Dive Brief:
- Beyond Meat will launch a plant-based sliced steak product most likely later this year, CEO Ethan Brown said at The Wall Street Journal’s Global Food Forum, the newspaper first reported. It will first launch at retail and then in some restaurants, Brown said at the event.
- The sliced steak product is designed to replicate a whole cut of meat, Brown said. Most of Beyond Meat’s other plant-based products — burgers, meatballs, sausages and chicken nuggets — replicate a ground or processed piece of meat.
- Beyond Meat’s sales have slowed during the past year, and its balance sheet has fared poorly. Last month, the company reported a $100.5 million loss during the previous quarter, which Brown attributed to infrastructure put in place for Beyond Meat Jerky.
Dive Insight:
Steak is often seen as the ultimate meat dish. Its look, flavor, texture and taste are beloved by meat eaters nationwide, and a realistic plant-based steak product would be a huge achievement for any company.
So by this standard, Beyond Meat may either be setting itself up for a phenomenal success or an epic failure. If this product can deliver on all of the attributes consumers want in a steak in a convincing and cost-effective way, it could be a major win — both for plant-based meat as a category and for Beyond Meat as a company. But if the product is not a home run, it could put Beyond Meat in an even deeper financial hole.
Not much additional information about the product is available, including its ingredients, how it is made, and how it will be sold. Brown told The Wall Street Journal that the steak is “probably one of our best products to date.”
That may be so, but Beyond Meat has faced myriad problems — some that are from the company’s own actions, but some that are attributable to much larger market forces. The company’s stock price has been consistently declining for the past 12 months, and shares in Beyond Meat have lost nearly 64% of their value since the company’s IPO in May 2019.
Beyond Meat has seen its U.S. sales slide since last summer, when consumers started moving away from the plant-based products they had tried during the pandemic. As the sector became more popular, many plant-based meat products also started crowding grocery store shelves, diluting brand sales — and were sometimes lower in quality, which turned some consumers off of the entire segment. And because of the pandemic, Beyond Meat’s once-booming U.S. foodservice sales have been slow to recover.
This slowdown seems to be universal across plant-based meat. In 2021, the previously fast-growing segment saw sales growth flatten, according to statistics from SPINS, the Plant-Based Foods Association and the Good Food Institute. Maple Leaf Foods, whose Greenleaf Foods division owns the Lightlife, Field Roast and Chao brands, has seen a huge slowdown in growth and is shifting its strategy to invest in the brands’ profitable growth. Kellogg, which owns MorningStar Farms — and plans to separate its plant-based brands into their own separate publicly traded company — has also seen consumption down compared to two years ago. However, CEO Steve Cahillane has described the slowdown as “more of a blip” than a reflection on the category as a whole.
Beyond Meat has faced its own share of issues over the past year. Labor shortages and severe weather that destroyed packaging in a plant have caused some losses. But the largest issue has been the investment needed to make its plant-based jerky. The product, which launched nationwide in March, is the first to come from Beyond Meat’s PLANeT Partnership joint venture with PepsiCo. Beyond Meat needed to build out an entirely new manufacturing process for the jerky, which launched at 56,000 stores nationwide at once. On an earnings call last month, CFO Phil Hardin said that the launch happened in “an expensive and inefficient manner,” but said the production cost will moderate in time.
A Beyond Meat steak product could also require a lot of start-up costs. Manufacturing processes for something that has the look, feel and texture of a whole cut could be very different than what the company uses for more ground forms of meat. It could also need wholly new ingredients and a different supply chain.
However, it would be one of the very first alternative steaks on the market, which could bring a significant advantage. Right now, only two other products in this space exist: Colorado-based Meati launched its mycellium-based steak last month, and Slovenia’s Juicy Marbles released a plant-based filet mignon earlier this year. Currently, neither of these companies has the name recognition and manufacturing or distribution advantage of Beyond Meat.
But timing is everything, and there’s still time to beat Beyond Meat’s steak to market. After all, Impossible Foods announced in 2019 it was working on a plant-based steak.
