US – Laird Superfoods, a maker of simple, functional foods with clean ingredients, has resorted to shifting the manufacture of its powdered creamers and hydration products to co-packers, to reduce its expenses and simplify its business.

The company said the decision came after it considered shuttering a manufacturing facility of the product in Sisters, Oregon.

The company added that 46 people will lose their jobs when the stated move will be effective, probably by the end of the year.

Laird Superfood, which went public two years ago at US$22 a share, has struggled with heavy competition and mounting losses.

In 2020, it was the newest plant-based food company to go public to take on large CPG companies and tap into the market for natural, organic, and functional foods and beverages valued at more than US$150 billion.

Laird Superfood is small in size compared to many companies that go public in the same category of the market.

The company 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 small-sized company also continues to lose money and has had a drop in sales, recently.

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 to save the business from plunging into a deep well of uncertainties.

“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.

Vieth argues that ending the production of some of its products and outsourcing 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.

In addition, 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.

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.

During the listing in the IPO, the plant-based nutritional company’s co-founders said it is planning to move into other food categories beyond beverages while stressing the 5-year-old business is not for sale.

The growth to other categories was achieved by Vieth, who 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.

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