Food Entrepreneur CHICAGO  — Some plant-based brands are in dark waters as the plant-based market continues to decline, causing more brands to close shop.

Sacred Serve, a brand that made plant-based gelato, is the next to fall victim to the declining market — just three months after Must Love, an animal-free frozen dessert brand, was discontinued by Sprouts Farmers Market.

Kailey Donewald launched Sacred Serve in 2019 to offer consumers a better-for-you, plant-based frozen gelato.

“My mission was rooted in healing people and planet through our food system,” she said. “In looking at the different categories at the retail level, I saw ice cream was ripe for disruption because it was still filled with all these harmful ingredients.”

While the product may have had strong consumer support, the market and capital were not there.

“It was a combination of a lack of capital, being over leveraged with a national launch, and then we saw this big decline in the plant-based category as a whole,” Donewald said. “Capital became very expensive, both on the debt and equity side, and as an early stage company we were reliant on that.”

Donewald worked behind the scenes to try to save the business but ultimately the declining market was the perpetrator.

“All those things made it incredibly challenging to get deals done,” she said. “Because when people see a down market, that’s really the last place they want to invest. The only way to survive would’ve been to have more time, ie a longer runway from a financing perspective.”

As a first-time entrepreneur, Donewald was surprised at how capital reliant food businesses needed to be to survive.

“One of the biggest things I wasn’t prepared for coming into this was how challenging it would be to raise capital,” she said. “That took me a little bit by surprise, both the amount of capital required for these types of businesses as well as the time and traction required to get it, particularly as a female founded company, according to the World Economic Forum.”

In recent years the plant-based category has seen a decline, which Sacred Serve also has felt in the market.

“Retailers aren’t reaching for it as much,” Donewald said. “Investors don’t want to invest in it as much and being as early and as reliant on outside capital as we were, we were very vulnerable to market forces and ultimately timing and luck were not on our side.”

While the plant-based market has been declining, around the time Sacred Serve was born Donewald said she saw the plant-based category was “up and coming and hot.”

“I decided to corner it by something trending,” she said. “A lot of people were paying attention to it. We certainly benefited from the early hype around plant-based. What we saw in the plant-based ice cream category were retailers allocating two, three additional doors worth of plant-based pints to their sets.

“Now what we’re seeing over the last two years as that growth in plant-based has slowed is retailers allocating those doors back to dairy.”

Donewald said she is excited to see where both the conventional and plant-based dairy categories are headed.

“I’m seeing dairy innovation push into regenerative (agriculture),” she said. “And I’m excited about A2 dairy.

“While I hope there continues to be strong, clean, plant-based offerings for those who love and need them, I am optimistic about the clean label, regenerative offerings that are coming to the market and the impact they will have on people and planet.”

Reflecting on her nearly seven year-run as a food entrepreneur, Donewald shared some final advice.

“Have conviction in your mission,” she said. “Starting a company is one of the most challenging things a person can do but knowing your ‘why’ and being deeply connected to it can bring a lot more resilience to the journey.” 

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