Beyond Meat in El Segundo, California, on May 30, 2024.
Christina House | Los Angeles Times | Getty Images
Beyond Meat will introduce a whole-muscle steak alternative as part of its pivot to win over health-conscious consumers.
CEO Ethan Brown said on Wednesday that the rollout will likely include a partnership with a restaurant chain known for serving healthier food, a departure from its prior strategy of teaming up with fast-food chains such as Dunkin’ and McDonald’s.
More than six months ago, Beyond announced a turnaround strategy that included cutting costs, hiking prices and discontinuing the jerky product it made through a joint venture with PepsiCo. To revive slumping sales, the company’s marketing has focused on the health benefits of eating a plant-based diet through partnerships with organizations such as the American Cancer Society and influencer deals with college athletes. While health has always been a part of Beyond’s pitch to consumers, the company used to put more emphasis on climate change, too.
In recent months, Brown has blamed some of the plant-based meat industry’s woes on misinformation from the meat industry and cattle farmers, such as skepticism about plant-based meat’s processing.
Beyond already sells plant-based steak tips, but the new product mimics the texture of a filet with mycelium, the rootlike part of fungi. Brown envisions the steak alternative as a substitute for chicken, topping salads and stuffing burritos as a source of protein.
“The focus on this has been a very small number of ingredients, very high protein, very low saturated fat,” he said.
The company is also rolling out reformulated versions of its Beyond Burger and Beyond Chicken to grocery stores. The new products have short ingredients lists, in the hopes of winning over customers who previously thought plant-based meat was too processed.
Beyond declined to share any details on the timing of the launches for its latest steak or chicken options.
Losing diners and investors
Beyond’s market value once topped $14 billion, fueling broader investment into plant-based meat and a flood of competitors.
But these days, the company has a market cap under $400 million, reflecting investors’ concerns about the health of the business and the industry’s struggling sales. Its stock has lost a third of its value in 2024.
In the second quarter, Beyond reported net sales of $93.2 million, down 8.8% from the year-ago period and a 37% tumble from its second quarter in 2021.
After Beyond went public five years ago, its stock soared as more consumers bought its plant-based meat at grocery stores and fast-food restaurants such as Dunkin’. The Covid-19 pandemic further boosted sales as lockdowns encouraged more at-home cooking — but the lift did not last.
Buzzy partnerships with restaurant giants such as McDonald’s and Yum Brands did not lead to permanent menu items in the U.S., although Beyond has had more success with the chains’ European markets. Its joint venture with PepsiCo led to a single product, its now-discontinued jerky that weighed on its margins for several quarters.
At the same time, the broader category started struggling. Consumers lost interest in trying plant-based meat, often complaining about the taste or concerns about its processing.
Sales of plant-based foods, which includes milk, meat, egg and butter alternatives, rose just 1% to $8.1 billion last year, according to data from the Plant Based Foods Association. The milk alternatives segment accounts for roughly a quarter of the category’s total retail sales, followed by plant-based meat.
As consumers’ tastes shifted away, investors also lost interest.
Kellogg mulled spinning off or selling its plant-based business in a broader three-part split of the company, but ultimately opted to keep it part of Kellanova, its snacking spinoff that Mars is buying. Impossible Foods has been rumored to be considering an initial public offering since 2021, but the company’s CEO said earlier this year that it could sell or go public in the next three years, a much longer time horizon.
However, Beyond has no plans to sell itself, Brown told CNBC.