Plant-based meat’s fatal flaw makes it the latest victim of the everything bubble: ‘Worse-tasting products that aren’t healthier than the real thing’

Irina Ivanova
Sat, February 17, 2024


The 2020s have been a real one so far. The interest rate shock that followed the highest inflation since the 1980s have created a world where money is just more expensive and it’s disrupting business models from dating apps to streaming services to commercial office leasing. And then there’s plant-based meat.

Once seen as the answer to human health and climate change, alt-meat startups raised nearly $15 billion in venture capital funding over the last dozen years. But they've now flamed out, and funding for food-technology startups has fallen to the lowest level in nearly a decade. Venture-capital bible Pitchbook, which has been tracking the carnage, recently asked, “Have we hit peak plant-based meat?”

And yet, reasons to eat mostly plants are more abundant now than ever. The Earth’s climate has just passed a key tipping point, with global temperatures for the past year 1.5 degrees Celsius above pre-industrial levels. Animal agriculture is the biggest industrial source of water pollution and takes up three-quarters of the world’s agricultural land. Americans with means are intensely interested in eating more healthily, and they’re well aware of plant-based foods.

“Of all the foods we eat, meat and dairy have the biggest impact. Globally, it makes up around 11% of all greenhouse gas emissions,” said Paul West, senior scientist of ecosystems and agriculture at Project Drawdown, an organization focused on climate solutions. “Changing what we eat and what we waste is essential to reduce emissions.”

So what went wrong with the plant-based meat promises? It comes down to price, taste, and the health factor, according to industry analysts and former workers.

Price is a major factor. It’s far cheaper to make a pot of rice and beans than a steak. But on the supermarket shelves, Beyond, Impossible and other plant-based burgers are consistently pricier than their animal counterparts—about 30% more, when compared to burgers.

“Plant based proteins [are] listed typically at a price premium, and typically when you're talking about traditional beef, a 30% to 40% price premium, so I think that's a very challenging sell in this inflationary environment," Alex Frederick, senior emerging technology analyst at Pitchbook, told Fortune. “Also, in an inflationary environment, it's challenging to get consumers to try new or more premium products.”

According to the nonprofit Good Food Institute, which promotes meat alternatives, price is a barrier for one in five people who don’t eat plant-based meats, and for one in four who eat them infrequently. GFI suggested consumers would be willing to pay just 5% to 10% more for alt-meat than animal meat.
‘We didn’t love it’

Saba Fazeli worked at Beyond Meat for five years after getting an education at Stanford as a mechanical engineer and eventually came to the conclusion that completely plant-based meats would never substitute for the real thing.

“It was really exciting; I was really proud to be doing that work,” Fazeli, 29, told Fortune. But after a few dizzy years, the market spoke. In 2022, Beyond’s sales fell 10%. In the third quarter of last year, the most recent available, U.S. sales were down 31% from 2022. Across all plant-based foods, unit sales between 2020 and 2021 were flat, and fell in 2022, according to GFI.

“The mass-market response was not an overwhelming, ‘Yes, we will give up meat and do this forever,’” Fazeli said. “It was more of a, ‘We tried it and we didn't love it, so we're not going to do it again.’”

Fazeli’s heart is still in the space—he left Beyond to co-found a startup that makes mostly plant-based meat. But he named several reasons for the price disparity between veggie burgers 2.0 and their animal-based counterparts.

Most of the ingredients that go into alt-meat patties—grains, rice, seed oils, soy—are relatively cheap, he said. But the chemical engineering that goes into “the last little bit,” making it taste meaty, is pricey. “Trying to emulate the fat-melting characteristics of a true animal fat with plant fats, all those little ingredient components that are added are what both contribute to the long ingredient list and also drive the cost up for the plant-based meat products.”

There's also the problem of scale—as startups, many plant-based meat companies are competing with industry players that are many times larger and benefit from efficiencies of scale. Startups might have to spend more money on marketing or trying to get themselves in front of consumers.

That’s not to mention the government subsidies available to animal agriculture. Consider one Berkeley study, which found that removing subsidies would push the price of a Big Mac from $5 to $13, even higher than typical supermarket prices for plant-based meats.

To be sure, engineered plant-based proteins have only been on the scene for an eyeblink compared to the two centuries over which humans have developed the industrial meat system. In a statement, an Impossible spokesperson said: “The plant-based category is just getting started. This is a $7.5 billion global industry compared to the $1.4 trillion animal meat industry. Meat analog products like ours have only been in-market for less than a decade and at mass in just the last few years."

