Sustainable meat alternative companies say the biggest business challenge is funding
Operate a sustainable abattoir or meat substitute company can be difficult for all sorts of reasons: high cost and consumers exhausted by inflation, just to name a few. But business leaders in that sector say their biggest challenge is raising capital.
Brent Young, founder of Meat Hook, a sustainable whole-animal butcher in Brooklyn, said at Luckof the Impact Initiative Conference on Wednesday that the biggest obstacle he faced was attracting investors to his business, and the only ones he could get were investors. venture capital.
“Everybody liked the idea, but the banks didn’t want to take a big risk on it,” Young said. “It’s slow cash flow and there are some slow-money angel investors out there. But when you need a million dollars and someone is willing to lend you $10,000, that’s not really helpful.”
Large amount of sponsorship to alternative protein startup plummet from 2.11 billion USD in 2019 to only 250 million USD in 2023. Consumers also seem to be retreating. Selling foods of plant origin in America slightly reduced to about approx 8.2 billion USD in 2022 to 8.1 billion USD in 2023, while the percentage of households purchasing these products decreased from 19% to 15% in the same period. Affordable price and quality have become major concerns for customers.
Other sustainable meat business are also feeling pressured. Brice Klein, co-founder and COO of Choppy, a ready-to-eat meat substitute company, agrees that funding is his biggest business obstacle. He noted that venture capitalists have thrown in money replacement proteins companies, but many people told him that these products does not meet consumer expectations.
“It’s hard to convince people to come back and try something that might be significantly better when they’ve had a somewhat sour experience,” Klein said.
This can be frustrating, especially when it comes to financing alternative meat company used to be easier to achieve. Hong ColeThe founder and CEO of Slutty Vegan, a chain of vegan hamburger restaurants in the United States, recalled how investors used to open their wallets just a few years ago. Now they have pulled out, adding to the financial pressure on sustainable eateries.
“The plot is that we all desperately need money. Access to resources and financing today is very different than it was in 2020 and 2021. People are holding on to their money more than before,” Cole said. She added that instability in the industry has led to some businesses going bankrupt. “I saw all my peers closing—every week another vegan restaurant closed.”
Cole added that many “green” restaurants and businesses will continue to struggle due to lack of capital. “It’s a difficult reality, but that’s because people—especially private equity firms and investors—are not being honest. believe they believe in the plant-based movement like they did before.”
