For some time now, debates have thrived regarding the state of the meat industry, and its impact on the environment. One of the field’s biggest players in this discussion is the plant-based meat industry. Many believe that plant-based meat will ultimately replace the traditional meat industry.
This is because plant-based meats are better for the environment, and they don’t include animal cruelty. However, it seems as if the sales of these meat replacements are not going as well as planned.
Business Rating
Business rating is the scoring system used to mark how well a company is doing, therefore instructing potential investors on how best to move forward. The biggest of the plant based meat companies–Beyond Meat–just received a reduction to their business rating.
This is a bad sign for the company itself, but also for the industry as a whole. Beyond Meat received an underperforming rating, equivalent to a sell rating. This will lead to more company stocks being sold.
“Our cautious approach to the total addressable market — specifically, fewer likely frequent purchasers of plant based meat as compared to milk given roughly half the number of non-meat eaters versus lactose intolerant—informs long term forecasts we believe are lower than the consensus view,” said D.A. Davidson Senior Research Analyst Brian Holland.
Beyond Meat
Beyond Meat has an ambitious plan for its role in the alternative meat industry: they have decided to go public on the stock market in April this year. Initially, the price of shares had soured for more than 500 percent. This was a major problem from the start: the company had long-term plans, but had widely overestimated how large the market for meat alternatives actually is.
The Numbers
The number crunchers for this market may have made a mistake in terms of where their assessment was based. There were already plant-based milk products, and there was an established market for it. This was the market for which plant-based meat was decided on as well.
The belief was that at least 50% of consumers who purchase plant-based milk would be willing to also purchase plant-based meat products. This has not been proven as fact, however. At this point, it is believed that only half of that 50% are willing to give plant based meat at try.
Competition
When it comes to the rest of the field, Beyond Meat is still doing great. It remains the largest company in the field, with a healthy head start in terms of creating a loyal customer base. The company plans to take 31% of the overall meat alternatives market by the year 2028.
However, as is the case with any other business enterprise, it is difficult if not impossible to predict how a company will fare in the long term.
Other Players
There are two types of competitors to consider when it comes to meat alternative businesses. The first is from other meat alternative companies–this is where Beyond Meat prospers, even if they aren’t doing as well as originally planned. However, the other type of competition stems from traditional meat providers. Some will ignore these companies due to concerns of animal cruelty, but those who wish to switch to plant-based meats may still be persuaded not to do so. Traditional farmers are taking the time and effort to run their operations in less damaging ways, and have the funds to take reform seriously.
In the end, there are those who believe that technology will soon be able to produce lab-based meat that does not rely on real animals at all. This could change the alternative meat market completely.
Conclusion
Plant-based meat is being hailed as one of the most important alternatives to traditional meat ,and many have decided to invest in the companies producing it. Despite being the market’s biggest player, however, Beyond Meat is faring far worse than expected.