Alt proteins’ diminishing hype

The plant-based meat market used to be hot. When Beyond Meat IPO’d in May 2019, shares shot up 163% in a single day. By June, its valuation had reached $10B. 

Today, Beyond Meat’s market cap is ~$258m, as the alt proteins space struggles with inflation and investor pullback. 

• Willicroft, a Dutch plant-based dairy company, announced its closure due to funding difficulties last month. Co-founder Brad Vanstone wrote in a LinkedIn post that in the company’s six-year history, it produced as much cheese as one of his grandfather’s cows had in its lifetime. 
• Sundial Foods, a California-based alternative protein startup backed by Nestlé, recently closed, citing a “challenging” fundraising environment, but sold its IP to an unnamed European food company.
• San Francisco’s SciFi Foods shuttered last year, also citing a tough fundraising market, despite its hybrid meat (plant-based and cultivated) having reached price parity with traditional beef. 

Why is the fundraising environment so “challenging”? 

Investments in alt proteins slowed in 2023 due to high interest rates, plus concerns over climate change, the economy, and political discourse surrounding alternative proteins. 

• Fundraising for cultivated, or “lab-grown,” meat plummeted by 75% from 2022 to 2023, while alt protein dropped by 44%.

Plant-based is still a growing market, per Seeking Alpha, but customers remain unconvinced — despite the good it’d do for the environment.

Real meat is usually cheaper, and vegetarians can find more affordable options in tofu, tempeh, and other brands. Many restaurants have dropped plant-based meats from their menus amid lackluster customer interest. 

Legislative and regulatory challenges have plagued the cultivated meat market, with Italy, Romania, France, and US states Florida and Alabama banning its sale. 

But is there good news for the lactose intolerant?

We’ll see. California startup Climax Foods worked with artificial cheesemakers and casein proteins to develop cheeses that reviewers say taste just like the real thing. 

A climate-conscious, easier-to-digest cheese that actually tastes good could win over consumers, but Climax has still struggled with funding and scalability. 

There is at least one interested investor, however: In 2024, Lauren Sánchez, Jeff Bezos’ fianceé and vice chair of the Bezos Earth Fund, announced a $60m contribution to build Bezos Centers for Sustainable Protein, which will attempt to develop better tasting, healthier, and cheaper alternative meats.