Remember Hewlett-Packard? There once was a day when the world watched the company's every move and its stock price was considered a bellwether as to how the personal computer industry was faring. It was synonymous with the future of our enthusiasm for tech. What does this have to do with plant-based food and the future of alternative protein?
The leading brand in the plant-based food space, Beyond Meat, is in danger of becoming the HP of plant-based meat. When The New York Times writes a scathing business story entitled, "Beyond Meat Is Struggling and the Plant-Based Meat Industry Worries," there are parallels to be drawn. The media is having a feeding frenzy on Beyond Meat, and the company's stock is getting hammered in the process, down to under $13 from a high of over $234.
Beyond Meat Is Not Having a Good Week
The Times article was just the beginning. The second shoe fell the next day, in the form of a bombshell story on Bloomberg News that listed a litany of disgusting and unsanitary conditions at Beyond's Pennsylvania plant, one that was supposed to be a cornerstone of growth for the company, in what is just the latest in a long list of growth hurdles that have included supply chain issues and management gaffes.
The Wall Street Journal followed up with a story called, "Beyond Meat's Very Real Problems: Slumping Sausages, Mounting Losses," and the same day and the next, The New York Post reported on two separate stories, one that reported on pictures of mold and documents that allegedly found listeria in the plant-based meat factory, as well as the company's "woke" image. Suddenly the sharks were in the water, feasting on pea protein chum.
Beyond's executives were not spared, as The Journal quoted insiders saying it was hard to "push back against CEO Ethan Brown," who was forced ultimately to fire Beyond's COO after he was in a brawl in a parking garage that allegedly involved him biting another man's nose. The jokes were plentiful (did beef alternatives include human flesh?) and might have been humorous had the whole scene not been so barbaric.
Plant-Based Meat is Now a Crowded Industry
The stock decline started when other plant-based meat companies began grabbing market share. The entire plant-based food industry is at an inflection point, as more competitors are entering the marketplace, offering cleaner products with fewer unrecognizable ingredients, a more modern approach to marketing, and products that many consumers think taste better.
According to a report in The Washington Post there are more than 60 plant-based meat companies competing for market share, and the sales are shrinking, so while the little guys appear to be growing it's at the expense of the established players. (There are fewer plant-based milk companies, at 45, and more consumers are adopting the dairy-free movement than the meat-free approach.)
That story (a full 10 days before the rest) pointed out that the big players who rushed to enter the plant-based market after consumer interest surged during the pandemic, like Tyson, Kelloggs, Nestle, Smithfield, Perdue, Hormel, and others, have since retreated.
As Beyond Meat was letting go of 19% of its workforce (or 200 people) Brazilian-based food giant JBS SA announced it was closing down its Colorado facility and leaving the US market. McDonald’s had tested the McPlant and decided not to roll it out nationally (though it's still sold in the UK and Europe).
While more competitors are entering the market, consumers appear to be stepping back from plant-based meat alternatives. Sales of refrigerated meat alternatives have dropped 10.5 percent by volume for the 52 weeks ending on Sept. 4, according to research conducted by Information Resources Inc. as quoted by Bloomberg. So now there are more people feasting on a smaller pie.
Beyond might have been first to the table, but it may not be the future of plant-based meat. Some people don't love the taste of Beyond burgers and think they are actually too meat-like. But now there are choices, so consumers can decide for themselves whether they prefer Dr. Praeger's or Impossible or other lighter, cleaner formulations.
So before we view Beyond Meat as the most important indicator of the plant-based market and consumers' desire for eating fewer animal products, let's remember that some people have chosen to move beyond the fake meat trend to go toward a healthier diet of less processed foods in general.
Plant-based meats like Impossible, Lightlife, Morningstar, and others are all vying for consumer loyalty, but at the end of the day, they are highly processed foods. The public is no longer under any illusion that these fake formulas are healthier for them than meat. Some are, but others offer about the same amount of saturated fat and calories as lean beef.
What meat alternatives offer is a more planet-friendly option, since meat agriculture is well-known to be one of the biggest contributors to greenhouse gases in the food sector. So while plant-based proteins are healthier for the environment, and no doubt for farmed animals, if you're a health consumer you are going to pass on the fake stuff. We are better off eating a veggie burger made with whole food ingredients like beans, beets, or mushrooms.
The Cost of Plant-Based Meat Is Higher than Beef
Plant-based sales have dropped since the pandemic when more Americans were searching for ways to be healthier. Among the multiple reasons is that customers are eager to avoid paying more for their ingredients at the supermarket.
Beyond Meat is still somewhat pricier than animal products by about a dollar a pound, and families who seek bargains at the store are going to choose cheaper meat options. But the company's recent woes go well beyond (sorry) the price of its meatless grounds.
And meatless meat remains pricier than beef, even as the costs of everything rise. The plant-based alternatives are not expected to come down in price to reach parity until 2023, at the earliest.
