Plant-based meat loses its enthusiasm in the United States as sales plummet
Plant-based meat is losing its enthusiasm, with falling sales in the United States clouding expectations that the nascent category would take a share of the actual animal meat market.
In the four weeks leading up to Oct. 3, sales of plant-based meat substitutes fell 1.8% from the previous year, bringing a decline for 2021 to 0.6%, according to the group of US SPINS retail data.
An increase in plant-based meat sales at the onset of the pandemic in 2020 posed a significant obstacle to growth this year, but demand has also been affected by consumers eating less at home as restrictions have worsened. lifted, while supply chain issues have made some products unavailable in stores, SPINS said. Elsewhere, a wave of new products has overwhelmed consumers, he added.
The United States is the largest market for “new” plant-based meats that simulate the taste and texture of real meat. The drop in sales comes after weak sales in the last few weeks of Beyond Meat and Maple Leaf Foods, the Canadian meat group which owns the vegetable protein specialist Green Leaf.
“Over the past six months, unexpectedly, there has been a rapid deceleration in the growth rates of the plant protein category,” Michael McCain, Managing Director of Maple Leaf, told analysts.
McCain blamed a 6.6% drop in the company’s plant protein sales to the decline in the refrigerated retail and restaurant food category. The group was looking at the causes, he said, to try to understand the changes in the market.
Maple Leaf exceeded revenue expectations with a 13.4 percent sales increase in its real meat division. BMO analysts said they expected the plant protein market review to result in reduced capital and marketing spending, which should improve results next year.
Shares of Beyond Meat have fallen since reporting third-quarter revenue of $ 106 million, after lowering its earlier guidance from $ 120 million to $ 140 million last month.
Ethan Brown, chief executive, criticized consumers for shopping less and being less open to trying new products, as well as being less interested in healthy options. He also mentioned the reduction in product sampling possibilities, as the Delta variant extended consumer exposure to limited exposure.
The drop in sales comes at a time when more start-ups and food companies are offering new plant-based meat products. The latest entrants are offering realistic “cuts” of meat using techniques such as 3D printing.
Bahige El-Rayes of consultancy Bain said that with plant-based alternatives to meat still 30-40% more expensive than real meat and the improvements in taste and texture required, an increase in capacity production to reduce costs and more research and development were essential. so that the category continues to grow.
Concerns about the environmental impact of livestock, cruelty to animals and health have spurred investments in alternative proteins in recent years.
In 2020, alternative protein start-ups raised record capital of $ 3.1 billion, including $ 2.1 billion for plant-based meat, dairy and eggs. Investors still seem bullish on the category, with Impossible Foods announcing this month the close of a $ 500 million fundraiser, raising nearly $ 2 billion since its inception in 2011.
Some executives believe the drop in sales is temporary. Steven Cahillane, managing director of Kellogg, owner of the MorningStar Farms brand of herbal products, said the company’s consumer research has shown “There is always a lot of enthusiasm and enthusiasm” for plant-based alternatives to meat.