Beyond Meat in El Segundo, California on May 30, 2024.
Christina's home | Los Angeles Times | Getty Images
Beyond the meat It will introduce a whole-muscle steak alternative as part of its strategy to win over health-conscious consumers.
Chief Executive Ethan Brown said Wednesday that the launch will likely include a partnership with a restaurant chain known for serving healthier food, a shift from its previous strategy of partnering with fast-food chains like Dunkin' and McDonald's.
More than six months ago, Beyond announced a turnaround strategy that included cutting costs, raising prices and discontinuing the jerky product it made through a joint venture with PepsiCoTo revive flagging sales, the company’s marketing has focused on the health benefits of eating a plant-based diet through partnerships with organizations like the American Cancer Society and deals with college athletes. While health has always been part of Beyond’s strategy for consumers, the company also used to put more emphasis on climate change.
In recent months, Brown has attributed some of the plant-based meat industry's problems to misinformation from the meat industry and livestock producers, such as skepticism about plant-based meat processing.
Beyond already sells plant-based beef steaks, but the new product mimics the texture of a steak with mycelium, the root-like part of mushrooms. Brown envisions the steak alternative as a chicken substitute, topping salads and filling burritos as a protein source.
“In this product we have focused on using a very small number of ingredients, a very high protein content and a very low saturated fat content,” he explained.
The company is also rolling out reformulated versions of its Beyond Burger and Beyond Chicken products to grocery stores. The new products have short ingredient lists, hoping to win over customers who previously thought plant-based meat was too processed.
Beyond declined to share details about the timing of the launches.
Losing diners and investors
Beyond's market value has soared to more than $14 billion, prompting broader investment in plant-based meat and a flood of competitors.
But the company's market capitalization is now less than $400 million, reflecting investor concerns about the health of the business and the sector's sales struggles. Its shares have lost a third of their value by 2024.
In the second quarter, Beyond reported net sales of $93.2 million, down 8.8% from the same period last year and a 37% drop from its second quarter of 2021.
After Beyond went public five years ago, its stock soared as more consumers bought its plant-based meat at grocery stores and fast-food restaurants like Dunkin'. The Covid-19 pandemic further boosted sales as lockdowns encouraged more cooking at home, but the boost didn't last.
Very interesting partnerships with restaurant giants such as McDonald's and Yum Brands It didn’t translate into permanent menu items in the U.S., though Beyond has had more success in the chains’ European markets. Its joint venture with PepsiCo resulted in a single product, its now-discontinued beef jerky, which hurt its margins for several quarters.
At the same time, the broader category began to struggle. Consumers lost interest in trying plant-based meat, often complaining about the taste or processing.
Sales of plant-based foods, which include alternatives to milk, meat, eggs and butter, rose just 1% to $8.1 billion last year, according to data from the Plant-Based Foods Association. The milk alternatives segment accounts for about a quarter of total retail sales in the category, followed by plant-based meat.
As consumer tastes changed, investors also lost interest.
Kellogg considered spinning off or selling its plant-based products business into a broader three-part division of the company, but ultimately opted to keep it as part of Kellanovaits snacks subsidiary that Mars is buying. Impossible Foods has been rumored to be considering an IPO as early as 2021, but the company’s CEO said earlier this year that it could sell or go public within the next three years, a much longer time horizon.
However, Beyond has no plans to sell itself, Brown told CNBC.
