Last week, the alternative protein segment saw divergent paths as more plant-based players decided to shutter operations, while cultured meat reached significant milestones. The plant-based bacon startup, Hooray Foods, and the nugget maker, Nowadays, announced their plans to cease operations due to declining plant-based meat sales. According to Circana data analyzed by 210 Analytics, plant-based meat sales dropped 12.2% to $81.6 million in July compared to the previous year, with unit sales decreasing by 18.7% to 13.9 million in the same period.
In contrast, Upside Foods, a cultured chicken manufacturer, revealed its plans to open its first large-scale commercial plant near Chicago. Additionally, GOOD Meat, a subsidiary of Eat Just Inc., announced that leading Islamic scholars have certified cultivated meat as halal.
This divergence in the alternative protein segment sheds light on the ongoing struggle between increasing consumer interest in animal welfare and sustainable food production, and their unwillingness to compromise on taste, texture, and flavor. It also reflects the current economic landscape, where price sensitivity has heightened.
In the face of challenging economics, Hooray Foods, known for producing plant-based bacon, announced its decision to close down after four years in the market. Despite receiving financial and advisory support from reputable venture capital funds and consumers, the company explained that the economics of running its sizeable operation did not align with its revenue. Similarly, Nowadays, a two-year-old plant-based nugget maker, shared the disappointment of shutting down.
On the other hand, the cultured meat segment continues its rapid progress. UPSIDE Foods, the first company to receive FDA and USDA approval to sell cultivated chicken in the US, announced its plans to construct a commercial factory for cultivated meat. The facility, sprawled across 187,000 square feet, will be located just north of Chicago and have the capacity to produce up to 30 million pounds of meat annually.
In a significant development, GOOD Meat revealed that Islamic scholars have opined that cultivated meat can be considered halal. This ruling expands the potential consumer base as approximately 25% of the global population follows halal practices. With the global halal meat market estimated to reach $375.05 billion by 2030, this decision presents a lucrative opportunity for cultivated meat producers.
The alternative protein segment continues to evolve, with plant-based startups facing tough economic challenges, while cultured meat ventures make significant strides. As the industry navigates the delicate balance between consumer preferences and economic realities, innovative solutions and partnerships with key stakeholders will be crucial for future success.
