The 11-unit Massachusetts-based chain, which had been looking for a buyer, is closing its locations on Thursday, two years after it emerged from bankruptcy.

Another plant-based chain is shutting down.

Clover Food Labs which two years ago emerged from bankruptcy with a vow to grow rapidly across New England, is closing its remaining 11 restaurants on Thursday, the company acknowledged in an email on Wednesday.

“For 17 years, we have championed local farms and served tens of thousands across Greater Boston,” Julia Wrin Piper, Clover’s CEO, said in a statement to customers announcing the closure. “We’re deeply saddened to share this news—for our employees, New England farmers, and you, our guests and supporters.”

Clover Food Lab was once considered a hot, up-and-coming concept that hoped to ride a wave of plant-based menus. Ayr Muir founded the concept as a food truck in 2008. Eventually, the concept grew to a dozen locations.

Former Panera Bread CEO Ron Shaich was an early investor and at one point the brand’s locations boasted $1.7 million average unit volumes and EBITDA margins, or earnings before interest, taxes, depreciation and amortization, of 18% of revenues.

But the chain struggled during the pandemic. The company didn’t get anticipated financing or sales growth, ultimately leading to its 2023 bankruptcy filing.

Clover emerged from that process the next year and vowed to grow to 60 locations in New England over the subsequent five years.

But then Clover ran into an economy suddenly unfriendly to both the industry and the plant-based trend. In April, the company warned that a shutdown was possible by the end of this month, while reports indicated that the concept was seeking a buyer.

In her message, Piper said that rising costs did the company in, noting that ingredient costs are up 30% to 50% over the past two years. “In the best of times, margins are thin, building new restaurants is expensive, and our industry is the most exposed to macroeconomic forces,” Piper wrote.

“Today, everyone is getting hit with rising costs. Food prices are up. Delivery prices are up. And a hundred other costs are moving in the same direction.”

Piper said that the company raised prices, “but there’s a limit. Every one of you is likely thinking about how you save and spend right now, too.”

A number of plant-based restaurant chains years ago received investment funding while companies like Impossible Foods and Beyond Meat put their products into grocers and major fast-food chains. The concepts hoped to catch fire with meat-loving consumers who wanted to cut back for health and environmental reasons.

But the trend has clearly waned. Beyond Meat, the plant-based meat maker that in 2019 sold its products in Dunkin’ locations and which counted former McDonald’s CEO Don Thompson among its backers, has lost more than 99% of its stock price value over the past five years.

Pinky Cole, the founder of the plant-based concept Slutty Vegan, filed for bankruptcy earlier this year. The vegan chain Planta filed for bankruptcy and was sold to its lender earlier this year. And Veggie Grill closed 40% of its locations in 2024 before it was sold to Next Level Burger.

At the National Restaurant Association Show last week in Chicago, plant-based food items that in recent years were popular displays among the exhibits, were few and far between, largely replaced by protein.

Source https://www.restaurantbusinessonline.com/financing/clover-food-lab-shuts-down-plant-based-meat-trend-fades