Fungi-fueled alt meat startup Meati Foods almost doubled revenues in 2024 vs 2023 and is on course to achieve positive gross margins by the end of the year, says CEO Phil Graves.
A high-profile player in the meat alternatives space with $365 million in funding, Meati has engaged in four “painful” rounds of layoffs over the past couple of years in a bid to streamline operations and accelerate the path to profitability.
However, things are moving in the right direction, claimed Graves, who was speaking to AgFunderNews after launching a new line of breakfast patties into Sprouts stores nationwide (280 stores) and securing new listings in Raley’s (118 stores) and Harris Teeter (250 stores), taking its store count to around 7,000 doors.
“Our financial models show us achieving positive gross margins at the end of this year, so we’re well on our way.”
Asked whether a near-doubling of revenues in 2024 was meaningful given that Meati launched in 2023, he said: “It would be a fair question if we had launched in December 2023, but the reality is, we launched in February 2023 and got into some major retailers, so we got off to a strong start. I can’t divulge specific figures, but nearly doubling on that base is growth we feel good about. We think we will continue to double, if not more, over time.
“We just launched in some new retailers and we’re seeing really good commercial traction. Thanks to our team and the product itself, we have increased our distribution by 130% year over year, from 23 to 24,” added Graves, a former Patagonia executive who took the helm at Meati last February following the departure of CPG veteran Scott Tassani.
“We’ve also engaged a firm to audit more than 1,000 of our stores and ensure that the product is consistently in stock, priced appropriately, and that any signage that’s there is as it should be.”
While sales of meat alternatives continue to decline in the US, Meati is tapping into demand for simpler products with fewer ingredients and less processing, he claimed.
Sweating assets at the Mega Ranch in Thornton, CO
Graves is currently talking to potential partners about utilizing spare fermentation capacity at its Mega Ranch in Thornton, Colorado to sweat assets until it is in a position to utilize all available space for in-house mycelium production, he said.
“We’ve had several firms visit and there are a few opportunities that we’re actively vetting from a technical perspective and negotiating from a commercial perspective although we don’t have anything to announce right now.”
Asked about a recent auction of some Meati processing equipment, he said: “We had a pilot facility in Gunbarrel, Boulder, that we outgrew and we had a handful of employees that were bouncing back and forth between that facility and our commercial production facility here in Thornton. Ultimately, I made the decision that it’s better to have everybody under the same roof.
“If you’re not fully utilizing a building, why have it just as a badge of honor showing you have multiple locations? We need to be good stewards of the capital that we have. So we pulled everybody here [to Thornton] and auctioned off some assets we no longer had a need for so we can deploy the proceeds back into the business.”
