San Francisco-based plant-based chicken startup Nowadays has ceased operations, two years after launching its first products, “due to an inability to raise ventures funds in this market,” AgFunderNews has learned.
The team has been laid off, but the founders are in “active conversations” about selling IP and other assets.
Founded in 2020 by Dominik Grabinski (KitchenTown, Yeap, DSM, Cargill) and Max Elder (Institute for the Future) and backed by just under $10 million from investors including Stray Dog Capital and Texas-based meat processor Standard Meat Co, Nowadays sought to punch above its weight in the category with products featuring an ultra-short ingredients list and superior nutritional profile.
Its frozen nuggets—launched direct to consumer in 2021 and at natural and organic retail accounts including Whole Foods on the west coast in 2022—were made using a patented high-throughput low moisture pea protein extrusion process enabling the firm to use fewer ingredients and scale up more easily with co-packers.
‘The economics only work if you have the capital to really push a multi-year brand building and marketing strategy’
Speaking to AgFunderNews this afternoon, Elder said the products were performing well in direct-to-consumer and retail channels with strong repeat purchase rates, but noted that the unit economics of distributing frozen foods were challenging for a startup without significant scale.
He added: “The economics only work if you have the capital to really push a multi-year brand building and marketing strategy and it’s really hard to access capital now.”
Asked about the company’s IP, he said: “We’ve been awarded patents for low moisture extrusion of whole cuts of clean label plant-based chicken using pea protein, and a patent on pea protein characteristics for the texturized outcomes of our platform. So there’s some differentiated enabling technology here that I’m excited to find a home for; we’re actively looking for opportunities to preserve the value of what we’ve built over the past three years.”
‘We just need to batten down the hatches and weather the storm’
Elder said he remained bullish about the meat alternatives category despite the recent grim sales data in the segment. “I still feel like long term the headwinds for conventional proteins will only get stronger and while companies are struggling to access capital I don’t think that fundamentally, anything has changed about the potential or the need for alternative protein products.
“I think we just need to batten down the hatches and weather the storm and sometimes that means some companies can’t survive because there’s limited access to capital. Long term hopefully the value that’s created by those companies can survive.”