Beyond Meat in El Segundo, California.
Christina House | Los Angeles Times | Getty Images
Beyond meat will introduce an alternative whole-muscle steak as part of its axis to win over health-conscious consumers.
CEO Ethan Brown said Wednesday that the launch would likely include a partnership with a restaurant chain known for serving healthier food, a departure from its previous strategy of partnering with fast-food chains such as Dunkin’ and McDonald’s.
Over six months ago, Beyond announced a recovery strategy which included cost cutting, hiking prices, and discontinuing the flagship product it was making through a joint venture with PepsiCo. To revive declining sales, the company’s marketing has focused on the health benefits of eating a plant-based diet through partnerships with organizations such as the American Cancer Society and influencer deals with college athletes. While health has always been part of Beyond’s offering to consumers, the company used to place more emphasis on climate change as well.
In recent months, Brown has blamed some of the meat industry’s woes on misinformation from the meat industry and ranchers, such as skepticism about plant-based meat processing.
Beyond already sells plant-based steaks, but the new product mimics the texture of a filet with mycelium, the root part of fungi. Brown envisions the steak alternative as a substitute for chicken — topping salads and filling burritos as a source of protein.
“The focus on this was a very small number of ingredients, very high protein, very low saturated fat,” he said.
The company is also releasing reformulated versions of Beyond Burger and Beyond Chicken in grocery stores. The new products have short ingredient lists, hoping to win over customers who previously thought plant-based meat was highly processed.
Beyond declined to share details about the timing of the launches.
Losing restaurants and investors
Beyond’s market value once topped $14 billion, fueling broader investment in plant-based meat and a flood of competitors.
But these days, the company has a market cap of less than $400 million, reflecting investor concerns about the health of the business and struggling industry sales. Its stock has lost a third of its value in 2024.
In the second quarter, Beyond reported net sales of $93.2 million, down 8.8% from the year-ago period and down 37% from the 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 pandemic boosted sales further as lockdowns encouraged more home cooking, but the uptick didn’t last.
Live partnerships with restaurant giants such as McDonald’s and Yum Brands it did not lead to permanent menu items in the US, although Beyond was more successful with the chain’s European markets. Its joint venture with PepsiCo resulted in a single product, the now-discontinued Jamba, which weighed on its margins for several quarters.
At the same time, the wider category began to struggle. Consumers have lost interest in trying plant-based meat, often complaining about the taste or concerns about its processing.
Sales of plant-based foods, which include milk, meat, eggs and butter alternatives, 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.
And as consumer tastes drifted away, investors lost interest as well.
Kellogg considered spinning off or selling its plant-based business in a broader three-part split of the company, but ultimately opted to keep it part of Kellanovaits snack spinoff being bought by Mars. 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 in the next three years, a much longer time frame.
However, Beyond has no plans to sell itself, Brown told CNBC.
