Wednesday, 28 Feb 2024

Meati Foods, plant-based protein producer, to cut 20% of its positions

Following the launch of its products in Whole Foods stores nationwide, Meati Foods, which makes plant-based meat alternatives, is cutting about 20% of its positions to focus on becoming more profitable.

The Boulder-based startup announced the cutbacks Tuesday. Scott Tassani, president and chief operating officer of Meati, said while about 60 positions will be eliminated, the actual number of layoffs could be roughly 30.

“There’s some opportunity where we’re deploying folks into different roles within the organization,” Tassani said.

The current workforce is about 300 people.

Meati started selling its cutlets and steaks, made from mushroom root, in more than 500 Whole Foods in July. Tassani said the company’s products are available in about 1,200 stores across the country.

“Our sales and our pipeline of customers that are interested are as robust as ever,” Tassani said.

Tyler Huggins and Justin Whiteley founded Meati in 2016, working with Venture Partners at the University of Colorado-Boulder. The company, which had a pilot plant in Boulder, moved into a 120,000-square-foot manufacturing facility in Thornton earlier this year.

Tassani said the privately held company doesn’t disclose its sales and revenue or the amount of money it has raised, but added that a recent extension of its Class C fundraising series was positive. Going forward, Meati will focus on increasing its profits.

“With the cost of capital being higher, there’s a direct challenge for an accelerated pace of profitability,” Tassani said. “One of the things that we have decided is that we have to get to a more sustainable business model that’s not just all about growth and speed.”

Meati is decommissioning its pilot plant in half of a 25,000-square-foot building in Boulder. Some of the company’s senior leadership positions are being eliminated.

The company laid off 17 people, or about 5% of its workforce, in June. Workers who lose their jobs will receive severance packages, Tassani said.

The alternative-protein market drew $14.2 billion in private capital over the past decade, according to Food Business News. The publication said companies using a fermentation process to make their products raised $842 million in 2022, with Meati drawing the largest amount in that category.

But the overall level of investment in alternative proteins dropped 42% in 2022 from the previous year, the Good Food Institute reported.

“I think the perception is more negative than the reality,” Tassani said.

Tassani sees plenty of opportunity for growth in the market. He said data shows that 4 out of 10 people who buy Meati products are first-time buyers of plant-based alternatives to meat.

“We are very confident that we will exit the year with thousands of stores carrying our product and we’ll be on the path to profitability in 2024,” Tassani said.

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