This™: Plant-based protein firm backs profitability despite fears UK’s appetite for vegan food is waning
The co-founder of plant-based protein company This™ has insisted the firm is on track to reach profitability next year, despite fears that the UK’s appetite for vegan products is fading.
Andy Shovel, who heads the company with his co-founder Pete Sharman, said that he forecasts the business will have its first profitable months at the end of next year, after it launched four years ago.
Shovel told City A.M.: “We’ve massively improved our gross margins in the first half of this year.
“For the first three years of trading, our gross margins were quite challenging, and we were focused on growth more than profitability. Now that emphasis is really switched to profitability.”
This™, which sells plant proteins which mimic the taste and texture of animal meat, arrived on UK supermarkets shelves just as veganism became mainstream in the UK.
It is currently stocked at ‘Big Four’ grocers such as Tesco, Asda and Sainsbury’s and also makes the “chicken” for high street stalwart Greggs’ vegan southern fried baguette.
While it is forecasted that the global vegan market could be worth over £50bn by 2028, many major players in the space have seen their sales plummet in recent months.
Fan favourite Beyond Meat just recently slashed its annual forecast for the year as its revenues plummeted 30 per cent in the second quarter due to customers becoming more reluctant to buy into fake meat alternatives amid the cost of living crisis.
The US company, which supplies its vegan plant-based burger patties to the likes of McDonald’s, said net revenues for the year are now expected to be in the range of approximately $360m-$380m (£296m-313m).
As soaring inflation hit consumers’ pockets, fellow vegan brand Meatless Farm entered into administration in June citing a lack of demand for its collapse. But the company was later rescued by plant-based rival VFC in a £12m deal.
Shovel said that talk of the vegan bubble bursting is also due to markets consolidating after a boom.
“The plant-based category is going through a very well travelled path consolidating and normalising after a big kind of hype cycle,” he said.
“There was a proliferation of far too many brands into the market, and not much of an eye on quality.”
Shovel said that now supermarkets are being more “discerning” with what they put on the shelf in terms of quality and performance of brands.
“We are a beneficiary of all this consolidation, because the supermarket’s made it really, really clear that they’re backing us as one of the few winners after this consolidation.”
Shovel said that the company’s sales are up 50 per cent year-on-year on last year figures, despite cost of living woes.
He added: “This year, it’s looking like we’re gonna land about £20m in sales. And that’s up from about £13m last year. So we’re charting a decent growth. Next year, we’re hoping for just over £30m in sales, that’s our target.”