Orior puts the brakes on plant-based products
Published: Thursday, Dec 5th 2024, 11:20
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The Orior food group, known primarily for its meat brands such as Rapelli and Albert Spiess, is dissatisfied with its business with plant-based alternatives. This - together with other reasons - leads to a restructuring.
The once strong development of vegetarian and vegan products is slowing down across Europe, Orior announced on Thursday. And sales in the export business are declining. In addition, the business is probably not profitable enough for the group: "Orior's priority remains the development of profitable new niches and customer segments," it said. For this reason, the cooperation with the business partner in England in the area of herbal products will now be suspended, according to the statement.
The development in the plant-based food business - together with "in some cases major adjustments to the product range" and tender losses - will lead to stagnation for the company in the current year. Orior writes that new sales will be around the previous year's level. The management had previously expected a slight increase.
Project in Oberentfelden canceled
In response, Orior is suspending various projects and investments. Among other things, the planned convenience hub - a center for the production of ready meals - in Oberentfelden will not be realized after all.
Two years ago, Orior invested in two new production lines at the site, including two wet extruders for processing plant-based proteins. At the time, it was said that the new equipment was intended to meet the high demand for plant-based products. Now, however, the site is apparently putting the brakes on.
Orior is also reviewing the closure of a factory in Olen, Belgium. The company has lost a large volume order from a foreign customer and therefore probably no longer needs the factory.
Including further provisions, for example for legal disputes at Casualfood or for "structural adjustments" to increase efficiency, this results in a charge of CHF 37 to 41 million. This also depresses operating profit (EBITDA) by CHF 17 to 19 million.
Migros as a major customer
As can be seen from the press release, Migros is also likely to have played a role in Orior's realignment. The retailer is a major customer of Orior and is in the middle of the largest restructuring program in the company's history.
Among other things, it announced that it would lower prices, ban expensive branded products from its range and increase the proportion of own brands. Migros is also abandoning its goal of guaranteeing the same minimum standards for imported meat as for Swiss meat. And unlike previously planned, the strict Bio Suisse guidelines will no longer apply to imported organic products. It is also clear that Migros no longer attaches the same importance to plant-based products as it did a few years ago.
"The retail trade in Europe and obviously also in Switzerland is constantly changing," writes Orior in the press release. "However, we consider the realignment of important market participants in Switzerland to be positive, especially for us," the company said, without going into further detail about the reasons for this statement.
Orior is without a CEO
Today's announcement follows the abrupt departure of Orior CEO Daniel Lutz announced a month ago. According to the announcement, no successor has yet been found for him. The Head of European Business, Filip De Spiegeleire, will take over the business on an interim basis. He has been a member of Orior's Executive Board since 2016.
It is not known whether Lutz wanted or had to leave. However, some of his decisions probably did not meet the expectations of the Board of Directors. In recent weeks, the Board of Directors has been working "intensively with the Executive Board on the concrete processing of all current issues", according to the statement, "with the aim of explaining the situation and the most important influences and creating more clarity for the future."
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