Eat Just’s Good Meat division fails to pay $30M worth of invoices

Dive Brief:

• Eat Just’s Good Meat — the company’s cultivated meat division — has failed to pay $30 million worth of invoices to ABEC, according to a complaint filed by the bioreactor specialist. ABEC has been working with Good Meat on pilot facilities in California and Singapore. 
• Good Meat and ABEC entered into a bioreactor development agreement in 2022, which required Good Meat to issue purchase orders for the various stages of work on the project. ABEC is suing the cultivated meat maker for breach of contract, describing the company’s actions as “repeated failures and broken promises,” and accusing Good Meat of being “woefully undercapitalized from the beginning,” the court documents filed in the Eastern District of Pennsylvania said.
• Both parties are “actively working to reach a settlement,” a source familiar with the matter confirmed to Food Dive. It is uncertain why Eat Just has failed to pay the invoices as ABEC has claimed.

Dive Insight:

As Eat Just looks to grow its business and become profitable, the skirmish with ABEC has come at an inopportune time. 

Eat Just and Peter Norman of Klehr Harrison Harvey Branzburg, an attorney representing ABEC, declined to comment on the ongoing litigation.

Under the contract, according to the court documents, ABEC has “delivered on all of its commitments,” including the construction of the bioreactors and supporting equipment in both the U.S. and Singapore, defendants “Eat Just and Good Meat have failed to live up to their financial obligations.”

The contract was an exclusive multiyear deal to build 10 bioreactor units of 250,000 liters in size for meat cultivation.

The documents also revealed that ABEC believes Good Meat is “vastly undercapitalized for its stated purpose,” and that it would be “unjust” for Eat Just to benefit from this undercapitalization at the expense of ABEC. 

Eat Just CEO Josh Tetrick has said his company’s plan to scale will require a significant amount of capital. In a milestone announcement in June, the cultivated meat maker was one of two companies to receive full regulatory approval to sell cultivated meat in the U.S.

Despite this achievement, Eat Just has struggled with costs, scaling its business and consumer education. Earlier this year, it slashed 18% of its workforce and enacted other cost-cutting measures like rolling back on ingredient spend.  

Just last week, Eat Just secured a new round of funding, which a spokesperson told Food Dive would be used for both Just Egg and Good Meat. Although the amount was not publicly disclosed, Bloomberg reported that the investment was said to be $16 million to help Eat Just “grow and become sustainable.”

If ABEC and Good Meat can work out their differences, then the companies could make a difference in the cultivated meat space by making an actual consumer product that is moving closer in price to animal-based protein. In order to rapidly grow the business and become profitable, scaling production with bioreactors of this size could be crucial for Eat Just’s Good Meat division.