Is the demise of the plant-based meat sector as hyped as its launch?
Farewell, plant-based meat. You sizzled for a while, but the last dribble of beetroot juice has rolled down our chins. You are not the future of food anymore, finally settling the question posed by thousands of articles asking if you were.
That’s what the latest headlines say anyway. Now they say Flop not Future, and they’re spiced up with a dash of carnivorous glee. Sparked by the wild downturn in the share price of Beyond Meat, from a $234.90 per share high in 2019 to $14.86 at the time of writing, the articles spin a sorry tale of doom for the plant-based burger.
Whether it’s Beyond Meat, or speculation over the future of its great rival Impossible Foods, or meat-giant JBS closing its Planterra plant-based meat operation, or the collapse of UK-based Meatless, the narrative is the same. It’s over. Pack up. Go home. No-one wants your replicant burgers here.
So has, as The Sunday Times suggested, the “supposed great vegan rollout been halted in its salty, sugary, ultra-processed tracks”? Or is the demise of plant-based as hyped up as its launch was?
Certainly speculation over the future of the still-to-IPO Impossible Foods continues. Like Beyond Meat, Impossible is hailed as a trailblazer in this space, so you could reasonably assume it’s also experiencing something of a slowdown. As a private company there is no share price to act as a barometer for its fortunes, but operationally it isn’t decelerating.
It continues to launch new products, like the leaner Beef Lite and the Indulgent Burger, which it says is “beefier, thicker, and juicier”. Extending its range gives consumers “more options and ways to try and buy Impossible,” said Peter McGuinness, president and CEO of Impossible Foods, at the time of the launch.
Impossible has also just hired a new Chief Supply Chain Officer – Rob Haas- and Chief Science Officer Sunil Chandran, to improve existing products and drive innovation to deliver new ones. It also has a new Marketing Director and fresh marketing campaigns are on the way. In short, Impossible Foods is not acting like a business grinding to a halt.
That may ease the unsettled stomachs of investors who piled into the plant-based meat market like a drunk in a curry house. The anticipated return on investment does not look likely anytime soon, but that doesn’t necessarily expose the plant-based meat industry as a flop, it just exposes those expectations as wildly optimistic.
Beyond Meat is currently on the end of a lawsuit from some investors who claim that optimism was fuelled by “false and misleading” statements to “deceive” the market over the likely success of a number of trials, such as the McPlant from fast-food giant McDonald’s (it only lasted six months in the US, although McDonald’s says it had a “remarkable response” in the UK where it remains on the menu).
“I think the amount of investment money that’s gone into plant based means investors probably aren’t getting the return that they want,” says one senior developer, speaking anonymously. “It was called out by Meatless in the press that one of their larger investors basically took money off the table, or didn’t come back to the table with further investment, which pushed them over the edge.”
Following its collapse Meatless has survived, picked up by VFC, which according to the administrator’s report paid £475,000 for the business, though creditors were left short of £1.9m. In a way it sums up the plant-based meat market, full of optimism and rapid expansion that ended up falling short.
The brand is back on its feet though. “Meatless Farm brand carries a huge amount of customer loyalty and engagement,” says VFC CEO Dave Sparrow. He adds it has a “fabulous range of products and it’s safe to say that they are here to stay, including the vegan mince. However it’s also worthy of note that Meatless Farm had a high level of complexity behind its product count and supply chain, and where possible we will be looking to streamline operations and take complexity out where it isn’t required.”
Sparrow also says a “lot has been said regarding the plant-based market recently, its clear and obvious that whilst it will see continued growth and demand, the level of early capital and emerging brands has saturated the space, and we will continue to see consolidation.”
A lot of people were rolling the dice on meat eaters coming over, but people have been talking about meat reducers for 10 or 15 yearsSenior industry developer
But still, reports that plant-based meat is dead are wide off the mark, says Carole Bingley, RSSL’s Food and Ingredient Innovation Technical Specialist. “I don’t think that the bottom has fallen out of the meat alternative market, we just haven’t seen the rate of growth that was predicted,” she says. “This has had an impact on investment in alternative meat producers. I spoke to an ex-Meatless Farm employee just as the news broke. His view was that sales were steady but not growing as quickly as they had hoped. The market is pretty crowded, particularly burgers and sausages, so it is no surprise that some brands won’t survive.”
Another senior industry developer says for the last two years he’s thought that the “proliferation of products that’s been happening will lead to consolidation at a certain point in time. And I think what we’re seeing now is not a contraction necessarily, it’s just consolidation. There is still a big industry in plant-based, and development is still ongoing.”
Certainly plant-based meat continues to evolve, such as emerging plant-based whole-muscle meat analogues that claim to improve the crucial fibrous texture in vegan meat. It seems premature to call time on a sector still innovating at pace.
Rolling the dice: the plant-based sector in numbers
So what do the numbers say?
