Catalan plant-based meat company Heura has announced its year-on-year sales grew by 22% last year, thanks to increased distribution deals across Europe. The business now aims to be profitable by 2025.

Weeks after closing a €40M ($43M) Series B fundraiser, Heura has revealed that it posted €38.3M ($41.4M) in turnover last year, marking a 22% increase in annual sales. The positive figures were bolstered by both international growth, where its sales rose by 63% from the year before – particularly in France (88%) and the UK (81%).

The plant-based meat company also cemented its leadership in its home market, capturing what it says is a record 26% market share and boasting the highest repeat rates in the category (50% above the average). Meanwhile, Heura’s portfolio accounts for four of the top five most-sold products in this sector in Spain.

“In a pivotal year of transformation for the plant-based sector, we emerged as a category developer leader, enabling other companies to accelerate the protein transition by introducing a licensing B2B division aimed at extending its impact to a global scale via breakthrough technologies,” said CEO Marc Coloma, who co-founded Heura with Bernat Añaños in 2017.

Expanding distribution and new B2B model fuel Heura’s growth

The announcement caps off a year of successes for Heura, which makes plant-based alternatives to chicken, beef, pork and fish in multiple formats. The company ranked 10 on the UK’s Forward Fooding FoodTech 500 list (described as “the Fortune 500 of agrifood tech”), won the Pyme del Año 2023 (which recognises the contribution of Spanish SMEs to the UK economy), and secured the EU’s Marie Curie Grant.

Outside of accolades, individual products experienced commercial triumphs too. The latest iteration of its signature beef patty, the 3.0 Burger, is the best-selling vegan burger in southern Europe, and has triple the rotation of the second-best brand in Spain. Meanwhile, the York-style ham slices launched in October became the top-selling plant-based deli product in its home market within three months, accounting for 52% of the category’s growth in Q4.

Heura also inked several new distribution deals across Europe, including with Vueling, Hilton and Royal Caribbean in foodservice, and Intermarche (France), Auchan (Portugal), Pam (Italy), Colruyt (Belgium) and Waitrose (UK) in retail. Plus, it boosted its presence in Spanish schools via a collaboration with catering company Serunion.

The other major development in Heura’s 2023 was the launch of its B2B licensing division, powered by its patent-pending Good Rebel Tech system, which was unveiled in April. The proprietary process involves a novel thermomechanical processing technique, which relies upon mathematical models similar to AI.

“We are basing our approach and models on new scientific understanding of plant proteins that we generate in the tech lab,” Coloma told Green Queen in October. “We can improve [the] accuracy of our predictions, limit biases and, most importantly, develop breakthrough technological solutions which are based on new scientific knowledge; rather than optimising technologies that already exist based on published existing data.”

The tech can create additive-free, affordable plant-based foods with superior sensory and nutritional values and fewer ingredients, using only protein, water and oil to structure the product. This is how its 11-ingredient clean-label ham slices were created, and it opens up a new business model for Heura, allowing the manufacturers to leverage the tech in multiple food categories. Just earlier this month, it entered a partnership with plant-based CPG giant Upfield (which is an investor in the company) to license its tech.

The clean-label, nutrition-forward aspects will speak to a European population that is eating less meat, and primarily due to health, a reason cited by 47% of respondents in a 7,500-person survey last year. The poll further revealed that nutritional inadequacies of plant-based food were a concern for 24% of consumers. Globally, too, an Ingredion survey found that 78% would spend more money on products with ‘natural’ or ‘all-natural’ packaging claims.

Heura finds success in a year of challenges for the sector

It’s not all about health for Heura, of course. The climate is just as important, and an ISO-compliant life-cycle assessment has revealed that its products have a 70-98% lower environmental impact than their conventional counterparts. Last year’s sales represented water savings equivalent to 6,600 swimming pools, carbon savings of 36.5 million kg (which could power 4,600 homes for one year), and the sparing of 1.3 million animals.

Heura’s €40M Series B financing was the second-largest publicly announced funding round for a vegan company in 2023, and took total investment in the business to €88M ($95M). The plant-based meat player had said it would use the funding to “boost its impact in the food industry”, accelerate international expansion, introduce new products, and explore more collaborative models beyond its own meat alternatives.

