July 31, 2021

Beyond Meat, why the craze for vegan steaks?

Article updated on November 7, 2019, with the fall of Beyond Meat on the stock market.

The “fake” meat business is still in its infancy, but it is already attracting investors and igniting passions. When it went public in May 2019, the startup Beyond Meat ignited Wall Street, and managed to raise $ 241 million. This young Californian shoot, which sold for 4.1 million dollars in one year, manufactures… steaks and vegetable sausages. However, its model is not yet really profitable, far from it. It posted a $ 30 million loss last year … and at the end of October 2019, it collapsed on Wall Street. While it had just released its first quarterly profit, its shares fell 18%, a sign that financial analysts are still reluctant to believe in the sustainability of what it offers.

Because the “vegetable steaks” that Beyond Meat makes are expensive. And even if the American company indicates that the “bottlenecks” in its production chain, which slowed down its expansion last year, have been “absorbed”, making vegan meat requires large production capacities … and research, which the startup still lacks.

But despite these brakes, fake meat is clearly a promising market, and around Beyond Meat, many other startups have been revolving for the past year, as well as a growing clientele. Thus, for over a year now, its vegan burgers have been a hit in the United States, in supermarkets (around 15,000 establishments), in hotels and in restaurant chains, such as Del Taco or TGI Friday’s. In France, where the start-up has just landed, it is already possible to have your “vegetable steaks” delivered to your home.

In addition, Beyond Meat sold some 92 million products in Q3 2019 (up 250% year-on-year), and remains supported by a host of Silicon Valley stars and billionaires – actors Leonardo DiCaprio and Jessica Chastain, Bill Gates, Twitter co-founders Biz Stone and Evan Williams, or former McDonald’s boss Don Thompson.

  • Want to try vegan steaks? Enter the code CNET when ordering, you will get 5% discount.

Veggie at private labels

How to explain such success? First, because the market for “plant” products is soaring. In France, the average consumer eats 84 kilograms of meat per year. But he buys less and less: thus, in 10 years, meat consumption has fallen by 12% in France. Faced with this trend, the food industry has already adapted. “Vegetarian” or “vegan” products have multiplied in recent years. Acquired by Danone, the Belgian company Alpro offers “plant-based alternatives” to yogurts. Fleury Michon and Herta each offer soy steaks. Carrefour offers a private label (private label) range of “veggie”, with, on the menu, wheat pancakes or nuggets, vegetarian prepared dishes, and again soy steaks. When we know that the market for vegan and vegetarian products represented more than 380 million euros in turnover in 2018, with growth of 24% in 1 year, it is difficult not to succumb to this fashion.

From vegans to flexitarians

But the “veggie” market remains limited – a niche sector (3-5% of the population). This is why certain companies, in the USA and in Europe, go further and try to reach the followers of another way of consuming: the “flexitarians”. The latter, more and more numerous, eat meat, but try to do it sparingly, for environmental or health purposes – in particular because they have been shocked by the various recent scandals affecting food or animal abuse, because they want to avoid developing heart disease linked to junk food, or because they want to participate in reducing the emission of greenhouse gases. The idea of ​​Beyond Meat is thus to create “substitutes” for meat, intended to appeal to both vegans and vegetarians, but also flexitarians and carnivores who tend slightly towards “flexitarianism”.

For this, the company perfectly imitates meat, from its taste to its appearance and texture. Thanks to a skilful mixture of peas, potatoes, coconut oil and beetroot juice, she thus manages to recreate, in the laboratory (with physicists and chemists), at the molecular level, well red meat. “rare” and juicy, which one would really believe of animal origin – which “cooks”, and whose taste is as close as possible to its model. “We are targeting ordinary consumers who are interested in healthier forms of meat,” says Ethan Brown, founder of Beyond Meat. Note that the animal rights association The Humane Society is a shareholder of Beyond Meat.

This fake meat, able to appeal to a wide spectrum of consumers, other start-ups are trying to manufacture and sell, with just as much success as Beyond Meat. Thus, Impossible Foods has signed a partnership with Burger King, for its flagship sandwich, the Whopper, and also offers rare steaks larger than life … but 100% vegetable, based on soy and potato proteins, coconut and sunflower oils. “The Impossible Burger” is currently being tested in a few states in the USA, but it is obviously expected to be marketed all over the world. Nestlé is trying to do the same, with its future “Incredible Burger”, based on soy protein and extracts of carrots and peppers.

