Maple Leaf Food dumps sodium nitrite and goes all-natural in entire line of processed meats
TORONTO — The latest TV commercial from meat processing giant Maple Leaf Foods features children at a spelling bee stumbling over the names of food additives such as maltodextrin and butylated hydroxytoluene.
“If you can’t spell it, you won’t find it in our food,” reads a caption at the ad’s close, leading to a shot of the company’s reformulated Maple Leaf-branded products and stated promise to convert the entire line to natural ingredients by the end of the year.
It’s part of what company chief executive Michael McCain bills as the “single biggest brand strategy initiative” in the 91-year history of the company, one which will see Maple Leaf switch 44 meat products that contain multi-syllabic preservatives and flavour-producing additives over to using basic ingredients such as lemon juice, salt and vinegar.
“Expectations had changed quite dramatically for some of the consuming public,” said McCain in an interview explaining the initiative, citing an extensive company research project involving 7,000 consumers. A third of the brand’s demand was coming from a group of parents wanting to feed their family luncheon meat or hot dogs free of ingredients such as sodium nitrite.
“Those people have greater expectations of the food that they are buying,” the CEO said. “We have engineered the food to avoid some of the crutches of the food industry of the past to give consumers what they want.”
But it remains to be seen how the sweeping initiative, part of a broader commitment by Maple Leaf to cut waste and energy use to become “the most sustainable protein company in the world,” will boost sales of its processed meats products, which have been flat to declining for several years.
That was despite solid returns from the additive-free segment of its business that Maple Leaf already introduced in 2010, a line of prepared meats under the brand Natural Selections.
Overall global demand for many processed meat products fell after the World Health Organization said in a 2015 report that processed meats, long containing ingredients such as sodium nitrite, are carcinogenic.
“I would point out that large food companies have had volume challenges in the last five years,” McCain said. “It’s not just a Maple Leaf issue, and it’s not just in this category.”
Large food companies have been trying to recapture traffic from a more health-aware group of consumers that have begun to avoid foods that nutritionists say are unhealthy in favour of more “real” or “natural” items, home-cooked meals using unprocessed food ingredients — whole grains, olive oil and fruit juices. While Maple Leaf also sells air chilled chicken and pork, it doesn’t break down its sales mix between those items and that of its prepared meats, such as packaged bacon and cold cuts.
Maple Leaf Foods offices in Mississauga, Ont.
In recent years, the real food movement has hit processed food-makers hard, leading to markdowns and tepid sales in the so-called “centre aisle” categories of the grocery store largely reserved for packaged food items. Sales of carbonated drinks declined 7.9 per cent between 2012 and 2017, according to data from market research firm Euromonitor, and cold breakfast cereal sales declined 8.4 per cent in the same period. Sales of margarine in the same period were weak, rising an average of 1.1 per cent annually.
“People are eating fewer prepared meats — that WHO report hit the industry hard,” said Kevin Grier, a food industry analyst at Guelph, Ont.-based Kevin Grier Market Analysis and Consulting, who said Maple Leaf’s natural ingredients initiative is a good idea.
“Data shows that consumers care about nutrition, price and taste, and I think this falls into the category of a wholesome, quality product with good ingredients,” he said. “I think it will help to differentiate them in a slow-growing marketplace.”
That said, Maple Leaf might be facing bigger issues ultimately in the face of growing competition from U.S. pork producers who have added more production capacity into the market, Grier said. Canada exports 60 per cent of its pork production and Maple Leaf is one of the largest industry producers. “We export far more than we can consume in Canada,” he said.
And Sylvain Charlebois, food industry expert and dean of management at Dalhousie University, said growing evidence of the benefits of eating more plant-based food and evolving consumer habits mean that Maple Leaf has a bigger issue on its hands.
“The narrative around animal protein is quite dominant, and it is not positive,” Charlebois said. “That is what Maple Leaf is up against. When Burger King starts to sell a veggie burger, it’s a sign. This goes beyond the ‘naturalization’ of an offering — it’s much broader than that.”
Maple Leaf has begun to diversify its offerings, acquiring two major plant-based protein companies the last year, Lightlife and Field Roast, and now has a market share of more than 50 per cent of the category in Canada.
While growth in the segment has been in the double digits, it is a minuscule part of the company’s overall business. “Relative to protein consumption in total it’s a small market, but it’s gaining momentum,” McCain said. “And as small as it is, small in the U.S. is pretty attractive to a Canadian company.”
When it comes to transforming the image and recipe of its classic Maple Leaf processed meat products, McCain, who was lauded for successfully reviving the company’s reputation after a listeria outbreak was linked to a Maple Leaf plant in 2008, admits it can take some time to change consumer perceptions and behaviour.
“As a brand marketer I am very conscious of the fact that consumer behaviour is highly habitual and it takes a long and sustained period of time to modify those habits and behaviours,” he said. Sales of prepared meats at the company were up in the first quarter, before the recipe and branding changes were announced.
“Early indications, whether they are extraordinarily positive or extraordinarily negative, don’t necessarily reflect the changing behaviour of consumers’ buying patterns,” McCain said.
Financial Post
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