By: Sylvia Lin
The plant-based protein start-up Beyond Meat’s shares price soared 163% on the first trading day. What does the future hold for this new company and the recently trendy plant-based “meat” market?
On their first trading day, shares of Beyond Meat, the plant-based protein start-up company, soared 163%. In the following month, the shares price increased by more than 600%. Beyond Meat is a California-based company that manufactures plant-based burgers and sausages; it is also the first company that only produces plant-based “meat” to go public. (1) However, the plant-based protein industry is about to get crowded. (2) Beyond Meat’s former investor, Tyson, sold its 6.5% share – worth an estimated $79 million – a week before Beyond Meat went public, and opened its own plant-based protein line. (3)
Other traditional meat-oriented companies are following Tyson and launching their plant-based protein lines. For example, Nestle, the world’s largest food company, announced that it would launch its own plant-based protein line called the Awesome Burger; Hormel Foods, known for its Spam canned pork, is also launching a meat substitute under its new Happy Little Plants brand. (4) These leading companies in the food manufacturing industry clearly all see the potential of the market. Indeed, global sales of plant protein increased from around $21700 million in 2013 to $36300 million in 2018, which was a 67.3% increase in sales. Increasing supply comes with growing demand. Between March 2013 and February 2018, numerous new products that featured at least one plant protein ingredient entered the global marketplace.
Manufacturers responded to this trend enthusiastically, resulting in a double win for consumers – both the availability of plant-based food greatly increased, and the price for plant-based food dropped due to increased scale of production.
However, the plant-based protein market has to face the challenges that come with popularity. In the past when there weren’t many options for vegans and vegetarians, they had to accept the bland taste, strange texture, and long ingredient lists of plant-based foods. As more and more flexitarian(someone who mostly consumes a vegetarian diet, but occasionally consumes meat) consumers and even traditional meat eaters have started to turn to plant-based food, expectations have also changed. These groups of consumers are accustomed to high-quality food choices and hold the same expectations for plant-based food. They focus on the taste and texture of the food, as well as the nutritional value of it, and prefer a shorter list of ingredients that they can recognize and understand. What’s more, there are life-long meat and dairy consumers who are reluctant to turn to plant-based food, but feel like they “should” do it either because of the trend, advice from health professionals, or encouragement from environmental activists. These consumers generally expect plant-based meat to taste, smell and look exactly like real meat.
Another type of plant food consumers are the millennials, who have turned to plant-based food due to ethical concerns and social media trends. These consumers eat plant foods not just for sustainability reasons, but also because of the “feel-good” value associated with the lifestyle, enabling them to feel like they are living a purpose-driven life. This market segment responds to the appeal that plant-based foods generate social media attention by providing vegetable-based products instead of meat-substitutes. These kind of plant-based dishes don’t pretend to be something they’re not; they want to look like they are obviously made of lots of vegetables for the implications of consuming them.
These consumers of plant-based food and beverages were first most common in North America and mainly consisted of millennials and younger women, but the consumer group has greatly expanded both in terms of gender and geographical location. Nowadays, plant-based foods have increasing appeals to men who seek health products too. Geographically, in other parts of the world, specifically in Asia Pacific, the Middle East and Africa, some well-educated young consumers are also adopting a plant-rich diet.
In general, well-educated, young consumers are leading the trend of plant-based food, with wellness seekers also contributing to the market. The rapid growth can then be attributed to changing lifestyle, growing trend of wellness and the awareness of environmental aspect of consuming meat, as well as people’s increasing consciousness of their health. Start-up companies like Beyond Meat seized the chance and went public, whilst traditional food processing companies such as Nestle, Tyson, and Hormel Foods also followed the trend for the potential of the market. However, since the plant-based protein market is still relatively new, it still has a long way to go.
Durbin, D.-A. (2019, May 2). Beyond Meat Goes Public as Plant-Based Foods Are on the Rise. Retrieved from https://www.inc.com/associated-press/beyond-meat-ipo-2019.html.
Zhang, N. (2019, September 14). How Beyond Meat’s Stock Surged 500% in 2019. CNBC. Retrieved from https://www.cnbc.com/2019/09/14/beyond-meat-stock-how-the-alternative-meat-company-surged-500-percent.html.
Fassler, J. (2019, June 18). After ditching Beyond Meat, Tyson Foods announces plant-based brand of its own. Retrieved fromhttps://newfoodeconomy.org/after-backing-out-of-beyond-meat-tyson-foods-announces-a-new-plant-based-brand-of-its-own/.
Siegner, C. (2019, September 5). Hormel grows into plant-based meat with its new Happy Little Plants brand. Retrieved from https://www.fooddive.com/news/hormel-grows-into-plant-based-meat-with-its-new-happy-little-plants-brand/562258/.
Cassity, J. (2019, September 9). The State of the Global Plant-based Protein Market. Retrieved from https://www.kerry.com/global-en/insights/kerrydigest/2019/the-state-of-the-global-plant-based-protein-market.
Global Plant-Based Protein Market to Reach $14.32 Billion by 2025, Growing at a CAGR of 8.1% – ResearchAndMarkets.com. (2019, August 23). Retrieved from https://www.businesswire.com/news/home/20190823005136/en/Global-Plant-Based-Protein-Market-Reach-14.32-Billion.