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Late last month, Mitchell Scott watched from afar as the company he had nurtured from a farmer's market vegan "butcher" shop to a darling of Canada's nascent plant-based meat industry collapsed.

From the outside, the Very Good Food Company seemed to be doing well. Its trendy bean-based burgers, bangers and briskets were in demand and being sold in about 1,700 stores across Canada and the U.S. The company had successfully appeared on CBC's Dragons’ Den and boasted a popular Victoria, B.C., storefront. Buzz about the company's potential was so high, its stock values soared by 800 per cent the day it went public in 2020.

But below the surface, trouble was brewing. Scott said the company never reliably turned a profit as it invested in new equipment and people to meet consumer demand, and its share prices had been in slow decline for over a year. Last spring, the company announced it was cutting production and staff, including Scott and co-founder James Davison. By September, the new executive team was trying to sell the business to stave off collapse. Those efforts failed, and in late February, the company closed.

"It's just super frustrating," he said of his business' demise.

The Very Good Food Company collapse reflects a broader slowdown in the North American plant-based meat industry. Recent months have seen the stock value of behemoths like Beyond Meat fall, and Canadian giant Maple Leaf Foods has scaled back its plans for plant-based products citing a "marked slowdown" in demand.

Some observers have attributed the decline to health concerns about the ultra-processed plant-based proteins that dominate the market. Others, including Dalhousie University food researcher Sylvain Charlebois, point out that plant-based processed foods are more expensive than real meat or dairy. An analysis by the Good Food Institute, an organization promoting plant-based foods, found they cost on average 43 per cent more than real meat.

The industry's decline is a marked change from euphoric predictions by analysts between about 2019 and 2021 that the industry would see "explosive growth" through the 2020s, fuelled by eco-minded consumers. Industry proponents have long claimed "alternative meats'' are key to reducing global meat and dairy consumption, which generate about 18 per cent of global greenhouse gas emissions and fuel biodiversity loss.

The market slowdown has generated a flurry of stories in mainstream media about how the industry failed "to deliver" and is a "flop." But for people like Scott and Charlebois who have closely followed the industry for years, the downturn is not a story of bored consumers and tumbling demand. Scott said demand for his ex-company's plant-based products stayed high, aligning with federal research from 2022 indicating that nearly half of Canadians are trying to eat more plant-based foods.

The tricky part is figuring out what people will eat — and how much they're willing to pay.

Late last month, Mitchell Scott watched from afar as the company he had nurtured from a farmer's market vegan "butcher" shop to a darling of Canada's nascent plant-based meat industry collapsed. 

"At the end of the day, it's all about cutting costs, making the product more natural (and) with less sodium," Charlebois explained. "That's what the entire industry is battling for."

High costs and health concerns mean the industry is "losing the battle" with meat and dairy on supermarket shelves, he said. As inflation pushes food prices to eye-watering heights, the steep cost of many plant-based products is a "big, big issue." The situation is "a bit of a different story" for restaurants and institutions like schools, who have guaranteed diners and buy in bulk, which can help mitigate cost, he explained.

The industry is settling out after taking the world by storm in the unusual context of COVID-19, Leslie Ewing, the executive director of industry group Plant-Based Foods Canada, pointed out. During the pandemic, more people were cooking at home than usual, driving demand for plant-based products at supermarkets to unusual heights. As the world returns to more normal eating patterns, it's no surprise that "unusual bump" in sales has dissipated, she explained.

Plant-based food manufacturers also continue to face supply chain problems linked to the pandemic, drought, inflation and "global instability" while trying to convince consumers to eat "unfamiliar" foods, Ewing said.

The mismatch between these realities and investors' speculation about what plant-based products could achieve fuelled the Very Good Food Company's demise, Scott said. New foods take longer to develop and adopt than products made by most other startups, making the Silicon Valley-style venture capital approach to financing "challenging."

The stocks were high, but their value wasn’t "sustainable," he said, and eventually, investors started pushing to see the business generate profits. The company struggled to produce its product at scale and find enough suppliers, production facilities, machines, packers and staff to keep up with demand. Eventually, it collapsed.

