Beyond Meat, the plant-based meat company, is set to introduce a whole-muscle steak alternative as part of its strategy to appeal to health-conscious consumers. CEO Ethan Brown revealed that the rollout of the new product will likely involve a partnership with a restaurant chain that is known for offering healthier options, a departure from Beyond Meat’s previous collaborations with fast-food chains like Dunkin’ and McDonald’s. This shift in approach is part of Beyond Meat’s turnaround strategy, which was announced more than six months ago and includes cost-cutting measures, price hikes, and the discontinuation of its jerky product made in partnership with PepsiCo.
To boost sales, Beyond Meat has been focusing its marketing efforts on highlighting the health benefits of a plant-based diet. The company has formed partnerships with organizations such as the American Cancer Society and has collaborated with college athletes to promote the advantages of plant-based eating. While Beyond Meat has always emphasized health in its messaging, it used to place more emphasis on the environmental benefits of choosing plant-based alternatives.
CEO Ethan Brown has attributed some of the challenges faced by the plant-based meat industry to misinformation spread by the meat industry and cattle farmers, particularly regarding concerns about the processing of plant-based meat. Brown believes that the industry’s struggles are due in part to these misconceptions.
In addition to the steak alternative, Beyond Meat is also introducing reformulated versions of its Beyond Burger and Beyond Chicken in grocery stores. These new products have shorter ingredients lists, aiming to address the perception that plant-based meat is overly processed.
However, Beyond Meat has faced setbacks in recent years. Its market value, which once exceeded $14 billion, has plummeted to under $400 million, reflecting investors’ concerns about the company’s health and the overall struggling sales of the plant-based meat industry. Beyond Meat’s stock has experienced a 33% decline in 2024.
In the second quarter, Beyond Meat reported a decline in net sales, down 8.8% from the same period the previous year and a 37% decrease from its second quarter in 2021. Despite its initial success, buoyed by increased consumer demand during the COVID-19 pandemic, Beyond Meat has faced challenges in maintaining its growth trajectory.
Partnerships with major restaurant chains like McDonald’s and Yum Brands did not result in permanent menu items in the United States, though Beyond Meat has had more success in European markets. Its joint venture with PepsiCo only yielded a single product, the now-discontinued jerky, which had a negative impact on its profit margins for multiple quarters.
The plant-based meat category as a whole has faced declining consumer interest, with complaints about taste and concerns about processing being common reasons for the loss of enthusiasm. According to data from the Plant Based Foods Association, sales of plant-based foods, including milk, meat, egg, and butter alternatives, only grew by 1% to $8.1 billion in 2023. Within the category, milk alternatives make up a significant portion of total retail sales, followed by plant-based meat.
This decline in consumer interest has also affected investor sentiment. Kellogg considered selling or spinning off its plant-based business as part of a broader company split, but ultimately decided to keep it as part of its snacking spinoff, Kellanova, which Mars is acquiring. Impossible Foods, another key player in the plant-based meat industry, has been rumored to be considering an initial public offering since 2021 but may take several more years before making a decision.
Despite these challenges, Beyond Meat has no plans to sell itself, according to CEO Ethan Brown. The company remains committed to its pivot towards targeting health-conscious consumers and aims to regain momentum in the market. By introducing a whole-muscle steak alternative and reformulated versions of its popular products, Beyond Meat hopes to win back customers who may have been deterred by concerns about taste and processing.
