Last year, Wicked Kitchen CEO Pete Speranza predicted the plant-based industry was headed for consolidation as sales slow and buzz fades.
Last week, the Minneapolis-based company was acquired by a Colorado startup looking to bring numerous plant-based brands under one roof.
Ahimsa Cos. paid an undisclosed sum for Wicked and its plant-based seafood brands, Good Catch and Current Foods, to "help stabilize and shape the new landscape for the plant-based industry," CEO Matt Tullman said.
"Ahimsa is a long-term investor because they're in it to take animals out of the food system," Speranza said. "That's a good investor to have because in this space you need patience."
Plant-based food sales declined last year for the first time since tracking began in 2017, capping a rapid rise fueled by intense investor speculation built on an overestimate of how fast consumers would swap out meat for new lookalikes.
After years of explosive growth driven by plant-based milks and brands like Beyond Meat and Impossible Foods, the category has leveled off at around $8 billion in annual sales.
"For the market to see sustained growth, products will need to better deliver on the key consumer drivers of taste, price and convenience, while offering clear propositions to entice consumers to make the switch," according to the Good Food Institute.
The industry also faces renewed pushback over ultra-processed food. A recent study showed people who followed vegan diets with high levels of ultra-processed food, including plant-based meat substitutes, had higher risks of heart attack. Meanwhile, plant-based diets built around whole foods easily beat meat-centered diets in terms of longevity and health.
"Recognizing the role of food-processing is crucial for favorable [cardiovascular] outcomes, even in plant-sourced diets," the study's authors wrote.
The Plant Based Food Association said the industry has come a long way in a short time and is responding quickly to consumer preferences.
"Consumers want more variety, and that is what will continue to improve consumer sentiment," said Julie Emmett, the group's vice president of marketplace development.
Wicked has dozens of products, including ice cream, pizza and burrito bowls, and Speranza said that helps it stand out while other brands focus on individual items like burgers.
"Being in multiple categories means we can be that go-to, trusted brand for people," he said. "We're in a better spot for wherever the consumer is."
Wicked was founded by chefs and brothers Derek and Chad Sarno in 2018 and first found broad distribution in the United Kingdom. The brand is now on shelves at Target, Walmart and other outlets throughout the U.S.
Plant-based food and beverages now make up about 4% of total food sales in the U.S., according to industry reports. Some categories are doing much better than others, especially plant-based milks and creamers, bars, and baked goods. Wicked's best-selling product in the U.K. is a chocolate chip cookie.
"We want people to not think twice about grabbing it and eating it, simply because it's delicious," Speranza said.
With a new owner, Wicked can keep its eyes on long-term growth rather than react to the short-term contraction happening in the industry.
"I see it as a long haul because that consumer adoption isn't going to be coming in leaps and bounds," Speranza said. "It's about strengthening the companies that will be in this space long term."
The Ahimsa Foundation and its various offshoots have "been in the background" as plant-based investors for many years, he added, and the chance to partner with other brands they own or may buy will be a win for the category and "get the company in a better spot" financially.
But despite Ahimsa's animal-free focus, Speranza said he wants to see Wicked stand on its own as a food brand, not a niche or "alternative" product.
"It's everyday food for everyday people and not so much about the plants," he said. "I'd rather compete against the whole market."