The spokesperson added, "We're the only plant-based meat company in the US seeing consistent growth and we're outpacing all our competitors in both dollar sales and unit sales."

Beyond Meat did not respond to a request for comment.

Tastes OK, less filling

Taste is another issue. While Beyond and Impossible took consumers’ taste buds by storm when they first reached mass markets, in the long run, that storm turned into a trickle. Taste is the top reason consumers avoid plant-based meat (or don’t repurchase after trying it once), according to GFI.

“For a lot of people, it's just too much of a jump,” said West. “Even if they're able to drive down the price so it is more competitive [with animal meat], and even though Impossible burgers taste a lot like a hamburger—I mean, I've had them; it's not the same thing,” he said.

And, fairly or not, health perceptions of alt-meat as more processed than the real thing have also played a role. Some newer plant-based burgers have been shown to have even more salt than the beef kind, along with lower amounts of some vitamins, and most nutritionists suggest approaching them as an occasional treat—not a staple. The presence of specialty lab-developed ingredients is also a concern for some people as well as a marketing point of pride for competitors (Chipotle declined to carry Beyond or Impossible meats in its stores, instead developing its own alt-meat that it boasted was “grown on a farm, not in a lab.”)

Some experts say the backlash against alt-meat is overblown. “It's still better than a burger, both in terms of the environment and your health, even if it's not a salad,” said West. But fairly or not, it’s had an impact. In 2020, half of consumers believed plant-based meats were healthy, but by 2022, that portion fell to 38%, as Beyond Meat executives said on a recent earnings call.

For Fazeli, and his co-founder, Brice Klein, all this coalesced into frustration with “the alt-meat space.”

“Asking people to spend more money for worse-tasting products that aren't healthier than the real thing is not a great way to drive repeat purchases,” Klein told Fortune. “The other frustration is that we realized that none of these products or companies are really solving a consumer problem—where climate change is an earth problem,” he added. But “you cannot eat values.”

29-year-old best friend entrepreneurs want to reinvent plant-based meat with real animal fat: ‘If you add fat, it makes it taste incredible’

Irina Ivanova
Sat, February 17, 2024 


As a 29-year-old on his second startup, Brice Klein has perfected the working-until-late routine, often leaving the office at 8 p.m. or later. But as he’ll willingly tell you, that demanding schedule often led to unpleasant compromises.

Chief among them was food. Klein, an early employee at a vertical-farm company aiming to revolutionize produce, found himself eating less-than-innovative food night after night.

“I have distinct memories of leaving the gym or my mom's house at 9, stopping by Mollie Stones at 9:15 or 9:30, minutes later microwaving the Amy's Vegetable Korma I'd just purchased, and then collapsing on the couch as I shoveled it down while watching an episode of The Office before bed,” Brice told Fortune.

“I didn't feel good about my existence,” he said. “It wasn’t a particularly amazing meal. I was like, ‘this kind of gets the job done.’” It was particularly challenging since Klein was a vegetarian.

“For a long time I'd eat a block of tofu or beyond burger or half bag of Quorn or Protein+ Pasta at night, but every one of those still felt like a concession on some combination of flavor, cost, and health,” he recalled.

These days, Klein still on the convenience kick but feels much happier about the mixes he’s throwing in a microwave or skillet. As one-half of the duo behind Choppy, Klein and his business partner and best friend, Saba Fazeli, also 29, are eating a lot of their own creations—chopped steak, pulled pork, or carne asada made of 90% plants and 10% animal parts.

For his part, Fazeli left a job at Beyond Meat to solve what he saw as the problem in the alt-meat space: Plant-based proteins just don’t taste like the animal kind.

Looking at the last three years of plant-based meat sales would seem to confirm that hypothesis. Plant-based proteins burst on the scene around 2018, promising to save the climate and Americans’ health, and soared high for a few years on cheap funding from venture capitalists.

But many startups stumbled during the pandemic and have yet to recover. Unit sales of plant-based foods were flat from 2020 to 2021, and then fell in 2022. The pioneer of the space, Beyond Meat, is in “survival mode,” according to one analyst. The company’s “bleeding” veggie burger propelled it to the the highest-popping IPO in 2019, but its onetime $3.8 billion market cap has shriveled to just $450 million today. And funding for alternative proteins has collapsed to the lowest amount in nearly a decade, according to venture-capital tracker Pitchbook, which last year asked, “Have we hit peak plant-based meat?”

