Beyond Meat Inc. (NASDAQ: BYND) stock jumped by more than 3% on June 1 following the company’s announcement of a deal with Yum China Holdings Inc. (NYSE: YUMC). Beyond Meat’s plant-based protein foods will be served in Yum China’s KFC, Pizza Hut and Taco Bell outlets in the country.
According to a press release from Yum China, Beyond Burgers will be introduced at five designated restaurants in Beijing, Chengdu, Hangzhou and Shanghai on June 3. Yum China CEO Joey Wat stated the obvious: “The potential of China’s vegetable meat market is huge. Through the introduction of KFC, Pizza Hut and Taco Bell’s introduction of other meat products, we hope to obtain value in different regions.”
Beyond Meat CEO Ethan Brown also made an interesting comment. “Overall, [the association] with Yum China and [brands like] KFC, Pizza Hut and Taco Bell has very encouraging and significant milestones for the global popularity of other meat planter products.” Given the sometimes idiosyncratic nature of Google Translate, it’s possible that Brown is referring to other Beyond Meat products or to products from other makers of plant-based meat products.
Although one major food producer was slapped by a European court this week, plenty of competitors are chasing the plant-based protein market.
U.S. Demand for Plant-Based Protein Is Rising
While the COVID-19 pandemic and a spate of hoarding may have had a temporary effect on Beyond Meat’s sales, market data indicates that growth is sticking to a steady path. A study published last week by the Plant Based Foods Association (PBFA) and SPINS, a provider of wellness-focused data and market analytics, showed U.S. retail sales of plant-based foods have considerably outpaced total food sales during the pandemic.
Plant-based meat retail sales rose nearly 150% year over year, spiking at 50% over the peak panic buying of animal-based meat. Over the subsequent four weeks, plant-based meat sales continued to grow at a rate of 61%, almost twice as fast as animal-based meat, during the same period.
Tony Olson, owner and CEO of SPINS, commented, “Our data shows, the plant-based meat boom of last year continues and as reports of animal-based meat shortages increase, we can expect plant-based meat to gain even more traction.”
The Playing Field Is Getting Crowded
International expansion is high on the list for every plant-based protein producer, including giants like Brazil’s Marfrig Global Foods or Chicago-based Archer Daniels Midland Co. (NYSE: ADM). The two said last week that they plan to expand their joint-venture operations from South America to North America.
PlantPlus Food will be 70%-owned by Marfrig, which also will be responsible for production and distribution in South America and the United States. ADM will supply technical expertise, application development and an array of plant-based ingredients, flavors and systems, most of which the company acquired in 2014 when it paid about $3.1 billion to acquire Germany’s Wild Flavors. The joint venture primarily will focus on North and South America but plans to serve customers in other global markets as well.
In fact, most of the major food conglomerates have some sort of plant-based meat play. Some are pushing meat/non-meat hybrids.
The Raised and Rooted brand from Tyson Foods includes hamburger patties made from a blend of beef and pea protein. The pitch is that blended burgers have fewer calories and less fat. Named a top food trend of 2020 by Amazon’s Whole Foods, “blended burgers” might also appeal to eco-conscious meat eaters who are looking to reduce their meat consumption.
Other meat alternatives competing for shelf space include Smithfield’s Pure Farmland, Hormel’s Happy Little Plants and Maple Leaf Food’s Lightlife. Some of these brands were launched only last year.
Global Meatless War Sees First Skirmish
Switzerland-based Nestlé is the world’s largest food processor. In 2018, the company posted food sales of more than $80 billion, out of total sales of around $93 billion. In a preliminary judgment issued last week, a court in the Hague ruled in favor of Impossible Foods, a U.S.-based plant-based protein maker in a ruling against the Swiss giant.
Nestlé has been selling a plant-based product called Incredible Burgers in some European countries. Impossible Foods claimed that the name was too close to its Impossible Burger and was confusing for customers. The court agreed and ordered Nestlé to remove all its Incredible-branded food within four weeks or face €25,000 a day in fines.
Although Nestlé said it will comply with the ruling and intends to appeal, the company already has dumped the Incredible name as it introduces the new product into the U.S. market with the Awesome Burger moniker.