What to Look for in 2024
Expect more layoffs, bankruptcies, and employer abuses in food tech
Last month, I wrote an end-of-year review in which I explained why 2023 was a terrible year for BS peddlers in “food tech”. So what we can expect in 2024? While I am hesitant to get too specific, certain signs are pointing to several trends to expect, none of which bode well for employees.
A slowdown in “stupid money”. We have already seen investment cash seriously declining in the food start-up world. While this is a good thing as it relates to BS food tech, it’s not so good for honest to goodness food companies. This is a sad by-product of the BS, it hurts everyone. While some are predicting VC cash to come back as interest rates decline, I predict that those “start-ups” that have been floating on investment capital (versus sales) will have a much harder time of it. Which will lead to…
More layoffs. We saw several food tech companies lay off employees last year, including Eat Just, inexplicably after securing a $16 million cash influx. We can expect far more layoffs this year, as companies run out of VC cash to burn. It’s important to remember that large amounts of investment money, while often celebrated by vegan media outlets, does not equal success in business. For that you need actual sales of actual products. Then you have to earn something called profit to be sustainable over time. Seems ridiculous to even have to write that, but in an era of clueless cheerleading and endless BS, here we are.
Brands getting sold. Investors need to get their “exits” somehow. In plain English, that means VCs stick around only long enough to see a return on their investment and then they cash out. Sometimes that takes the form of an IPO, which I don’t expect to see more of after Beyond Meat’s painful rise and fall from going public. Other times, it means a company gets acquired, either by a private equity firm or another larger food company. For example, the plant-based creamer brand Nutpods was recently sold to private equity. So, brands that are actually showing revenue are likely to get bought up. Is this a good thing? It depends on whose buying. Often equity firms are all about slashing a burning, to get the brand ready to sell (yes again). So you can expect to see layoffs in the name of “efficiency”, because at the end of the day, all investors want is payback.
Founder removals. A telltale sign of founders getting ousted against their will is when the announcement is made without the founder being quoted. (If you look back on the numerous founder departures in the vegan world, you will see what I mean.) That was the case with the recent media regarding biotech milk company Perfect Day founders being replaced. Ditto plant-based chicken company Nugg’s founder, as reported by Forbes, with the apt headline: “Ben Pasternak Is Out As Nuggs CEO, The Latest Casualty In Fake-Meat Fallout”. Not that I feel sorry for men getting the boot; it’s kind of refreshing to see given that most other ousted founders I know are women. Anyway, more founders are likely to be shown the door as investors get antsy and take over. It’s often a deal with the devil.
More bankruptcies. Last year, the slowdown in VC cash also led to many food startups declaring bankruptcy. We can expect more of the same this year, especially in food tech. If last year’s failure of biotech meat company New Age Eats is any example, we can also expect brash founders and CEOs to take zero responsibility for how they wasted VC money and had no experience to run a food company in the first place. The Big Question is which food tech companies will finally stop the charade. The two that come to mind are Upside Foods and Eat Just, both of which have had several exposes written in major media outlets and yet, they somehow keep going. Both are also run by arrogant CEOs who seem to think positive PR will keep them afloat, but the jig is up. So will 2024 be the year they finally run out of other people’s money to play games with? (Fingers crossed.) In the plant-based food world, we will likely see more companies close. It seems those happen more quietly. For example, I heard (and confirmed) that the plant-based seafood company, New Wave Foods recently filed for bankruptcy.
Sadly, all of this adds up to more employees getting laid off, gaslit, disillusioned, and otherwise potentially abused by plant-based and biotech food companies. As I wrote about last year, food tech companies who claim to care about animals are laying off employees in cruel ways. Similarly, companies like Beyond Meat lay off workers while maintaining exorbitant C-suite compensation.
If this all sounds rather depressing, I am sorry, but it’s best we stop pretending the market will save us. The sooner the BS stops the better; we have needed this “correction” for a long time. In better news, stay tuned for an exciting announcement from me about how I plan to help employees suffering workplace abuses.