Even though it’s making headlines, lab-grown chicken is the least of the plant-based meat industry’s concerns right now.
Driving the news: Plant-based meat is the latest victim of high-interest rates and inflation, with a rash of startups lining up for the slaughterhouse as investments dry up, production costs surge, and shoppers looking to cut grocery bills opt for the real, cheaper thing.
- This past year, two big Canadian plant-based meat players collapsed: Winnipeg processor Merit Foods and Victoria “vegan butcher” Very Good Food Company.
Investors poured money into fake meat makers after Beyond Meat’s US$3.77 billion IPO in 2019, but lofty sales expectations have been met with results that are more disappointing than an overcooked bean burger thanks to stubbornly high prices and questionable quality.
- Industry leaders aren’t closing their doors, but they too are having trouble. Beyond Meat is projecting its net revenues to drop anywhere between 1% and 10% this year.
- Canadian meat giant Maple Leaf Foods continues to struggle with its plant-based options, with sales down 16.7% last quarter compared to the quarter before.
Why it matters: Closures and consolidations are par for the course for any emerging sector. And from a consumer POV, that’s good, one plant-based meat exec told Bloomberg. Only the fittest companies surviving will result in higher quality products at better price points.
Bottom line: Plant-based meat is far from dead. Opportunities abound as eating habits shift, and Canada just entered a partnership with the UK to help bolster each other’s plant-based food industries. Ultimately, the key will be making products both cheaper and tastier.