MALMÖ, SWEDEN — Fats and oils have a place in the plant-based alternatives category. Evidence comes in second-quarter financial results from AAK.
Within the company’s Food Ingredients division, plant-based foods volume grew by double-digit percentages in the quarter. Plant-based meat systems drove the growth, primarily in the United States where restaurants have started to fully open in the wake of lifted restrictions, according to the Malmö-based company.
AAK, by offering fats and oils, is a specialty player in the plant-based meat alternatives category, said Johan Westman, president and chief executive officer, in a July 16 earnings call.
“Of course, (AAK) competitors are looking at it as well,” he said of the category. “You’re looking at it from a protein perspective and an oils and fats perspective.”
Flavors, fragrances and other ingredients are found in plant-based meat alternatives, too, he said.
“So everyone is there, looking at it, seeing it as an opportunity, and if the estimations that many have in front of themselves looking 20, 30 years down the line, there’s going to be plenty of volume, and this is going to be an industry where you would have specialty solutions for more difficult applications and you would have commodity oils and fats and other ingredients for the more volume plays and with less complex solutions,” he said.
Sales in the plant-based dairy alternatives category remained strong throughout the pandemic.
“But now we see also on the back of restaurants being more open, we see plant-based meat solutions now growing again, which is really a good sign,” Mr. Westman said.
Demand from existing foodservice customers in the plant-based meat alternative space is returning, he said.
“On top of that, we are adding new customers,” he said. “I shouldn’t say maybe every day, but we’re adding new customers in a very good pace.”
The Food Ingredients business posted operating profit of 343 million Swiss francs ($373 million) in the second quarter, which was up 31% from 262 million Swiss francs in the previous year’s second quarter. Net sales rose 35% to 5.5 billion Swiss francs ($6 billion) from 4.09 billion Swiss francs.
Volume increased 18% to 365,000 tonnes. Foodservice and bakery mainly contributed to volume growth as the they recovered in the second quarter thanks to the easing of pandemic-related restrictions and lockdowns. Volume in foodservice increased by high-single-digit percentages, but the volume has yet to return to pre-pandemic levels.
Companywide, AAK reported operating profit of 237 million Swiss francs in the second quarter, which was down 43% from 417 million Swiss francs in the previous year’s second quarter. Excluding items affecting comparability, operating profit was 541 million Swiss francs, up 32% from 411 million Swiss francs. Net sales increased 34% to 8.19 billion Swiss francs behind higher volumes as well as higher raw material prices, which were offset partly by a negative currency translation impact of 539 million Swiss francs. Volume increased 14% to 550,000 tonnes.
In the Chocolate & Confectionery Fats segment, operating profit of 205 million Swiss francs was up 31% from 156 million Swiss francs in the previous year’s second quarter. Net sales increased 38% to $2.24 billion Swiss francs. Volume rose 28% to 118,000 tonnes.
In Technical Products & Feed, operating profit rose 11% to 31 million Swiss francs, and net sales increased 8% to 441 million Swiss francs. Volume decreased 15% to 67,000 tonnes as an extended maintenance stop in the quarter led to a decline in feed volumes.
Companywide in the first half of the year, AAK reported operating profit of 788 million Swiss francs, which was down 18% from 959 million Swiss francs in the same time of the previous year. Excluding items affecting comparability, operating profit of $1.09 billion Swiss francs was up 14% from $957 million Swiss francs. Net sales rose 16% to 15.77 billion Swiss francs. Volume increased 7% to 1.12 million tonnes.