.
One analyst noted Beyond Meat’s success building brand recognition by selling its products through quick-service restaurant chains. When A&W Food Services of Canada Inc. started selling Beyond Meat burgers, the chain temporarily ran out of stock.
McCain said Maple Leaf has discussions with food service customers and “you’ll probably see examples of it,” but he said his experience tells him that is the best way to build a brand.
“That’s not how we count victories,” he said of seeing the name of his company’s plant-based burger on a restaurant menu.
“I want to be associated with the attributes of my product, not its existence on somebody else’s menu.”
The company is just launching its Lightlife burger now, he said, and it will start to roll out into retail distribution over the next 90 days.
The comments came as Maple Leaf reported a first-quarter profit of C$50.1 million, up from $27.9 million a year ago, as its revenue grew 11 per cent.
The profit amounted to 40 cents per diluted share for the three months ended March 31, compared with a profit of 22 cents per diluted share a year ago.
Sales totalled $907.1 million, up from $817.5 million in the first quarter last year.
On an adjusted basis, Maple Leaf earned 20 cents per share for the quarter, down from an adjusted profit of 29 cents per share a year ago.
Analysts on average had expected a profit of 31 cents per share and $890.8 million in revenue, according to Thomson Reuters Eikon.