Just a few years ago, Tattooed Chef appeared poised for big things. The California-based company’s products lined the frozen food aisle at many retailers with an array of plant-based items, such as ready-to-cook bowls, wood-fired pizzas, and handheld burritos.
Then, in 2021, the company’s story began to change, leading to this summer’s epilogue.
“Despite (colleagues’) commitment to our mission and our best efforts to maintain the operations of Tattooed Chef, our business has continued to be impacted by a challenging financing environment and an inability to raise additional capital,” CEO Sam Galletti wrote in a recent press release.
The first two lines of that press release read: “Tattooed Chef intends to file for voluntary chapter 11 bankruptcy protection and pursue a sale of assets.” The company said it will “solicit competing bids from interested parties,” seeking an expedited sale process.
Plant-based Products Meet Heavy Skepticism
Other plant-based companies have faced similar fates to Tattooed Chef this year. The Meatless Farm, for example, failed to raise new funds and ended up selling its meat-free brand to VFC Foods last spring. Additionally, The Very Good Food Company collapsed in January.
First-quarter net revenue for Tattooed Chef fell 12.7%, to $59.1 million, reported Just Food.
In 2021, Tattooed Chef was given a non-compliance notice from NASDAQ for undercutting prices to the point of gross revenue loss. The company began a distribution partnership with Walmart in 2022, but in addition to increasing product availability, the retailer also served to slash prices further, lowering company profitability, noted Tasting Table.
The plant-based category has received occasional criticism in recent years for heavily processed products. Other industry insiders claim plant-based brands’ production methods aren’t as environmentally safe as consumers might assume.
Plant-based brands’ “reliance on large-scale, monoculture farming can have negative consequences for the environment,” Morgan Gold, a regenerative farmer from Vermont, told The Food Institute. “Monoculture practices often deplete soil health, require extensive water usage, and contribute to habitat destruction and biodiversity loss.”
Plant-based Meat Market is Rife with Opportunity
While some companies in the category struggle, the global plant-based meat market, specifically, is nevertheless projected to grow at a CAGR of 13.3% through 2030, according to Verified Market Research.
“There are multiple ways to enter this market and see success, given the natural consumer interest,” said Lindsey Cunningham, CEO of RollinGreens. “One-third of U.S. consumers want to reduce or eliminate meat from their diets, and 22 percent of all consumers identify as flexitarians. The plant-based market is full of innovation, new products, and opportunities.”
Reesav Niraula, team leader at Plants Craze, said the most successful plant-based brands – behemoths like Beyond Meat – typically find success due to their focus on a few key elements, like the following:
- Taste and texture
- Persistent innovation
- Stressing brand values
“Success in this industry depends on creating appealing products, effective marketing, accessibility, and a commitment to continuous improvement,” Niraula said.
The Food Institute Podcast
What’s plant-based, gluten-free, and of South African origin? Turns out, chakalaka is just that, but what is this product? Chakalaka Brands founder Leeto Tlou joined The Food Institute Podcast to explain his pivot from the finance world to the food industry, the South African cuisine’s history, and how its flavors could be perfect for the American palate.