Getting through the disappointment trough with plant-based meat

With the exception of the ominous image on the recent cover of Bloomberg Businessweek (a cheap stunt: US plant-based meat sales may not be red hot, but Beyond Meat patties were not grey, last I checked), that article received an astounding amount of praise—and vitriol—for merely stating what everyone following this space has known for months: Retail meat substitute sales in the US have decreased, and Beyond Meat has had a terrible year.

But if you look at the media today, supporters of cultured meat are compared to Theranos, while those who support plant-based meat are compared to Meghan Markle (first they liked her, then they loathed her).

The tech bros were supposed to save the world, but now they've been exposed as greedy gamblers selling us processed mush and pipedreams. This belief is shared by some unlikely bedfellows, such as large meat producers and anti-GMO natural product manufacturers, who take pleasure in every depressing report coming out of Silicon Valley.

False dichotomies abound in this world of black-and-white choices, pitting "fake" hamburgers against "regenerative" pasture-raised beef as if these were the only options. However, the stated goal of almost every alternative meat company I've ever spoken to is to lessen our reliance on factory farming, not to compete with your organic grass-fed steak.

False burgers are juxtaposed against "regenerative" pasture-raised beef as though these were the only two choices in this world of black and white.

Has Beyond Meat fulfilled the early promises it made? not by any means. And is it conceivable that animal agriculture will be "eradicated" by 2035, as Impossible Foods founder Dr. Pat Brown originally predicted? Though I have never seen anyone who took this remark literally—including, I assume, Dr. Brown himself—I skepticism it.

Therefore, as Bloomberg Businessweek claims, is plant-based meat a "fad" and a "flop"?

Given the struggles in getting us to go from our cheap burgers and fries to chickpea curries, I sincerely hope not. This is not to say that we shouldn't embrace whole food plant-based culinary traditions; it merely means that Channa Masala and Impossible Burgers may both be acceptable menu items.

According to research from New York University, the demand for grass-fed beef won't be met unless we have a few planets to spare or can persuade people to cut back on their meat consumption. If you follow this debate on social media, it seems like grass-fed beef is the solution to all of our problems.

The latter is being pushed by progressive legislators in several nations, but don't hold your breath if you're hoping to see it in the upcoming Dietary Guidelines from the USDA.

So let's stop thinking in absolutes and accept that there are many different approaches we can take to lessen our reliance on animal agriculture, which is a major contributor to climate change, deforestation, antibiotic resistance, and habitat devastation.

Animal foods don't have to meet the standards for human food in terms of appearance, nutrition, or taste.

Reverse engineering meat is one such tactic, and I have little doubt that over time, as technology advances and costs decrease, plant-based, fermentation-based, and cultivated meat analogs will gain more traction with consumers, who yearn for the flavor, texture, and aroma of meat rather than mass slaughter.

Yet, there are alternatives to simple analogs.

There is a wide range of potential for food companies to make a more diverse range of foods inspired by plant-based culinary traditions and to develop new center-plate protein-based options that are tasty and satisfying but don't look or taste at all like animal foods. This is good news for consumers who believe that reverse-engineering the western diet demonstrates both a lack of imagination and a disregard for human health.

Pork, chicken, cattle, tuna, shrimp, cow's milk, and chicken eggs don't necessarily have to meet the standards for human food in terms of appearance, nutrition, or taste; they're simply things that our agriculture system has gotten very good at mass-producing.

Several foods that we consume now were not available in our homes even ten years ago, let alone one hundred years ago.

Who can predict what we will be eating in 2123? There are fungal strains that can be cultivated with a fraction of the environmental effect of beef and have as much protein as beef, as much fiber, no saturated fat, and a ton of B vitamins; perhaps these will become dietary mainstays.

Milk from nursing ruminants may need to be marked as "cow's milk" in 2123 since it is no longer the standard. Maybe we won't even hear the word "milk" anymore.

The idea that we're forced to maintain the status quo just because Beyond Burgers have not reached expectations in the US market demonstrates a certain lack of vision. There are dozens of foods in our homes now that we weren't consuming even 10 years ago, let alone 100 years ago.

