The Tofoo Co has defied wider declines in meat alternatives as shoppers shun ultra-processed options in favour of more natural ingredients.
Turnover at the business increased 10.4% to £20.2m in the year to 31 December 2023 as volumes rose 4%, according to accounts at Companies House.
Tofoo, started by husband-and-wife team David Knibbs and Lydia Smith in 2016, noted the performance had been achieved against a backdrop of penetration falling as fewer households shopped the category.
It blamed negative press around the category and ultra-processed foods for difficulties in the space, which saw multiple companies collapse last year, and said the situation was not helped by the impression meat-free was expensive relative to traditional protein sources.
Tofu bucked the wider difficulties, growing annual penetration to 8.7% as additional households bought into the category. This trend was led by the Tofoo Co brand, which recorded value growth of 14.4% on 4.8% higher volumes, the business said in the accounts.
Gross profits returned to more normal levels at the company (up from £5.9m to £7.7m) thanks to rising volumes, price increases taking effect and better processing and labour efficiency. This came despite a continued hit from higher soya bean costs.
Pre-tax profits moved from £257k in 2022 to £1.6m, back at levels seen in 2021 and 2020.
Knibbs told The Grocer the market was “turning strongly in favour of natural solutions”. He said category data showed Tofoo Co was now the second biggest brand in meat-free, behind Quorn.
“We have also become the bestselling SKU in the market with our Naked 280g and we are also performing very strongly on tempeh,” he added. “We are the biggest tempeh brand, with £2m sales, more than double the size of the next biggest brand.”
NPD launched this year to expand the brand into seitan and burgers helped the business maintain good momentum in the 2024 financial year, Knibbs said.
As revealed by The Grocer in April, Tofoo is working with advisors at investment bank Piper Sandler to explore strategic options surrounding a potential sale.
“The directors believe that given strength of trading in 2023, and notably in the first quarter of 2024, there will be increased demand for tofu products in the coming years followed increased awareness of both more natural, healthier and environmentally friendly diets and products,” the accounts stated.
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