‘Adding meat back’

Klein and Fazeli met as freshmen at Stanford, where they quickly bonded over their shared love of board shorts and skateboarding and went on to graduate as mechanical engineers. The duo bounced around roughly 70 business ideas between them before landing on Choppy (business name: “Momentum Foods”), whose tagline is “adding meat back into plant-based meat.” They’re one of a handful of startups aiming to boost plant-based meats with the addition of something until recently unthinkable—real fat.

In San Francisco, Mission Barns is working on developing lab-grown fat to add to plant-based meatballs and burgers. In London, the startup Hoxton Farms, launched after its omnivore founders had a disappointing experience eating a plant-based burger at a pub. “We realized what it was missing, it’s fat,” co-founder Max Jamilly told Fortune. They beta-tested this idea during the pandemic by cooking plant-based burgers at home with added pork fat, and then graduated to growing pork-fat cells in a lab, on the belief that lab-grown fat would bypass the ethical issues of raising and slaughtering animals.

The company, now with roughly 50 employees, has raised $29 million at a $50 million valuation, according to Pitchbook. And while Jamilly touts the climate benefits of lab-grown fat, but he believes its true selling point will be the taste.

“Health and environment and animal welfare are enough to make you order something off a menu or put it in your shopping basket at the grocery store, but that will not make you eat it every week,” he said. “What makes people keep eating stuff is taste.”

And, he added, “Any chef will tell you, any day of the week, if you add fat, it makes it taste incredible.”

Plant-based meat startups are adding real animal fat to the mix: ‘It didn’t sizzle right, it didn’t smell right, it didn’t have that incredibly fatty taste and mouth feel’


Irina Ivanova
Sat, February 17, 2024 

Biologist Max Jamilly was in a pub with a friend when he hit upon the idea for his next business. Jamilly and his friend Ed Steele, both meat-eaters who were trying to cut down on their carbon footprint, had ordered a plant-based meat patty off the menu. They soon regretted it.

“It didn’t sizzle right, it didn’t smell right, it didn’t have that incredibly fatty taste and mouth feel,” Jamilly told Fortune. At that point, he realized what plant-based foods have been missing, and what he would spend his future years developing: Fat.

Now, as founders of the three-year-old Hoxton Farms, Jamilly and Steele are at the forefront of a nascent trend in the alt-meat world: Putting animal fats (often cultivated in a lab) into plant-based items.

London-based Hoxton Farms cultivates different types of pork fat. They’re competing with Mission Barns, in San Francisco, which is developing vat-grown pork fat to incorporate into plant-based bacon, meatballs, and sausages. And then there’s Los Angeles-based Choppy (formerly Paul’s Table), which mixes 10% animal fat, collagen or broth into mostly plant-based carne asada and chopped steak, which it sells in a handful of supermarkets on the West Coast. Others, including Lypid and Cubiq Foods, are working on convincing vegan versions of animal fat.

Ed Steele and Max Jamilly of Hoxton Farms.

The turn toward meat (of a sort) comes after a dismal couple years for alternative proteins. Once flying high on venture capital funding and lofty promises to save the climate and Americans’ health, plant-based protein companies crashed during the pandemic and most haven’t recovered.

Beyond Meat, whose “bleeding” veggie burger propelled it to the the highest-popping IPO in 2019, has slid from a market cap of $3.8 billion to just $450 million today. Beyond Meat is in ‘survival mode,’ an analyst told trade publication AgFunderNews recently. Impossible Foods, which reported 50% revenue growth last year, has nonetheless backed off IPO plans, citing market conditions. Both companies laid off staff last year. And funding for plant-based meats has collapsed to the lowest amount in nearly a decade, according to venture-capital tracker Pitchbook, which last year asked, “Have we hit peak plant-based meat?”

It turns out that, after the “wow” factor wore off, meat-eaters weren’t convinced enough by the imitation stuff to keep eating it—in particular, as plant-based beef runs about 30% to 40% pricier than the real thing, according to Pitchbook senior emerging technology analyst Alex Frederick.

“Asking people to spend more money for worse-tasting products that aren't healthier than the real thing is not a great way to drive repeat purchase,” Brice Klein, a co-founder of Choppy, told Fortune. “None of these products or companies are really solving a consumer problem, where climate change is an earth problem. But it's not a consumer problem; you cannot eat values.”

