Beyond Meat Face Lawsuits. This May Change Your Next Burger Order
Plant-based burger leader Beyond Meat is facing a lawsuit that claims its products do not contain as much protein and nutrients as the company advertises. Meanwhile, another suit alleges the burger alternative is not "natural" since it contains the unnatural ingredient methylcellulose. Filed by Don Lee Farms, the label-claim lawsuit accuses Beyond of overstating its protein content by up to 30 percent. The suit, filed in California, is just the latest development in a four-year-long legal standoff between the companies, and Don Lee Farms once supplied the raw materials to Beyond, but later sued the giant for breach of contract.
In the latest legal foray, Don Lee Farms’ parent company Goodman Food Products claims that it sent Beyond Meat Beefy Crumbles and Burgers to an unbiased third-party testing facility to determine whether Beyond was boosting the protein content claims, which would be a major problem since that is one of its biggest selling points.
Don Lee Farms asserts that Beyond is violating California's strict state laws regarding false advertising, and unfair competition – as well as violating the federal Lanham Act – the law that regulates trademarks, service marks, and unfair competition.
The headline of a recent Forbes article: “'Something is really wrong at Beyond Meat,' According to this Investor." The filing questions Beyond's claims that its products are made without synthetic ingredients but testing found that Beyond products include methylcellulose – an emulsifying ingredient made from chemically treated plant cells. Methylcellulose is not considered natural but it is commonly used in many plant-based meat alternatives.
“Beyond Meat’s problems are many, but they trace to one root cause: the company’s tendency to ‘over-promise and under-deliver,’ then scramble for excuses,” the lawsuit reads. “With the company reeling due to operational failures, CEO Ethan Brown has offered up ‘excuses’ described as ‘laughable’ and that industry insiders pan as ‘difficult to take ... seriously’ and as flunking ‘the smell test.’
Don Lee Farms’ lawsuit emphasizes that Beyond’s advertising tactics and misinformation have hurt its own ability to sell its products. In the lawsuit, the company refers to its signature plant-based burger as “the first truly all-natural plant-based burger,” claiming that Beyond misrepresents its burger as all-natural and high in protein. The lawsuit also notes that Beyond then mislabelled its products under federal FDA standards.
Beyond is actively pushing back on Don Lee Farms’ claims, referring to them as “fictional” accounts and narratives designed to overtake their market position.
“The allegations in the filing lack merit and we are prepared to vigorously fight this in court,” a Beyond Meat spokesperson told Food Dive.
Beyond is Facing More Than One Lawsuit
In another legal filing, a class action suit joined by six Illinois residents alleges that Beyond is misleading its customers. This complaint focuses on the quality of the proteins that Beyond uses, emphasizing that not all proteins offer the same nutrition profile. The Illinois residents claim that the proteins boasted by Beyond Meat are low-quality.
The lawsuit asserts that the Beyond Beef Plant-Based Ground contains seven percent of the daily value for protein, not the 40 percent that the company claims. This data calls into question whether Beyond meat is as good a meat alternative as it advertises.
“As manufacturers, suppliers, wholesalers, distributors, and/or retailers, Defendant tested, or should have tested, the Products prior to sale,” the Illinois lawsuit asserts. “As such, Defendant knows or should have known that the claims are false and misleading on the Products.”
Beyond Responds to the Allegations
Beyond and Don Lee Farms have engaged in legal battles for four years, following the early termination of Don Lee Farms' exclusive supply agreement. Since then, the company has launched an anti-Beyond campaign that aims to reveal the truth behind the company and its products. An earlier, separate case will be tried on September 26, 2022, dealing with breaches of contract and fraud.
Last August, Don Lee Farms lost its first lawsuit against Beyond Meat, citing similar trade secret violations and unfair competition charges. The court's ruling squashed Don Lee Farms' first attempt to bring Beyond to trial. In a press release from last year, Beyond stated that:
“The Court’s ruling puts an end to the fictional narrative Don Lee Farms has attempted to use throughout this case that Beyond Meat misappropriated Don Lee Farms’ trade secrets to manufacture the Beyond Burger and other products. Beyond Meat will vigorously defend against Don Lee Farms’ remaining claims against Beyond Meat.”
Beyond Fights to Maintain Market Share
Beyond Meat is struggling to maintain its market standing as its stock price has fallen over recent months. As of July 11th, the company shares were trading at just under $30 per share, which is a substantial downturn from $150 a year ago, and its market high of $234.90. Despite hiring no lesser cultural influencer than Kim Kardashian as Chief Taste Officer, Beyond Meat is falling short of its goals of market domination. Now, Beyond faces serious competition from other meat alternatives such as Impossible. Lightlife, MorningStar Farms, and dozens of upstarts, all eager to take advantage of the consumer demand for tasty, healthy, protein-packed meat alternatives. These lawsuits are the last thing the company needed.
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