Companies that make faux burgers and other meat substitutes are laying off employees and staring down weak sales, amid what Beyond Meat describes as "ongoing softness in the plant-based meat category."
Why it matters: The biggest fast-food chains and meat producers have raced to cash in on fake meat, sensing consumer appetite for sustainable and animal-friendly alternatives. But high prices and flattening demand have dogged the industry.
Driving the news: Beyond Meat announced a 19% workforce reduction this month amid steepening revenue declines.
- McDonald's shelved plans to introduce a McPlant burger nationally.
- Brazil's JBS is closing Planterra Foods, its U.S. plant-based meat business, and Canada's Maple Leaf Foods has whittled its plant-based meat division.
- Impossible Foods laid off 6% of employees, though it positions the move as part of a reorganization and says sales are growing.
“It’s worth asking: Are we nearing the end of a decade-long fad?” asks The Takeout.
State of play: Despite the drumbeat of bad news, Beyond Meat officially introduced "Beyond Steak" on Monday — a splashy new product available at more than 5,000 Kroger and Walmart stores.
- It's "designed to deliver the juicy, tender, and delicious bite of sliced steak tips," a Beyond Meat spokesperson tells Axios.
- "Early feedback on taste and texture has been very positive, so we’re confident this is a product consumers are going to be very impressed with," the spokesperson said.
- A separate product — Beyond Carne Asada Steak — was rolled out last month for a limited time at Taco Bell locations in Dayton, Ohio.
Meanwhile, arch-rival Impossible Foods is gearing up to introduce a plant-based steak of its own — and not just any cut.
- “I’ve tasted our filet mignon prototypes, and they’re pretty damn good,” Impossible Foods founder Pat Brown said at MIT Technology Review’s ClimateTech conference this month.
The big picture: Amid a recent 10.5% annual sales drop in refrigerated meat alternatives, the product's purveyors are looking to the long term — which includes seeking price parity with "real" meat, which tends to be less expensive.
- "We believe that broader nutritional and environmental benefits of plant-based protein will continue to make plant-based meat a compelling option for consumers," Beyond Meat tells Axios.
- Nestlé is still bullish on plant-based products, with Steve Presley, the CEO of its North American business telling Food Dive that it's "still a really strong consumer trend, but I think it got a bit frenzied."
- Kellogg's plans to sell or spin-off its plant-based division, which houses MorningStar Farms, citing "significant opportunity to capitalize on strong long-term category prospects by investing further in North America penetration and future international expansion."
What they're saying: "Vegetarians were doing just fine without fake meat before Beyond and Impossible came along, and hardly have reason to add expensive alt-proteins into their diet," Marnie Shure writes in The Takeout.
- "Vegetarians and vegans were never the intended customer for Beyond: These products exist to cater to flexitarians ... and those folks aren’t going to spend more on a habit they haven’t yet cultivated."
Yes, but: There are still bullish growth predictions for plant-based meats, and Impossible Foods — a private company that doesn't have to report its numbers — tells Axios it's seeing "hyper-growth, with over 60% year-over-year sales growth in retail alone."
- "We’re not experiencing anything like what Beyond Meat has reported – quite the contrary," an Impossible Foods spokesperson tells Axios.
- "It's not accurate or reflective of our business to assume that because the overall category is flat to down, or because we recently re-organized our business, we're contributing to the category's decline," the spokesperson said. "In fact, we're responsible for the vast majority of the category's growth and have been for some time."
Taste test: Beyond Meat sent private chefs to cook Beyond Steak for journalists like me in advance of the product announcement.
- Vox employees found it delicious, but "opinions var[ied] on texture and how close it comes to tasting like steak from a real cow."
- Fast Company's reporter and her husband were very impressed with both taste and texture.
- Personally? I found it a bit too chewy, but my partner liked it well enough — and his daughter gave it a rave.
Go deeper: McDonald’s bringing back McRib for a “farewell tour"
