Dive Brief:
- Laird Superfoods, a maker of simple, functional foods with clean ingredients, said it will shutter a manufacturing facility in Sisters, Oregon, used to make its powdered creamers and hydration products by the end of the year. The company said 46 people will lose their jobs.
- Instead, Laird will turn to co-packing to manufacture the products in order to reduce its expenses and simplify its business.
- Laird Superfood, which went public two years ago at $22 a share, has struggled with heavy competition and mounting losses.
Dive Insight:
Jason Vieth, who was picked as president and CEO in January, has been at the helm of Laird for fewer than 12 months, but he is moving quickly to implement changes.
“While we’ve made considerable progress on commercial and operational initiatives over the past several quarters, ongoing challenges in the macro environment make the shift to third-party manufacturing an essential move,” Vieth said in a statement.
Laird is not only facing pressure from large CPGs and countless upstarts that are producing similar offerings, but it has been getting hit especially hard by supply chain disruptions and inflation that is eating into shoppers’ buying power. The tiny company also continues to lose money and has watched sales drop.
Vieth, a former WhiteWave Foods and Sovos Brands executive, has brought the company into trendy areas to boost growth. Earlier this year, he took the Laird name beyond creamers, coffees, cereals, pancakes and waffle mixes into plant-based protein bars — the brand’s first entry into the snack category popular with on-the-go consumers.
But the decision from Vieth to end production of some of its products and outsource them to someone else will allow Laird to focus on creating and marketing its offerings rather than having to deal with the challenges of manufacturing them in today’s volatile business environment.
As he noted, the initiative will play a large role in helping Laird reach its long-term gross margin target of 35%. The reason for the plant closure is simple: Laird believes a co-packer could do just as good of a job making its products but for less.
“The reason for this decision is based on an inability to produce at this facility at a rate that is competitive with the industry, which is exacerbating significant financial pressure currently on the business,” Vieth said in an Oct. 12 letter to employees.
Laird’s difficulties have not gone unnoticed by at least one investor. In August, Laird received an unsolicited offer from EF Hutton SPV I LLC to pay $3 for each share of the plant-based food company. Laird, which currently has a market cap of about $16 million, said at the time it would review the offer.
