The alternative meat industry is going strong, with grocery chains stocking their own private-label products to compete with market leaders like Beyond Meat.
As consumers grow increasingly aware of the animal welfare, health and environmental impacts of animal meat production and consumption, demand for alternatives continues to rise. Last year Barclays estimated that plant-based and lab-grown meat alternatives will become a $140 billion business by 2029. Industry leader Beyond Meat made waves in 2019 when its share price surged 500% in the three months following its IPO. The company is now valued at about $5 billion.
Partnerships with fast food chains have given the industry a major boost. In August Burger King rolled out its Impossible Whopper, made by Beyond Meat’s main rival, Impossible Foods. Fast food restaurants are expected to expand their plant-based meat offerings this year.
Until recently Impossible Foods was in talks with McDonald’s about launching plant-based burgers, but decided it would not be able to supply the world’s top fast food chain. “I wish we had vastly more capacity than we do right now because the demand is high,” said CEO Pat Brown. McDonald’s is moving ahead with plans to expand its test of a Beyond Meat plant-based burger in Canada.
Major retailers have also joined the trend, and a growing number are developing their own private-label meat alternatives. This month Kroger, the biggest U.S. grocer, launched a line of plant-based burgers under its Simple Truth in-house brand. It plans to sell them at “more affordable prices” than brand name competitors.
German-owned supermarket Aldi U.S. also sells its store-brand plant-based meat products at a lower price point. The company told Reuters that sales were up 300% last year. “It wouldn’t surprise me if it was up 300% again this year,” said Scott Patton, Vice President of Corporate Buying. Aldi plans to launch more alternative meat products this year. Albertsons, the second-largest supermarket chain in North America, is also competing on price with its imitation meat products.
Beyond Meat is not concerned about the growing competition from grocery stores, contending that they will not be able to match its products in quality. “You can put something in the shape of a patty and put it on a shelf where we are, but the barriers to entry are low and the barriers to success are high,” Beyond Meat Chairman Seth Goldman said. The company has been approached by several U.S. grocers to create plant-based meat for their private-label brands, but has declined.
“Really, the pivot-point for the whole industry was the Beyond Meat IPO,” said Danny Goodman from Don Lee Farms, a food maker that supplies products to top U.S. retailers including Kroger, Whole Foods and Albertsons. “I think it made a lot of companies sit up and put more resources into working on my plant-based line.”
