In the food and beverage industry, Monde Nissin continues to face challenges with its meat alternatives business, particularly with its Quorn brand, as sales declined and profits remained in the red in the first quarter of the year. Despite an overall increase in revenues for the Asia Pacific branded food and beverage business, the company reported a 4% drop in sales for meat alternatives, although this was an improvement from the previous year.
Specifically, meat-free sales in the UK fell by 2.8%, largely attributed to the performance of the Quorn brand in a challenging retail market. To address this decline, Henry Soesanto, the company’s spokesperson, emphasized the importance of cost-minimization and efficiency improvements to maintain EBITDA levels or achieve better results by year-end.
Interestingly, while retail sales of meat alternatives decreased, foodservice sales saw a significant increase of 14.5% in the quarter. This growth was particularly notable in the UK and Europe, driven by strong performance in establishments like KFC. However, this gain was partially offset by lower sales in the US and other quick-service restaurant customers.
Despite the decline in sales, Monde Nissin’s overall revenue for meat alternatives totaled 3.4 billion pesos ($59.1m) in the first quarter, contributing to an overall sales growth of 2.1% to 20.3 billion pesos. However, gross profit for meat-free products decreased by 14.5%, with margins dropping by 376 basis points due to production volume decline and cost impacts.
On a positive note, EBITDA and net losses improved for the meat alternatives category, attributed to restructuring benefits, cost control measures, and timing of marketing expenses. EBITDA losses narrowed to 60 million pesos, while net losses decreased to 216 million pesos from the previous year’s negative figures.
In contrast, Monde Nissin’s Asia Pacific branded food and beverage business saw a 2.2% sales increase to 16.9 billion pesos, driven by brands like Lucky Me, SkyFlakes, and Nissin. Notably, gross profit increased by 26.5%, while EBITDA and net income also saw significant growth.
CEO Soesanto expressed optimism about the company’s performance, highlighting the rebound in margins and profitability in the APAC BFB business. Looking ahead, Soesanto expects the second quarter to reflect continued improvements in profitability and growth.
