For years consumers have been bombarded by stories about Impossible Burgers and Beyond Meat. These meat substitutes, they were told, would save the earth by decarbonizing the “meat” industry, and best of all, they’re “just like real meat.” Except, reality appears not to be living up to the hype. Emiko Terazono and Judith Evans report in the Financial Times:
Bean patties and tofu burgers have been around for decades, but consumer interest in the new generation of plant-based meats, mimicking the taste, texture and smell of animal meat, surged around the flotation of US start-up Beyond Meat in 2019.
Neil Rankin of Symplicity Foods displays some of his vegan ‘meat’ products, which are made from fermented onions, beets and mushrooms © Harry Mitchell/FT
But the push by Rankin coincides with a faltering in sales growth in the sector. After a 46 per cent rise in 2020 on the back of soaring demand at the start of the pandemic, sales in plant-based meat in the US in 2021 fell 0.5 per cent, according to data provider SPINS. In the UK, Kantar numbers show that sales tailed off in the second half of last year, although in December they experienced a rebound.“We have probably had a bit of a hype cycle, with an awful lot of people trying things once or twice,” says Will Hayllar, global managing partner of OC&C Strategy Consultants. “That has driven very rapid growth.”
The slowdown in growth has taken some executives by surprise. Many had anticipated that the continuing anxiety over climate change and the environmental cost of the meat industry — which accounts for 15 per cent of global carbon emissions — would act as a major spur for plant-based faux meat. Created with the help of biochemists and molecular scientists, it offers a way of cutting meat intake without sacrificing something that many consumers crave and love.
“This category has decelerated across the board,” Michael McCain, chief executive of Maple Leaf Foods, told analysts in November as he announced a review of the Canadian group’s plant-based meat business. Investors have also been unnerved by Beyond Meat’s performance and its relatively subdued US revenue outlook, blamed on a range of issues from Covid-related labour shortages to outages at its facilities. Its shares now trade at about a quarter of its 2019 peak and the lossmaking group’s market capitalisation, once above $15bn, has slipped below $4bn.
Rankin believes the ebbing of the sales surge is down to products which fail to meet taste expectations. “There are a lot of people that have moved to plant-based because of sustainability issues, but yet they aren’t really satisfied with what’s out there,” he says. Price has also been an issue as plant-based meat makers have struggled to get repeat purchases from customers once the initial excitement has died down.
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