This week, Beyond Meat had some lousy news for Wall Street: US sales were down 13.9% year over year.
According to the company, the culprit for the sales drop was a softening in their grocery and foodservice markets.
For some, a sales drop for a high-flying alt-meat pioneer like Beyond might come as a shock. Like Impossible Foods and others in the fast-growing plant-based meat industry, Beyond has had mostly good news over the past few years as revenue went up and to the right on the back of new sales channels, geography expansion, and growing consumer demand.
So what’s going on here? Why is an alt-meat bellwether like Beyond suddenly seeing its sales drop?
The company cites a number of issues, including supply chain constraints, restaurant labor challenges, and ordering uncertainty in the face of never-ending pandemic. They also say new competition is putting downward pressure on market share.
I have no doubt these reasons are true in varying degrees, especially increased competition. More alt-meat alternatives are coming to market all the time, giving grocers and consumers more choice.
Still, from what I can tell, Beyond Meat products are ubiquitous on the shelves of every grocery store or warehouse club I walk into. So if the product is still widely available, I have to wonder: is this a Beyond Meat-specific problem? Or, more specifically, are consumers buying more plant-based meat in general and just less Beyond?
Maybe. Market watchers have estimated that plant-based market grew 12.1% year over year for the month ending July 31st 2021, which shows the industry doesn’t necessarily have a sales problem, at least yet. Personally, I’d love to know what Impossible’s sales have done over the same period. The two companies are the Coke and Pepsi of alt-meats, and if Beyond’s sales drop while Impossible’s continue to go up, that would be a bad sign.
At this point, it’s worth emphasizing I have no idea if this is the case, only that it’s a possibility. Remember, unlike factory-farmed cow or chicken meat, plant-based meats are unique. They are essentially designer products, different in taste, mouth feel and other flavor attributes. I know some people who like Impossible but won’t eat Beyond, and vice versa. Maybe there’s just more of the former than the latter.
I also suspect there might be another non-Beyond meat factor at play here, which is this: a growing negative perception of some plant-based meat products.
Like many who follow the plant-based meat industry closely and are overly aware of the techology-powered ingredient list and carbon footprint of the products, I’ve had friends who don’t spend nearly as much time thinking about plant-based tell me they’ve heard these products are highly processed, unhealthy (or outright bad for you) and less natural compared to the “real thing”.
All of which sounds a lot like the messaging I’ve watched come from the Cattleman’s Association over the last few years. The large meat-growers trade group and other lobbying organizations have continued to push out thought pieces and commentary putting plant-based (and cell-based) meat in a negative light. The messaging is all focus-group tested and aimed to directly appeal to a variety of consumer values and it appears it may be working.
So: Is this a Beyond problem, or is it a canary in the coal mine indicating a growing perception problem for alt-meat? I suspect it may be a little of both. Either way, I am sure the plant-based meat – as well as the factory farming industry – are all watching what happens very closely.
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