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New consumers and investors are losing interest in Beyond Meat for a variety of reasons. Those curious about vegan products have many more choices of products. Investors are already turning to new trends.
Burgers made of peas, beets and brown rice: With this, the US start-up Beyond Meat made itself the darling of investors when it went public in 2019. The share price tripled in the first few days of trading. The appetite of consumers also grew steadily. Beyond Meat is now the market leader in the USA and supplies numerous restaurants and retailers outside the home market – also in Switzerland.
But after a lull in autumn, things are now going down further. Revenue in the second quarter fell 31 percent to $102 million. The company is still making losses – although employees have already been laid off and the costs are therefore somewhat lower.
The view ahead is cloudy. Founder and CEO Ethan Brown shriveled back on sales forecasts – an admission that the company can’t meet its once-lofty goals. Other companies active in the plant-based meat market have also lost value.
So are consumers suddenly turning their backs on pea meat? No. Nevertheless, the years of steep growth rates are probably over. There are various reasons for this: consumers now have more choice. Other large food manufacturers such as Kellogg’s or Tyson Food are entering the market. The largest Swiss food manufacturer, Nestlé, also plays a key role in the meat substitutes market.
Legend: The glory years at Beyond Meat are over. This also has something to do with the market entry of other companies. AP Photo/Richard Drew
At the same time, the large food manufacturers have more market power than a single start-up. For example, you can negotiate differently with retailers than a supplier who only has a small range. In addition, food giants are more likely to offset losses with other profitable products.
At the same time, vegetarians and vegans are a minority. In Switzerland, an estimated 5 percent do without meat altogether. It is therefore a niche market that is not constantly growing.
Initially, the market for plant-based alternatives grew extremely quickly – between 10 and 20 percent annually – Nestlé recently confirmed. But now he is in a normalization phase. In Switzerland, substitute products currently account for almost three percent of sales of meat and meat substitutes. Experts around the world estimate the market for plant-based meat at 10 billion dollars. The one with real meat is $1.4 trillion.
New trend: laboratory meat
However, the so-called “flexitarians”, i.e. consumers who switch between meat or vegetarian and vegan products, are also critical: In the USA, surveys show that 30 percent have no taste for these burgers.
25 percent complain about the price – in times of rising inflation rates, vegan quickly becomes a luxury. And again a similar number do not trust the additives that are processed in the products. The latter in particular has recently damaged the image of the industry.
Investors, meanwhile, are already turning their eyes to the next adventure: lab meat. It is considered the new competition – not only for sheep and beef, but also for peas and beetroot.