On Monday, Beyond Meat made an announcement about a significant decline in its net revenue, which resulted in a 10% decrease in its share price. This news comes amidst ongoing reports of a downturn in the plant-based meat sector. Despite this, it is important to note that Beyond Meat is just one company, and its struggles do not automatically reflect the entire plant-based industry. However, Clive Black, director at investment group Shore Capital, believes that Beyond Meat’s difficulties shed light on broader issues within the plant-based meat industry.
According to Black, many participants and investors have overestimated the demand for plant-based meat, leading to an oversupply in the market. He argues that factors such as the complexity of alternative proteins, their price, and their relatively poor eating quality have contributed to major challenges for the industry.
In contrast, Jasmijn de Boo, CEO of ProVeg International, takes a more optimistic view of the industry’s future. She believes that the plant-based meat market will continue to grow due to increasing concerns about the environmental impact of animal-based meat. De Boo cites the UN’s Intergovernmental Panel on Climate Change (IPCC), which recommends transitioning to plant-based diets as a way to reduce greenhouse gas emissions and prevent ecosystem collapse.
Although plant-based meat has been available for several years, it is still a relatively new market compared to animal agriculture, which has been around for centuries. This newness has resulted in an overabundance of new players entering the market, leading to oversaturation. Furthermore, Beyond Meat’s recent challenges can be attributed to various factors. The cost-of-living crisis has affected consumer spending habits, especially for premium products like Beyond Meat. Additionally, the complexity of plant-based products and their level of processing may be turning some consumers back to conventional meat or simpler non-meat options.
De Boo emphasizes that the plant-based industry is still in the early stages of development and requires time to establish infrastructure, scalability, investor confidence, and financial instruments. Despite the challenges, she believes that price parity with conventional meat is achievable through ingredient cost reduction, lower margins, and long-term discounts.
As for the European market, de Boo remains optimistic about its growth opportunities for food manufacturers. Recent data indicates that the European plant-based meat segment has reached over €2 billion in sales value and that an increasing number of Germans are adopting flexitarian diets. However, Black is less positive, predicting a contraction in the plant-based meat industry overall until supply aligns with market demand.
Ultimately, the future of plant-based meat remains uncertain. While some believe that the industry will continue to expand due to environmental concerns and shifting consumer preferences, others caution against market saturation and the challenges associated with pricing and product complexity. As the industry evolves, it will be crucial to address these issues and find a balance that ensures economic sustainability and meets consumer demands for sustainable and ethical food options.
