Beyond Meat, manufacturer of ersatz-meat products like the Beyond Burger, has slumped on the stock market after yet another failure to meet its profit goals.
Although this may mark the beginning of the end for one of the biggest meat-replacement brands in the world, it is unlikely to mark the end of fake meat, despite flagging economic performance and growing evidence that the products are no better than garbage processed food.
Beyond Meat: The beginning of the end?
As Zero Hedge reports today, “Beyond Meat plunged 14% after reporting preliminary net revenue for third quarter of about $106 million, missing the estimate of $134.3 million by about 30%, and a huge disappointment to the company’s prior guidance which was $120 million to $140 million.”
Although the company had issue third-quarter guidance which anticipated a decline in net revenue, the decline was much greater than expected.
Beyond Meat said a number of different factors caused the lag in sales, including the impact of the new Covid-19 delta variant. The company said a Canadian distributor decreased retail orders for longer than expected as its restaurants reopened, and it had expected incremental orders that didn’t materialize after one of its large customers changed distributors. In addition, the company claimed that labor shortages delayed distribution expansion and made shelf-restocking harder, further harming profits.
Operational challenges also hurt its results, Beyond Meat claimed. A Pennsylvania facility lost drinking water for two weeks and another suffered water damage to inventory after severe weather.
Beyond Meat’s initial forecast for its third-quarter revenue disappointed investors when the company first released it at the beginning of August.
After soaring grocery sales last year during lockdowns, demand has fallen. At the same time, food service orders haven’t rebounded completely yet, even as restaurants operate at full capacity. Executives said last quarter that many eateries were being more conservative with their orders because they were unsure of the impact of the delta variant on business.
These developments do not come out of a clear blue sky for Beyond Meat. Back in May, we reported that the stocks of a number of plant-based companies, including Beyond Meat, had taken a similar slump, leading many companies to slash their prices in a desperate bid to increase sales.
As Barrons reported at the time:
“Privately held Impossible Foods plans to lower the price of its plant-based patties by 20% at grocery stores in the U.S. That means that the suggested retail price of an Impossible Burger would be $5.49 in thousands of grocery stores across the country, with similarly planned price cuts for other markets, from Canada to Hong Kong.
“The move is part of a longer-term plan to achieve price parity with ground-beef prices. In the first week of the year, Impossible Foods announced what was then its second price cut in a year, bringing the price of a patty to $6.80. While the most recent move gets the company closer to its goal, it’s still roughly double the cost of a $2-to-$3 beef patty.”
But even as plant-based meat prices continue to tumble, consumers have failed to be enticed by the alternative.
In fact, a study found that social pressure was by far the most effective tool to convince consumers to make the switch to plant-based meats. Plant-based companies like Oatly have increasingly capitalized on this research, as evidenced by their sneering “Help Dad” campaign, in which woke teenagers berate their fathers for choosing real milk over Oatly’s vegetable-oil-and-sugar slush.
The strength of the resistance against plant-based alternatives to meat has surprised and disappointed some, not least of all the companies making them. Another recent study found that almost three-quarters of Australian men would rather die 10 years early than cut out meat.
Resistance has also come from the legislature in certain parts of the world. Texas lawmakers zeroed in on plant-based meats and passed a bill demanding plant-based meat companies to drop meat-related labels such as “beef” or “chicken” as it is deemed to be misleading to consumers.
There is a wider cause for concern because plant-based substitutes are loaded with vegetable oils and phytoestrogens while failing to provide equal nutrition to the products they’re supposed to replace. A scientists involved in the creation of plant-based meats even came out recently and admitted that these products are no better than other forms of unhealthy processed food. Quite the endorsement!
A low-fat vegetarian diet is linked with significantly lowered testosterone levels and, as we discussed in another article, animal fat is necessary for a healthy, functioning brain.
Despite these strong consumer and scientific indications that plant-based meat alternatives aren’t what consumers want to eat or should eat, don’t expect that to stop manufacturers, retailers and governments from pushing them.
As the debate about climate change and the environment takes on an increasingly alarmist tone, commentators with links to government are already suggesting meat taxes and that governments will have to find ways to “force people to eat less red meat.”
The UK government’s National Food Strategy, a government investigation into the future of food in the UK, recently reported that algae and plant-based meat would have to make up a significant proportion of people’s diets in the UK if the government is to meet its carbon targets.
So although today’s news about Beyond Meat may seem like a victory for meat-lovers, the truth is that the war is from over.
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