Do Good Foods files for bankruptcy after being named “one of the world’s most innovative companies”
19 Jun 2023 --- US-based Do Good Foods, a start-up that focuses on reducing food waste and enhancing sustainability in the chicken business by turning residues from grocery stores into feed for chickens, has filed for bankruptcy.
The company received an investment of US$169 million from investment managing firm Nuveen in 2021 and has a US$170 million facility in Pennsylvania.
Its chicken is available at retail chains including Safeway, Target and ShopRite.
In 2022, Do Good Foods launched its first consumer product, Do Good Chicken, the first ever verified carbon-reduced chicken and the first verified chicken brand actively combating climate change.
In early March, Do Good Foods was named to Fast Company's prestigious annual list of the World's Most Innovative Companies for 2023.
Chapter 11 bankruptcy
The business filed for bankruptcy last Friday in the US state of Delaware.
Do Good Food Chicken, Do Good Foods Facility Management, Do Good Foods Fort Wayne, Do Good Foods, Do Good Foods Managed Services and Do Good Foods Selma will be heading to court to enter Chapter 11 proceedings.
Chapter 11 is frequently called a “reorganization bankruptcy,” according to the Administrative Office of the US Courts.
In 2022, Do Good Foods launched its first consumer product, Do Good Chicken, a carbon-reduced chicken and the first verified chicken brand actively combating climate change.One year of Do Good Chicken
In April, the company’s chicken division celebrated its launch's first anniversary, announcing it had diverted 27 million pounds (12.25 million kg) from going to landfill.
The company talked about “aggressive expansion” ahead of the second year of its chicken business, planning to incorporate two more processing facilities.
Furthermore, the company added, “Good Chicken has recently expanded its retail distribution with Inserra Supermarkets under the Shoprite banners, as well as Morton Williams in NYC and select Jewel-Osco locations in Chicago.”
In September 2022, the company noted that half of US citizens were more concerned about food waste than one year prior. Company research revealed that 85% of US consumers would be more likely to buy from a grocery store working to reduce food waste.
However, lack of resources and not knowing where to begin were barriers noted by 69% of respondents.
Struggling start-up space
Interest rates are at a 16-year high in the US, as the country’s Federal Reserve raised rates to tame inflation. This has made borrowing increasingly more difficult.
When the company launched, in 2021, central bank interest rates were at between 0% to 0.25%, compared to the current 5% to 5.25%.
Other start-ups are also struggling amid a complex macroeconomic environment.
Beyond Meat sold up to US$200 million worth of new shares last month to raise funds.
The company had US$259 million of cash on hand in April, compared to US$455 million in Q2 2022 and US$733 million at the end of 2021.
By Marc Cervera
