Unreal Food ended its pursuit of an eggless egg. Remastered Foods stopped developing vegan bacon. The Meatless Farm halted its plant-based sausages.
The great shakeout in the world’s fake meat sector is here and it’s widening.
As money flows less freely due to surging interest rates, investors have sharply pulled back funding just as inflation increases production costs and makes consumers more selective about their food choices. That’s hitting a crowded field, which had mushroomed after the early success of Beyond Meat and Impossible Foods.
Photo: AFP
With shoppers put off by excessive processing, nutritional value and taste, a growing list of alternative-protein companies are shutting down, laying off staff and selling themselves. Industry observers say more turmoil is coming before the sector stabilizes.
“You probably need a bit of a clear out in some of these categories to allow winners to come through,” said Mark Lynch, a partner at Oghma Partners in London, a corporate-finance advisory specializing in the food and beverage sector. Fewer players means resources will be more concentrated and survivors will control more of the available shelf space, he added.
Enthusiasm for alternatives to beef and pork surged in the aftermath of Beyond Meat’s 2019 initial public offering, and venture capitalists were willing to invest in companies that offered little more than a recipe book.
But sales haven’t matched wildly optimistic projections, as high prices and odd tastes and textures made the costly products easy to cross off shopping lists. The spate of failures extends from plant-based proteins and vertical farmers, to insect breeders and lab-grown meats. Global investment in food and agriculture tech dropped 44 percent in 2022, according to AgFunder.
The downturn has so far mainly claimed obscure names and early-stage companies, like Canada’s Merit Foods and China’s Hey Maet.
But in the UK, two up-and-coming companies recently appointed administrators: The Meatless Farm laid off staff at its headquarters in Leeds, while Plant & Bean got hit by soaring food and energy prices just two years after opening a mega factory in Lincolnshire.
ADJUSTMENT PHASE
The upheaval is part of an adjustment phase that happens in almost every high-growth consumer segment from smoothies to popcorn, said Andy Shovel, co-founder of British plant-based meat company THIS, whose sales are up about 45 percent this year.
The result will be less confusion at stores, better quality and prices getting closer to meat, according to Shovel.
“From a customer’s point of view, this is only good news,” he said.
Industry stalwarts have also stumbled. Beyond Meat, which has seen its market value drop over 90 percent from its peak, has had multiple rounds of layoffs in the past year, as has Impossible Foods. Cuts have also affected Spain’s Heura Foods and California-based Eat Just, which has continued to expand distribution in the US.
Traditional food companies are also retrenching. Nestle SA pulled its Garden Gourmet line and Wunda pea milk from the UK because of intense competition. Meat giant JBS SA discontinued its Planterra unit after pouring money into a mega factory in Colorado.
INVESTORS UPBEAT
Despite the turmoil, some investors remain upbeat. Big Idea Ventures, a food-tech investor fund, said last month that it’s closing in on a US$75 million fund-raising target. Fake bacon maker MyForest Foods raised US$15 million in fresh funding earlier this month, and Israeli startup Chunk Foods announced a seed round of the same size in the spring.
Agricultural giant Archer-Daniels-Midland still has faith in the sector, too. At an innovation center in Manchester, England, the company mixes processed soy with flavors to help make alternative proteins more appealing. Its venture capital unit is also continuing to invest in startups.
“The category is now evolving into what really consumers have been asking for,” said Leticia Goncalves, ADM’s president of global foods. “Companies are now learning from the past and adjusting with new launches.”
ADM expects the alternative-protein market to grow annually by “high single-digits” and reach US$100 billion in sales by 2030. Euromonitor International, which tracks sales in retail outlets and food services, predicts global sales volume of meat and seafood substitutes to grow more than 10 percent this year.
About two-thirds of young consumers are planning to spend more on vegan meat and dairy products citing health perceptions and environmental benefits, according to Emma Ignaszewski, associate director at Good Food Institute, an industry group.
For some companies, the disruption is an opportunity. Minnesota-based Wicked Kitchen — a maker of vegan convenience foods like jackfruit pepperoni pizza — acquired plant-based seafood company Good Catch for over US$7 million in stock as well as vegan fish brand Current Foods in a deal valued between US$7 million and US$10 million, said Chief Executive Officer Pete Speranza.
Food is now widely understood as central to efforts to combat the climate crisis and alternative proteins are seen as delivering the biggest benefit, according to Rosie Wardle, a partner and co-founder of Synthesis Capital, who has been active in the space for a decade.
“This correction was overdue,” she said. “The best companies in the sector will be able to find the capital they need even in these challenging times. Ultimately this sector is here to stay.”
There is a Chinese Communist Party (CCP) plot to put millions at the mercy of the CCP using just released AI technology. This isn’t being overly dramatic. The speed at which AI is improving is exponential as AI improves itself, and we are unprepared for this because we have never experienced anything like this before. For example, a few months ago music videos made on home computers began appearing with AI-generated people and scenes in them that were pretty impressive, but the people would sprout extra arms and fingers, food would inexplicably fly off plates into mouths and text on
On the final approach to Lanshan Workstation (嵐山工作站), logging trains crossed one last gully over a dramatic double bridge, taking the left line to enter the locomotive shed or the right line to continue straight through, heading deeper into the Central Mountains. Today, hikers have to scramble down a steep slope into this gully and pass underneath the rails, still hanging eerily in the air even after the bridge’s supports collapsed long ago. It is the final — but not the most dangerous — challenge of a tough two-day hike in. Back when logging was still underway, it was a quick,
From censoring “poisonous books” to banning “poisonous languages,” the Chinese Nationalist Party (KMT) tried hard to stamp out anything that might conflict with its agenda during its almost 40 years of martial law. To mark 228 Peace Memorial Day, which commemorates the anti-government uprising in 1947, which was violently suppressed, I visited two exhibitions detailing censorship in Taiwan: “Silenced Pages” (禁書時代) at the National 228 Memorial Museum and “Mandarin Monopoly?!” (請說國語) at the National Human Rights Museum. In both cases, the authorities framed their targets as “evils that would threaten social mores, national stability and their anti-communist cause, justifying their actions
In the run-up to World War II, Admiral Wilhelm Canaris, head of Abwehr, Nazi Germany’s military intelligence service, began to fear that Hitler would launch a war Germany could not win. Deeply disappointed by the sell-out of the Munich Agreement in 1938, Canaris conducted several clandestine operations that were aimed at getting the UK to wake up, invest in defense and actively support the nations Hitler planned to invade. For example, the “Dutch war scare” of January 1939 saw fake intelligence leaked to the British that suggested that Germany was planning to invade the Netherlands in February and acquire airfields
RSS