Booming plant-based brands should heed the category’s US slowdown

To borrow the name of the Vegetarian Butcher’s fake chicken line… what the cluck? Plant-based meat looks like it’s “losing its sizzle” in its biggest market – the US – according to a report by the Financial Times today.

In the four weeks to 3 October, sales of plant-based meat alternatives fell by 1.8% compared with the year before, the report claimed, citing data from US retail data group SPINS. October’s slump represents the seventh month in a row that sales across the (previously booming) category have fallen.

This reinforced a trend reported by US trade journal Food Business News last week, which quoted the “concerned” boss of Canadian protein giant Maple Leaf Foods, Michael H McCain, who said plant-based meat alternatives had “basically flatlined”.

Category giant Beyond Meat was one of the many businesses to be suffering a downturn, the FT added, with its Q3 results significantly behind expectations, and US retail sales dropping by 15.6% year on year.

With total quarterly revenues of $106m – downgraded from its earlier guidance of $120m-$140m – Beyond’s share price is now 29% lower than it was on 3 November. Its performance would have been far worse were it not for the sharp rise in international sales to $38.9m during the period.

While Beyond CEO Ethan Brown blamed the pandemic for much of the brand’s performance, the FT reported the wider category’s slump could also be explained by a growing consumer backlash against the combination of high prices, supply chain issues and “a wave of new products overwhelming consumers”.

Added to concerns – voiced in the Food Business News report – that shoppers also felt these products were too processed and not “clean” enough, and the category could have a problem on its hands. “When you look at the ingredient list of a McDonald’s burger, like a Quarter Pounder or Big Mac, it’s phenomenally simpler; it reads a lot simpler than traditional plant-based meats,” said Chris DuBois, senior VP of IRI’s protein practice, while also noting the sustainability credentials of some products were questionable.

So could booming meat-free sales in this country go the same way?

The data (for now at least) would suggest not. According to our plant-based category report, published earlier this month, total meat-free sales rose by 16.3% to £659.9m over the past year [Kantar 52 w/e 8 August].

Stats for our upcoming Top Products issue next month are set to further reinforce that position, with strong growth across the majority of the category’s brands.

M&A activity has also been particularly busy this year, with the €819m sale of Kerry’s consumer meats division (which contains its hugely popular plant-based products) to Pilgrim’s Pride standing out. The sale of brands such as Vivera to JBS in April, alongside major investments from companies such as Quorn and Meatless Farm, show the category remains in rude health on this side of the Atlantic.

That is further reinforced by the recent foundation of a trade body, the Plant-based Food Alliance, to “act as a voice” for the growing plant-based food and drink sector.

But as the sector now prepares for Veganuary, its major players will do well to take note of what’s happening in the US, and how quickly consumer sentiment can change.

After all, UK consumers similarly want their products to be ‘clean’ and healthy. Already there have been concerns over how meat alternatives fit into this agenda. A report by UK campaign group Action on Salt last week warned three in four plant-based meat alternatives contained “unnecessarily high” levels of salt.

As Action on Salt said, while plant-based foods often boast a perceived “health halo”, not all of them are actually that good for you. And if shoppers start listening to these kinds of messages, it could ultimately harm the health of the category.