Meatless Farm is seeking new investment as it warns that shareholders could start facing millions of pounds in potential losses.
According to a report from The Grocer, the plant-based brand – which employs about 100 staff in the UK, Europe and the US – is weeks away from running out of cash and is attempting to find a buyer.
As demand for plant-based meats starts to drop as the cost-of-living crisis continues, the Leeds-headquartered business has hired advisors at insolvency specialist Kroll in an effort to secure its future.
Earlier this month, it was revealed that plant-based categories are struggling to maintain growth as cost pressures rise, with 73% of vegan shoppers actively trying to make savings on their grocery bills.
Meatless Farm’s plant-based mince, burger patties and sausages are currently stocked in the big four supermarkets, however there are only a few limited lines available as of this week.
Despite the brand investing heavily marketing last year, it struggled to compete against larger players in the meat-free category, such as Richmond and Beyond Meat.
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It follows the group making a £15.6m loss on sales of £7.5m in 2020, which was followed by a pre-tax loss of £23.5m on turnover of £12.5m in 2021.
In March, the plant-based food company said it was hoping to keep prices down as it encourages consumers to eat a more sustainable diet.
Founded in 2016, Meatless Farm has raised around £40 million in funding across several rounds and from a range of investors, including Channel 4 and South Korea’s SK Inc.
“It has put the company into a very difficult situation that we are trying to solve,” Meatless Farm founder, Morten Toft Bech, told The Grocer.
“Operationally, Meatless Farm is doing really well but the cashflow squeeze is proving hard to manage given the short notice we have been given from the investor to solve it.
“It is a very sad situation for an otherwise good and healthy company with strong growth, and it is very stressful for our employees and existing investors.”
He added: “We are looking in the short term for a quick investment solution at very favourable terms, but the company needs a fresh cash injection of more than £10m to secure its long-term goals for profitability.”
