Is Beyond Meat beyond saving?

New York
CNN Business

Having a frame that bit someone’s nose might be the least of Beyond Meat’s problems. Investors have taken a big bite out of Beyond Meat’s share price as fears grow that the popularity of plant-based foods has peaked.

Shares of Beyond Meat (BYND) were around $16 on Wednesday. That’s down more than 75% this year, near an all-time low and well below its all-time high price of nearly $235 in 2019 shortly after the company went public.

So is the craze for plant foods a fad that is already over? Not exactly. Companies like Beyond Meat, rival Impossible and plant-based milk producer Oatly are still making big deals with supermarket chains and restaurants to get their products on store shelves and menus.

Beyond Meat recently announced a recent partnership with Taco Bell. The Yum! (YUM) The Brands-owned Mexican fast food chain will sell quesadillas featuring Beyond’s plant-based carne asada steak.

But in the company’s latest earnings call, Beyond Meat CEO Ethan Brown admitted the company (and the industry) faces challenges.

“We’ve gone from a pandemic to record inflation,” Brown said. “And for a sector that’s still recovering and still in kind of a first set of lows, that’s a very tough set of conditions to navigate.”

Brown conceded that “progress for us and for the industry is taking longer than expected.” Making it harder for the company – Beyond Meat’s products tend to cost more at the grocery store than real animal meat.

That’s why Brown said inflation will add more “pressure on consumer spending and especially the impact this has on more expensive protein and foods.” As such, he expects “a delay in the recovery of post-Covid growth”.

Oatly, which went public priced at $17 in the summer of $21 and quickly peaked near $30, is also struggling as inflation issues and supply chain issues present big problems. Shares have fallen 66% this year and are now trading below $3.

“We see huge challenges for retailers here to just navigate around this unprecedented change that’s happening and also for consumers who are really watching their family budget,” Oatly CEO Toni Petersson said during the meeting. the company’s latest earnings conference call last month.

These economic headwinds will likely prompt Impossible Foods, which was due to go public later this year, to delay an initial public offering. Impossible was valued at $7 billion based on its last fundraising at the end of last year. That was before the market imploded.

Of course, Beyond Meat and Impossible also face the challenge of competing with established food giants such as Kellogg (K), ConAgra (CAG), and Campbell Soup (CPB), which have also entered the plant market.

Companies in the plant-based food world face another, more daunting challenge on top of broader economic difficulties and new rivals: it may be harder to convince consumers to switch to burgers or of plants.

“After years of growth, plant-based meat sales in the United States are stagnating,” consulting firm Deloitte said in a recent report. “The addressable market may be more limited than many thought.”

Deloitte suggested that “the portion of the US population willing to repeatedly try and buy ‘vegetable protein’ may already have reached a saturation point.”

Plant-based businesses can also face the problem of being seen as “woke” in a highly polarized America.

Deloitte said in its report that customers who don’t buy (or even try) plant-based foods “may not be easily reachable, in part because of cultural resistance.”

Take, for example, the social media outcry last month when Cracker Barrel (CBRL) announced it was adding Impossible’s sausage to its breakfast menu.

So there is nothing wrong with Wall Street’s concerns about the sharp decline in demand for “fake” meats and milks.


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