Most notably, Heura said the investment would help drive the company towards profitability – and now, it has confirmed its aim to become profitable by 2025. To do so, the business has “transitioned from a hypergrowth approach to a sustainable growth strategy”, which has involved changes to “improve efficiency and focus on the milestones nearing profitability”.

The financial results come just a week after plant-based meat giant Beyond Meat published its own Q4 earnings, which revealed an 18% decrease in annual revenue (which reached $343M), but a 2.5% reduction in net losses ($338M) from 2022 too. Its performance in the last quarter was better than analysts predicted, signalling a shift in fortunes for the company as well as the sector as a whole.

While VC activity has largely slowed down and sales have been disappointing over the last year, some feel that the sector’s slump will turn around this year. Matthew Glover, co-founder of the Vegan Food Group, told Green Queen this week: “The signs are that the declines are reducing, and I think we’ll be cheering the news that the categories will be back in growth during this year.”

While he acknowledged that double-digit growth won’t be a reality just yet for most plant-based meat companies – Heura has turned out to be an exception here – he added: “The economic climate generally seems to be improving, and there are some powerful advocacy programmes, which should help reengage consumers to the category.

“Whilst it’s a tough trading environment, I do feel like we’re soon to be over the worst of it. The planet and the animals need us to be successful, and I’m confident we will be.”

The post Heura Seeks Profitability After International Growth Spurs 22% Increase in Sales appeared first on Green Queen.

This post was originally published on Green Queen.

Plant-based giant Beyond Meat witnessed an 18% decrease in annual net revenue in 2023. Despite posting losses in Q4 too, its sales were better than expected, sending the company’s shares soaring and signalling a turnaround in fortunes for 2024.

Fresh from a product revamp with new recipes for its beef and burger analogues, Beyond Meat’s stock jumped by 78% yesterday after it posted higher-than-expected numbers in the last quarter of 2023. Quarterly revenue dropped by only 2% – compared to a 26% decline from Q2 to Q3 – to $73.7M, better than the $66.7M predicted by analysts. For the full year, the Californian company’s revenue fell by 18% to $343M.

“In 2023, Beyond Meat undertook extensive initiatives to reset the business toward sustainable operations and, ultimately, profitable growth. Much of this reset is now coming into view,” said CEO Ethan Brown. He added that the company’s plans for this year include reducing operating expenses, changing pricing structures, and right-sizing its production footprint, and rolling out the Beyond IV line of products.

“We believe these sweeping changes, together with measures we plan to pursue this year to bolster our balance sheet, will strengthen our near-term operations as we pursue our vision of being the global protein company of the future,” Brown said.

Beyond Meat discontinues jerky and forecasts improved margins

Beyond Meat’s Q4 net losses doubled from the previous quarter, reaching $155M. These were heavily impacted by the one-off charges of $85M from its global operations review last year, which was launched last November to reassess elements of the business that don’t line up with profitability plans (this also involved a potential restructuring of its China operations). The company finished the year with $10.6M in capital expenditure, 85% less than 2022.

It further managed to bring down its operating expenses by 19% to $259M, following a year where it laid off 19% of its global non-production workforce (about 65 employees), consolidated its operations from 13 co-manufacturing locations in North America to just one, and discontinued its slow-selling beef jerky line (which it launched in 2022 through a partnership with PepsiCo).

“These refinements allow focus and resources to be put against our latest product platform renovation, Beyond IV, and other SKUs,” Brown said in an earnings call to analysts and investors, outlining why the company decided to discontinue the jerky, despite its position as the top-selling vegan jerky. He added that the reformulated beef products and its other analogues have a higher growth potential in the US, and that the changes reflect the business’s increased focus on Europe.

Moreover, the alt-meat giant’s yearly losses shrunk by 2.5% at $338M, and the significant restructuring and cost-cutting activities last year mean it is able to forecast improved margins for 2024 (these were in the negative in 2023).

Beyond Meat has an outstanding debt of $1.1B – owing to convertible notes (a type of investment that begins as a loan and turns into equity) that are due to be paid back in 2027. “We’re doing everything that we need to do to fix the fundamentals of the business so that we are a lower cash consumption business with a longer-term goal, obviously, of getting to sustained free cash flow positive,” said CFO Lubi Kutua.

