NotCo, a pioneering plant-based start-up from Chile, has announced a delay in its timeline for achieving group-wide profitability, which has been pushed back from this year to 2027.
This development was initially reported by Bloomberg, following an interview with NotCo’s CEO, Matias Muchnick. He indicated that the delay stems from complications in the company’s ‘co-branding’ initiatives within the United States and Canada, specifically regarding its collaboration with Kraft Heinz.
However, NotCo clarified in communications and during the Bloomberg interview that it anticipates achieving profitability in its Latin American and Mexican operations well ahead of the 2027 target.
NotCo formed a partnership with Kraft Heinz in 2022, known as The Kraft Heinz Not Company. This collaboration focuses on developing, producing, and marketing plant-based proteins in North America, excluding Mexico.
A spokesperson for NotCo indicated that several products have already launched in retailers including Whole Foods Market and Sprouts, which feature NotMayo, NotSausage, NotHotDog, Kraft NotCheese Slices, Not Mac & Cheese, NotChicken Patties, NotBurger, and Philly Plant-Based Cream Cheese.
During his interview with Bloomberg, Muchnick noted that NotCo’s New York office has closed, with Kraft Heinz now handling the sales and marketing efforts in the US and Canada.
“NotCo, in collaboration with Kraft Heinz, made the strategic decision to consolidate its operational efforts in the US and Canada, while expanding the portfolio within the joint venture,” the spokesperson said.
“The JV is now the primary vehicle for the commercialization of plant-based food products for both companies in these markets. At the same time, NotCo remains firmly focused on its food business in LATAM, where it continues to experience solid growth.”
While Kraft Heinz has yet to comment on the situation, inquiries have been made regarding which company is responsible for producing the JV products and at which facilities.
“The collaboration with Kraft Heinz not only broadened our portfolio but also created opportunities to enhance operations, distribution, and commercial efforts,” added the spokesperson.
“While we remain committed to profitability across all business units, we now anticipate reaching profitability by 2027.”
Nonetheless, NotCo’s own-branded business, NotCo Foods, is “on track to reach profitability as early as 2025.”
Muchnick stated to Bloomberg that operations in Chile and Argentina are expected to become profitable by the second quarter of this year, while Mexico and Brazil are slated to reach this milestone by 2026.
NotCo has also announced a workforce reduction of approximately 11% in November 2023 as part of a restructuring initiative aimed at “optimizing operations” for enhanced efficiency and long-term sustainability.
The company emphasized, “Despite these adjustments, NotCo remains a strong and growing organization, dedicated to advancing plant-based innovation and expanding its market presence.”
