JBS shutters Planterra brand after 2 years

Dive Brief:

• Planterra, the U.S. plant-based meat arm of meat giant JBS, is ceasing operations this year, according to a notice given late last week to the Colorado Department of Labor and Employment. The news was first reported by the Denver Business Journal. JBS USA confirmed the closure of the segment in an email.
• An estimated 121 jobs will be lost from the brand’s corporate headquarters and its manufacturing facility. The business will be completely shut down by Dec. 20.
• The closure is the latest blow to the plant-based meat sector, which has seen slowing sales stymie its once meteoric growth. Planterra started as an offshoot of JBS in March 2020, launching products under its Ozo brand.

Dive Insight:

The closure of Planterra is an ominous sign for the plant-based meat space in the U.S.

Planterra employees were sent home midweek, according to the Denver Business Journal article. The customary legal notice to the state was dated Thursday. Nikki Richardson, a JBS spokesperson, said in an emailed statement that the company is working with Planterra employees to find employment opportunities at other JBS locations.

The timing of this notice seems abrupt. A week before the closure was announced, the company was touting a foodservice expansion, with Ozo’s Plant-Based Bacon becoming available on breakfast sandwiches at Gregory’s Coffee and Veggie Grill. 

“We continue to believe in the potential of plant-based options for consumers and remain committed to the alternative protein market,” Richardson said. “JBS will focus its efforts on its plant-based operations in Brazil and Europe, which continue to gain market share and expand their respective customer bases.”

From the outside, it seemed Planterra’s business was performing well for JBS. In June, Ozo debuted plant-based bacon and a month later it entered into a three-year partnership to become the official plant-based protein of the Chicago Cubs. Earlier this year, it rolled out whole cuts and shreds of plant-based chicken and opened a new R&D Innovation Center at its Colorado headquarters last August.

Outward appearances, however, can be deceiving. JBS is publicly traded, but the company is so massive globally, especially in its home country of Brazil, that it has not singled out Planterra’s performance in any recent earnings reports.

The business unit is lumped under JBS Beef North America, which saw a 4.6% decrease in year-over-year revenue in its most recent quarter. Other publicly traded meat companies have struggled with revenues recently because of costs, inflation and supply chain woes.

Plant-based meat has seen sales slowing for about the last year. IRI data cited by Bloomberg showed meat alternatives sold at retailers dropped 10.5% during the 52 weeks ended Sept. 4, compared to the year prior. 

After a year of missed targets and slow or stagnant growth, Beyond Meat cut its annual net revenue projections and laid off about 40 employees — about 4% of its workforce — to reduce costs. And Maple Leaf Foods, whose Greenleaf division produces Lightlife, Chao and Field Roast, announced this summer it was reducing the size of the division by 25%.

JBS’s shutdown of Planterra may hearken to the beginning of Big Food backing out of plant-based meat. In addition to Maple Leaf, Kellogg is looking to spin off or sell its plant-based division, which includes the MorningStar Farms brand. 

When JBS announced it was getting into this area in 2020, it added more legitimacy to the sector. After all, it is a company known for meat. Planterra CEO Darcey Macken said in a 2020 interview that the unit was started to give consumers more choice in what they ate. And, she added, having a plant-based brand from JBS was a boon to the strength of the plant-based sector.

“In this world of startups, people want stability,” she said at the time.