After naming Phil Graves the chief financial officer of alternative protein maker Meati Foods at the beginning of February, he is now the company’s new chief executive officer.
Co-founder Tyler Huggins will transition into the role of chief innovation officer, where he will oversee the company’s brand refocus as Meati, maker of alternative protein cutlets and steaks from mycelium, or mushroom root, rolls out more of its MushroomRoot product in 2024.
The company also said it was reducing its workforce by 13% as Meati works to “build a financially sustainable business,” Graves told TechCrunch exclusively.
“To do that, you have to have the right organizational structure and team in place,” Graves said. “It’s hard to build something that is entirely new, so we are having a reduction in force. While it’s painful for all involved it’s also imperative that we as a business have a clear path to financial profitability.”
The company did not disclose how many jobs that entailed. Meati said it had as many as 150 employees in 2022. Severance packages were still being decided at the time of publication.
Meati Foods sinks teeth into $150M to expand its mushroom-root meat operations
Meati is another example of a tech company making layoffs that didn’t appear to be in trouble. Meati’s Mega Ranch facility scaled production throughout 2023. Products are now in more than 3,600 retail locations nationwide, including Whole Foods Market, Meijer, Cub Foods and Sprouts Farmers Market. Graves even said the company has a goal of expanding that to 10,000 locations before the end of 2024.
Mushrooms are big at the moment, too. Companies are turning fungi into functional beverages and leather-like materials, which has resulted in companies gaining success — and venture capital funding — for doing nothing more than growing more mushrooms.
Meati itself benefited from investor attention. The company raised significant venture capital in the past two years, most recently at the Series C level. An initial $150 million was announced in July 2022, and that round took in another $22 million in January 2023 before ultimately closing at over $200 million later on in 2023.
Much of that was invested in the 100,000-square-foot “Mega Ranch” facility that enabled Meati to produce an annual rate of tens of millions of pounds of its protein. Once fully ramped up, the facility will have the capability of producing more than 45 million pounds of product, Huggins told TechCrunch at the time.
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“Production is ramping up as expected; however, the days where companies can raise unlimited capital and defer profitability for decades are gone,” Graves said. “One of the main things that I am laser-focused on, and the team is as well, is showcasing a clear path to profitability in the next 12 months. We aim to be EBITDA positive, and we have a path to get there. Our ceiling is as high as it’s ever been with these changes.”
Meanwhile, Graves joined Meati this month from Wild Idea Buffalo Co., a company focused on sustainable meat production, where he served as the CEO for nearly two years. He also previously worked at Bass Pro Shops and Patagonia, where he was the founder of its corporate venture fund, Tin Shed Ventures.
“Phil is undoubtedly the right person to lead the company forward while I focus on delivering the product and brand that will establish Meati’s long-term legacy,” Huggins said in a statement. “We are coming significantly closer to fulfilling the reason Meati was founded — to elevate the health of people and the planet with the boundless potential of nature.”
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