Running a sustainable butcher shop or alternative meat company can be difficult for a variety of reasons. High costs and consumer fatigue from inflation, to name a few. But business leaders in the field say the biggest challenge is financing.
Brent Young, founder of Meat Hook, a sustainable all-animal butcher in Brooklyn, said at the Fortune Impact Initiative Conference on Wednesday that the biggest obstacle he faced was attracting investors to his business, Venture capitalists can do it.
“Everyone likes the idea, but banks just don’t want to take a big risk on it,” Young said. “It’s slow money, and there are slow money angel investors out there. But if you need $1 million and someone is willing to lend you $10,000, that’s not particularly helpful. .”
Significant funding for alternative protein startups has plummeted from $2.11 billion in 2019 to just $250 million in 2023. Consumers appear to be retreating as well. Sales of plant-based foods in the United States will decline slightly from $8.2 billion in 2022 to approximately $8.1 billion in 2023, with the percentage of households purchasing these products increasing from 19% to 15% over the same period. It decreased to Affordability and quality have become major concerns for customers.
Other sustainable meat industries are also in trouble. Bryce Klein, co-founder and chief operating officer of Choppy, a ready-to-eat meat alternative company, agrees that financing is the biggest business hurdle. He noted that venture capitalists are pouring money into alternative protein companies, but many say these products are not meeting consumer expectations.
“It’s hard to convince someone who’s already had a slightly bad experience to come back and try something that might be better,” Klein says.
This can be discouraging, especially when funding alternative meat companies used to be easier. Pinky Cole, founder and CEO of American vegan burger restaurant chain Slutty Vegan, recalled how investors opened their wallets just a few years ago. Now they are leaving, and the financial pressure on sustainable eateries is getting even worse.
“The story is that we all need money so badly. Access to resources and financial resources is very different now than it was in 2020 or 2021. People are holding onto their money more tightly than before. ,” Cole said. He added that instability in the industry has caused several businesses to fail. “I’m watching all my colleagues close. Every week a different vegan restaurant closes.”
Cole added that many “green” restaurants and businesses will continue to struggle to get back on their feet due to a lack of funding. “The harsh truth is, it’s because people, especially private equity firms and investors, aren’t honestly thinking that they believe in the plant-based movement as much as they did before.” ”