US sales falter but McDonald’s deal boosts European performance

Beyond Meat witnessed a 32% fall in year-over-year sales in its home market in 2023. Despite pricing its products lower in grocery stores, retail revenue dropped by 27%, while foodservice figures were also down by 26%. It reflects the larger decline in US retail sales of plant-based meat, which dipped by 11% to just over $1B in the year ending January 28, 2024.

Brown ascribed this to the polarisation and politicisation of plant-based meat in the US, noting that the biggest consumption barrier for Americans is the health attributes of these products. While half of US consumers found meat alternatives healthy in 2020, that number fell to 38% in 2022. And this loss in faith has since continued, with a Mintel survey from last year showing that nutrition is the second-biggest reason (35%) for Americans’ reticence to try plant-based meat. “It’s not just the animal protein players and their lobbyists, it’s actually members of the pharmaceutical industry, which I find to be kind of disturbing, actually,” said Brown.

Beyond Meat has made health the focal point of its marketing efforts, with its latest marketing drive honing in on the Beyond Steak, which was certified as ‘heart-healthy’ by the American Heart Association (AHA). It has continued to do that with its new Beyond Burger and Beef, which has undergone a recipe change that now includes avocado oil, fava beans and red lentils, and has 60% less saturated fat, 20% less sodium, 20% more calcium, and 12% higher potassium content.

“The current climate of misinformation and efforts by incumbents – including, sadly, pharmaceutical interests – to poison the plant-based meat well push us to accelerate gains in the health profile of our product platforms,” noted Brown, adding: “We had to right the message. We can do that by yelling from the rooftops about the benefits of our existing products, or we can just try to make them even more healthy and unassailable.”

The company’s performance internationally, however, has improved by 18% from 2022-23, with both retail and foodservice sales up. This is thanks in large part to its European deal with McDonald’s, which uses the Beyond Beef patty for the vegan McPlant burger. Brown highlighted that the business had witnessed “continued traction at McDonald’s across countries such as Austria, Germany, Ireland, the Netherlands, UK, Malta, Portugal, Slovenia, and Switzerland”.

Beyond Meat to increase prices in the US this year

When Beyond Beyond Meat announced its product reformulation last week, Green Queen reported that the new burger and mince would be more expensive, given the use of premium ingredients like avocado oil. Now, it has emerged that this will coincide with a larger overhaul of the company’s pricing structure, which will see some of its products in the US become more expensive. Brown insisted that this “does not reflect an abandonment of our long-sought price parity goal, which we in fact achieved in certain very specific offerings”.

“Pricing just wasn’t as effective a tool,” he revealed. “We probably ended up selling a lot of our products to the same consumer at a reduced price. So we learned that and moved away from it.” Outlining the reasons for the higher markups, he said restoring margins was important, while the pricing programmes the company previously implemented failed to convert early adopters into the mainstream.

“In certain areas, there will be more of a delta between animal protein and ourselves, but in others, there will not be. And so, this is not a kind of crude application of a price increase. We have some very important partnerships and relationships where getting on the product line, there won’t be much change,” explained Brown.

“In retrospect, the noise and swirl surrounding the category reached decibels that were perhaps sufficient to ground out pricing and other messages,” he noted, adding that the new cost structure would take on a tiered approach across its product lines. “I do think there’s a real opportunity to continue to offer outstanding innovation year after year that does have a more premium price on it, while you continue to offer some of the rest of your portfolio at lower pricing.”

This is something Beyond Meat’s chief communication officer, Shira Zackai, highlighted last week. “Based on the significant nutritional benefits and elevated taste profile of these new products, we feel confident in the value we will be providing to consumers relative to their cost,” he told Green Queen.

The price hikes will be implemented in the US this year, but in markets like Europe, Brown admitted that the company had to adjust retail prices, which were “just too high”. Kutua highlighted that a big reason for this is the higher level of private-label penetration in Europe compared to the US. He explained that the company narrowed the price gap with its competition two years ago in Europe, but it still carries a premium in certain categories, and over time, the goal would be to further bridge that gap – though it’s not an immediate concern.

One thing the company will look to do in 2024 is expand its presence in German retail, which would be a shrewd move considering it is Europe’s largest plant-based market. Beyond Meat forecasts its 2024 revenues to be level with last year’s, between $315-345M, with Q1 sales for this year also expected to remain in the $70-75M range.

