Rising economic pressures have slowed growth in the plant-based sector.
- Meatless Farm faced cashflow issues but was saved by VFC after a takeover.
- VFC continues to expand, launching new products while saving Meatless Farm.
- Beyond Meat reports significant sales decline due to various market challenges.
- LoveSeitan ceased operations due to unsustainable sales and market conditions.
The plant-based sector is experiencing significant challenges as economic pressures mount. Seventy-three percent of vegan shoppers are seeking ways to reduce grocery expenses, resulting in slowed growth and financial struggles for meat-free brands.
In May, Meatless Farm sought fresh investment to tackle its cashflow challenges, enlisting Kroll’s advisors with little time before running out of capital. Founder Morten Toft Bech remarked on the operational success but financial strain. By June, the workforce was largely redundant, with looming administration amid substantial losses. The brand’s rescue by VFC, described as a ‘golden opportunity’ by CEO Dave Sparrow, led to the return of several products to shelves.
VFC, launched in 2020, has notably increased its presence across major UK retailers while focussing on product innovation. Securing £7.5m in early 2022 from Veg Capital, it expanded its range, recently adding chilled chicken alternatives. In a strategic move, VFC acquired Meatless Farm during its administration phase.
Beyond Meat, while expanding its UK retail footprint last year, faced a 30% sales decline in its recent quarter. CEO Ethan Brown linked challenges to high inflation, recession fears, and health perception concerns. The brand is shifting marketing strategies to bolster sales, with adjusted expectations indicating significant drops from initial forecasts.
LoveSeitan, known for its high-protein wheat gluten products, concluded operations this month. Co-founder Steve Swindon cited tough market conditions and rising costs as pivotal factors in its closure, unable to sufficiently promote seitan’s benefits.
Another brand that sought growth through strategic funding was This. Since its 2019 launch, This has raised significant investment, reaching £15m in series B funding last year. Despite a difficult funding climate, the brand’s rapid growth and strong R&D efforts maintain investor confidence.
The plant-based sector faces significant hurdles as economic pressures impact brand performances.
