The Very Good Food Company axes founders
Mounting losses and plummeting share price result in change of leadership at NASDAQ-listed alt-protein company
NASDAQ-listed The Very Good Food Company has announced that co-founder and chief executive Mitchell Scott’s employment has been “terminated” with immediate effect.
The British Columbia-based company also announced that Scott’s fellow co-founder James Davison has resigned as chief research and development officer and board member.
The two men founded the company in 2016 but on Friday it reported a C$54.6million (US$43.6 million) loss for 2021, widening from a C$13.9 million loss the year prior. The share price dropped by 4.7% to 61 cents the same day – down more than 80% of the value a year ago.
Very Good said it has temporarily created an executive committee consisting of the company’s senior executives to steer it as it searches for a new chief executive.
Very Good’s president Ana Silva said: “Very Good is at an important juncture, and we are taking decisive steps. Our focus is to continue to build on our brand and reputation and grow our market share in the plant-based meat segment while optimising our operations towards a path to profitable growth. Very Good is implementing cost improvement measures as it transitions from a focus on top-line growth, to a focus on achieving sustainable, profitable growth. These measures include:
“Improve the economics of the e-commerce business. The digital marketing costs to acquire new customers through our e-commerce business have increased over the last year such that it impedes the profitability of this channel. The company is shifting the focus from digital marketing campaigns that are aimed at acquiring new customers to our existing subscribers and those customers that are driven to our website because of our existing brand awareness and equity.
“Right-size the organisation through a workforce reduction. A workforce reduction will occur across multiple business operations which will result in a sizable reduction in total annual salaries. The company is also evaluating different options for consolidating its production facilities to improve efficiencies.
“As we go forward, we will continue to execute against a strong set of strategies that will help us to further drive our top-line growth by expanding our distribution points and improving our customer and consumer marketing model. And while we expect some volatility in the next couple of quarters as we set up cost improvement initiatives and work to streamline our operations, our long-term growth thesis remains intact as we continue to lead and innovate within the plant-based food industry.”