Running a sustainable butchery or meat alternative company can be tough for all sorts of reasons: Costs are high and consumers are worn down by inflation, just to name a couple. But business leaders in that space say their biggest challenge is raising money.
Brent Young, founder of the Meat Hook, a sustainable whole-animal butcher in Brooklyn, said at the Fortune Impact Initiative Conference in Atlanta on Wednesday that the largest obstacle he faced was getting investors to kick in for his business, and the only ones he could get were venture capitalists.
“Everybody loves the idea, but banks just don't want to take a big risk on that,” Young said. “It's slow money, and there's some slow-money angel investors out there. But when you need a million dollars and someone is willing to lend you $10,000, it's not particularly helpful.”
The amount of large funding to alternative-protein startups plummeted from $2.11 billion in 2019 to just $250 million in 2023. Consumers seem to be retreating as well. Sales of plant-based food in the U.S. dropped slightly to about from $8.2 billion in 2022 to $8.1 billion in 2023, while the percent of households buying these products fell from 19% to 15% over the same period. Affordability and quality have become major concerns for customers.
Other sustainable meat businesses are feeling the squeeze too. Brice Klein, cofounder and COO of Choppy, a meat alternative company selling ready-to-go meals, agrees that funding is his biggest business hurdle. He noted that venture capitalists have thrown money at alternative protein companies, but many have told him that these products are not meeting consumer expectations.
“It's hard to convince people to come back and try something that might be notably better, when they've already had a slightly soured experience,” Klein said.
This can be disheartening, especially when funding for alternative meat companies used to be more attainable. Pinky Cole, founder and CEO of Slutty Vegan, a vegan hamburger U.S. restaurant chain, reminisced on how investors used to open their wallets just a few years ago. Now they’ve pulled back, exacerbating financial pressure for sustainable eateries.
“The story line is that we all need money very much. Access to resources and financial resources is a lot different today than it was in 2020 and 2021. People are clutching their money more than they did before,” Cole said. She added that instability in the industry has led to several businesses going under: “I see all of my peers closing their doors—every week there's a different vegan restaurant closing.”
Cole added that many “green” restaurants and businesses will continue to have a hard time getting on their feet because of this lack of funding, “It's a hard reality, but it's because people—especially private equity firms and investors—don't honestly believe that they believe in the plant-based movement like they did before.”
