The Tortoise and the Hare
One of the things you may not know about me is I went to Cardiff University, one of the top places to study English Literature and my course included a module on Children’s Literature.
Whilst there, we studied the role of fables in our society and the impact they have in determining our moral fabric as adults. One text we examined was “The Tortoise and the Hare”, one of Aesop’s Fables which gained huge popularity worldwide with its tale of the tortoise who challenges the boastful hare to a race. The interpretations of this morality tale have varied over the years as it is used as a metaphor for many things in our daily lives - the triumph of age/wisdom/self-assuredness over youth/arrogance/adversity.
“In Classical times, it was not the Tortoise’s plucky conduct in taking on a bully that was emphasised but the Hare’s foolish over-confidence. An old Greek source comments that ‘many people have good natural abilities which are ruined by idleness; on the other hand, sobriety, zeal and perseverance can prevail over indolence’.”
— THE TORTOISE AND THE HARE. (2023, FEBRUARY 15). IN WIKIPEDIA. HTTPS://EN.WIKIPEDIA.ORG/WIKI/THE_TORTOISE_AND_THE_HARE
Right now, it feels like a story that needs to be reflected upon, as the plant-based industry has had a month of turmoil - both highs and lows.
The creation of the plant-based industry has been brought about by a group of enterprising, passionate vegans who wanted to make eating plants cool and scale alternatives to animal proteins globally. To take on this mammoth task, many chose to adopt the Silicon Valley philosophy and follow in the footsteps of the tech bros before them - raising funds (often pre-product launch) and a “fail fast and break things” attitude.
Some of these OGs include Beyond Meat and Impossible Foods who found themselves at the spiky end of the spear this month, in a damning article by Bloomberg which proclaimed that: “Fake Meat was supposed to save the world. It became just another fad.” Impossible bit back immediately with a NY Times ad pointing out all the planetary and health benefits of plant-based food whilst every commentator on the internet and plant based food company threw in their FWIW. The problem that was highlighted is the current profitability of these companies vs their levels of investment and investors becoming spooked by falling share prices and reported falling consumer demand. To me, this highlighted the comprehension of plant-based food capital markets have; the problems it aims to solve, and the projected S curve of growth it is likely to follow.
The perils of this investment approach when applied to food came into sharp focus last week with the shock announcement that vegan food hero, Miyoko Schinner had been ousted from her company, Miyoko’s Creamery as CEO. Over the weekend, they launched a lawsuit against her.
I am not here to comment on the details but the shockwaves that have rippled through the industry are palpable. As someone with such a stellar reputation on the vegan scene, I think most are surprised at how inelegantly it has been handled. I can think of other vegan women who have been subject to this kind of treatment; Chloe Coscarelli of By Chloe and Jodi Manelle of Live Kindly spring to mind. All seem to have been unceremoniously booted out of the businesses they built with little recognition of their massive contribution to the building of an industry in the days when vegan = hippie, alternative weirdos. It feels like such a shame, particularly when you look at what seems to happen next.
When Miyoko started her business as a 50-something, Asian-American woman, she bucked every trend and became a welcome breath of fresh air. Her voice advocated for animals and her farm sanctuary echoed the authenticity of her vegan values. During her time at Miyoko’s, she fought for the right to use terms for dairy products in California on plant-based equivalents and, importantly, WON, thus setting a precedent and smoothing the path for others in the alternative protein realm.
I think we need to get real about the investor landscape and the potential outcomes of taking on outside investment. Their interest is in seeing a return on their investment, and this means always acting in the best interests of the business which throws vegan principles under the bus as soon as there is a conflict between them and potential faster/higher profits (unless your investors are vegan, of course!).
All this a week after another vegan OG had an altogether different kind of exit! Seth Tibbott is the tortoise in our story and I’m sure he wouldn’t mind me saying so! Having started to build Tofurky 44 years ago, there aren’t many investor horizons with that kind of patience. And yet, he built a great company, on vegan values, which in recent years has been run by his stepson, Jaime Athos. Their annual revenue is estimated to be approx $50m, so a fair way short of the Beyond Meat’s of the world ($300m) but they are markedly different since they have long been profitable, pausing to invest in equipment with a $7m loan in 2019, seemingly to avoid the pressures that external investment would inevitably exert.
“A lot of this money (PB food investment) is doing good,” Athos said. “It’s stoking consumer demand and that helps us all as an industry. What I don’t envy is the strings that are attached. A lot of investors aren’t expecting incremental returns. They took big risks and they want big rewards in the short term.”
HTTPS://WWW.FORBES.COM/SITES/JANETFORGRIEVE/2019/02/14/WHY-TOFURKY-WAITED-FOR-FINANCING-WITHOUT-TOO-MANY-STRINGS-ATTACHED/
Tofurky pulled out of UK and Europe following export challenges during Covid and since then have had a solid business model, loyal customer base and fun brand activation which kept costs down but sales up.
Last week, they were acquired for an undisclosed sum, by a partner that they have worked with for over 20 years - which feels fitting for such a family business.
Congratulations, Seth and his loyal team, many of whom have been with him for 5-10 years. 44 years of hard work, treehouses and dedication won the race! If you want to find out more about Seth and how he built Tofurky in a derelict schoolhouse, whilst living in a treehouse, I highly recommend his book, “The Hunt for the Wild Tofurky”! It’s a guaranteed eyebrow raiser!
It does feel like we have reached a moment of change.
Maybe it’s a tipping point, but it feels like this week is a cautionary tale for any founders building companies out there, and looking for investors. There is blood in the water and the sharks are circling. For those plant-based businesses out there raising, investigate what other creative ways you use to keep going - loans, crowdfunding, and partnerships, whilst keeping your ambitions big but your execution steady. If you are deadset on raising investment, invest in a sh!thot lawyer.
You too can win the race (but it might not be in 3 years time!)!