Beyond Meat (NASDAQ: BYND) has been riding the wave of its rollout of plant-based burgers in China this week. But competitor Impossible Foods has thrown down the gauntlet in the United States with a new channel for consumers to obtain its alternative meat products.
Impossible Foods, based in Redwood City, California, launched on Thursday a direct-to-consumer website, allowing U.S. customers to purchase plant-based burgers and have them shipped directly to their homes. (The service is not available in Alaska or Hawaii.)
Through the website, the startup company offers “family size” quantities of Impossible Burger starting at $49.99 plus tax. Two-day shipping is free in containers that are kept cool with dry ice. The packaging, except for the dry ice packet, is compostable and recyclable, the company says.
The smallest item has four 12-ounce packages of Impossible Burger. The largest, which sells for $69.99, contains 20 quarter-pound patties. Impossible Pork is not yet available on the new website.
Interest Grows in Vegan Food
Beyond Meat said last month that it was working on a direct-to-consumer operation that will launch this quarter. Currently, its website directs customers who want to order online to grocery store delivery services, like Peapod (NASDAQ: PPOD) and Fresh Direct.
Beyond Meat and Impossible Foods have been taking advantage of expanding interest in vegan protein products as the COVID-19 pandemic reduced supplies of beef, pork and chicken across the country. Beef and pork producers, including Tyson Foods Inc. (NYSE: TSN), shut down plants earlier this year to reduce the spread of coronavirus after large numbers of employees tested positive.
President Donald Trump ordered the meat-packing plants to reopen. But the shortages stemming from the supply-chain problems have attracted new customers to meat substitutes, in many cases simply because they are seeking sources of protein.
Sales of fresh meat alternatives surged 178.5% in the week ended May 23, while sales of fresh meat rose 24.4%, according Nielsen, the market research company.
Spike in Plant-Based Food Sales
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. In the subsequent four weeks, plant-based meat sales continued to grow at a rate of 61%, almost twice as fast as animal-based meat in the same period.
The U.S. plant-based meat market is projected to exceed $4.15 billion by 2026, according to a report by Global Market Insights. Rising adoption of veganism for environmental and health reasons will increase the demand for plant-based products, the report said. In addition, increasing awareness of animal cruelty in slaughterhouses has led to growing adoption of vegan and flexitarian lifestyles. Flexitarians consume some animal products but consciously work to increase the percentage of plant-based foods in their diets.
Vying for Market Share
Beyond Meat and its major rival, Impossible Foods, are competing to gain market share among the newcomers to plant-based foods. They have both established footholds in supermarkets and fast-food restaurants.
According to a press release from Yum China, Beyond Burgers has been introduced at five designated restaurants in Beijing, Chengdu, Hangzhou and Shanghai. Yum China chief executive Joey Wat said, “The potential of China’s vegetable meat market is huge.”
The consensus among analysts is that investors should Hold their shares of Beyond Meat. The median 12-month price target among 17 analysts is $95, with a high estimate of $173 and a low of $42.
At midday Friday, the share price was down just over 1% at $134.85. Year to date, Beyond Meat’s stock price has gained about 80%.