The situation with Allplants is undeniably sad, and I hope a resolution can be found. While I don’t know founder Jonathan Petrides personally, I have huge respect for what Allplants has done for the sector and its shared mission to get the world eating more plants. This will no doubt have been an immensely challenging past few months.
The Allplants headlines clearly make for grim reading, but is this really a reflection of the team or even the plant-based category itself?
Of course, it’s impossible to know the inner workings of any business unless you’re in it. But in my opinion, this is more a symptom of the investment hype that drives trends in emerging sectors.
Whether it’s plant-based food, pet tech, rapid grocery deliveries or generative AI, the same thing will happen again. When billions are funnelled into new markets, there will inevitably be more failures than successes. This isn’t new. It’s a cycle we see time and again.
The investment cycle
There are very few companies that have a perfect product or business model within their first two to three years. At that time, throwing excessive money at growth makes little sense, but the pressure takes many businesses down this path.
I speak from experience: Grubby almost fell into a similar trap in our second year, caught up on the growth train and struggling to slow it down. Fortunately, we managed to put the brakes on just before we too hurtled into the station barriers. No early-stage business – plant-based or not – is immune to these challenges.
The reality is, investors want growth. Founders often feel they have no choice but to deliver it, even if it’s premature. During the ‘good times’, when cash was abundant, this approach worked for many.
Growth brought more funding, which fuelled more growth – and there was little more than a sideways glance at profitability. But in today’s tightened economic climate, the old rules no longer apply. The focus has shifted to core business fundamentals: profitability, efficient operations, and sustainable growth.
We’ve worked hard to pivot in this direction. We had our first two profitable months in Q3 this year, and revenues are up c30% vs 2022. EBITDA losses are down c80% to a point where (dare I say it) profitability is in our sights.
These changes have been driven by product and service improvements, operational efficiencies, and a more fine-tuned acquisition strategy, whilst our new plant-based product marketplace has shown very strong potential for further growth.
Ongoing demand for plant-based
The changes we’ve made reflect the broader challenges – and opportunities – in the sector. While we’re all having to adapt to this new economic landscape, the demand for plant-based solutions is still strong and growing.
Per capita meat consumption in the UK is at its lowest-ever levels and still declining at a rapid rate year on year. One in three people in the UK now identifies as flexitarian.
Rising health concerns, environmental awareness and animal welfare concerns are all encouraging younger generations to reduce or eliminate their consumption of animal products entirely. Currently, about 34% of Gen Z and 28% of millennials in the UK identify as flexitarian, vegetarian, or vegan, compared to 14%-15% of older generations (Gen X and boomers) and 5% of those even older than that.
With c1.4 billion meals eaten in the UK every week, and 75% of those being home-cooked, there is significant, unwavering demand for convenient, sustainable, and healthy food solutions.
At Grubby, we’re seeing increased interest in high-protein, high-fibre meals, 15-minute recipes, and indulgent ‘fakeaway’ options alongside meat alternatives. These trends reflect growth opportunities across the sector, from healthy snacks and desserts to more convenient quicker meal solutions, and even nutritionally complete meal drinks like Huel (which many forget is plant-based).
Period of consolidation
The sector is undoubtedly reeling from casualties, but much of this turbulence was inevitable – driven by Covid-19, inflated investment expectations, and economic upheaval. We are now in a period of consolidation, where there will be fewer plant-based products to choose from in each category.
The survivors will be the tastiest products that offer the best customer experience, with strong margins and unit economics. Taste has always been king, and it always will be.
This clearly isn’t the end – it’s a recalibration. For the plant-based category to thrive, I believe collaboration is going to be key. The sector must come together, set egos aside, forge proper meaningful partnerships, and focus on what matters most: delivering great-tasting products that allow the sector to deliver on our joint mission to get the world to eat more plants.
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