Impossible Foods Looks Towards Layoffs As Plant-Based Meat Sales Slump
News of a possible recession looms large these days as various sectors report on tell-tale signs of a slowing economy, says Fox Business. High-interest rates imposed by the U.S. Federal Reserve in an effort to curb inflation coupled with the sudden cessation of most forms of government economic stimulus, and am underperforming export markets portend a bear market.
While investors will likely feel a recession in their portfolios, it is more tangibly felt by the many workers facing layoffs. Already, the tech sector has made a staggering (if unsurprising) number of job cuts. Forbes reports that Amazon, Alphabet, Meta, and Microsoft all announced layoffs in the five-digit range. While these cuts primarily represent high-end wage earners, that is not to say that a general reduction in staffing is not being felt in these and other industries.
In the food industry, layoffs at PepsiCo, contract buyouts at Coca-Cola, and workforce realignment at General Mills have been the harbinger of what may be a larger trend, says Food Navigator. Aside from these titans, newer entrants to the market are also feeling the pinch of the shrinking economy and making tough labor decisions to help weather what is ahead.
Substitute meat sales slumping
A rise in "clean" eating, as well as environmental concerns, have fueled the rise in interest and sales in the meat substitutes industry, notes Allied Market Research. In 2018, the outlet notes, Netherlands firm Vegetarian Butcher was purchased by conglomerate Unilever, and Yahoo Finance explains that "global players are focusing on product innovations and partnerships to drive growth."
Despite the growing popularity of meat substitutes, the budding industry is not immune to the vagaries of the global economy. Case in point, Impossible Foods, one of the biggest names in alternative proteins, announced a reduction in its workforce to the tune of 20% or about 140 of its 700 employees, reports Bloomberg. The move is predicated on a recent slump in meat substitute sales, which declined 15% by volume and 14% monetarily for the year ending January 1, 2023. The trend is reflected in sales to restaurants that slipped to 9% in the same window.
While reflective of the larger economic trends, it is a bit surprising that Impossible has announced such sweeping cuts. TechCrunch notes that recently, the company possessed "a strong balance sheet, good cash flow, and growth of between 65% and 70%." But, for now, the economic winds in this sector have shifted, as Impossible Foods is joined by rival Beyond Meats, which also announced staffing cuts to the tune of 19% or 200 employees due to a slip in sales.