Five years ago, oat milk hardly registered in the US plant-based milk data; today, it ranks #2 behind almond milk and is responsible for the majority of the category's growth. Unexpectedly swiftly, certain consumer behaviors shift.

Silicon Valley did not produce any meat substitutes in 2010

Resuming with alt meat If it is a fad, it has been around for a while. Silicon Valley did not invent meat analogs in 2010—not simply bean burgers, as some media outlets continue to claim.

Since the Han Dynasty, there has been tofu; in the 19th century, Dr. John Harvey Kellogg introduced soy and peanut-based'meat' at the Battle Creek Sanitarium; in the 1960s, NASA experimented with growing meat from microbes; in the 1970s, ADM's textured vegetable protein gained popularity; and in the 1980s, Quorn introduced fungi-based meat for sale.

Others simply believed there were more intelligent methods to feed people on a planet with limited resources than massacring billions of farm animals. For some pioneers, the motivation was health; for others, animal welfare; while others, the need to feed people.

With this in mind, you can bet that despite falling American retail sales—and the concomitant decline in investment—all of the world's largest food businesses, from Nestlé and Unilever to JBS and Cargill, are still very much following this so-called "fad."

Test and learn about plant-based meat

In comparison to a third of American eateries in 2012, all major fast-food chains, restaurant chains, and coffee chains now have plant-based meat or dairy alternatives, and they are all experimenting to determine what their customer base prefers.

Has McDonald's launched Beyond Burgers across the country in the American market? No. Does this indicate that the biggest fast-food company in the world has "given up" on meat alternatives? I sincerely doubt it.

With a well-known alternative meat brand, has Taco Bell gone national? Not yet; similar to every other restaurant chain, it is still looking for what appeals to its patrons. Although the motivations for these studies haven't changed, businesses must continue looking for meat substitutes if they hope to satisfy environmental objectives, especially if they are publicly traded and under pressure to appear on ESG stock indexes.

Although American retail sales of plant-based meat have stalled, they haven't dropped precipitously.

According to data from the US retail sector, although total sales of meat substitutes have substantially decreased after experiencing a boom in the early months of the pandemic, the category hasn't completely collapsed. Dollar sales were unchanged in 2022, while unit sales dropped -8.2% year over year, according to IRI statistics analyzed by 210 Analytics* (*see below).

A 'flop'? Investors getting ahead of themselves and betting on a hockey stick growth curve rather than a slight slope appear to be the main cause of the crisis of trust.

A red herring is ultra-processed fake meat, right?

There are many plausible explanations for the slowdown. Some commentators point to inferior taste and texture and over-saturation with me-too products, while others blame ingrained cultural barriers (Americans love meat). Still others argue that the slowdown is just a natural correction following a period of rapid trial in the early months of the pandemic.

The claim that alternative meat products don't appeal to meat lovers because they are too "processed" or not plainly healthier than the goods they are replacing is another one that is frequently stated.

Nevertheless, once you start examining the data, it becomes clear that there is no direct link between sales performance and shorter, cleaner ingredient lists or amounts of sodium and saturated fat.

Beyond Meat has less saturated fat than most competitors, Lightlife assured consumers that its meat was manufactured in a kitchen, not a lab, and Planterra's OZO brand had the lowest saturated fat and one of the category's "cleanest" ingredient lists, but was nevertheless discontinued by parent company JBS.

Soymilk would continue to dominate the plant-based milk market in the US, rather than almond and oat milk, if health were the main driving force behind purchase decisions.

Because they provide a consumer benefit, Americans consume a lot of highly processed packaged meals with lengthy ingredient lists you won't find in Grandma's kitchen.

Consumer survey information on "ultra-processed" foods isn't particularly enlightening. Allulose, Reb M, mono- and diglycerides are some of the processed food ingredients you won't find in Grandma's kitchen, but we all buy them because they provide a consumer benefit, such as the claim that the food is "sugar-free" or the absence of an oily slick at the top of your jar of peanut butter.

Would customers like goods manufactured solely from "kitchen cabinet" ingredients? No doubt. Will the market for alternative meat suddenly explode if methylcellulose or titanium dioxide were banned? I have my doubts.

Price: Is the full picture known?

