Lifeless Market For Meatless Meat
The dream of plant-based chicken, pork and beef appears to be withering.
Chloe Sorvino, Forbes
Jun 18, 2022
Ross Mackay and Eliott Kessas emigrated from Scotland with a dream. The longtime vegans founded Daring Foods, a meatless chicken-nugget startup, with the aim of reducing unhealthy meat consumption and creating more climate-friendly foods. At first, it caught on. Daring’s nuggets secured shelf space in Sprouts stores, Whole Foods and some Albertsons and Target locations.
Then came the big money. In October 2021, the Los Angeles-based brand, not yet two years old, raised $65 million at a valuation of more than $300 million. Investors included D1 Capital Partners, a hedge fund that’s backed companies such as Instacart, as well as DJ Steve Aoki and tennis superstar Naomi Osaka. All told, Daring has raised more than $120 million.
Less than a year later, however, the bottom is falling out. There are more than 100 plant-based chicken-nugget companies, many of them with products similar in taste and texture. To break out from the pack, Daring hired newlyweds Kourtney Kardashian and Travis Barker to take photos eating the faux nuggets while wearing lingerie. It was unclear whether the result — 1.2 million likes on Kardashian’s post; 5 million on a video Daring posted — was enough to goose sales. There’s simply too many brands struggling for space on supermarket shelves, and the rare chefs who adopt meatless products for their restaurants are reluctant to keep unpopular items on the menu. Consumers are ruthlessly weeding out the market while investors tread lightly now that money is more expensive than it’s been for a decade.
“Capital was free almost for a long time and now it’s very, very expensive,” Mackay, Daring’s CEO, told Forbes. “We’re aware of the situation. We have to be as effective and efficient as possible.”
Plant-based meats seem to fizzle before the trend ever really got going. Through the early weeks of the pandemic, fake-meat sales grew some 200% at retail outlets, and the hype around that helped the sector secure more than $2 billion in funding. Yet, aside from that brief spike in 2020, the foods haven’t sold well. In 2021, sales in the U.S. stagnated, according to the latest data from the Plant-Based Foods Association. Global growth in annual retail dollar sales has been slowing, too. Last year they rose 17% to $5.6 billion after growing 33% in 2020.
An estimated 79 million U.S. households are purchasing meatless meat alternatives, according to the association, little changed from 2020. The question remains whether customers purchasing the analogous products are simply trying new foods or if they’re coming back to purchase again. So far, the retail data shows repeat buying rates have grown by inches, from 78% of customers in 2020 to 79% in 2021.
“Where plant-based meat hasn’t cracked the code is repeat purchasing,” said investor Catha Groot, a partner at Radicle Impact, the fund cofounded by Kat Taylor, the wife of billionaire Tom Steyer...