“We’re cautious in our optimism,” said Brown. “We’ve obviously had some tough years, but by making these changes and creating the sustainable baseline for which we can grow, we’re going to create some room for ourselves to execute and get back on track for growth.”

The post Bye Bye Jerky: Beyond Meat Posts Better-Than-Expected Q4 Sales, Plans Price Increases for 2024 appeared first on Green Queen.

This post was originally published on Green Queen.

From pollution and destruction to disease, the societal costs of livestock meat production are an incredible burden.

In 2020, the average American ate almost 280 pounds of meat, a figure which is very likely higher today.  Many European and Latin American countries, not to mention Australia, New Zealand, Canada and Hong Kong also eat a large amount of animal meat. In most industrialized nations, animal proteins are at the center of the average person’s breakfast, lunch, and dinner plate. But what of the costs to our collective health and environment? This past December, the UN’s Food and Agriculture Organization (FAO) released a paper showing that our food systems, which we know to be based on animal proteins, externalizes $12.7 trillion in costs to society. That is an estimated 10% of global GDP.

Why does meat cost society so much? 

There is no shortage of research linking excess meat consumption to chronic disease. Both the Journal of American Medicine (JAMA) and The National Library of Medicine show that regularly eating processed meats (bacon, sausage, deli slices, hot dogs) can cause heart disease. The World Health Organization qualifies processed meats as carcinogenic. Further, meat consumption is associated with rising levels of diabetes and obesity, as per the National Library of Medicine. All this illness costs the average taxpayer dearly: from debilitating personal illness to skyrocketing healthcare costs, not to mention severe environmental damage and considerable economic loss.

For example, a 2018 Milken Institute report suggested that the $1.1 trillion in U.S. healthcare costs for chronic diseases such as heart disease, cancer, diabetes, and obesity, as determined by the Center for Disease Control (CDC) is closer to $3.7 trillion when lost economic productivity is included. “This is equivalent to nearly 20 percent of the U.S. gross domestic product (GDP),” according to the report authors.   

The FAO paper, published during the UN climate conference COP28 where sustainable and healthy food systems advancements were part of the main programming for the first time, noted that 73% of the $12.7 trillion cost to society was due to dietary pattern-induced productivity losses. In laypeople’s terms, we pay for our addiction to meat and other processed foods in more ways than at the grocery store.

Another societal cost of our meat-dependent food systems, perhaps not reflected in the $12.7 trillion, is our growing antibiotic resistance. Livestock animals are raised in cramped conditions where disease is rampant, and as such, require enormous amounts of antibiotics (over 70% of all antibiotics produced globally are used by the livestock industry). By consuming meat, we ingest those pharmaceuticals and develop a resistance to them.

Then, there are the environmental costs of our current food system, which the FAO report says “have an expected value corresponding to about 20 percent of total quantified hidden costs [$2.6T] caused by agrifood systems. Of these, more than half pertained to nitrogen emissions (mostly from runoff to surface waters and ammonia emissions to air). These were followed by the contributions of greenhouse gas emissions to climate change (30 percent), land-use change costs (14 percent), and water use (4 percent).” 

Big Meat’s media tricks and the taxpayer burden

Through sophisticated media campaigns that follow the PR playbook of other polluting industries such as fossil fuels and tobacco, the livestock industry has convinced the average consumer that meat is healthy, a non-negotiable part of their cultural identity, and that they can’t live without it. Made aware of the significant costs and tax burden of livestock meat production detailed above, would most people choose differently? 

Alas, the duping of society by the Big Meat lobby is quite seductive. Take, for example, a Big Mac. What appears to be one of the cheapest meals/foods available to a US consumer, is actually quite costly upon further review, in large part because of external costs (see above) and substantial meat production subsidies. According to a paper by the American Institute for Economic Research titled ‘The True Cost of a Hamburger’, “the United States federal government spends $38 billion every year subsidizing the meat and dairy industries. Research from 2015 shows this subsidization reduces the price of Big Macs from $13 to $5 and the price of a pound of hamburger meat from $30 to the $5 we see today.” Guess who pays for those subsidies in the end? That’s right! It’s us, the taxpayers. Not only are we incentivized to eat foods that make us sick and damage our environment, we are made to pay for it through taxes. Not only is this infuriating, it’s fiscally irresponsible. Not to mention it’s all in the service of a very below-average hamburger.

