The Plant-Based Seafood Sector Faces a Wave of Change
In a surprising turn of events, New Wave Foods, a company that once showed great promise in the plant-based seafood industry, has shut down its operations and entered into an assignment for the benefit of the creditors (ABC), a process akin to bankruptcy. The San Francisco-based startup, known for its innovative plant-based shrimp products, has ceased operations as of November, according to documents first shared by trade publication Alt Meat.
The company, which had secured an impressive $18 million in a series A funding round back in January 2021, has admitted to being unable to fully repay its debts. The decision to halt business and transfer its property to an assignee was deemed to be in the best interest of its creditors and stockholders. Although the general assignment document did not detail the assets of New Wave Foods, a notice of assignment accompanying the document has set a deadline of May 13 for creditors to file claims against the company.
Michelle Wolf, the co-founder and CEO of New Wave Foods, expressed her sentiments to AgFunderNews, highlighting the company’s growth and the momentum they were gaining in 2023. They had even secured a major customer for 2024. Yet, she acknowledged that they could not “outrun industry headwinds.” Despite the setback, Wolf remains optimistic about the plant-based industry’s future and proud of New Wave’s contributions to promoting sustainable eating and advancing plant-based innovation.
The Challenges and Potential of Plant-Based Seafood
The journey of New Wave Foods, founded in 2015 by Michelle Wolf and Dominique Barnes, demonstrates both the potential and the challenges faced by the plant-based seafood sector. The company initially used a combination of brown algae and soy protein for its shrimp alternative, later switching to mung bean protein. It attracted notable investors such as Tyson Ventures, New Enterprise Associates, and Evolution VC Partners.
The market for alternative seafood has been growing, driven by concerns over issues like overfishing, pollution, and unethical labor practices in the conventional seafood industry. However, the U.S. market for plant-based seafood is still nascent, with the Good Food Institute reporting a modest $14 million in retail sales in 2022. Despite this, new entrants like Konscious Foods are making waves, launching products that aim to appeal to health-conscious and younger consumers without compromising on price, taste, or texture.
The Competitive Landscape and Future Outlook
The closure of New Wave Foods occurs at a time when the alternative protein sector is experiencing a downturn in investment. Marissa Bronfman, the founder and executive director of Future Ocean Foods, a trade association for alt-seafood startups, described the current climate as “grim” for alternative protein investment. However, she also pointed out the vast global opportunity in the seafood market, urging investors with a long-term perspective to consider the sector’s potential.
Indeed, the need for sustainable protein sources is becoming increasingly urgent as the global population continues to grow. While the market for plant-based seafood is still small, the recognition by large seafood companies that the status quo is unsustainable suggests that there may be significant opportunities for innovation and growth in the future.
The story of New Wave Foods serves as a cautionary tale but also a beacon of hope for the plant-based seafood industry. As companies like Konscious Foods enter the market with competitive pricing and appealing products, the future of sustainable seafood alternatives may still be bright. It calls for resilience, innovation, and perhaps most importantly, a clear understanding of the complex and ever-changing tastes and demands of the global consumer.