Beyond Meat’s promise is similar to that of a lot of venture capital darlings that pledge to make the world a better place. But, when it comes to environmental impact, the Good Food Institute rates the company the runner-up against the other big name in plant-based meats, Impossible Foods.
Launched in 2011, Impossible wants to eliminate animals from the food production system by 2035. “Animal agriculture is a prehistoric technology to turn plants into delicious protein. It’s also the most destructive technology on earth. There is a better way: meat from plants,” said an Impossible spokeswoman. The company closed on a $500 million funding round earlier this week, bringing the total for outside investment to $1.3 billion since 2011.
Beyond Meat declined to comment for this story.
As for expansion, during the investor call, Beyond’s Brown said the company is still just “scratching the surface” of the U.S. restaurant market and remains optimistic about moving into Europe, Asia, and the Middle East, despite concerns about the coronavirus outbreak.
“We continue to focus on Asia with the goal of producing in the region before the end of 2020, pending some level of resolution of the coronavirus crisis,” Brown said on the recent earnings call. “The magnitude of the opportunity merits significant investment. We believe that the core price in Asia provides an unprecedented opening to introduce new production models for meat.”
Beyond Meat reported a gross profit margin of 34% for the last quarter, meeting analysts’ projections, although a decline from the previous quarter’s gross profit margin of 35.6%. Sales during the fourth quarter of 2019 came in at $98.5 million, topping analyst estimates.
Despite concerns about margins and aggressive expansion risks, many Wall Street investors and industry analysts view Beyond Meat’s outlook favorably. “Beyond Meat should be a major beneficiary of PBM (plant-based meat) growth, given its first-mover advantage, and the brand’s strong performance in taste tests (consistently second only to privately held Impossible Foods),” said a research note from Morningstar. “Beyond has significant opportunity to expand into new product offerings (bacon, chicken nuggets) and geographies (Europe and Asia).”
There are still questions, however, about whether or not the company will be able to control consistency of its products as sales grows, in particular to fast-food chain restaurants across the United States. Fast-food chains that already sell Beyond Meat products include McDonald’s, KFC, Starbucks, and Dunkin’.
Also, while the marketing of many plant-based companies focuses on what they say is the nutritional superiority of their products compared to conventional meat, there is still little comprehensive independent data to back up a lot of these assertions.
According to Morningstar: “Beyond Burger’s relative lack of health benefits as compared with lean beef may garner increased consumer attention as the category gains additional retail and food-service distribution, limiting PBM product adoption. Consumers have been shifting away from products with long ingredient lists (such as Beyond’s fare), opting toward fresh, natural products, which could also limit ultimate demand.”
And though Impossible’s spokesperson said the company’s production process could potentially “turn back the clock on climate change,” there are plenty of people who remain unconvinced of those claims.
“Plant-based meat can be just as dirty as a T-bone steak, depending on how it’s produced. In both cases, pesticides enter the environment, novel genetic material is passed from crop to livestock to the environment, workers and communities are drained of their wealth and vitality,” said Alan Lewis, a director of special projects at Natural Grocers by Vitamin Cottage who focuses on government affairs and food and agriculture policy. “Impossible Foods has far more in common with JBS, Purdue, and Cargill than with a small holder grass-fed rancher.”
And those companies are starting to add meat alternatives to their protein lineups. A JBS USA spokesperson said the company is launching new products in response to consumer cravings.
JBS has previously tested its plant-based products in Brazil, the U.K., Europe, and Australia. And, in April, the company will start distributing its Ozo brand in the U.S.
Get ready for lab-grown meats
Smaller startups that produce lab-derived meat alternatives have started to join the category. The companies claim that their production processes beat both traditional and plant-based meat companies on the environmental front.
And they often cite population statistics—and the need to feed the world’s fast-growing population—as a reason for their faster-to-create products to win out over anything that starts out growing in or walking on the ground. Current estimates put the global population at 10 billion people by 2050, which will require a 70% increase in the demand for food production, according to the World Resource Institute.
