The day it went public in May 2019, Beyond Meat’s stock soared by 163 percent—the best one-day performance for a major American company in nearly two decades. The Los Angeles–based company, along with its California neighbor Impossible Foods, had positioned itself at the vanguard of a new protein industry, bringing a Silicon Valley sheen to the hippyish world of meat alternatives. There was clearly something in it. Sales of fake meat grew by 74 percent between 2018 and 2021, driven by slick marketing and genuine concern about meat production’s impact on the environment. As the hype cycle rolled on, analysts predicted that alternative meats would continue to boom. Barclays said the market would hit $140 billion by 2030. Boston Consulting Group went further, putting its guess at $290 billion by 2035.
But now the rose-tinted spectacles have come off. On an earnings call on August 7, 2023, Beyond Meat CEO Ethan Brown told investors that net revenues had decreased 31 percent year-on-year, prompting the company’s share price to slip more than 10 percent. It isn’t just Beyond Meat that’s struggling. Sales of plant-based meat fell by 1 percent in the US in 2022, following a year of zero growth in 2021. In June the US brand Tattooed Chef announced it was filing for voluntary Chapter 11 bankruptcy protection, while in the UK other vegan brands have scaled back their product ranges and struggled with their financials.
The slump led to inevitable predictions that the market had reached “peak vegan.” Investors trimmed their expectations. But while it’s true that enthusiasm for vegan meat alternatives among consumers does seem to have waned, there is still a lot of room for plant-based proteins to grow. The current generation of alternative meats rode to prominence in an era of venture capital splurging and tech-fueled optimism. But plant-based meat companies aren’t tech startups, and the food industry isn’t the internet. Looking beyond the hype-boom-bust cycle of the industry, it’s clear that people—particularly those outside of the US—are still prepared to embrace more plant-based diets, if they’re given a little push from governments.
“I think the main issue with the category is not bringing in enough new consumers. That’s the number one issue,” Brown said on the earnings call. But the problem is bigger than that. Those customers who do try plant-based brands once often don’t return to them. In March 2022 the Canadian food company Maple Leaf released a review of the US plant-based category. Lots of people wanted to try meat alternatives, it found, but only a small number of those customers came back for more.
Recurring purchases are crucial for companies to grow, says Johnny Reams, a partner at the food tech venture capital fund Stray Dog Capital, which was an early investor in Beyond Meat. If people aren’t coming back to buy alternative proteins again, it’s a sign that the products out there are underwhelming customers, he says. “We believe that there have been a lot of products that have come to market that are just not good enough from a taste, texture performance for the consumer,” says Reams.
Brown alluded to this problem in Beyond Meat’s earning call. The company is working on the fourth version of its beef burger imitation, and has also released a thinner version with a new formula and texture.
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