- Greenleaf Foods will buy and build out a 118,000-square-foot Indianapolis food processing plant to ramp up production of Lightlife tempeh products in response to rising demand, parent company Maple Leaf Foods announced. The company expects the purchase to close in early April.
- The Indianapolis plant will have an initial production capacity of about 99.2 million pounds of tempeh. Greenleaf Foods estimates the project — including the purchase costs — to total approximately $100 million. The company expects the plant to be fully operational by the first half of 2022.
- This is the second Indiana manufacturing facility that Chicago-based Greenleaf has planned since its launch in 2018. The company announced plans in 2019 to build North America's largest plant-based protein facility in Shelbyville, Indiana. The company said in the tempeh plant announcement that the pandemic and other factors have delayed the project. By acquiring the Indianapolis plant, the company hopes to quickly ramp up tempeh production in the short term while continuing to develop Shelbyville plans for the future.
Despite its century-old history as a packaged meats supplier, Maple Leaf Foods has pursued plant-based protein for additional growth in recent years. It acquired Lightlife Foods and Field Roast Grain Meat Co. in 2017, launched its Greenleaf subsidiary and sped up the innovation pipeline.
The Canadian meat company has succeeded in getting trendy plant-based products on store shelves across the United States. In 2019, Lightlife debuted its first plant-based burger made with pea protein. The brand sought to differentiate itself with a clean-label appeal, and even challenged Impossible Foods and Beyond Meat to simplify their ingredients lists. In 2020, Field Roast Grain Meat, best known for its plant-based sausages and hot dogs, deli slices, Celebration Roasts and Chao cheeses, launched its first plant-based chicken product, nuggets formulated with wheat and pea proteins.
But it's tempeh, a centuries-old fermented soybean-based protein related to tofu, that Greenleaf is focusing on with this Indianapolis factory. Low in fat and high in protein with a chewy texture and nutty taste, tempeh has enjoyed a sales boost in recent years as many consumers have turned to plant-based options to stay healthy. Sales of tofu and tempeh totaled $128 million in 2019, up 15% over the past two years, according to the most recent, complete set of SPINS and IRI data shared by The Good Food Institute and Plant Based Foods Association. The pandemic goosed sales even more. During the height of panic buying in April, tofu and tempeh retail sales rose 88% compared to the year prior, the Plant Based Foods Association reported, citing SPINS and IRI data.
Lightlife Foods, which was first established as Tempeh Works in 1979, had more than 80% share of U.S. tempeh sales in 2020, according to the company. Today, the company's tempeh lineup includes traditional cake forms as well as flavored strips and fiber-rich flax and grain blends. Last November, Lightlife's tempeh made its debut in Walmart, bringing its total distribution to 18,500 retail locations. And it underwent its own brand refresh. Retail sales of the Lightlife brand rose more than 44% in the 52 weeks ending Oct. 4, 2019, according to IRI and SPINS data cited by the company.
This dominance in tempeh gives Greenleaf Foods a powerful differentiator at a challenging time. For one, the plant-based space is becoming increasingly crowded, with new players, proteins and brands jockeying for consumers' attention. Lightlife's tempeh is organic, non-GMO, Kosher-certified and has 12 to 19 grams of protein per serving. It also is more versatile than many newer plant-based proteins. Consumers can eat it raw or cooked, crumbled, cubed or sliced in sandwiches, salads and other dishes.
But the pandemic has also been rough going for Greenleaf. Despite a more than 9% jump in plant-based sales during its most recent quarter — up to $68.5 million compared to $66.6 million a year ago — the plant-based segment saw gross margins drop more than 66% — to $4.5 million from $13.3 million a year ago — according to its September 30 earnings report. In a slide presentation for investors, Maple Leaf acknowledged it struggled to meet demand as it juggled equipment downtime, labor problems and distribution delays for new products during the pandemic. The company highlighted plans to lean on Greenleaf's established brands such as Lightlife, strategic acquisitions and accelerating innovation to grow its plant-based protein business in the year ahead.
That's what makes time of the essence in the push to expand tempeh production. For Greenleaf, getting out ahead of its supply issues to grab accelerating demand offers the greatest promise in moving beyond the tripwires of the pandemic — and taking advantage of the tailwinds.