Food system innovation is the silver lining

There is a silver lining: investing in food system innovation. Per the U.N.E.P., despite livestock farming accounting for up to 18% of global greenhouse gas emissions, agrifood tech funding accounts for only 4% of global climate investments.

Public markets haven’t yet priced in the true negative costs of livestock meat production and the full positive potential of future food innovations. Now is the time to invest in what some might call a golden opportunity.

Where there is inefficiency, there is disruption through innovation. Markets thrive on this, and eventually, the great solutions rise to the top and there is mass adoption across society. Think of how the horse and buggy gave way to the automobile, the film developing industry gave way to digital imaging and the landline gave way to the cell phone. Today’s smart protein industry is alight with innovation that makes animal factories look like the dark-age torture relics they are.

Indeed, innovation for efficient protein diversification through plant-based foods, precision fermented proteins and cultivated meat is growing, and the benefits are many. With alternatives, society can meet the rising demand for protein from a growing, economically-mobile and urbanizing global population for a fraction of the health and environmental costs, as noted by the COP28 host nation the UAE’s Minister of the Environment Her Excellency Mariam Almheiri during the conference.  

We can see the path to food systems change is already taking shape with pioneering startups hitting key milestones. Israel’s Aleph Farms, for example, has just received approval from the Israeli government for the public sale of cultivated beef. Their peers at Upside Foods and GOOD Meat received US regulatory approval for cultivated chicken in June of last year. In the past few weeks, several precision fermentation dairy companies have earned FDA self-affirmed GRAS status for their animal-free dairy proteins. Meanwhile, the plant-based industry continues to iterate and work to improve taste, ingredient quality and health credentials.

It’s never been a better time to invest in the future of food, and it’s never been more important. Soon, Governments across the world are waking up to this reality. In the meantime, you and your financial portfolio could potentially benefit from the market’s assymetry.

The post Society’s Burden: How Taxpayers Carry the Crushing Costs of Livestock Production appeared first on Green Queen.

This post was originally published on Green Queen.

US mycelium meat maker Meati has appointed a new CEO and cut 13% of its workforce in a right-sizing move aimed at reaching profitability.

Meati has switched up its C-suite by making Phil Graves its new CEO. The former Patagonia executive, who joined the alternative meat startup just two weeks ago as CFO, takes over from Meati co-founder Tyler Huggins, who will move into the role of chief innovation officer. It follows ex-COO and president Scott Tassani’s exit earlier this month.

Amid restructuring in the wider food industry, the Colorado-based company has also let go of 13% of its workforce, marking the business’s third round of job cuts in nine months. The decision to right-size has been made with an eye towards accelerating the company’s path to profitability. The details of any severance packages are unclear, but Meati said it doesn’t expect any supply chain disruptions due to the layoffs.

Graves argued that although such changes are challenging, they’re essential for aligning resources with profitability objectives. “These changes allow us to better serve our customers and pave the way for long-term, sustainable growth,” said the new Meati CEO.

Meati layoffs come after a challenging year for plant-based meat

In June last year, Meati laid off 17 employees (about 5% of its workforce), followed by another round of cutbacks in September that saw 30 staffers (10% of the total at the time) lose their jobs. This was accompanied by a reshuffle that meant the elimination of 60 positions, as well as the shuttering of its pilot plant.

Striking a similar tone to Graves now, a Meati representative told Green Queen at the time: “These job cuts, while incredibly difficult, are a necessary part of ensuring we achieve a sustainable business model. Despite creating incredible products and an excellent commercial start in the market, we must be nimble and focus on near-term profitability.”

They added: “Meati is a young, disruptive company navigating uncharted territory – bringing a novel food to the forefront of a highly competitive industry in a challenging economic climate. Each of these factors requires us to regularly evaluate every aspect of our operations.”

Meati is not the only plant-based meat company to have cut its workforce over the last year, which has been incredibly challenging for the industry in terms of both funding and sales. Beyond Meat, one of the sector’s leading companies, laid off 19% of its global non-production workforce (about 65 employees) last year in an effort to reduce operating expenses and improve its cost structure, after reducing its annual sales forecast. A few months prior, rival company Impossible Foods let go of 20% of its staff.

