They've shown normal animals before. That's what they eat. But that's how you become a man. I think the crazy part is that there aren't any orgies going on. Think about it. You have a bunch of 11+ year olds running around without adult supervision. They should be banging each other
People eat Pokémon. This has been hinted at numerous times in the anime and some pokedex entries talk about how tasty some Pokémon are. This isn't the only messed up thing about the show, some Pokémon have some pretty dark backstories.
Cubone (my fav Pokemon)
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Wears the skull of its deceased mother. Its cries echo inside the skull and come out as a sad melody. It pines for the mother it will never see again. Seeing a likeness of its mother in the full moon, it cries. The stains on the skull it wears are from its tears.
Spoink
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Spoink bounces around on its tail. The shock of its bouncing makes its heart pump. As a result, this Pokémon cannot afford to stop bouncing - if it stops, its heart will stop.
Yamask
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Each of them carries a mask that used to be its face when it was human. Sometimes they look at it and cry.