Beyond Meat Sales Drop: The Beginning of the End for Faux Meat?

This is a free excerpt from one of Shortform’s Articles. We give you all the important information you need to know about current events and more.

Don't miss out on the whole story. Sign up for a free trial here .

Has the fake meat revolution been overhyped? Why are sales dropping so rapidly? Will they pick back up?

Beyond Meat recently reported a 30% second-quarter sales plunge, leading to doubts about artificial meat’s future. Factors like high prices, inferior taste and texture, and scaling challenges have stunted the product’s growth.

Here’s a look at why Beyond Meat’s sales have dropped, along with other fake meat producers.

Fake Meat Falls Out of Favor

Beyond Meat’s sales plunged 30% year-over-year, leading some experts to conclude that the fake meat craze may be over.

Background

Fake meat refers to products designed to mimic the taste, texture, and appearance of conventional meat, but that are made from plant ingredients like soy, peas, and potatoes instead of animal products. These meat analogues became popular in the 2010s, buoyed by startups like Beyond Meat and Impossible Foods that used new technology to create extremely meat-like veggie burgers and sausages.

These factors sparked both consumer interest and industry investment, spurring rapid growth for companies in the plant-based meat market.

The fake meat industry experienced an almost two-fold increase in its US sales between 2017 and 2020, growing even faster globally.
Investors injected $2.2 billion into plant-based startups in 2020.
Production agreements with prominent fast food chains such as Burger King and Starbucks led Beyond Meat’s stock price to soar after its 2019 IPO, reaching a $1.5 billion market valuation.

The future looked bright for fake meat.

A Dip in Faux Meat Popularity

Despite its prior successes, the plant-based meat industry has recently seen setbacks. The trend gained early adopters, but mainstream consumers lost interest.

Premium-priced brands like Beyond Meat and Impossible Foods reported declining revenues.

In the second quarter of 2023, Beyond Meat’s net revenue fell by 31% year-over-year, following a nearly 10% decline in 2022.

Impossible Foods postponed its long-anticipated IPO due to cost concerns.
Grocery store sales of meat alternatives fell 1% last year after seeing zero growth the preceding year.

View #1: Fake Meat on the Decline

Some experts cite multiple factors as contributing to plant-based meat’s slowing growth including:

Inferior flavor and texture compared to real meat.
High pricing, making it unattractive to cost-conscious consumers, particularly amid rising inflation.
Gender and political divides in meat consumption patterns.
Market correction after fake meat’s rapid growth during the COVID-19 pandemic, when consumers were panic shopping and experimenting with different foods.
Health misconceptions. Despite appearing healthier than traditional meat, most plant-based foods are highly processed.
Scaling challenges due to thin profit margins, a selective consumer base, and high production costs.

View #2: Fake Meat Is Here to Stay

Other industry observers remain optimistic about the long-term prospects for artificial meat, arguing that:

Companies will continue to adapt and thrive by improving fake meat’s taste and texture and refining their messaging.
Fake meats are eco-friendly.
The competitive market may lead to the emergence of stronger brands through market consolidation.
Demand remains high, especially in international markets like Europe.
Health concerns may be exaggerated. Plant-based meats, while processed, often contain fewer calories, less saturated fat, and more fiber than their animal-based equivalents.

Looking Ahead

Although the fake meat industry has experienced a slowdown, some predict that the market will still expand annually in the high single digits and achieve $100 billion in sales by 2030. But realizing the industry’s potential in the US will require better products, savvier marketing, and structural changes to make plant-based options more accessible.

Beyond Meat Sales Drop: The Beginning of the End for Faux Meat?