Creating "actual beef" used to be fairly expensive, but, over the decades, companies have found out how to produce it for as cheap as possible, while still earning billions in profits, without consumers feeling as though beef is expensive. That efficiency comes with time. Plant-based meat is still in its infancy by comparison. So, even though the costs to consumers is high, the amount of profit the plant-based companies earn may be similar, or even lower than, what the beef industry earns.
Then there's Beyond itself. Striking a deal with McDonald's likely involved a lot of time and money — and then the "McPlant" product immediately failed. If you're going to convince Americans that plant-based meat is good, meeting them where they're at with fast food may seem like a good idea. But the type of people who find themselves in the McDonald's drive-thru, and the type of people who will pay extra for plant-based meat, is a tiny sliver of the theoretical burger Venn Diagram.
Now, you could call that grossly mismanaged, or you could call it the best possible shot they had at catering to a wide audience and breaking out of the niche vegan market. But the fact is, the product failed. Where can they possibly go from here to continue growth?
Here's the thing. You might see a lot of these plant-based meat options in grocery stores and think "it's certainly not a flop! look at the grocery store sales!"
But now take a look at the major industry players. JBS, Tyson, Danone, etc. The ones with more capital than you can imagine and every reason to consider plant-based product lines.
Track their PR timeline over the past 5 years and it's easy to see that they tried to push this stuff into the market and it was not accepted in a way that generated profits.
Yes, I know big-meat is subsidized and not pricing in externalities. But that is the world we live in. These are just honest observations of a bizarre market.
If you are passionate about sustainable food systems, it's important to take a hard look at the truths surrounding meat production. Sexy tech and moral high-grounds only get you so far.
At least in the UK, the plant-based meat business appears to fall between two stools.
In the high-end niche market, plant-based meat is up against organic, grass-fed, free-range, 30-day aged and the like. While itself frequently including awful ingredients like Palm Oil, being (of at best) unknown impact on health and never (so far) being anything other than just about *acceptable* in terms of taste and texture to a meat eater.
While at the other end where there is little concern for animal welfare, climate change, health and even taste. It costs more for the same quantity.
To achieve its potential, the plant-based meat industry either needs to figure out how to do better than millions of years of evolution and target the high-end. Or figure out how to churn out mass-market products at a lower cost than the dead-animal equivalent.
(For my money, churning it out at least appears tractable)
Is the premise here that beyond beef et al. are trying to trick customers into thinking they are buying regular beef? A moment's thought reveals that to be utterly absurd. Their business model is entirely dependent on people buying their product specifically because it is plant-based. Seems like old-fashioned protection of a favored industry.
- It's trading way beyond its revenue and losing lots of money.
- The McD partnership alone isn't going to put them in profit, nowhere close, not to mention McD are going to be suffering themselves (relatively speaking) over the next few years.
- People with plant based diets don't tend to be huge McD consumers.
- BM's growth has been poor over the last few years. A lot of meat eaters tried these plant based burgers as a gimmick during the initial hype, few continued to buy it regularly. Sure, there is a general growing market for plant based options but it's a slow burner.
- Even within that growing plant based market, Beyond Meat is expensive. It's a luxury choice. It's exactly the type of business I can see suffering over the next few years as disposable income shrinks.
They might be on a nice path for the future if you're thinking very long term, but in general these equity markets are placing the most weight on what's happening in the next 6-24 months, and in the next 6-24 months I can't see a bullish argument for Beyond Meat.
Beyond Meat just arrived in our market a few months ago and while the product is fine, its price is absurdly expensive.
To produce it's purported benefits, Beyond Meat needs to adopt the Coca-Cola / Mcdonalds approach - license the tech / brand to local franchisees for local expansion and utilize the local agri sector for raw materials.
Not the person you're responding to, but their grand parent. If you look at food costs at the grocery store, it's pretty clear that a plant based burger which is cheaper than a beef based burger is possible in theory. And I actually believe that this will happen eventually, but I was responding to somebody who was stating categorically that these burgers were more environmentally friendly than beef burgers. My point was simply that that's probably not the case today.
And to speak to your point specifically: if it were simply a matter of reducing per-unit R&D costs by achieving economies of scale, they should be selling below cost so that they can grow unit volume. It's hard to achieve economies of scale when your product is more expensive than the competition.
They have a niche product that requires a lot of up-front investment; getting it cheaper than mass produced beef is a pipe dream. They're out to make money from price-insensitive vegetarians, which means prices will stay high. The only way this will change is with some sort of government action to raise the price of beef for consumers, but that isn't going to happen because this is a democracy; beef is popular and veggie burgers are a niche product. Even vegetarian dictators don't expend their finite political capital on issues like this.
Convincing meat eaters to convert is going to be hard but just getting McDonalds to make it special on their menu could make a vast number give it a go and once they find it to be just as good or even better, and eventually cheaper, then a good portion of that resistance will have been overcome.
McDonalds gets hit disproportionately by anti-capitalists and environmentalists and is always trying to improve their green credentials so I'm sure they'll be working on their own recipe.
"Fake Meat Was Supposed to Save the World. It Became Just Another Fad
Beyond Meat and Impossible Foods wanted to upend the world’s $1 trillion meat industry. But plant-based meat is turning out to be a flop."
It is of course for any business to "flop", whether or not it makes good products.
