What sizzled is now slumping
Beyond Meat’s struggles have spurred worries about future of the plant-based industry
For a while, it seemed Beyond Meat was taking over the world.
Its faux burgers and sausages were landing on dinner plates in homes throughout the United States and on the menu boards of chains like Subway, Carl’s Jr. and Starbucks. When the company went public in 2019, its shares skyrocketed as investors bet that the meatless movement was finally having its moment. During the pandemic, Beyond Meat’s grocery store sales surged as curious consumers tried its vegan options.
But these days, Beyond Meat has lost some of its sizzle.
Its stock has slumped nearly 83% in the past year. Sales, which the company had expected to rise as much as 33% this year, are now likely to show only minor growth. McDonald’s concluded a pilot this year of the McPlant burger, made with a Beyond Meat patty, with no plans to put it on the menu permanently.
In late October, the company said it was laying off 200 people, or 19% of its workforce. And four top executives have departed in recent months, including the chief financial officer, chief supply chain officer and chief operating officer, whom Beyond Meat had suspended after his arrest on allegations that he bit another man’s nose in a parking garage altercation.
What investors and others are debating now is whether Beyond Meat’s struggles are specific to the company or a harbinger of deeper issues in the plant-based meat industry.
“At the category level, we’re seeing volumes for plant-based meats down 22 consecutive months now,” said John Baumgartner, a consumer food analyst at the financial institution Mizuho Americas.
A few years ago, investors expected the category to explode with growth year after year, Baumgartner said. Now, he said, those expectations are being reconsidered.
“We’re positive on the future for plantbased 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 pricier plant-based meat for less-expensive animal meat. But others wonder if the companies have simply reached the maximum number of consumers willing to try or repeatedly purchase faux burgers and sausages.
Analysts at Deloitte, who conducted a survey of consumers this year, questioned whether the 53% who were not buying plant-based meats could be turned into customers.
While inflation played a role, so did a decline in the perception that plant-based meats are healthier than animal proteins. But the Deloitte analysts said another problem might be resistance to a product that some segment of customers see as “woke” and linked to politically left-leaning ideas.
The data from the category are mixed. Over the past year, volume sales of refrigerated plant-based meats slid 11.6%, according to IRI, a market research firm. But volume sales of frozen plant-based meats, which are typically less expensive than the refrigerated products, fell only slightly. Volume sales of faux chicken nuggets and patties rose sharply.
Moreover, some plant-based meat manufacturers are seeing rising sales. Privately held Impossible Foods said demand for its products grew tremendously last year.