Fungi-fueled alt meat startup Meati Foods has laid off 5% of its employees this week, three months after opening a new production facility in Thornton, Colorado, but says the move does not reflect weak demand for its products.
The layoffs—first reported by The Denver Post—follow recent reductions in headcount at Impossible Foods and Beyond Meat, and came as Circana released data* showing US retail sales of meat alternatives have continued to slide, falling -9.2% year-over-year to $82.3 million in April, with unit sales down -16.4%.
VP marketing communications Christina Ra told AFN that Meati’s mycelium-based whole cuts—launched in March—were resonating with shoppers: “Meati is available across a number of retailers including Sprouts and Meijer. Our commercial relationships remain incredibly strong, and we are in the process of finalizing partnerships with key retailers and foodservice operators across the US to dramatically grow Meati’s footprint.”
She added: “Meati remains on plan for a national, omni-channel footprint later this year, and demand continues to heavily outpace supply. We’re as bullish as ever on our short- and long-term opportunities and plans to capture 20% of what we think will be a $5 billion retail market in five years. We look forward to sharing news in the coming weeks that demonstrates we’re firmly on track.”
‘We’re as bullish as ever on our short- and long-term opportunities’
Asked why the company had laid off staff, she said: “Building a disruptive company with a novel product from the ground up is not straightforward. It requires consistent agility to adapt, and we have applied incredible learnings to our operations to not only produce what it takes to deliver our near-term growth but also support future ranch designs.
“On this path to scalability, we continuously identify the most strategic way to allocate our resources, and unfortunately, this week, we identified a small number of positions that were eliminated from Meati’s workforce, totaling 17 or 5% of the company. Conversely, we also created all-new roles, many in engineering, that will further ensure Meati’s long-term success.”
Mycelium-based whole cuts
Founded in 2015 by engineers Dr Justin Whiteley and Dr Tyler Huggins, Meati is seeking to differentiate itself in the meat alternatives market with a fungi-based platform capable of producing whole cuts of alternative meat from mycelium, the filamentous-like roots of mushrooms.
The Boulder-based startup—which has raised well over $250 million from investors including Revolution Growth and Grosvenor Food & AgTech—recently started production at its “Mega Ranch” in Thornton Colorado.
The Thornton facility will ultimately be able to produce 40 million pounds a year (the equivalent of about 151 million 120g steaks), said president and COO Scott Tassani, who told reporters in February he expected to capture “20% of what we think will be a $5 billion retail market in five years.”
While such bold predictions raised eyebrows at the time, given that the firm was barely out of the starting blocks, Meati has the potential to disrupt the market, Tassani told AFN.
“We have a pipeline of customers that want Meati, and it’s unlike anything I’ve ever seen in my many, many years at General Mills, and I’ve launched thousands of new products. The first third of the Mega Ranch is fully operational at this point and we still have significantly more demand than we have product [to supply] in the near term. However, we will have a national omni-channel footprint by the end of 2023.”
*According to Circana data crunched by 210 Analytics, US retail sales of meat alternatives fell -5.2% to $1.1 billion in the 52 weeks ending April 2, 2023 (total US, MULO, integrated fresh).