Beyond Meat Plans To Push Back Against Beef Producers As Sales Triple

Continuing to spend heavily on marketing and R&D, Beyond Meat saw its stock price tumble  as much as 10% in after-hours trading after revealing yesterday that it had failed to turn a profit its fourth quarter despite seeing its revenue rise 212% to $98.5 million from a year earlier.

“The El Segundo, Calif.-based company said it lost $452,000, or 1 cent a share, in the quarter, compared with a loss of $7.5 million, or 18 cents a share, in the year-ago quarter. Analysts surveyed by FactSet had expected net income of 1 cent a share on sales of $81.2 million,” Jon Swartz writes   for MarketWatch. “The fourth-quarter loss followed Beyond Meat’s first profit in the third quarter.”



The company “plans to place promotions on social media and other digital platforms bolstering the better-for-you motto that helped Beyond more than triple sales in 2019, enabling the still-small fake-meat business to grow faster than sales of the genuine variety,” Jacob Bunge writes  for The Wall Street Journal.

“Beyond and plant-based rivals like Impossible Foods Inc. are pushing back against criticism, much of it driven by beef producers, that plant-based products are laden with artificial ingredients and may present health risks. Beef groups have pushed legislation to restrict the description of products as meat to those made from animal flesh,” Bunge adds.

“There’s noise out there that we need to break through,” Beyond Meat’s CEO Ethan Brown tells Bunge in an interview.

Indeed, in a November 2019 story, Bunge and Heather Haddon revealed that “cattle ranchers and their allies are pushing regulators to scrutinize alternative meat-makers, recruiting food scientists to test plant-based products for potential health risks, and ramping up counter-campaigns to highlight beef’s nutritional benefits while comparing their rivals to dog food.

“They’ve even created a digital assistant, available on voice-activated Google and Amazon devices, that can answer consumers’ questions about beef and, when pressed, beef alternatives. ‘The best alternative to beef,’ it says, ‘is more beef,’” Bunge and Haddon reported.

Earlier last year, “the Center for Consumer Freedom, a public relations firm whose financial supporters have included meat producers and others in the food industry … placed full-page ads in The New York Times and other newspapers raising health concerns about plant-based meat substitutes like the Impossible Burger and the Beyond Burger, which are designed to look, taste and even appear to bleed like real meat,” Anahad O’Connor reported for The New York Times.

“The ads call them ‘ultra-processed imitations’ with numerous ingredients. ‘What’s hiding in your plant-based meat?’ asks one ad featuring a sad face made of two patties and sausage. Another directs readers to a site that compares  plant-based burgers to dog food.”

Meanwhile, however, Beyond Meat and Impossible Foods -- which cut a deal with Disney on Tuesday, Vox reports -- keep gaining new outlets in mainstream retailers and restaurants.

“Starbucks recently announced that it would offer a Beyond Meat sandwich at almost all of its 1,500 Canadian stores starting in March. The patty is made from peas and brown rice and features a blend of fennel, rosemary and other spices. KFC is also testing Beyond Meat’s plant-based fried chicken in Charlotte, North Carolina, and Nashville, Tennessee, next month,” the AP’s Dee-Ann Durbin writes.

“But Tim Hortons pulled Beyond Meat sausages from its 4,000 Canadian stores. The company said the sausage, introduced last May, was a slow seller,” Durbin adds.

Beyond Meat CEO Brown “said the company is ‘only scratching the surface’ of the U.S. restaurant market, but investors may be impatient for a bigger deal with a major player like McDonald’s Corp. Beyond Meat is in about 4% of the 650,000 U.S. restaurants, Brown said, referring to the low number as an opportunity for rapid growth,” write Bloomberg’s Andres Guerra Luz  and Deena Shanker.

“Competition is also rapidly intensifying as big-food players catch up with faux meat products of their own, although Brown said Beyond Meat cut prices less than had been expected with all the new entrants. Still, Wall Street may be pricing in slower gains following the rapid share gains of the past year,” they add.

The sense of competition is also internal.

“We have a kind of cannibalistic approach to innovation where we’re trying to take out our existing products and there’s a lot of pride in doing that,” CEO Brown tells Reuters’ Richa Naidu and Praveen Paramasivam.

As for the coronavirus and its possible impact: “We’re looking, like everyone else, at when things are going to clear … but it’s not something we’re wringing our hands about it here,” Brown says.

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