BOL Foods founder Paul Brown said his ethically-inspired move had proved a tough sell to investors because a similar decision to remove meat and fish had dealt a near £3 million blow to sales.
The 38-year-old, who set up BOL in 2015 following a 14-year stint at smoothie-maker Innocent, said he felt compelled to produce purely plant-based ready meals following concerns over the environmental damage of intensive animal farming.
It has been widely claimed that meat and dairy farming is exacerbating global warming by filling the atmosphere with dangerous levels of carbon dioxide.
Despite the ingredient shake-up, BOL is still on track to more than double sales to £10 million this year, as the firm eyes an international push into Ireland and France.
Mr Brown said the financial impact of his decision to cut out dairy would “not be as drastic” because existing products were being redeveloped.
He said: “When we dropped meat and fish it was a case of dropping the recipes from market, so going to our customers and saying these recipes will no longer be available.
“This is why the sales dropped so drastically.
“Because we have had more time to plan this change, which we will be making at the start of the summer, all being well we won’t lose the space and lose the sales.
“I can’t afford to make another decision that halves the size of the business.”
BOL - pronounced “bowl” - employs 41 full and part-time workers and manufacturers its salads, vegetable pots and soups at sites in Leicestershire and Merseyside.