Vegan butter and cheese company Miyoko’s Creamery is raising $12 million and preparing for a potential sale of the business, according to documents viewed by Bloomberg News.
The Petaluma, California-based company is executing a “financial stabilization plan” in an attempt to place itself “on a path to profitability and open doors to a range of strategic alternatives, including selling the business,” Chief Executive Officer Stuart Kronauge told shareholders in a Nov. 10 letter.
The company has “run at large deficits for many years,” she wrote.
Kronauge was named CEO in August, following a tumultuous period at the company that included the ouster of its founder and original CEO, Miyoko Schinner. Sales of the company’s nut-based imitation dairy products doubled between 2019 and 2021, reaching more than $40 million, the letter shows, but they fell in 2022 to about $33 million and were around $25 million through Sept. 30, 2023.
The company and Kronauge didn’t respond to requests for comment.
In the letter, Kronauge blamed the slowdown on challenges in both the plant-based market and the larger economy. While a broad nondairy-cheese category tracked by market-research firm Circana has seen slowing sales since a pandemic-era peak in 2020, the smaller category of specialty nondairy cheese, which includes some of Miyoko’s products, grew 67% in 2021 and 16% in 2022.
Kronauge noted the recent closing of the company’s Petaluma manufacturing plant and said more opportunities to control costs lay ahead. “We also plan to continue discussions with potential strategic partners that could result in new partnerships or the sale of the business,” she wrote. “This plan requires an immediate injection of capital into the business.”
Miyoko’s raised $52 million in new funding in August 2021.
Current investors CULT, GroundForce and Obvious Ventures have already invested $1.5 million and agreed to put in as much as $12 million, but the company is also urging all shareholders to invest. Those who don’t will see their current stock holdings downgraded, the letter says, “without certain liquidation preference and voting rights” that they currently have.
Billy Bramblett, Miyoko’s original chief operations officer, a former board member and a current shareholder, isn’t pleased with the company’s proposition. “I believe that directors of a corporation have a fiduciary duty to protect the value of the shares and investment of those shareholders whose class(es) of stock they represent, and certainly in relation to what may be their own holding,” Bramblett told Bloomberg via email.