Prosperity Organic Foods Acquires Assets of Miyoko’s Creamery

In a significant development for the plant-based dairy sector, Prosperity Organic Foods, Inc., headquartered in Boise, Idaho, has successfully secured the assets of the financially troubled plant-based dairy company Miyoko’s Creamery. This acquisition includes the brand name, recipes, formulations, and select equipment from the renowned dairy-free butter brand.

CEO’s Vision for the Future

Scott Fischer, CEO of Prosperity Organic Foods, expressed his excitement about the acquisition, stating he was “surprised and delighted” to have won the bidding process. The immediate objective is to ensure a smooth transition and minimal disruption to the supply chain for existing products, which are currently produced by third-party copackers. Fischer noted the distinct audience each brand serves, saying, “We are the two premium plant butter brands in the category, without a doubt, and there are so many parts about the two brands that are compatible.”

Restoring Production Quickly

Fischer emphasized the importance of swiftly resuming production: “The priority right now is making sure that retailers and consumers have those products available. We’re pretty confident we’re going to have production back up and running very quickly, but specifics of how and where we’re doing that are still being discussed with all involved parties.”

Financial Challenges in the Plant-Based Sector

Addressing Miyoko’s previous challenges, Fischer noted, “The issue at Miyoko’s was not declining sales. You need a commercial model that enables you to survive. When liabilities exceed assets, there has to be something wrong in the P&L. The disappointment is that despite more than $100 million in investment, they were not financially sustainable.”

He conveyed confidence in the quality and sales performance of the acquired products, stating, “We did our homework and we’re 100% confident in the quality and sales performance of the products and the demand, and we will do our best to be good stewards of the brand.”

Market Trends and Consumer Sentiment

When discussing declining sales in the plant-based dairy category, Fischer acknowledged shifts in consumer sentiment primarily driven by economic factors. “I think Miyoko’s can and will do a better job at recognizing and responding to those consumer requirements, while still maintaining its quality and craftsmanship,” he remarked. As for Melt Organic’s performance, he indicated that the brand is thriving despite the challenging market landscape.

Controversial Transition Period

Miyoko Schinner, founder of Miyoko’s Creamery, launched an unsuccessful bid to reacquire the brand she created. She clarified her lack of association with the new ownership and emphasized her name and image should not be used. Recently, she shared a text exchange where Fischer was quoted making disparaging remarks about her leadership, leading him to apologize on LinkedIn for the unprofessional language.

The Journey of Miyoko’s Creamery

The journey of Miyoko’s Creamery has been marked by turbulence since its inception in 2014. Originally founded by Schinner, the company gained attention for its artisanal cheese wheels and later diversified into various plant-based products. Despite raising over $70 million from notable investors, Miyoko’s faced financial difficulties and management disputes, culminating in a public lawsuit and a court-mandated mediation process.

Challenges Ahead

The recent insolvency and subsequent acquisition signal the need for strategic restructuring. Miyoko’s Creamery’s closing of its production facility in Petaluma to rely on co-manufacturers further indicates the firm’s efforts to regain financial stability.

Market Dynamics

Recent data from SPINS reveals a concerning trend in the plant-based cheese and butter market:

• Total refrigerated plant-based cheese sales dropped by 8.5% to $220.3 million.
• Shredded and grated cheese sales fell by 4.1% to $107.8 million.
• Sliced cheese and snacks decreased by 13% to $78.9 million.
• Spreads declined by 1.7% to $9.7 million.
• Other categories, such as blocks, saw a drop of 14.5% to $24 million.

Additionally, sales of products marketed as plant-based butter have decreased by 14.9%, totaling $157 million in the year leading up to October 5, 2023.

Conclusion

The acquisition of Miyoko’s Creamery by Prosperity Organic Foods marks a new chapter in the evolving landscape of plant-based dairy products. With clear leadership and a commitment to quality, there is potential for a revitalized brand that resonates with a consumer base increasingly mindful of both quality and affordability.