No. Definitely not
Because food is local. Because food is cultural
Plant based meat has a 2000+ year old history in China. Still today Plant based meat has a large acceptance in China. The same is the case of SE Asia.
However as a credible meat replacement, it was the US market which really generated a strong buzz. Companies like Beyond Meat and Impossible Foods took the lead in setting the tone and pace of the industry. As celebrities en masse supported plant based meat category, the space took off in the US. Billions of dollars were invested in plant based meat companies in the USA in the last decade. That led to a sharp acceleration in consumer adoption.
The strategy adopted by these two leading companies was to provide a premium offering to consumers which was much more expensive than real meat. Health, environment and animal welfare were the pillars on which the value proposition of plant based meat was built.
It is important to note that there had been quite a few plant based meat companies in the US predating Beyond Meat & Impossible Foods, eg Tofurky, Loma Linda, Field Roast etc. These companies are doing well even today
What BM & Impossible did was to target one of the most popular food format in the US, the Beef Burger, improve the texture from the earlier plant based meat companies and adopt high decibel marketing campaigns.
This strong push helped the space quite a lot. Beyond Meats blockbuster IPO in 2019 was an iconic moment for the space of plant based meat. Since then it has been tough for the BM share to maintain the highs of the IPO. In the current gloomy market scenario the shares have been receiving massive downward pressure.
While it’s IPO price was $25, the share reached an astronomical $234.90 in July 2019.
Since then it has come down to more realistic $38.26 ( as on Aug 05, 2022)
The crazy hype initially in 2019 was unwarranted. So is the current gloom in the US market.
From the days of the incredible hype initially to the current doomsday scenario, we get too much carried away by the optics.
It’s interesting to take a look at the recently announced Q2 results of Beyond Meat :
1) Net revenues were down 1.7% year over year to $147 million.
2) On a positive note, Beyond Meat did sell 14.6% more pounds of product than it did in Q2 2021. However, its net revenue per pound was down, which is why revenue was basically flat. But it's important to note that this was by design. Management is trying to get the prices for its plant-based meat substitutes down to what comparable animal protein costs.
They have forecasted an annual revenue of approx $500 million.
This revenue is no mean achievement. From an extremely niche segment only a few years back to a situation where one of the leading plant based meat company is generating $500 mn in Net revenue is a BIG WIN in my books.
More on the Indian context in my next post.