The plant-based meat industry is in a bad place. Sales in the US fell last year as the pandemic-era enthusiasm for vegan burgers and sausages continued to wane. Beyond Meat, once the darling of the plant-based boom and the first one of its cohort to go public, in 2019, has become a cautionary tale about the tough road ahead for similar companies.
Beyond Meat announced mixed results for the second quarter of 2024. Revenue was down 8.8 percent, and sales volumes declined by 14 percent compared to the second quarter of 2023, but the margin the company made on each of its products was up.
“We are encouraged by many of the results we see this quarter, results that demonstrate clear progress against our 2024 plan and our longer-term goal of profitable operations,” Beyond Meat CEO Ethan Brown told investors in an earnings call Wednesday.
In 2023, Beyond’s revenue declined by 18 percent, to $343.4 million—which was above the low market expectations—but it also reported $82.7 million in losses. In the US, sales declined by 32.3 percent. So far, the company hasn’t rebounded, announcing a weak first quarter with revenue down by 18 percent again, to $75.6 million, as it continued to be hit by underwhelming demand from the US.
Europe has been one of the brighter spots for Beyond over the past couple of years. In 2023, the company’s international sales grew while sales in the US sharply declined. In the UK, McDonald’s has sold McPlant burgers with Beyond Meat patties since fall 2021, while a similar partnership in the US didn’t get beyond the trial stage.
Although Beyond reported declining sales internationally as well, on the most recent earnings call, chief financial officer Lubi Kutua said that the company was focused on widening its distribution in Europe. “We’re starting from a very small base in the EU,” Kutua said. “We just don’t have that large of a presence out in Europe at the moment.”
Faced with difficult decisions in its path toward profitability, one investor predicted during an earnings call in February that the “center of gravity” of Beyond’s business was likely to shift to international markets. Brown did not directly address that point in the February call but conceded that, in his opinion, the conversation in the US around plant-based meats had been “politicized” and “clouded with this misinformation.” Plant-based meat has been pitted against animal meat in the US’s culture war.
The entire plant-based industry has been affected by a fickle customer base. Rival Impossible Foods, which is targeting a “liquidity event” to raise capital in a move that could see it IPO or consider a sale to another company, has decided to rebrand itself to increase its appeal to meat eaters. Meanwhile, other vegan brands like Nowadays, Meatless Farm, and VBites have gone bust.
Plant-based meats shouldn’t be counted out altogether, says Chris DuBois, an executive vice president at the analyst firm Circana. “It’s still a billion-dollar category, and that’s a big deal.”
In Europe, where meat consumption is already lower and supermarkets are showing some signs of support for vegan alternatives, the stagnation of plant-based meats might turn around.
The world of faux meats has been on a wild ride in the past five years, says Chris Bryant, a researcher and consultant for the alternative protein industry. Early on during the pandemic, sales increased in some places by 200 percent as slaughterhouses closed and supply chains seized up, but then dollar sales of plant-based meat and seafood in the US fell by 13 percent between 2021 and 2023.
This drop masked an even bigger fall in unit sales—the literal number of packets of sausages and burgers being sold. Those sales fell by 26 percent over the same period. Beyond’s share price has been on a similar trajectory—it is down 97 percent since October 2020. Rather than appealing to the mainstream public, sales have concentrated in a smaller group of consumers who keep coming back for more.
Lofty Goals
All this isn’t exactly what alternative protein startups were aiming for when they burst onto the scene in the 2010s. In 2017, Impossible Foods founder and then-CEO Pat Brown told The Guardian that his ultimate goal was to eventually replace all animal foods with plant-based alternatives. “If we succeed completely in that, there would obviously still be cows, pigs, and chickens, but they would not be a significant part of the food system but kept around because they are interesting creatures,” he said at the time.
That’s exactly the kind of moonshot-y line you’d expect from a Silicon Valley founder. The only problem is that the world of food manufacturing is significantly harder to crack than software, and plant-based companies have struggled with perfecting their products, bringing prices down, and combating attack messages from groups defending the interests of the animal protein industry.
In the UK, Beyond Meat is one of the most expensive plant-based alternatives on shelves (listed at £4, or $5, for two patties), particularly as many supermarkets have brought out lower-priced own-brand vegan meats. “There’s a massive price premium on Beyond compared to the rest of the market,” Bryant says. In the long term, Bryant expects that the price of plant-based meats will come down and be more competitive with conventional meat. That might help tempt those who have never tried plant-based meats. (According to one 2023 poll, more than 50 percent of US adults have never tried plant-based meat.)
Beyond, like its rivals, is also a hostage of supermarkets’ placement decisions. In the US, plant-based meat brands have been squeezed by high competition in refrigerated aisles, says DuBois. “The meat case is one of the hardest places to compete in,” he says, and retailers are wary of giving valuable shelf space to products that might not sell out quickly. He says that plant-based brands are finding an easier time of it in the frozen aisles, where competition is a little less intense.
Europe is one part of the world where things might be shifting in favor of plant-based companies. One of Europe’s largest supermarket chains, Lidl, has committed to reporting how its sales of protein are divided between plant-based, eggs, fish, poultry, and red and processed meat. It has also permanently cut the prices of its plant-based proteins to match the equivalent animal proteins in its stores in Belgium, Germany, Austria, Denmark, and Hungary. Jumbo Supermarkets, which operates in the Netherlands and Belgium, and the UK’s Co-operative Group, have both pledged to price-match their own-brand plant products to their meat equivalents.
“What we know about Europe is that demand is there,” says Carlotte Lucas, head of industry at Good Food Institute Europe, a nonprofit that supports the alternative protein industry. “We’re seeing a lot of European startups really focusing on innovation to really expand the amount of products and variety in the market.”
It might be no coincidence that meat consumption in some parts of Europe is starting to drop. In 2023, people in Germany ate a record low average of 51.6 kilograms of meat per person, according to provisional figures from the Federal Office for Agriculture and Food. In the Netherlands, about 43 percent of people’s protein intake is plant-based—much higher than the US, where nearly 70 percent of protein in people’s diets comes from animals.
The switch to plant-based meat has been tarnished by studies that claim that some vegan alternatives and meat substitutes are ultra-processed foods that can contain more sugar and salt than the products that they are replacing, a claim that plant-based companies have rebutted. Beyond has responded to worries over the healthiness of plant-based meats by launching a new version of its burger that has less salt and saturated fat. It also has a new range of sausages made of spinach, bell peppers, rice, and lentils—a shift away from mimicking meat.
But Bryant warns that plant-based companies shouldn’t stray too far from reminding consumers of the reason why many of these firms got started in the first place: The climate impact and animal welfare cost of conventional meat.
The industry needs to pull people toward cheaper, tastier, and healthier alternatives to animal protein, says Bryant. “But then there does need to be, frankly, funding of putting the messages in front of people that get people to change,” he says. “And a lot of that is the uncomfortable stuff about animal cruelty, which people won’t like seeing but will change their behavior.”