In the current inflationary environment, pricing is clearly restricting market growth, but it is probably not the only factor at play.

As an illustration, Daring Foods, a luxury brand that makes plant-based chicken with a few ingredients using high-moisture extrusion, is doing well while some of its more affordable competitors are having trouble.

Identify and fix a consumer issue right now and tomorrow.

Above all, whether you're producing bean-free coffee or plant-based burgers, you must hit the right notes in terms of taste, value (which is not the same as price), and convenience. You must also have a strong brand, excellent execution, and a clear understanding of the problem you're resolving for your target consumer today and in the future.

In the current economic climate of food inflation and layoffs in various sectors, it may not be enough to justify a price premium unless you're also hitting all of the other hot button issues above. Having a long-term mission and talking passionately about how you're tackling structural problems in the food system from deforestation to drought are important.

Let's face it, most people have more pressing concerns when they shop, including those who worry about climate change: is this a good bargain, will my kids eat it, is it better for me, and is it easy to prepare?

Hence, brands must provide consumers more compelling reasons to buy now as well as reasons to feel good about their purchases later on, such as "I chose better for the environment/animals."

Plant-based milk and meat are not the same things.

In fact, aside from the fact that they're simpler to prepare, one reason I assume plant-based milks have a higher home penetration rate than plant-based meats is that they provide a number of immediate buying impulses that have nothing to do with preserving the environment.

Yet the majority of them do not taste like dairy milk. In certain instances, that is the real reason consumers choose to purchase them, demonstrating once more that every business need not strive for exact imitation.

Maybe you started drinking oat milk with coffee after giving it a try in a coffee shop and like it. Perhaps you use almond milk since it contains fewer calories. Perhaps you prefer the flavor. Perhaps you avoid lactose, or your children are allergic to milk proteins.

As we all would be vegetarians if that were the case, it's wonderful if you can feel good about your purchase later because it's better for the environment, but let's be honest—probably it's not the main reason you got it.

Message and branding

Successful brands are aware of their advantages and disadvantages as well as their target audience. For instance, Miyoko's Creamery has developed a sizable following for its artisanal cultured nut products in the US plant-based cheese industry.

Yet Miyoko's venture into more processed American-style alt-cheese slices failed, in part because the products didn't measure up to expectations but also because it didn't make sense for the brand, which has a solid reputation in the culinary world.

It's probably not surprising that sales are declining for alternative meat players in the fresh meat case, a commoditized market segment dominated by private labels, if the best you can do is offer something that is only marginally more appealing than what is already available (conventional meat) for almost twice the price.

Arguments in favor of plant-based meat

But don't give up hope just yet. There is a huge opportunity to improve supply chain efficiency, produce more desirable goods, and develop more persuasive branding and marketing strategies to draw attention to goods that provide consumers a good value proposition.

No "Got Milk" campaign exists for meat substitutes. But surely there are inventive ways to argue for plant-based meat, which at least attempts to address an environmental issue rather than causing a new one, if enterprising food marketers can convince consumers to pay dollars for something most households have on tap in their own kitchen for cents (bottled water in single use packaging, backed by celebrity investors touting their green credentials, no less)?

According to Impossible Foods, "the category of plant-based meat has done a terrible job of defining itself."

The CEO of Impossible Foods, Peter McGuinness, is a marketer by profession. He told me last year that when it comes to selling meat substitutes to the general public, "The category has done a horrible job of explaining itself."

He asserts that nobody else "is saying in a mass, convincing way that these things are better for you and the planet, other than via keynote speeches and lobbying campaigns. When you talk to individuals about the environment, they still prefer to discuss recycling or electric cars over their dietary habits. This, in my opinion, is one of the most difficult food communication problems.

As attendees at a recent cellular agriculture conference hosted by Tufts University were informed, success in the meat alternatives industry is far from certain, and many businesses may probably run out of money before these products actually make a dent in the protein supply.

Yet, pioneers in this field can only maintain cool, press on, and attempt to make the future a reality, as Uma Valeti, creator of grown meat company UPSIDE Foods, also highlighted at the occasion.

Speaking is inexpensive. So let's order our priorities... accept the constructive criticism, but continue on your path.

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