By, Sophia Krnjeta
This year has been revolutionary for the market of plant-based meat alternatives. As an increasing number of consumers strive to include more plant-based foods into their diet, the potential of the market is soaring.
Leading the plant-based rise is Beyond Meat. This rapid-growing Los Angeles-based company was founded in 2009 by Ethan Brown with a mission to “create the future of protein.” The company was formed on the foundational goal of reducing the demand for livestock and ultimately combating climate change. They have achieved this through creating a plant-based alternative that nearly replicates the taste of meat and has transformed the way we think of food.
Beyond Meat has seen tremendous growth throughout 2019. In their second quarter of this year, the company had net revenues of US$67.3 million, which is a 287.0% increase from the prior year’s period. Their gross profit for the quarter was 33.8% of sales, totaling US$22.7 million, improving dramatically from last year’s quarterly gross profit of US$2.6 million, which was 15.0% of sales.
The company also went public this year in May with an IPO of US$25.00, selling over 11.0 million shares. After its first day of trading, the stock closed at US$65.75 and has since seen staggering growth to its current value of US$145.72. This influx of investment has worked to expand the company’s research, development, and marketing, and research and development.
A substantial amount of exposure for the company in Canada has come from its early adopter, A&W. The popular fast food chain, largely known for its beef burgers, has devoted a significant amount of its marketing efforts toward their Beyond Burger. The fast food chain has seen major returns from this venture with increased same-store sales of 10.0% in the first quarter of 2019. While this growth can be attributed to multiple factors such as dedicated management and new innovations, the introduction of the Beyond Burger has likely played a role in driving sales.
Another notable early adopter is Tim Hortons, which introduced its Beyond Meat burgers and breakfast sandwiches this summer. In contrast to A&W’s success, Tim Hortons decided to pull Beyond Meat from its menus in all provinces across Canada except British Columbia and Ontario where it saw the most sales. Noticeably behind on the trend is fast-food giant McDonalds. The restaurant chain is just beginning to pilot their Beyond Meat burger this week in 28 restaurants throughout Ontario. Beyond Meat has also recently become available across several different grocery stores and restaurants, including Whole Foods and NoFrills.
The market for Beyond Meat, and plant-based meat alternatives in general, has grown tremendously over the past few years as meat consumption continues to drop. According to a report by UBS, the plant-based meat market is expected to grow from a current USD$4.5 billion to USD$85.0 billion by 2030.
In addition to concerns over climate change, these trends have also been driven by more Canadians avoiding red meat due to health-related concerns. Canada’s new food guide even outlines the importance of eating more plant-based proteins in replacement of meat.
While these facts remain true, many consumers are reluctant to support the idea that eating such a heavily processed product could be good for their health. Potential health risks associated with Beyond Meat products have not been discovered, but the unknown factor around this relatively new method of food production is enough to drive some consumers away.
Given these trends encouraging greater adoption of plant-based alternatives, there is a large potential for future growth in the market. Early adopters such as Beyond Meat and the vendors that sell their products are building market loyalty which will presumably benefit them in the long term. Companies who are yet to take on this trend may want to evaluate the possible loss they are undertaking.
Featured image by Armando Ascorve Morales.