Vegetarian meat loses its steam in the US as sales drop

Vegetarian meat is losing steam, as falling US sales cast a shadow over expectations that the emerging category will take a significant portion of the real animal meat market.

In the four weeks to October 3, sales of plant-based meat substitutes fell 1.8 percent from a year earlier, falling in 2021 to 0.6 percent, according to US retail data group SPINs.

There was a boom in the sales of vegetarian meat at the beginning of pandemic In 2020, it identified a major obstacle to growth this year, but demand has also been affected by consumers eating at home less as restrictions are lifted, while supply chain problems have left some products unavailable in stores, according to SPINS. Elsewhere, she added, a wave of new products swept consumers.

The United States is the largest market for “new” plant meats that mimic real meat in taste and texture. The drop in sales comes after weak revenue numbers over the past few weeks from Beyond Meat and maple leaf food, the Canadian meat group that owns Green Leaf that specializes in plant-based protein.

“In the past six months, unexpectedly, there has been a rapid slowdown in the growth rates of the plant-based protein category,” Michael McCain, CEO of Maple Leaf, told analysts earlier this month.

McCain blamed a 6.6 percent drop in the company’s plant-based protein sales for declines across the category from refrigerated foods to retail and foodservice services. He said the group was reviewing the grounds in an effort to understand shifts in the market.

Maple Leaf beat revenue expectations with a 13.4 percent increase in sales in its real meat division. Analysts at BMO said they expect the vegetable protein market review to reduce capital spending and marketing, which should improve results next year.

Beyond Meat’s stock has fallen since then mentioned $106 million in third-quarter sales, after discount Her previous guidance of between $120 million and $140 million last month.

Ethan Brown, CEO, blamed consumers taking fewer shopping trips and being less open to trying new products, as well as being less interested in healthy options. He also noted lower product sampling opportunities because the delta variant propagated limited exposure to consumers.

Line chart of Beyond Meat and Maple Leaf Foods shares reworked showing a tale of two plant-based protein companies.

The drop in sales comes at a time when more startups and food companies are introducing new plant-based meat products. The newest arrival offers realistic “cuts” of meat using technologies such as 3D printing.

Bahij Al Rayes of Bain Consulting said that with plant-based meat alternatives still 30-40 percent more expensive than real meat and improvements in taste and texture required, increased production capacity to cut costs and more research and development are essential for the category to continue to grow.

Concerns about the environmental impact of livestock and animal cruelty and health have spurred investments in alternative proteins over the past few years.

In 2020, alternative protein startups raised a record $3.1 billion in capital, of which plant-based meat, dairy and eggs took in $2.1 billion. Investors seem bullish in this category as ever, with Impossible Foods announcing this month that it has closed a $500 million funding round, raising nearly $2 billion since its founding in 2011.

Some executives believe the drop in sales is temporary. Stephen Cahillan, CEO of Kellogg Corporation, which owns the MorningStar Farms brand of plant-based products, said the company’s consumer Show search “There is still a lot of enthusiasm and excitement” for plant-based meat alternatives.

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