Mar 14, 2024 - News

Investors sowed millions into slow-growing chicken venture, then it closed

Illustration of chickens and chick with abstract shapes.

Illustration: Allie Carl/Axios

Editor's note: This is part 1 of a series about the sudden suspension of operations by Cooks Venture of Decatur.

72,000 baby chicks were delivered to Leslie Harp's farm near Clifty at 5:30pm on Nov. 17.

  • By 8pm, she'd been notified that the company that owned the birds — Cooks Venture — was going out of business.

Why it matters: The Decatur company's sudden closure was startling. More than a million chickens were euthanized and not used for food, including those on Harp's farm.

Many farmers, including Harp, still haven't received payment or help disposing of carcasses despite promises of both from Cooks' management.

  • And still, months later, questions remain about how a "next-generation food company" that raised upward of $150 million could fold without warning.

What they're saying: "There was never any indicator that they were ever going out of business … or [had] any financial issues" because the company kept bringing chickens to raise with only 7-10 days between deliveries, Harp said. Ten days is a short turnaround in the industry.

  • There is the "potential to lose our farm if we don't find another [company to grow for] or find another path," she told Axios in January.

The big picture: Cooks Venture launched at a time when many U.S. consumers were looking for options to buy slow-growing, free-range, raised-without-antibiotics chicken — for taste and quality. Some consumers believe this type of farming is better for the planet, though there are trade-offs.

  • A leader in the conversation, Whole Foods, said in 2016 it would require vendors to raise slow-growing chickens by 2024.
  • A venture to capitalize on the demands of discerning consumers surely made sense to company executives — Cooks founder Matthew Wadiak and executive vice president Blake Evans — and investors.

Follow the money: Axios estimates Cooks Venture collected between $123 million and $152 million from private investors from its founding in 2019 through 2023, per SEC and Pitchbook data. The most recent infusion was $3.5 million in late August, just three months before closing.

  • The company laid off 511 workers, including six executives, from Nov. 20 to Nov. 30.
  • More than 80 contract farms in Arkansas were growing its chickens.

The intrigue: It's unclear how the company used its capital, if it maintained a prudent reserve or why it continued to place chicks on farms when executives were aware of a possible closure.

  • Evans and former employees of the company did not immediately respond to requests for comment.

Between the lines: The realities of chicken farming make Cooks' abrupt closure even more striking. It takes about three weeks to incubate an egg and about eight weeks before this breed of chicken is grown enough to slaughter, roughly 11 weeks.

  • In other words, the supply line is planned well in advance.
  • Cooks Venture's human resources director told employees in a Nov. 17 letter that the company had been "engaged in serious discussions with investors to obtain financing" since "at least as early as Sept. 1, 2023."

That span is 11 weeks, or about how long it takes to grow the Cooks breed to harvest weight.

The latest: Harp was more optimistic speaking with Axios in March. "We're not in danger of losing our farm at the moment because the payment's not due until October," she said.

  • In the meantime, she's exploring options to convert the farm to horticulture, but noted she had to get a job to pay the bills.
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