A few days ago, Beyond Meat released their quarterly earnings report and indicated lower than expected profits and sales, leading to a tumble in the firm’s stock price. On Twitter, Julian Melletin noted the firm lost $1.25 for every $1 sold, and he showed some interesting data on the history of sales over the past few years.
Beyond Meat is just one company, and it would a mistake to take these headlines and draw broad conclusions about the market trends surrounding plant-based meat alternatives. After all, Beyond Meat might be losing sales because of new entrants and competition to this space.
There isn’t good public data available on sales of meat alternatives, but IRI (a purveyor of grocery store scanner data) has released a series of interesting dashboards showing aggregate trends in a variety of grocery categories, including meat and meat alternatives. Here is what their data imply about total sales meats and meat alternatives.
Derived from IRI data at https://indices.iriworldwide.com/covid19/?i=0
The figure above suggest the downward trend in meat alternative sales extends beyond Beyond Meat. For example, in the week ending October 31, 2021, sales of alternative meats were down 7% relative to the same week last year in 2020. By contrast, sales of beef are up 5%, chicken up 6%, pork up 8%, and turkey up a whopping 38%.
In addition to reporting sales, IRI also reports changes in prices.
Derived from IRI data at https://indices.iriworldwide.com/covid19/?i=0
Whereas prices of traditional meat items are all up 10% or more relative to the same time last year, the same isn’t true of meat alternatives. Indeed, despite all the headlines about overall food price inflation, the price of meat alternatives is actually lower now than it was a year prior.
The two figures above indicate: 1) prices of meat alternatives is down and 2) sales of meat alternatives are down. Taken together, these two facts are strong evidence that demand (i.e., consumers’ willingness-to-pay) for meat alternatives has fallen.
Why is demand for meat alternatives down relative to the same time last year? It isn’t entirely clear. However, note the data above relate only to grocery store sales. It is possible demand is up in the restaurant sector; however, at least in the grocery store, demand for meat alternatives is down. Moreover, the phenomenon can’t be explained by an overall reduction in grocery sales because sales of other meat items is, in fact, now higher than was the case at the same time last year.