The vegan crash: Beyond Meat & Co.: the hype is followed by disillusionment

The Vegan Crash
Beyond Meat & Co.: the hype is followed by disillusionment

Von Jannik Languages

Vegan alternatives to meat or cow’s milk are increasingly in demand in the supermarket. But on the stock exchange, manufacturers are past their best. The flagships of the industry are trading 90 percent below their all-time high. Inflation and politics are to blame.

For a moment the world seemed headed towards a future without meat. That was in 2020, a few months after the Corona outbreak. McDonald’s sold the McPlant, a vegan burger, supermarkets reserved entire refrigerated shelves for meat substitutes and Berlin baristas used oat milk instead of cow’s milk as standard.

Today the world is different: McDonald’s no longer sells the McPlant, the number of food start-ups in Germany is decreasing – and more and more manufacturers are reporting problems. The most recent example: Beyond Meat, formerly the manufacturer of the McPlant and probably the best-known supplier of meat substitutes. The Californians have now announced that they will lay off almost a fifth of their approximately 1000 employees. Four top executives will also have to go (including controversial COO Doug Ramsey, who bit a passerby on the nose in September).

The problems at Beyond Meat run deep – and can be seen across much of the industry. This is the situation: Food startups continue to grow, but much weaker than hoped. At the beginning of the year, Beyond Meat still expected growth of 33 percent for 2022. Instead, sales fell by 22 percent in the past quarter – and ultimately the loss was even greater than sales. For the year as a whole, sales growth is likely to be in the low single-digit percentage range. Similarly, acclaimed oat milk producer Oatly burned twice as much money through October as it did in the same period last year.

Beyond Meat loses 95 percent

Beyond Meat 12,31

This is also reflected in the share price. Beyond Meat is now 95 percent away from the all-time high of 209 euros. A share certificate from the meat substitute manufacturer recently only cost 13 euros. Oatly’s stock is doing just as badly, trading 90 percent below its all-time high of currently $1.77.

But why is that? The manufacturers have problems, especially in the important drive market USA. According to analysis house Mizuho Americas, fewer animal replacement products have been manufactured there for 22 months in a row. These include meat and milk substitutes. The main reason for this is the galloping inflation. Products from Beyond Meat, Endori or Greenforce still cost significantly more than conventional meat – the difference per kilo is around 2 euros in this country. And now that prices are rising in all areas of life, consumers are holding onto their money, especially when it comes to higher-priced products.

In the US, however, there is a second important effect that has something to do with politics. Meat substitutes are often seen as a “woke” there, and whoever consumes them is considered left. The polarization in the country means that the products are becoming inedible for parts of society. “Go woke, go broke” was one of the battle cries widely shared by right-wing groups on social media.

At the same time, however, the promise that plant-based products are healthier and have fewer calories is becoming less and less popular. In fact, they rarely are. However, as a Deloitte study found out, this is one of the reasons why US consumers used the products for many years. In the meantime, however, the agreement with this statement is decreasing, the authors determined – and growth is slowing down accordingly.

Industry continues to grow

Nonetheless, and this is important, the industry continues to grow in many parts. In Germany, for example, the consumer researchers at GfK are observing growing interest, which has at best cooled off temporarily. “People haven’t lost their appetite,” says Robert Kecskes. “On the revenue side, meat alternatives are still the category that’s growing the most in retail.”

While the overall market collapsed by three percent in the first half of 2022, twelve percent more meat alternatives were sold. But this value is also far below the expectations of 30 percent and more growth – that explains the turbulence on the financial markets, where the corrections in the share prices of Beyond Meat & Co. are reflected.

Kecskes explains that the demand for meat-alternative products is better than that of the market as a whole because of the inflation: “We are seeing strong price increases for conventional meat, for example beef, which rose by 22 percent in August. For meat substitutes it was only 2.8 percent. Of course, this development also strengthens the consumption of meat substitutes.” A kilo of fresh meat is currently around 9.17 euros, a kilo of meat substitutes costs an average of 12 euros – and the difference is currently decreasing month by month.

Two factors determine how much growth there is still in the market: the consumers and the mix of producers. 30 percent of all German households already buy meat substitutes at least once every six months. If one assumes that all meat consumers tend to be potential consumers of substitutes, another 45 percentage points are possible.

Big players are crowding out startups

However, this still represents huge growth potential, and that is why more and more large producers are interested in the market. The Rügenwalder Mühle already sells more vegan products than conventional meat. Unilever and Nestlé also have their own products on the market. However, this is precisely what leads to problems for first movers such as Beyond Meat and Oatly, who were first on the market but now have to fight to be listed in the supermarkets.

In addition, there is sometimes bad management: Year-on-year, Beyond Meat’s gross margin fell from plus 21.5 percent to minus 17.4 percent. With every euro invested, the company loses 17 cents. The attempt to prove price leadership in the market has probably failed – nobody at Beyond Meat is talking about the first mover advantage as a market pioneer anymore.

And this could ultimately show what has shaped the food market for a long time: the big ones win the race – and at some point the small ones take over. However, there are no signs that the market for meat substitutes is dead again. “We are positive about the long term for a period of 20 to 25 years,” explains John Baumgartner from Mizuho America. “But not much will have happened in ten years.”

The article first appeared at

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