Phil Graves, who took over as CEO of fungi-fueled alt meat startup Meati Foods in February, is steering the company through a series of transformative changes aimed at accelerating its path to profitability. “The product is fantastic,” Graves said, reflecting on his initial impression of Meati’s mycelium-based steaks and cutlets. “But it was clear when I joined that the business needed to make some strategic shifts and needed to make them quickly.”
Meati, founded in 2015, has raised $365 million to support its innovative product line but has faced significant challenges, including four “painful” rounds of layoffs over the past couple of years. Despite these setbacks, the company is also actively recruiting new staff as it refocuses on its key priorities. Graves, a former Patagonia executive, took over from CPG veteran Scott Tassani, who had ambitiously predicted that Meati would generate $1 billion in retail sales within five years. “We’ve put some overly exuberant goals out there publicly in the past and we own that,” Graves told AgFunderNews. “So today we are setting goals that are grounded in reality.”
Graves emphasized the increasing market pressure to demonstrate profitability in a shorter timeframe. “Can you show profitability not in 10 years, but in 12-18 months?” he asked. “And how we were set up when I arrived, the answer was no, so we needed to make some changes, as the market has dramatically shifted. We had raised a large amount of capital and brought in a lot of uncommonly talented individuals, but ultimately, we were overstaffed and we were very siloed.”
Meati now boasts products in 7,000 locations across major retailers like Kroger, Whole Foods Market, Meijer, Sprouts, and Wegmans. Yet, the company has learned some hard lessons along the way. “In the early days, we were myopically focused on door growth [adding new retail locations], but we took our eye off the ball in terms of retail execution,” said Graves. He noted that simply being authorized in stores doesn’t guarantee shelf presence, emphasizing the importance of flawless execution and accountability.
The company has brought in John Bortells as the new chief commercial officer and Dawn Jacobs as the VP of marketing to help steer these efforts. “We need to hold our brokers accountable. We need to make sure that out of stocks are as low as possible,” Graves said. He also highlighted the importance of strategic product placement on shelves to ensure Meati’s offerings stand out.
Graves believes that Meati’s mycelium-based products, which offer better nutrition and a cleaner ingredient deck than many plant-based alternatives, will eventually carve out a unique subcategory within the alternative protein market. “We’re not made from plants, we’re made from mycelium,” he said, adding that retailers are now “doubling down on the winners” in the alt meat category.
Although Graves did not disclose revenue growth figures, he claimed that Meati is driving incremental growth in the category by attracting new shoppers and achieving above-average repeat rates. “One of our launch partners said that more than 40% of Meati purchasers were brand new to the category and repeat purchase rates were in the mid-50s,” he noted.
As part of its profitability strategy, Meati is exploring partnerships to utilize spare fermentation capacity at its Mega Ranch in Thornton, Colorado. “We have 12 fermentation trains producing well over a million pounds per month,” Graves said. “We’re getting far more production per fermentation train than we had expected, and we have identified a handful of fermentation trains that are available for others to use.”
Graves also addressed the recent interest from Beyond Meat in mycelium-based products, viewing it as a validation of Meati’s approach. “Our vision is to build a category and be a leader, so we welcome competition, although we also have a multiyear head start with the taste, texture, and product profile,” he said.
Founded by engineers Dr. Justin Whiteley and Dr. Tyler Huggins, Meati is striving to differentiate itself with its fungi-based submerged biomass fermentation platform. Despite recent challenges, the company remains committed to its vision of leading the alternative protein market and achieving profitability in the near term.