Despite these challenges, Scott is optimistic about the future of plant-based foods. Even though the "hype has died down," the seed has been planted in consumers’ minds, he said. Charlebois echoed those thoughts, adding research into less processed plant-based products created using fermented or cellular meat and dairy and other ingredients like mushrooms looks promising.

"I don't think vegetable proteins are dead. It's actually the opposite," he said.

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The transition from animal food to vegetable food faces the same resistance as transition from fossil to renewable energy.
Humanity has a huge financial, cultural and human investment in agriculture and oil exploitation. Millions of people make their living using long-established methods: it is very hard to change. Those who own the facilities to exploit the environment are naturally very resistant to change and they lobby strongly against any new system that would require them to invest in new methods to make money. Governments cannot resist.
The only way to change is to demonstrate that the new more environmentally sustainable production methods are cheaper than the existing ones. The advantage of new systems must be evident for everyone involved. A very very slow process.

"Governments cannot resist"???
More like do not, or will not resist.
As far as "cheaper than the existing" products goes, I've been paying attention for decades to what people in the check-out lineup are buying. Very few buy real food, and what they buy is generally not less expensive than real food is. Those who are buying real food often purchase the expensive cuts of meat: so I'm not convinced it's anything more than emotional habit. The sizzle sells the steak. Health isn't a "sexy" product, and that's possibly because our general understanding of "health" has to do with doctors and drugs.

Huge numbers of people throughout history have lived on mostly plant-based diets. None of them involved a gimmick where they tried to make the plants pretend to be meat. I'm frankly much more willing to reduce my meat intake in favour of grains and tofu and whatever just being themselves (ideally with some snazzy spices) than I am to eat stuff that's pretending to be a burger and reminding me that it is not, in fact, a burger.

Actually, arguably the whole "beyond meat" phenomenon is just another example of the trend towards overprocessed and overpackaged food. There isn't much profit in just selling people beets or mushrooms.

Me too!

Yayyyyy! Someone said it before I was thinking someone needed to!!!
The real piece is not pretending to be a burger, but pretending to be flesh-food: meat.
Remember when "vegie burgers" were a thing, and people even lined up for them at the Queen Mother Cafe on Queen Street West in Toronto. When I was young.
There are many kinds of pulses ... lentils, chickpeas, dried peas, and many kinds of beans from around the world, that with herbs and/or spices, vegies, pre-cooked whole grains make awesome burgers.
If there's no effort to replicate texture, taste and color of meat, there's no need for all the garbage, including all the manufacturing.
(Tofu is a straightforward process of cooking, grinding, filtering and coagulating followed by pressing: not a chemical process involved ... TVP not so much). In any event, tofu, also, is eaten in small amounts.)

This is so disappointing.

Their products have been excellent--I've been waiting & agitating for an expansion of their lines throughout Canada.

I can only wonder, if some of the "agriculture support" $ our politicians hand out to animal farming, had been switched, even in part, to plant farming support, if this and other vegetarian/vegan companies would still be alive, and available to consumers.

I'm happy to eat beans instead of meat, but I don't want to pay more to have my beans highly processed and adulterated in an attempt to make them seem like meat. Especially when the highly processed beans-plus-whatever taste terrible. I've tried various brands of plant-based pseudo-meat products and could hardly gag them down. I'd far rather make up my own bean, seed, and mushroom inventions!

I tried these products for some time, long enough to conclude that they simply weren't as good as occasional real meat and I just didn't feel as well after eating them, probably because of the processing with too much coconut oil, wheat protein and whatever else was involved. Although it did make some of the products TASTE fairly close to the original, I agree with Rufus that it's probably better to just eat more vegetarian stuff for which there are so many good cookbooks now.
The end of the article mentions use of fermented meat and mushrooms which sounds like it might naturally capture more of that "meaty" flavour without adding a bunch of other stuff in.

One always hears that meat is terribly inefficient, 10X worse than eating plants.

So, there was some hope that plant-based 'meat' would be cheaper, and it was not. So you're selling it as a premium product, like Elon Musk selling cars for their virtue, not their better economics. Electric is taking off now that it's becoming cheaper, as it should be (more efficient), it had to get over a hump of start-up costs.

If plant-based meat is inherently cheaper once you get past start-up costs, it'll enjoy the same advantage as margarine over butter. Butter was not eliminated from the market, but margarine has a secure niche.

And margarine still tastes gross.