COVID-19 has claimed another food-related business, this time plant-based seafood startup Ocean Hugger Foods.
The company, which had raised $500,000 in late 2019, had been gaining traction through much of 2019 for vegan sushi products as it reeled in wins at select Whole Foods and quick service restaurants such as Ahipoki.
But once COVID-19 hit, the bulk of the company’s customers closed down for months and, as a result, Ocean Hugger couldn’t survive.
The company disclosed the news via an open letter on its website. From the letter:
Due to the COVID-19 health crisis our world is facing, and the fact that our company sells exclusively to foodservice customers (such as university and corporate cafeterias, and restaurants) who are suffering greatly during this time, it is with tremendous sadness that we must report that Ocean Hugger Foods must cease operations.
The company had launched its second product at last year’s National Restaurant Show, a vegan eel sushi (unami). The product followed its original ahimi (the company’s plant-based “tuna” sushi).
While some food companies that rely heavily on food service were able to sustain themselves through ramped up restaurant delivery or by pivoting to direct to consumer channels, Ocean Hugger didn’t benefit much from either of these alternative models. Sushi is the type of food most prefer to eat fresh and in-venue, and it certainly isn’t the type of product that could be delivered direct to consumer through order-by-mail.
While Ocean Hugger wasn’t the only company with plant-based sushi alternatives, they were maybe the most well known and seemed to be on a good trajectory before COVID-19.
With restaurants in the US and other markets slowly reopening, hopefully other startups who have been struggling like Ocean Hugger can start to sell their products again. However, with some markets starting to see an increasing number of COVID cases as people start heading to restaurants, chances are we’ll probably see some future COVID-related casualties.