Dive Brief:
- New York-based Livekindly Collective acquired California-based Alpha Foods on Tuesday, marking its sixth food brand acquisition.
- LKC is on track to become one of the plant-based industry’s leading food companies as the segment struggles with reduced growth and sales for a myriad of reasons.
- The acquisition deal comes just a few months after Alpha Foods partnered with the Every Company to create plant-based food with animal-free eggs. The partnership was intended to help Alpha Foods improve its products’ taste and texture — an issue that many companies across the category have dealt with.
Dive Insight:
By consolidating brands, LKC is looking to become a dominating presence in the plant-based industry and may be able to improve operational efficiency and eliminate competition over customers and resources.
Founded in 2020 — and backed by more than $500 million in funding from investors including The Rise Fund, S2G and Blue Horizon — LKC’s portfolio of plant-based brands includes Oumph! (UK), The Fry Family Food Co (US, UK, Australia, South Africa) ,LikeMeat (Germany), No Meat (UK), and The Dutch Weed Burger (The Netherlands).
Purchases of plant-based meat alternatives fell 12.6% in the five weeks ending July 2, to $106.8 million, a 19.8% decline year-over-year. Facing several issues including price parity with animal-based meat as well as inflation and improving taste and texture, the plant-based space is looking for ways to achieve growth again.
Meanwhile, due to inflationary pressures, average price-per-unit increased across plant-based meat, animal-based meat, and total food, according to the 2023 outlook from the Good Food Institute. Given the plant-based category’s premium price, the macro environment put further pressure on potential consumers and affected retail sales.
A focus on improving taste and affordability, as well as effectively communicating consumer benefits, including health, could help the sector see growth, according to the Good Food Institute. A large uphill battle for the plant-based segment is taste, with 53% of all consumers agreeing that plant-based protein products should taste indistinguishable from meat, according to data from Mintel.
But still, despite investment, new product launches and cutting edge technology, many plant-based brands have seen sales decline. Beyond Meat, for example, has made good on plans to focus on expanding distribution of recently launched products in the U.S. and new items in international markets. The brand thinks that will help bolster revenue growth in the latter part of the year.
Under this acquisition deal, LKC will now be able to enter another burgeoning category in the plant-based section with ready-to-eat breakfast and burrito options. Alpha is known for their plant-based burritos. LKC could also expand its distribution in the U.S., with Alpha Foods’ more than 200,000+ distribution points across 40+ countries, according to the release.
By manufacturing some products at Livekindly Collective production facilities, Alpha Foods may be able to expand its range and reduce costs — a major issue for a lot of plant-based companies, according to reporting from AgFunder Network.
Founded in 2015, Alpha Foods specializes in breakfast sandwiches and burritos, vegan chicken nuggets, tamales, wraps, meatballs and mac ‘n cheese. The company is currently rolling out a new version of its plant-based Chik’n strips.
