The demise of Farmison tells a story that goes well beyond the DTC butchery player. Having racked up soaring growth in the pandemic, the business was put formally into administration last week after failing to raise new funds to secure its future.

Brought by private equity investor Inverleith in 2022, the online butcher had grand plans to hit sales of £100m. Now it has ceased trading, with most of its 75 employees made redundant.

Administrator FRP pointed to its “high cost base” and failure to reach revenues to justify the significant investments made in the business. “Without a major capital injection, the business could not continue trading,” the administrator said.

Put simply, the group appears to have run out of cash and couldn’t find a backer willing to bet on a longer-term turnaround.

It’s the typical scenario for a business forced to call in the receivers. But Farmison also points to wider trends that are causing headaches for an army of food and drink challengers.

Firstly, big bets on online growth have run into trouble in the bounceback from Covid.

As The Grocer wrote in March, the dramatic shift in online buying during the pandemic did not turn out to be the ‘new normal’ after all. Consumers have shifted back to typical pre-pandemic buying habits at a faster and deeper rate than many expected.

That slowdown in online consumption has been exacerbated by a consumer slowdown generally – with new figures yesterday showing retail sales growth is well below the headline inflation rate. This has hurt premium digital players as shoppers prioritise affordability.

Farmison was arguably better placed than many DTC rivals to weather this storm. It had created a differentiated, high-quality offer that was much loved by its customers; hence being able to stage a £2m crowdfund campaign late last year before it was eventually pulled amid management disagreement.

A brand like Farmison was also well placed to capitalise on longer-term consumer trends: a focus on provenance and sustainability with the convenience of delivery and flexibility.

But this is not a cheap business model to scale up, which brings us to the second fundamental headwind. As the era of cheap debt comes to an end – at least for now – investors are focusing more urgently on the prospect of bottom line returns. And they are less willing to plough in endless – and cheaply funded – pots of cash to fund growth.

That is to the detriment of many growth companies, which make significant early-years losses to fund customer acquisition.

Before the current inflationary wave, an admired business like Farmison with a loyal consumer base could have raised the necessary funds to keep it going. But access to growth capital is now significantly harder.

Indeed, fellow DTC agriculture player Farmdrop also ceased trading in December 2021 after failing to secure new funding and falling victim to these same pressures.

In Farmdrop’s case, it had raised £36m from investors willing to fund growth. But it found that willingness had hit its limit when it sought another £20m, and eventually a buyer, to continue to fund those losses while it moved towards profitability.

As The Grocer wrote after the collapse: “Farmdrop’s model – with runaway spending and ever more costs – just couldn’t balance the sustainable and ethical heart of the business with ambitions to compete against the mighty Goliaths of the industry.”

The likes of Farmdrop and Farmison are by no means alone. Ethical supermarket Planet Organic is in a race to secure its future, having also found funding has run dry.

It is a grave threat to innovation in food retail if smaller players cannot find backers to enable them to challenge the status quo and back the expense of championing sustainability and ethics.

But – just as the era of cheap debt is over – it may well be that the era of debt-fuelled growth will take a back seat.

Challenger brands may need to prioritise a sustainable bottom line over changing the world, for now.