MINNEAPOLIS — Investments to expand plant-based capacity continue to pay dividends at SunOpta, Inc. Enhanced ability to meet growing demand for dairy-free options helped the company deliver one of the strongest quarters in its history, said Joe Ennen, chief executive officer.
Production output in SunOpta’s plant-based facilities in the second quarter increased 20% year-over-year and was in line with record output achieved in the first three months of the year. Sales of milk alternatives, which account for two-thirds of the company’s plant-based business, grew 30%.
“Growth in plant-based was exceptionally broad, with nearly every major customer up double digits, every channel up double digits, every product type up double digits and every go-to-market business up double digits,” Ennen told analysts during an Aug. 10 earnings call. “Drilling into plant-based milks, growth was led by over 40% increases in both almond milk and oat milk, with each having revenues of over $30 million.”
Foodservice sales for the plant-based segment grew 20% while retail sales were up more than 40%. The company’s branded business posted year-over-year gains approaching 40%, with sales of Dream and Sown beverages nearly doubling on the heels of expanded distribution. The co-manufacturing and aggregate ingredients businesses grew 31% and 47%, respectively.
Net income for the second quarter totaled $924,000, equal to 2¢ per share on the common stock, which compared with a loss of $1.7 million in the same period a year ago. Company-wide sales increased 20% to $244 million from $202 million, with 60% of the gain coming from pricing and 40% from volume.
Plant-based food and beverage sales surged 31% to $146 million from $111 million, marking the segment’s 15th consecutive quarter of sales growth. Volume accounted for more than half of the revenue growth, with volume/mix up 17 percentage points and pricing up 14 points.
SunOpta has undertaken a series of capital expansion projects across its plant-based business, adding capacity to its oat processing facility in Minnesota and its beverage production facility in Pennsylvania. The company in April unveiled a new pilot plant and innovation center as part of its new corporate headquarters.
Additional projects to boost capacity are underway. A new line at SunOpta’s plant in Modesto, Calif. will be online this fall. Construction has begun on a second oat extraction facility on the West Coast that will be completed in 2023. A new “mega plant” in Midlothian, Texas — the company’s largest capital expansion project to date — is expected to complete its first saleable production run later this year.
“These investments are needed to double the revenue and profits of our plant-based business,” said Scott E. Huckins, chief financial officer at SunOpta. “We continue to believe we will be rewarded over the next several years for executing these investments in such a challenging environment.”
SunOpta’s fruit-based segment generated sales of $97.6 million, up 7.4% from $90.9 million in the same period a year ago.
SunOpta updated its full-year outlook to reflect a strong first half of the year. Executives raised revenue guidance to a range of $930 million to $960 million, up from $890 million to $930 million, representing growth of 14% to 18% versus 2021. Adjusted EBITDA guidance increased to a range of $72 million to $78 million, up from $67 million to $75 million, representing growth of 18% to 28%.