Meati Foods, a Boulder-based plant-based protein company, has announced its second round of layoffs within a span of a few months. This move comes as the company aims to navigate the complexities of a highly competitive industry while focusing on near-term profitability. The layoffs raise questions about the sustainability of rapid growth in the alternative protein sector and highlight the challenges startups face in this burgeoning market.
The Second Wave of Layoffs
On September 14, 2023, Meati Foods confirmed that it laid off 60 people, reassigning 30 of them, resulting in a net 10% reduction in its workforce. This follows a previous round of layoffs in June, where the company terminated 5% of its workforce, or 17 people. The layoffs impact nearly every part of the organization and are part of a broader structural reorganization aimed at maintaining a sustainable business model.
The Company's Evolution
Meati Foods, operating under the trade name for Emergy Inc., specializes in converting mushroom-based proteins into products resembling whole cuts of meat. Founded in 2016, the company has been optimistic about the future of plant-based proteins and recently opened a production facility in Thornton, referred to as its "mega ranch."
Financial and Market Context
While the plant-based protein industry has seen declining sales, Meati Foods continues to experience incremental growth, thanks to its product placement in Whole Foods and Meijer grocery stores. The company has not disclosed specific sales and revenue figures but has emphasized its focus on near-term profitability.
Employee Benefits and Future Plans
Employees affected by the layoffs were offered a severance package, health insurance plans covered by the company, outplacement services, and employee assistance programs. Despite the workforce reduction, Meati Foods plans to add nearly 100 additional positions in the near term to expand production capacity.
The second round of layoffs at Meati Foods serves as a wake-up call for startups in the alternative protein sector. While the market offers significant growth opportunities, the focus must also be on creating a sustainable and profitable business model. Meati Foods' recent moves could serve as a blueprint for other companies in the industry, emphasizing the importance of balancing growth with financial stability.