How Lenders Can Safeguard Their Interests As Alternative Meat Companies Fall From Grace

After a stunning rise, many of the alternative meat brands that emerged in the latter half of the 2010s have hit rough times. Shifting consumer sentiment, an oversaturated market, regulatory and legal challenges and macroeconomic headwinds have put the industry on the defensive.

The tumult has drastically altered these companies’ valuations and risk profiles. Lenders in this space need to understand the effect these shifts are having on borrowers and respond accordingly.

Boom and Bust

Alternative meat products fall into one of two categories: plant-based meat and cultivated meat. Plant-based meats use non-meat ingredients such as vegetable proteins or fungus, while cultivated meat is grown in a lab from animal cells. For both types of companies, early investment is critical to support research and development (R&D), build pilot plants and scale for commercial production.

A boom in consumer and investor interest in meat-mimicking foods began in the 2010s and continued into the 2020s. Venture investment in plant-based and cultivated meat reached $3.8B¹ and $1.3B,² respectively, in 2021. Investors were attracted by outsized growth projections: in August 2021, Bloomberg Intelligence predicted that sales of plant-based meats could reach $162B by 2040 and account for as much as 7.7% of the global protein market,³ with some companies and their investors expecting even stronger consumer appetite.

The investment frenzy drove a sharp rise in the number of alternative meat companies, leading to intense competition. Upstarts had to contend with one another as well as two industry giants—Beyond Meat and Impossible Foods—as they fought for market share. In an industry where patents are paramount, lawsuits over intellectual property were common.

But consumer interest waned as shoppers began moving away from foods they perceived to be ultra-processed. U.S. retail sales of plant-based meat fell 7.5% in 2025, spotlighting the unrealistic nature of earlier projections. And at $10.4B, the global plant-based meat market had a market share of less than 1% when compared to the roughly $1.5T global meat market.⁴ Growth has disappointed and venture investment has cratered, dropping roughly 90% from its 2021 peak.⁵

Regulatory, policy and macroeconomic obstacles have compounded the challenges. Several U.S. states have banned cultivated meat products in the name of protecting the traditional meat industry and/or public health. The European Union is considering proposals that would restrict plant-based brands from using words like “beef,” “chicken,” “bacon” and “wing” to market their products. Although the Asia-Pacific region’s large vegetarian population offers a relative bright spot for plant-based products, many countries have erected regulatory hurdles pertaining to cultivated meat. Meanwhile, high interest rates have significantly reduced the easy access to capital that fueled the 2010s and early 2020s’ boom.

Alternative Meat Companies Now Face Challenges

These conditions are forcing many privately held alternative meat companies to shutter or restructure operations. Even established brands are diversifying to weather the challenges. Beyond—formerly Beyond Meat—faces potential delisting from Nasdaq after its stock dipped below $1 per share. In the third quarter of 2025, the company suffered a $110.7M net loss while carrying approximately $1.2B in debt.⁶ In response, the company has rebranded and expanded into plant protein-based functional beverages.

For smaller companies, the fallout has taken several forms. Boston-area food tech company Motif pursued an innovative, fermentation-based approach to create its plant-based meat. However, it faced several lawsuits and could not achieve cost parity with conventional animal-based products. When the company closed, it owned a substantial amount of valuable manufacturing equipment, some of it brand new, scattered across multiple facilities and warehouses, without comprehensive inventory records. When Gordon Brothers was initially engaged, locating and identifying the offsite assets was a key component of the sale preparation.

Another cautionary tale comes from a Colorado-based company whose investors expected alternative meat to grow to between 10% and 20% of the overall protein market. They invested more than $200M to scale up the company’s production plant, but the anticipated demand never materialized—a particularly difficult problem given the product’s short shelf life. A new owner attempted a pivot to direct-to-consumer pet food, but that strategy also failed. Saddled with debt and lower-than-expected revenues, the company was unable to meet its financial obligations and subsequently seized after failing to pay $7M in property taxes. When the owner walked away, they left the facility untended and without working utilities—creating a potential biohazard as the fungus the product was based on continued to grow unchecked.

What Lenders Need to Know

Lenders with outstanding loans to alternative meat companies need to recognize when their portfolio companies may be facing trouble, understand the repercussions that could follow, and have a plan to try to recover as much of their investment as possible should the company fail.

Several red flags can signal potential trouble at an alternative meat company. A decline in patent filings may signal that a company is conserving cash or that its R&D is stalling—an early and potentially crucial warning sign in an industry driven by intellectual property. Loss of retail or food service distribution footprint is another important indicator, because shelf space and menu placement are difficult to recover once lost. Scaling challenges can also signify trouble: reaching cost parity with conventional meat is a make-or-break milestone, and a company that can’t chart a credible path forward is unlikely to succeed, no matter how compelling its technology. Finally, sudden shifts in strategy often precede failure. As the Colorado example illustrates, companies frequently flail before they fail, pivoting business models in a last-ditch effort to survive.

To protect themselves, lenders should follow rigorous due diligence processes when underwriting these loans, and demand up-to-date asset inventories with regular audits. When companies fail to maintain accurate records of their equipment and assets, creditors seeking to recover capital can face serious complications.

In cases where a company has failed or is in the process of failing, lenders should work with knowledgeable partners who can help avoid costly mistakes. Selling a failed company’s equipment typically offers the best path for creditors to recover capital, since much of the machinery used in alternative meat production—fermenters, bioreactors, processing lines—can also be used in the food, chemicals or pharmaceutical industries. But this equipment needs to be handled and decommissioned properly to maximize its value. In one case, Gordon Brothers worked with a lender whose borrower owned valuable equipment that had been disassembled for sterilization. Auctioning the machines in pieces would have yielded a far lower price. Maximizing the recovery required us to reassemble the equipment before bringing it to market.

Lenders should monitor whether struggling borrowers continue paying basic bills, such as utilities. This step may seem elementary, but it can lead to major consequences if overlooked. Without utilities, equipment can’t be turned on for inspections and there is no climate regulation, which can be crucial for some facilities. Without running water and electricity, facilities can’t be properly cleaned, either. For example, when creditors came to collect on the assets of a failed alternative meat company, they discovered that the utilities at the plant were in arrears. The bank needed to settle hundreds of thousands of dollars in outstanding bills before gas and electric service could be restored. Monitoring accounts payable can provide an early warning sign when a portfolio company fails to meet its financial obligations.

The alternative meat industry’s trajectory over the past decade has been defined by the gap between transformative potential and commercial reality. For lenders exposed to this sector, disciplined monitoring, proactive asset management, and partnerships with experienced advisors are the best tools for navigating what comes next.

Gordon Brothers works with lenders to evaluate these risks and, when needed, maximizes recovery through detailed liquidation analyses. We can put together a winddown plan, estimate gross and net recoveries, and flag the key risks and pitfalls involved in shutting down an alternative meat facility. Our goal is to give lenders a clear view as early as possible to help them make informed decisions.

To learn more, reach out to one of the authors or contact us.

---