Maple Leaf Foods Faces System Outage Following Cyberattack

Ontario-based meat and plant-based foods producer Maple Leaf Foods has suffered a system outage due to a “cybersecurity incident,” the company announced Sunday.

In a press release, the company – Canada’s largest meat and poultry producer – said it “took immediate action and engaged cybersecurity and recovery experts” to restore the system, but noted it would “take time and result in some operational and service disruptions.”

In addition to its namesake line, Maple Leaf owns several meat and plant-based meat brands sold in the U.S., Canada and Asia, including Greenfield, Field Roast, Lunch Mate, Schneiders and Lightlife among others.

Reached by NOSH, Maple Leaf said via email that it does not have an estimated time frame for when the recovery might be finished. Although the company did not offer specifics on the nature of the cybersecurity issue, the disruptions “vary by business unit, plant and site.” The company operates 21 manufacturing facilities and has over 14,000 employees.

“We are well into executing our business continuity strategy and implementing workarounds to mitigate impact as we restore our systems,” the company stated. “Our goal is to maintain our operations, appreciating that there will be some disruption. We will continue to work with all our customers and suppliers to minimize these disruptions as we work to do our best to continue delivering the nutritious food people need.”

The outage comes after Maple Leaf president and CEO Michael McCain declared the current operating environment “chaotic and unpredictable” during the company’s Q2 earnings report in August. At the time, McCain cited a whirlwind of issues – including post-pandemic economic recovery, the war in Ukraine, “unnatural agricultural and trading markets,” inflation and struggles hiring “adequate people resources to operate our supply chains” – as contributing to Maple Leaf underperforming growth projections for the quarter.

Total company sales grew 3.1% to CAD$1.19 billion in Q2 with net losses of CAD$54.6 million. The Meat Protein Group business was up 3.8% to CAD$1.16 billion while the Plant Protein Group reported a CAD$18.6 million “restructuring charge” as the company has worked to overhaul its plant-based meat strategy, cutting the division by 25%.

Maple Leaf isn’t the first protein producer to find its cybersecurity compromised. Last year, North American meat maker JBS USA paid hackers around $11 million after a ransomware attack shut down production at nine of its U.S. beef processing plants.

Although the disruption in the JBS attack was relatively brief, it still had an immediate impact as the USDA saw a 22% drop in livestock processing the day of the incident and a 15% reduction the day after. According to HuffPost, prices returned to normal quickly after production resumed, but had the JBS outage gone on longer it could potentially have caused more wide-reaching price hikes and supply shortages.

The JBS attack also raised concerns about increasing consolidation within the meat industry, which makes the supply chain and economic health of the entire sector more vulnerable to disruptions at a single company. As 85% of the U.S. beef market is controlled by just four companies – Tyson, JBS, Cargill and National Beef Packing – some industry groups, including the U.S. Cattlemen’s Association, have warned that consolidation is also contributing to sharp price increases within the meat space.

Last week, the Biden administration announced plans to invest $73 million into 21 grant projects in the first round of approved payments through the Meat and Poultry Processing Expansion Program, a $1 billion initiative which aims to address industry consolidation by supporting independent meat processors.