Defenders of plant-based meats note that they've only been on the scene for a short time. In a statement, an Impossible spokesperson said: “The plant-based category is just getting started. This is a $7.5 billion global industry compared to the $1.4 trillion animal meat industry. Meat analog products like ours have only been in-market for less than a decade and at mass in just the last few years."

The spokesperson added, "We're the only plant-based meat company in the US seeing consistent growth and we're outpacing all our competitors in both dollar sales and unit sales." Beyond Meat did not respond to Fortune's request for comment.

Today, vegetarians or vegans make up just 5% of Americans, roughly the same portion as two decades ago. And those carnivores who are interested in cutting back on their meat intake—including the three founders who Fortune spoke with for this story—are more likely to substitute beef with chicken, or vegetables, than a faux-beef patty.

“Many people would rather reduce the number of times they eat burgers rather than having a meat alternative that doesn’t taste quite as good and where they’re not sure what is in it,” Rosemary Green, a sustainability professor at the London School of Health and Tropical Medicine, told Fortune.

Startup alt-meat founders

Where’s the beef?

Enter the next phase of the alt-meat revolution: Actual fat, or, in some cases, meat byproducts like broth or collagen.

Fat, as any professional chef knows, is a powerful conduit of flavor—it’s why many recipes have the cook sauté garlic or spices in oil before adding other ingredients. “Fat gives food that creamy, silky, rich texture that we crave,” chef and culinary instructor Becky Selengut wrote in an essay recently. We crave it because hominids evolved to gravitate to calorie-dense fats and proteins during a time when food was hard to come by; indeed, some research suggests our taste for fad led to the evolution of humans’ unusually big brains.

Animal fat, which is solid at room temperature, is especially hard to replicate using plant-based oils, says Hoxton Farms’ Jamilly. (Even coconut oil, the most solid of the plant fats, melts at around 76 degrees Fahrenheit, a far much lower melting point than animal fat.)

“Fat affects the way [food] looks and it has by far the biggest effect on how meat cooks,” he says. “When you heat up a steak, some of the fat softens and then some of it renders, it turns to liquid,” he explains. As the steak cooks in its own fat, the heat and oxygen combine to create the Maillard reaction, which browns the meat. “And the reason the flavor of a steak really lingers is because the fat coats your taste buds,” he says.

Animal fat contains different flavor profiles, what Jamilly calls a “signature,” which contribute to the distinctive flavor of each meat. “That’s why pork tastes different from beef and from chicken. None of them taste like coconut,” he says.

That’s why, according to Jamilly, alt-meat companies “are desperate for innovative ingredients that will make their products better.”

Some flavor, slightly less processing

Cell-cultivation companies still have a long way to go before their products hit shelves, including scaling up and, in the UK, gaining regulatory approval. (U.S. regulators cleared lab-grown meat to eat last year; the UK’s government has yet to weigh in.) They’re betting on the idea that lab-grown meat will still be viewed more positively than lab-processed vegetable proteins. Consumers who have become increasingly health-conscious and were likely turned off by the revelation that Impossible and Beyond are highly processed and not great for health.

“Rightly or wrongly, people think of meat as one ingredient,” says Jamilly. “People like the idea of a clean label, and if they can replace five or six nasty ingredients with cultivated fat, people love it.”

In a sense, plant meat suffered from the worst of both worlds—more “processed” than most typical vegetarian fare and more expensive than animal meat. Once the novelty of almost-the-real-thing veggie burgers wore off, it made sense that consumers would return to their typical ways.

“With meat, you are comparing against a commodity product,” says Frederick. And then there’s the cost: plant-based meats are about 30% to 40% more expensive than the equivalent beef product, he says—”that's a very challenging sell in this inflationary environment.”

In a sense, putting a little bit of fat or broth in a vat of (mostly) plants is just a high-tech version of millennia-long cooking techniques when resources are scant: Adding some beef bones to a stew for flavor, or stretching ground meat with grains or breadcrumbs for meatballs. It’s undeniable that humans will need to eat less meat in the future if we are to prevent climate change. But that diet may look more flexitarian and less strict vegetarian.

“People care most about flavor, and then price and health,” Choppy co-founder Saba Fazeli tells Fortune. Mostly-plant products like his, he says, are the future, rather than absolutes. “It tastes like what you'd expect, and it's better for you and the planet.”

This story was originally featured on Fortune.com