For a moment it seemed that Beyond Meat was taking over the world.
The fake burgers and sausages ended up on plates in homes across the United States and on the menu boards of chains such as Subway, Carl’s Jr. and Starbucks. When the company went public in 2019, shares skyrocketed as investors bet that the meatless movement was finally reaching its peak. During the pandemic, Beyond Meat supermarket sales soared as curious consumers tried the vegan options.
But these days, Beyond Meat has lost some of its zest.
The stock is down nearly 83 percent over the past year. Sales, which the company had expected to increase by as much as 33 percent this year, are now likely to show only minor growth. McDonald’s completed a pilot of the McPlant burger — made with a Beyond Meat patty — this year with no plans to make it on the menu permanently.
At the end of October, the company said it would lay off 200 people, or 19 percent of its workforce. And four top executives have left in recent months, including the chief financial officer, chief supply chain officer and chief operating officer, whom Beyond Meat had suspended following his arrest on charges of biting another man in the nose in an altercation. in a parking garage.
What investors and others are now debating is whether Beyond Meat’s struggles are specific to the company or a harbinger of deeper problems in the plant-based meat industry.
“At the category level, we’ve seen plant-based meat volumes decline for 22 straight months now,” said John Baumgartner, consumer nutrition analyst at financial institution Mizuho Americas.
A few years ago, investors expected the category to explode with growth year over year, said Mr. Baumgartner. Now, he said, those expectations are being reconsidered.
“We are positive about the future of plant-based meat, but this is a 20 to 25 year story,” he said. “It’s not going to happen in three to five to 10 years.”
Some say the slowdown in sales is a product of food inflation as consumers trade more expensive plant meats for cheaper animal meats. But others question whether the companies have simply reached the maximum number of consumers willing to try or repeatedly purchase fake burgers and sausages.
Analysts from Deloitte, who conducted a consumer survey this year, wondered whether the 53 percent who did not buy plant-based meat could become a customer.
“The category has been growing at double-digits for a long time and was expected to continue, but what we saw this year is that the number of consumers buying it did not increase,” said Justin Cook, the US consumer products researcher. leader at Deloitte.
Although inflation played a role, the perception that plant-based meat is healthier than animal protein also declined. (The companies are focusing on the environmental benefits.) But the Deloitte analysts said another issue could be resistance to a product that is seen as “awakened” by some of the customers and is related to politics leftist ideas.
In August, when the restaurant chain Cracker Barrel stated on its Facebook page that it had begun offering the meatless “Impossible Sausage,” the post was flooded with thousands of comments from irate customers. “Wake up, go bust,” one wrote. “You just lost a lot of your base. You clearly don’t know your customers.’
The data surrounding the category is mixed. Over the past year, volume sales of refrigerated plant-based meats fell 11.6 percent, with packages of mock minced meat and patties taking a particular beating, according to IRI, a market research firm. But volume sales of frozen plant-based meat, which are usually cheaper than refrigerated products, fell only slightly. Volume sales of imitation chicken nuggets and patties rose sharply.
In addition, while some plant-based meat producers are struggling, others are seeing increased sales.
In October, Brazilian meatpacking giant JBS announced it was closing Plantterra Foods, its plant-based meat company, after just two years. And volume sales for vegan meat producer Morningstar Farms, which Kellogg has said it plans to spin off or potentially sell, fell sharply this year in almost every category, according to IRI data. Speaking to Wall Street analysts in August, Kellogg CEO Steven Cahillane attributed the drop to supply chain issues with a co-manufacturer of the products.
But the privately held Impossible Foods said demand for its products boomed last year.
“We’re not experiencing anything like what Beyond Meat has reported or some of the other brands in the space,” Keely Sulprizio, a spokeswoman for Impossible Foods, said in an email. “On the contrary, we are seeing hypergrowth, with retail sales alone growing more than 60 percent year-on-year.”
The IRI data shows that while sales volumes of Impossible ground beef and mock burger patties fell slightly, volumes of other categories, including frozen mock meat and chicken, soared.
“We recently launched frozen with a larger family size, and it is very popular with both retailers and consumers,” said Ms. Sulprizio.
Speaking to Wall Street analysts in early November, Ethan Brown, the founder and chief executive of Beyond Meat, said an increasing number of plant-based meat players are vying for a smaller group of consumers as shoppers turn to cheaper meats. pet food. protein. As a result, “there seems to be a shakeout underway, and we expect more brands to pull out or consolidate,” Mr Brown said. Beyond Meat declined to comment on this article outside of talking to analysts.
While the company hoped to restore growth in its refrigerated products, which have some of the highest profit margins, Mr. Brown noted that it was expanding distribution of many of its frozen products.
“Frozen plant-based chicken is the largest single subcategory in all plant-based meats and continues to grow at double-digit rates,” he said.
Mr Brown also noted that McDonald’s continued to offer the McPlant burger in other markets, including Britain and Ireland, and that Beyond Meat was testing new products with other chains, including KFC and Taco Bell.
For example, Panda Express said in September it would offer Beyond the Original Orange Chicken on the menu nationally for a limited time after an initial offering in New York City and Southern California sold out in less than two weeks last year.
It “showed us the high demand for an innovative plant-based dish at Panda,” Evelyn Wah, vice president of brand innovation for Panda Express, said in an email. She added: “We are happy with the positive feedback we received from our guests.”
Mr Baumgartner said when his firm asked consumers in a survey why they didn’t buy plant-based meats, they said they didn’t like the taste. As the competing companies continued to improve existing products while quickly rolling out new ones, he said, he is concerned that some products are coming to market too quickly.
“You’re not selling iPhone version 1.0 and maybe it’s not the best and best, but consumers can upgrade to version 2.0, which has better graphics and keyboard,” said Mr. Baumgartner. “If you roll out something in the food industry that is not quite where it should be in terms of quality and taste and the consumer tries it and has a bad experience, they will not come back.”