A "$1 trillion meat industry" with influential interests is not going to transform (much less disappear) suddenly. Consumers of meat products, like people who seem to need bigger and bigger vehicles, are accustomed (conditioned) to viewing their needs a certain way.
The failure of a business that sought to deliver a product that would change the above is not a surprise. For sociological context, consider (as TFA states) that McDonalds is still selling its plant-based product in markets outside the US.
None of this changes the principles of vegetarianism or veganism. These practices have existed for a long time and for good reasons.
If you're trying to bring a new product to market don't you want to rely on the infrastructure that already exists? What's the alternative if you want to make an impact quickly?
Sure, KFC, PizzaHut, etc. have contributed significantly to increases in meat consumption, but isn't that exactly the place to start?
Just like BP, Shell, etc. are diversifying away from fossil fuels, the companies you mentioned likely see the writing on the wall. Considering the fact that they already have supply chains in place to support a significant portion of the population, using them as a proxy to get alternative meats to people at a reasonable cost seems like the path of least resistance.
Agreed, these companies in many ways have despoiled the land as you said but their real motivation is generating profit, they don't necessarily care about the food being low quality, they care that it's good enough for people to buy it and cheap enough to sell it.
If alternative meats drive the same demand, or more, as regular meats and can be sold at similar margins, and as a byproduct the companies can say they're on the alternative meats train, I think you'll see them come onboard.
My parents, who are as far from alternative meat fans as you can find, are in complete alignment that eating meat isn't going to be nearly as commonplace in 30 years as it is today and are interested in investing in alternative meat producers just due to the fact that society is trending in that direction.
Of course you've got the rise of countries coming out of poverty whose populace is going to expect to eat a bunch of meat which is why it's critical that we get economies of scale, distribution, etc. nailed down now before they acquire a real taste of beef grown on an industrial farm, instead we need options for them to buy alternative, or potentially lab grown, meats.
Doing so would have the benefit of generating massive amounts of innovation in how food is produced while, hopefully, reducing relative and absolute greenhouse gas emissions.
While I’ve seen that was the goal of the meat substitute co’s - I’m now seeing the fast food co’s goals aligning, which makes the plant meat business much less niche/quixotic.
If its something like its too costly then that's fine too. Let mcDonalds become bean burgers if their pricepoint with the cost of proper grassfed beef doesn't make any sense anymore.
I don't see it purely as a policy problem. Plant-based meats are primarily focused on the US market, and so outside the US these brands can't compete in price either for price-conscious consumers, lacking supply chains that employ cheap domestic labor.
* This tastes almost as good as real meat, and better than some shitty burgers I've had. With some development it'll be indistinguishable.
* I'm not a vegan myself, but vegan products are a growth sector so we can make money there. I've heard veganism is popular with young people who worry about the environment, so the fact none of my 60-year-old golf buddies are vegan doesn't mean it's not a good opportunity.
* The world's population is rising, and countries like India and China have a growing middle class. Even ignoring veganism and environmentalism, demand for meat is likely to rise. A company with good quality substitutes and the ability to increase production fast could be well placed to capitalise on this.
* Lab-grown meat could revolutionise how we eat - why shouldn't every steak be perfectly marbled A5 Wagyu Ribeye, if it's being 3D printed in a lab? People who invest in the right company could make a fortune! This company isn't precisely that, but they've got a product I can taste right now, and it tastes pretty good to me.
* I need to polish my reputation, with some ethical investments to counterbalance all that money I've given to scumbags and scam artists. I'll invest the loose change I found down the back of my couch in this burger company.
Fast-food beef is retired dairy cows and flavorings made in a lab.
Gross.
Many people don't know or don't care.
There are enough people that do care to significantly impact their bottom line though. For better or worse.
If plant-based foods are so good then sell them as so. Don't sell them as $adjective meat. If your whole business idea is based on misleading customers, perhaps it's not that good.
Not sure "dead" is the right word (chuckle) but certainly shouldn't have attracted the kind of investment that it did. The basic premise is flawed: that grazing land can be turned into meat-like proteins without meat creatures. The aspirations were laudable (less cruelty, less GHG emissions, less water use) but the kinds of plants being used to make meat-substitutes just won't grow in enough quantity to replace meat. Turns out cows are pretty efficient after all.
The humans running the cows could use a lot of smartening up though. From genetics to supplemental feed they could do a lot to reduce emissions, and practices could reduce cruelty quite a bit, but things move slowly in Agriculture.
"Michael McCain, chief executive, told analysts last month that while the company had built a business model for plant-based meat assuming a radical shift in consumer behaviour, “this transformational outcome did not materialise”."
and also relying on a "radical shift in consumer behaviour" seems extremely risky. "Build it and they will come" is not a business strategy, it's a wish.
Then there's Beyond itself. Striking a deal with McDonald's likely involved a lot of time and money — and then the "McPlant" product immediately failed. If you're going to convince Americans that plant-based meat is good, meeting them where they're at with fast food may seem like a good idea. But the type of people who find themselves in the McDonald's drive-thru, and the type of people who will pay extra for plant-based meat, is a tiny sliver of the theoretical burger Venn Diagram.
Now, you could call that grossly mismanaged, or you could call it the best possible shot they had at catering to a wide audience and breaking out of the niche vegan market. But the fact is, the product failed. Where can they possibly go from here to continue growth?
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