Shareholders in The Kraft Heinz Company have overwhelmingly rejected a proposal that would have pressed the food firm’s board to disclose its plans regarding meat-based protein alternatives as such products grow in popularity.
The vote took place against a background where companies selling meatless proteins have been attracting a great deal of attention. Beyond Meat launched a high-profile IPO in May and Impossible Foods announced this week that its Impossible Burger will make its debut in US grocery stores today.
Specifically, the Kraft Heinz shareholder proposal would have asked the board to issue a report explaining the company’s ‘long-term strategy toward protein diversification within its product catalogue.’ Almost 886 million shares were voted against the measure, with just 29.5 million in favor at the company’s AGM in Pittsburgh last week.
The proposal was based on the argument that consumers are eating less meat and demanding more plant-based proteins, often out of concern for the environment, animal welfare and/or their own health.
‘Companies with limited exposure to sustainable protein options may face a number of business risks, including reputational damage due to changing consumer expectations and a loss of market share to competitors that have more rapidly adapted to an evolving market,’ the proposal materials state.
The materials add that last year sales of plant-based meat alternatives increased 24 percent over 2017, resulting in $3.3 billion in sales, while sales of animal-based protein products increased only 2 percent during the same period. The proponents cite other companies’ initiatives and plans to offer or explore offering more plant-based options.
‘Currently, Kraft Heinz mentions plant-based protein once within its publicly available materials as a component of the company’s push toward ‘Better Nutrition’. This page of the sustainability report simply has pictures of products Kraft Heinz produces that fall under the category of plant-based without discussion of the company’s broader goals and strategies,’ the proponents write.
The company’s board successfully urged shareholders to vote against the proposal. ‘[W]e are aware of increasing consumer demand for plant-based protein options, and we continue to invest in and innovate our plant-based protein offerings,’ the board states, pointing to its meatless BOCA brand.
‘Beyond our investment in the BOCA business, we are supporting disruptive innovation to add more convenience, variety and flavor to our portfolio,’ the board adds. ‘We believe such efforts, as well as those further described in the Kraft Heinz CSR report published in December 2017, reflect our commitment to improve and diversify our product categories to satisfy a broad spectrum of consumer preferences.
‘Given our public statements, track record and current programs related to diversification of our products, we believe the additional report requested by this stockholder proposal is unnecessary, not in our stockholders’ best interests and redundant to our current practices and initiatives.’
A Kraft Heinz spokesperson said in a statement: ‘Kraft Heinz already has diverse protein offerings and continue[s] to improve them. Most notably is the BOCA line. We acquired BOCA in 2000, making soy-based burgers. We have grown the brand to include a whole family of products – along with a new marketing campaign. We are always supporting disruptive innovation to add more convenience, variety, flavor to our portfolio.’
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