Circana data crunched by 210 Analytics reveals that retail sales of meat analogues dipped by 11.1% to $1.05B in the 52 weeks ending January 28, 2024, while volume was down by 16.5%. In comparison, sales of fresh meat declined only by 0.5%, with volumes decreasing by 1.5% in the same period.

Investment has also slowed down in the plant-based protein space, as part of a wider funding hurdle for food tech. In the first half of 2023, plant-based companies attracted just $124M in investment – while data for the second half is yet to be updated, it still represents an alarming drop from the $1.2B injected in the sector for the full year of 2022.

Meati – which has raised over $275M in total investment – said its latest cutbacks follow precedents set by other leading companies “navigating transformative market shifts”. Last month, over 6,650 layoffs were publicly announced in the food sector, which is the highest number of monthly cutbacks in the sector since November 2012 (which were a result of factory closures), according to data from Challenger, Grey & Christmas Inc.

Meati continues to grow, targeting 10,000 retailers by year-end

Graves’ move from CFO to CEO leaves the company without a dedicated chief financial or commercial executive, but a spokesperson for Meati told AFN that the departure of Tassani, who joined TreeHouse Foods after two years at Meati, wasn’t sudden: “He took another role that was offered to him that he couldn’t pass up. Scott left before Phil was brought in as CFO, and that hiring process had been ongoing.”

The reshuffle sees Huggins, who founded Meati alongside CSO Justin Whiteley in 2017, move to a product-focused position. He will oversee the launch of a new foodservice Chef Cut product and drive the business’s sustainability initiatives. “I am incredibly proud of what we have achieved to date, and I am confident that in Phil we have found the right individual to lead the company to our next exciting chapter,” said Huggins.

Despite the layoffs last September, though, Meati added nearly 100 positions to amp up production capacity for its mycelium-based chicken and beef alternatives, which have been produced in a ‘mega ranch’ facility in Thornton, Colorado since January 2023. This will ultimately be capable of manufacturing 40 million lbs of meat analogues annually to rival the output of animal farms, which will help the company achieve its goal of $1B sales, which was previously earmarked for 2025, but may now be pushed back.

“Our future is bright. This category-defining product is already in 3,600 stores nationwide after just one year of production, showcasing its boundless potential,” revealed Graves. Its products are available in Whole Foods Market, Meijer, Cub Foods and Sprouts Farmers Markets, among other retailers, while it launched a D2C marketplace in September alongside a subscription service for new product trials. By the end of this year, it aims to enter 10,000 retail doors.

The company added chicken nuggets, jerky SKUs, and more flavours to its roster ahead of Christmas, all powered by its patented MushroomRoot ingredient, its commercial name for the Neurospora crassa strain of mycelium. An AI-led study has shown that this ingredient, whose whole-food nutritional density could address “prevalent nutritional deficiencies” and enhance “cardiovascular health”, also boasts certain “exceedingly rare/non-existent” compounds in food that present “pointed” health benefits.

It’s a leading company in the red-hot mycelium protein space, which has seen a bunch of innovations and developments in the last year, including Esencia Foods‘ whole-cut seafood analogues, Better Nature‘s soybean mycelium chicken, Libre Foods‘ whole-cut chicken breast, and Bolder Foods‘ cheese alternatives. Plus, investors have shown heightened interest in the sector, with MyForest Foods bagging a $15M Series A extension in June and Infinite Roots securing $58M in Series B funding last month.

It speaks to the potential of mycelium, with a study authored by Meati employees revealing that the fungi can take on different desired tasting notes through biochemistry and flavour chemistry, while being high in protein with all essential amino acids and micronutrients. It has been shown to lower LDL cholesterol too, with the potential to reduce food waste by valorising the sidestream and be produced in a cost-effective manner.

The study argued that mycelium could resolve global hunger and food insecurity if scaled effectively with enough investment and consumer education: “Once achieved, mycelium will certainly be appealing as an environmentally friendly, nutrient-dense protein source that can aid in the reduction of global hunger.”

The post 10,000 Locations by Year-End: Meati Appoints New CEO, Lays Off 13% Staff in Bid for Profitability appeared first on Green Queen.

This post was originally published on Green Queen.