The Plant-Based Revolution Is Here
While doing your grocery shopping and approaching the meat section, you’ll most likely come across a section dedicated to plant-based items. This section wasn’t always there and it wasn’t as prevalent as it is now.
In 2019, Meat-eaters and non-meat-eaters launched a plant-based revolution. Last year, the market for plant-based meat in the U.S. hit $5 billion. That revolution was due, in part, to Beyond Meat (NASDAQ: BYND). The company went public on May 2, 2019. Prior to its initial public offering (IPO), the company did the usual “IPO roadshow” to market itself and its products to gain investor interest. This introduced much of the public to Beyond Meat's products.
The Plant-Based Foods Association (PBFA) indicates that U.S. sales of plant-based foods increased by 11% from April 2018 to April 2019, while the total U.S. retail food market grew only 2%. The plant-based foods market could rise even higher in the years to come. According to a report by Meticulous Research, it could be worth $74.2 billion by 2027. Companies like Beyond Meat have brought more attention to plant-based food despite those types of food having been around for some time. Many plant-based alternatives for milk and yogurt have taken off because of an increase in lactose intolerance. Additionally, people are trying new food products with the goal of a healthier lifestyle.
PBFA Senior Director of Retail Partnerships Julie Emmett said:
Plant-based foods are a growth engine, significantly outpacing overall grocery sales. We are now at the tipping point with the rapid expansion of plant-based foods across the entire store, so it is critical for retailers to continue to respond to this demand by offering more variety and maximizing shelf space to further grow total store sales.
That’s exactly what we've seen in the last few years. What really caught the industry's attention was how well Beyond Meat's stock performed at IPO and since it's been public. The company has been able to broaden its product lines and even expand throughout the world. Just earlier this week, Beyond Meat announced that it would be expanding its Beyond Breakfast Sausage patties to thousands of additional stores nationwide like Kroger (NYSE: KR), Walmart (NYSE: WMT), and Publix locations. This new product was only launched at the beginning of this year.
Plant-based meat alternatives have been especially popular during the pandemic. Nielsen data shows that unit sales for fully cooked plant-based alternatives jumped about 25% in the four weeks prior to August 22. And in the April to June period, sales of these meat-alternatives surged 31.4%. Beyond Meat has been able to become a leader in the industry. You would think that the people who’re buying these products are buying them because they are vegetarian or vegan and that Beyond Meat and other plant-based food companies meet a need that hasn’t been filled for vegetarians and vegans. However, some data shows that the people who are buying these products don’t self-identify as vegetarian or vegan, and these are the people making this market explode.
This data gives Beyond Meat and competitor Impossible Food the drive to continue innovating and developing new plant-based alternatives to intrigue meat-eaters and non-meat-eaters alike. Impossible Foods has been able to raise $500 million to create plant-based alternatives to lamb, goat, and fish. And some of these products are being sold at popular fast food restaurants like Burger King, KFC, McDonald’s, and Dunkin’ Donuts. Younger generations are fueling this desire for food that’s sustainable and healthy.
When Beyond Meat started trading, some analysts believed that hype surrounded the company and that it and the market would fizzle out, but it appears the opposite has happened, especially with more people aware of the need for sustainable ways of acquiring food and the impact that food products have on our environment. However, that doesn’t mean that Beyond Meat will stick around or remain a leader in this market.
Until next time,