Plant-based food sales across Europe grew 22% between 2020-2022 according to a Good Food Institute Europe report from April 2023, which used NielsenIQ data drawn from 13 European countries including the UK. Specifically on plant-based meat, the report said the category grew 19% across Europe to over €2bn between 2020 and 2022, taking 6% of total pre-packaged meat sales.
In the US, the GFI says volume sales of plant-based meat dropped 8% in 2022, but the long-term picture is more optimistic.
In the UK, it says sales of plant-based meat grew 1% between 2020 and 2022, but slowed down between 2021 and 2022, dropping 8%, leaving it with a 3% market share of the pre-packaged meat category and the second highest plant-based meat sales value in Europe.
The industry developer says it’s worth bearing the cost-of-living crisis in mind in regard to this slowdown, and that some people could be taking a break from plant-based products because they’re “struggling with cash and moving back to something cheaper.”
It’s a fair point. At Tesco, plant-based bacon retails at £29.17/kg, regular bacon costs £5.27/kg. Tesco’s own ‘Plant Chef’ sausages sell for £5.57/kg, its regular sausages for £3.30/kg. Beyond Meat burgers cost £17.70/kg, regular fresh Tesco burgers cost £5.70/kg. “The own-label products are pretty good and usually considerably lower in cost,” says Bingley. For a more direct branded comparison, Birds Eye Green Cuisine Chicken-Free Dippers cost £13.64/kg, Birds Eye actual chicken dippers cost £9.93/kg.
It’s a small sample of what’s on offer in supermarkets in the way of plant-based meat options in 2023, but it reinforces a significant price differential that may be burdensome on plant-based consumers, and dissuade curious shoppers and flexitarians from giving it a try. And if they do trial plant-based meat, not everything they try will convince them, adds the developer.
“A lot of people were rolling the dice on meat eaters coming over, but people have been talking about meat reducers for 10 or 15 years,” he says. “And because of the amount of mediocre products on the shelves, where retailers were just keen to swell that aisle or gondola end, people have said ‘No, I don’t like it, I’ll go with the regular sausages, thank you very much‘”.
So how are manufacturers and developers affected by this overarching slowdown?
“We are opening less projects for new developments,” he says. “The cost of raw materials has spiralled, the cost reduction element is now first and foremost. Some of the larger brands and start-ups are really looking at their input costs. Don’t forget a lot of them actually don’t own factories, they buy raw materials from around the world. And we know that last year everything went up a lot in quantifiable terms, the increases were massive.”
He also says he’s talked to “two of the bigger brands” in frozen food that have “big plans in plant-based retail, and they are looking inwards because there has been a 20% reduction in volume sales. They’re now looking to cut costs to absorb the cost increases of last year, because clearly they’ve been passing that on and making their products more expensive than their meat equivalent, but they’re also cost reducing internally so they can compete on price with their meat equivalents and hopefully regain market share.”
It’s also important to note that the fortunes of plant-based meat do not speak for the plant-based sector as a whole, even if lots of the recent doom-laden media coverage of plant-based meat has.
For instance, the market for plant-based dairy was estimated at $26bn in 2022 by Grand View Research, with a revenue forecast of $66bn by 2030. That compares to $4bn for plant-based meat in 2022, expected to rise to $24.9bn by 2030. So imitation meat is not even the biggest player in the still emerging plant-based food market, despite being the original poster-child for it.
Even in food service we are seeing more plant-based offerings added to menus regularly both in Europe and the US.Anne Marie Butler, Edlong
Edlong specialises in dairy and dairy-free flavours, and Anne Marie Butler, Global Director of Strategy and Innovation at the company, says it is “not seeing a slowdown in projects in this space. Yes, there has been a lot of talk about some of the big players in the plant based meat space, but the plant based sector is still going strong both at a global level and in Europe and the UK. The level and pace of innovation in plant based is incredible and we are seeing this move beyond North America and Europe, with increased product development taking place in Mexico and the Middle East.
“Many companies are developing plant-based products as part of their mainstream offerings,” she adds. “Even in food service we are seeing more plant-based offerings added to menus regularly both in Europe and the US. Once these would have been limited edition offerings, they are now menu staples.”
In short, there is a lot more to the plant-based sector than imitation burgers and sausages. “I’m also seeing more interest in vegetable and pulse-based innovations to provide options which deliver on nutrition and taste without necessarily needing to taste like meat,” says Bingley.
Butler also notes a recent survey by Innova that said consumers are “actively looking for more plant based options that aren’t mimicking meat or dairy.”
It remains to be seen whether emerging developments and technologies can give a boost to plant-based meat, a sector that’s clearly experiencing something of a reckoning. Though even if early expectations haven’t been met, demand for plant-based meat remains and supply will continue. And from a broader plant-based perspective, Butler expects “rises and dips in sales and development in the years ahead. But plant-based is not a fad. It has carved out its own segment of the food industry that is here to stay.”