Plant-based-protein company Beyond Meat’s market capitalization plummeted from $14 billion after its 2019 initial public offering to less than $700 million after the company announced this week that it needs to raise up to $200 million in additional capital to make up for all the cash it is losing. Founder and chief executive Ethan Brown expressed optimism on a Wednesday earnings call that the business is “turning a corner” and will eventually “cross over the chasm from early adopters to mainstream consumers.”
But American retail consumers bought 8 percent less fake meat in 2022 than in 2021, according to the Good Food Institute, a nonprofit created to promote alternatives to animal products, and only 63 percent were repeat customers. The novelty has worn off, and people are no longer excited about trying highly processed foods that cost more and don’t taste as good as the meats they’re trying to imitate. Future innovators can learn from these five struggles:
• The taste, texture and smell of fake meat are unappetizing. Taste is the top reason people who have tried meat alternatives give for not trying them again. Mintel, a market research firm, found in a survey that only 20 percent think plant-based meats are tasty, compared with 61 percent for animal-based meats. “Shamburgers” don’t smell good when cooked because of ingredients added for effect. For example, Beyond uses cryogenically frozen fat balls made from canola oil and refined coconut oil. Beet juice is supposed to give patties their bloody quality. Impossible, a competitor, includes a yeast called soy leghemoglobin. Many fast-food chains piloted fake meats but opted not to permanently place them on U.S. menus.
• It’s too expensive. The Good Food Institute says fake meat costs on average, pound for pound, 67 percent more than real meat. Fewer people have been willing to pay this premium as inflation made everything else more expensive. Stagnant sales made scaling up harder, which made it more difficult to lower prices.
• The ingredient lists are too long. Packaging for fake meat usually includes eyebrow-raising lists of chemicals regular people have never heard of, not to mention elevated sodium levels. The Catch-22 for producers is that reducing salt and fat will make it taste even worse, but adding in more will give consumers looking for healthy options even more pause. Industry groups counter that plant-based products are higher in fiber and lower in saturated fats than their animal-sourced counterparts and don’t have cholesterol. But public perception has shifted, and most Americans no longer see fake meat as health food.
• It’s hard to shame adults into eating something. Let’s stipulate that shifting toward fake meat could reduce carbon emissions, require less land for animal cultivation and decrease antibiotics in food. Studies show most people do not change their preferences regarding plant-based substitutes even when they’re given informational nudges about the environmental impacts of meat production.
Emphasizing climate change in marketing materials entangled the industry in the culture wars. Cracker Barrel faced customer blowback last summer, for example, when it introduced Impossible sausage.
• Fake meat isn’t well-suited to American culture. Interestingly, fake meat has been performing better in Europe than in the United States.
While the United States has been a carnivorous nation since the Colonial era, society has gone through previous phases of dabbling with fake meat. In the 19th century, eschewing animal flesh became trendy among temperance activists. In addition to making cereal, John Harvey Kellogg also sought to replicate the look, smell and taste of meat using nuts, according to University of Georgia historian Stephen Mihm. During the Great Depression, meat substitutes became an economic necessity. In the 1970s, amid elite hysteria about a population bomb that never detonated, hippies embraced fake meats such as Prosage, Stripple, Wham and Chicken-Like Loaf. But the market stagnated and then collapsed.
Companies should stop playing imitation games. Surely they will incrementally improve quality and find ways to reduce price. But vegetables prepared properly are likely going to taste better than vegetables pretending to be ground beef. Consumers will likely revert to the better-tasting genuine article when given the chance. Instead of replicating beef, offer something different and tastier.
In the meantime, those rightly concerned about meat’s climate impacts should invest in ways to make real meat production more efficient and ethical, as well as less environmentally destructive, whether by reducing cows’ methane emissions or mastering lab-grown meat. More than 100 start-ups are working on such cultivated meat products, and we’re hopeful they can pioneer the next generation of food production.
