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 to how the personal computer industry was faring. 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 crushed in the process.
Beyond Meat Is Not Having a Good Week
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 suit with a story called, “Beyond Meat’s Very Real Problems: Slumping Sausages, Mounting Losses,” along with The New York Post reporting on two separate stories, one that reported on pictures of mold and documents that allegedly found listeria in the factory, as well as the company’s “woke” image, and the sharks were in the water, feasting on chum.
The executives were not spared from the media field day, 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 barbaric.
Plant-Based Meat is 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.
But 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. and quoted by Bloomberg.
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 highly processed foods. The public doesn’t have an illusion these fake formulas are healthier for them (some are but others offer about the same amount of fat and calories as 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, they aren’t necessarily that much better for us.
The Cost of Plant-Based Meat Is Still 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.
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.
Meatless Meat is 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, who promised to take his business elsewhere.
Climatarians and Flexitarians On the Rise
Whatever happens to the embattled company, plant-based foods are here to stay. That’s because over half of the population wants to try eating more plant-based, according to a Gallup survey. And among Gen X and Millenials and Gen Z consumers, flexitarians are a growing number, amounting to 54 percent of the population to date.
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.
That means by cutting out meat and dairy you could save over two-thirds of your own personal carbon “foodprint,” as the climatarians like to say. (A climatarian is a consumer who shops with the impact on the planet in mind and chooses food and other goods that lower their climate impact, one checkout counter at a time.)
Plant-based eating may be in a dip, as a result of factors that are as far-reaching as inflation, the election, health awareness, and supply chain issues, as well as intense competition, but the fate of one company is not the same as the fate of the entire industry.
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
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.
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