Beyond Meat's Stock Price Is Running Downhill
The IPO of Beyond Meat in 2019 was highly anticipated and touted by food industry analysts and plant-based advocates alike as the beginning of a new day when consumers appeared ready to embrace plant-based meat.
Beyond's stock price debuted at $25 and soared to a high of $234.90 in July before starting its descent over the next several years, until now, three years later when the stock price is trading at just under $13 (as of November 22, 2022). The stock has been falling long before the recent media feeding frenzy, it should be noted.
What happened? Just as climate change is becoming a more accepted reality, Americans are seeking ways to eat healthier and stay disease free in the wake of a global pandemic. So if you don't love the taste of Beyond (which is so beefy it's almost meatier than meat) and you want to be healthy by choosing less processed foods, Beyond gets two strikes when it comes to flexitarians and plant-based eaters who want to eat healthy and clean.
Plant-Based Chicken is a Bright Spot
The exception: Beyond's chicken alternatives are soaring in sales, as evidenced by the fact that Beyond Meat's chicken product is now growing faster than its other offerings and is being picked up by KFC and other chains, in the wake of its popularity at fast food chain Panda Express. Panda Express is selling so much Beyond Chicken that it has rolled out the plant-based dish across the entire country.
The plant-based chicken is faring better than Beyond's sausage or patty products, but none of this should be the determining factor of whether plant-based faux meat is going to be the future of our protein source of choice in this country. It's facing backlash from health-conscious consumers and climate deniers alike.
Meatless Meat Aligned with Woke Culture
Eating for the planet and trying to reduce one's carbon footprint is also receiving backlash from those who see it as an integral part of "woke" culture. the "woke" culture of sustainability and climate change has had some consumers sweeping up plant-based products into the culture wars that pit right against left.
When Cracker Barrel announced it would start to offer meatless options on its menus, the backlash in comments began to show up. "Go woke and go broke," wrote one commenter, who promised to take his business elsewhere.
So Why Will Plant-Based Eating Win? Climatarians
Whatever happens to the embattled company, or fake meat in general, eating more plant-based foods is here to stay. That does not mean eating plant-based meat alternatives.
Why will the plant-based protein movement expand? Because farming animals is a massive contributor to greenhouse gases. This has become an ever-concerning reality among young consumers.
Last August, the UN released its "Code Red for the Planet" report and urged first-world nations to eat less meat, pork, and poultry for the sake of reducing our global warming rate and temperatures. They followed it up with a more hopeful paper that gave us an incentive. If we all eat more plant-based we can keep climate change in a slower state of rising temperatures and live life as we know it. The other alternative is dire, scientists warned.
The Stockholm Environment Institute then issued a report that found the raising and feeding of animal products contributes 20 percent of total greenhouse gas emissions, and by many estimates, it is closer to 30 percent. By cutting out meat and dairy, it's possible to reduce your contribution to climate change significantly.
Consumers who care about the climate, aka "climatarians" want to lower their carbon footprint, to help achieve the modest goal of keeping global warming below the rate of rising 1.5 degrees Celsius, per year.
That means by cutting out meat and dairy you could save over two-thirds of your own personal carbon "foodprint," as the climatarians call it. Growing numbers of climatarian shop with the impact on the planet in mind and chooses foods and other goods that help to lower their climate impact, one checkout counter item at a time.
As of last January, a survey found that over half of the population wants to try eating more plant-based, for health and the sake of the planet, but this does not necessarily mean buying fake meat. Among Gen X and Millenials and Gen Z consumers, flexitarians are a growing number, amounting to 54 percent of the population. As climate change becomes more of a kitchen-table issue, these numbers are expected to expand =.
Flexitarians are those consumers who eat more plant-based than their parents and who occasionally eat meat but are trying to go even more plant-based for the planet, with a full understanding of the toll that animal agriculture takes on CO2 emissions. Estimates vary but a reliable source has concluded that animal agriculture or "big farm" companies account for over 60 percent of all greenhouse gas emissions in the food sector.
Plant-based eating is not dead or even on life support. If anything is going stronger than ever. As more consumers want to help lower their carbon footprint, eat healthier, and not be a participant in the cruel treatment of farmed animals, flexitarians, vegetarians, and pescatarians –– and all styles of plant-based eaters are actually on the rise.
Bottom Line: Beyond is Not Synonymous With Plant-Based Eating, Which is Not Going Away
Plant-based meat sales may be in a decline, as a result of factors that are as far-reaching as inflation, the election, health awareness, as well as increased competition, but the fate of one fake meat company is not the same as the fate of the entire plant-based eating movement.
As more younger consumers care about their impact on the planet and their healthy food choices, eating plant-based will gain in popularity. The future of highly processed meats like Beyond is less certain.