Other companies are trying to make synthetic meat from animal cells, such as Memphis Meats and Just in the USA, or Mosa Meats in the Netherlands. For his part, Jeff Bezos invested in March 2019 nearly $ 30 million in NotCo, a Chilean start-up specializing in alternatives to animal proteins – from mayonnaise to yogurt and cheese. The Amazon boss has also invested tens of millions of dollars at the same time, alongside Bill Gates, in Motif Ingredients, a company that aims to create a whole range of ingredients necessary for the manufacture of alternatives. vegetables with meat, milk and eggs. In short: without going into more details, let’s say that this is a real groundswell in favor of “alternative foods” and vegan / flexitarian foodtech.

So what is it that motivates the billionaires of Silicon Valley, who invest heavily in these “fake meat” production projects? The bias of the tech giants is primarily ideological, and specific to “flexitarianism”, almost as popular in California as transhumanism is. Clean meat is less destructive to the environment, according to its manufacturers. Bill Gates, who has invested in Beyond Meat, but also in Impossible Foods (alongside Google and Facebook co-founder Dustin Moskovitz) and Memphis Meats, has himself long been a part of this movement – thus consisting in adopting a more environmentally friendly diet, while continuing to eat meat. As early as 2013, he wrote an article on his blog titled “The Future of Food”, in which he described his experience, after tasting vegetable-based chicken meat produced by Beyond Meat.

According to him, the future of food will go through plants and laboratories, for environmental reasons, above all. “By 2050, the world population will reach over 9 billion people and our appetite for meat will increase at the same time. But raising animals for meat takes a lot of land and water and has a big impact on the environment. Simply put, there is no way to produce enough meat for 9 billion people. But we can’t ask everyone to become vegetarians. Even though I love veggies, I know I wouldn’t want to give up on burgers – one of my favorite foods. This is why we need more options to produce meat without depleting our resources ”, he noted six years ago. And then to praise “these innovative products, with great potential”, thanks to which we should be able, tomorrow, to create “nutritious meals rich in protein, beneficial for ourselves and for the planet”.

Save the world, but earn money

But you probably can imagine, Bill Gates and the like aren’t there to just do philanthropy and save the world. The 24% increase in sales of vegan products clearly does not leave them indifferent. In Telerama, the author of “The Art of False Generosity”, the writer and journalist Lionel Astruc, indicates that “the ultra-rich like Bill Gates consider that classical philanthropy is not effective because it is too focused on social justice. They practice a form of charity by applying the methods of capitalism, which have made their financial success, to their donation action: the laws of trade, the market, liberalism ”. Seen from this angle, it is difficult not to see the investments of the tech giants as a means, also, of later reaping the fruits of a market (“clean meat” and flexitarianism) which could eventually become very important. lucrative (much more than veganism and vegetarianism). Even if for the moment, synthetic meat is rather expensive (30 euros for a box of ten Beyond Meat steaks, for example), the goal of the fake meat startups is to lower the prices, to match or even supplant. animal meat producers and distributors.

According to MarketsandMarkets, the vegetable-based hamburger market is expected to be worth $ 6.4 billion by 2023, globally (up from 4.6 billion currently). We are still far from the 1.4 trillion dollars of the global animal meat market, but the potential is there: according to analysts at Barclays, specializing in the food and catering industry, “alternative meat” could then explode until weighing, in the next 10 years, nearly 140 billion dollars.

These estimates expect rapid growth, reaching 10% of the “traditional” meat market. Because, as Quartz writes, “market research suggests that the most dedicated meat consumers will not shy away from beef burgers and steaks, but would at least be willing to try a plant-based product. claiming to taste this good ”. Thus, like the Business Insider analysis, the 3 key factors behind the announced success of “clean meat”, and which therefore explain why its start-ups attract so many investors, are “climate change and concerns”. environmental issues, those related to animal welfare, and those related to human health ”.

So would cattle breeders have to worry about? Hard to say. In any case, for Bill Gates, Dustin Moskovitz or Evan Williams, “clean meat” could well be a new way to make money. Especially the day when Beyond Meat will have succeeded in its bet: “to transform the meat market into a protein market”. With the idea, therefore, that meat does not have to come from an animal to be nutritious.

Note that in France, 39% of people already declare themselves flexitarians. But above all, besides Western consumers, many, many others are increasingly inclined to consume fake meat and alternative foods. According to a study published in the academic journal Frontiers in Sustainable Food Systems, the Chinese are “quite willing” to replace traditional meat products made from animal-based meat, much more than the Americans. Almost 96% of them, precisely, are ready to buy vegetable or synthetic meat (against 75% in the USA).

  • Want to try vegan steaks? Enter the code CNET when ordering, you will get 5% discount.