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Related tags alternative protein cultivated meat plant-based
Last week, the plant-based bacon startup Hooray Foods and nugget maker Nowadays independently shared plans in to shutter operations, amid declining plant-based meat sales which Circana data crunched by 210 Analytics reports fell 12.2% to $81.6m in July over the previous year alongside an 18.7% drop in unit sales to 13.9m in the same period.
At the same time, cultured chicken manufacturer Upside Foods revealed it will open its first large-scale commercial plant just north of Chicago, and Eat Just Inc. subsidiary GOOD Meat revealed leading Islamic scholars determined cultivated meat can be certified halal.
The divergent paths of both sides of the alternative protein segment shines a light on the tug-of-war between growing consumer interest in animal welfare and sustainable food production, but also their unwillingness to compromise on taste, texture and flavor as well as the realities of the current economic landscape which is spurring increased price sensitivity.
After four years on the market and producing more than 5 million bacon strips made to sizzle and smell like animal-based bacon but with a blend of white rice flour, pea and tapioca starch, coconut oil and natural flavors, Hooray Foods told fans on social media Sept. 7 that it will cease business operations.
Despite financial and advisory support from well respected venture capital funds, including Stray Dog Capital and Evolution VC Partners, as well as consumers who supported the business not only through sales but a crowdfunding campaign in January, the company explained in an Instagram post that “the economics of running a company of this size simply do not match our revenue and we are unable to continue producing our product for sale.”
Earlier this year, CEO Sri Artham told FoodNavigator-USA that the past year has been “a tough year for plant-based in general,” but he added his company at the time had “been doing pretty well” with sales growth month over month, increasing velocities and margins that were “doing well.”
However, he also acknowledged at the time that the company needed an infusion of $150,000 to become profitable without being reliant on outside capital.
Days after Hooray Foods shared its feelings of disappointment and frustration, two-year-old plant-based nugget maker Nowadays shared similar news of its closing.
Even as company co-founder Max Elder announced on LinkedIn last week that the team “made the difficult decision to shut down Nowadays,” he lauded the company’s achievements in a short period.
“Our journey over the past three years has been extraordinary. From commercializing a product in less than nine months, patenting novel extrusion technology, launching into retail with Whole Foods Market, establishing partnerships with award-winning restaurants nationwide and feeding lots of friendly cases along the way, it’s been an incredible ride,” he wrote.
Elder says he will stay in the alternative protein world by joining Food System Innovation as managing director.
As the plant-based protein segment continues to suffer setbacks, the cultivated meat segment continues to move forward.
UPSIDE Foods, which was the first company to get the green light from FDA and USDA to sell cultivated chicken in the US, announced it will build its first commercial factory for cultivated meat. The 187,000-square-foot facility will be just north of Chicago and will have capacity to expand production up to 30 million pounds annual.
Another notable victory for the cultivated meat segment is an opinion from Islamic scholars shared with GOOD Meat that cultivated meat can be halal if:
The decision significantly expands the potential consumer base for cultivated meat given about 25% of the world’s population follow halal practices. It also allows it to tap into a fast-growing market. According to some estimate, the global halal meat market is estimated to reach $375.05bn by 2030 from $202bn in 2021.
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