Beyond Meat’s results for the second trading quarter will give more comfort to traditional meat producers, as the company plunged into the red with gross margin losses of $6.2m (€6.13m). This compares with a gross profit of $47.4m for the same period in 2021.
The company puts this loss down to having to offload product through the liquidation channel, which it estimates cost $14.7m and the introduction of a jerky product that it says cost $7.7m.
Company revenues were marginally down on the same period last year at $147m compared with $149.4m in the second quarter of 2021.
This performance will be particularly disappointing for a business that offers a manufactured product that is supposed to replicate the taste of meat.
Global beef and lamb prices have been at record highs in the second quarter of 2022, which should, in theory, give a processed product a competitive price advantage.
Despite this advantage, Beyond Meat was forced to offload stocks of its product at a discounted level.
There are also reports from the US that McDonald's is not of a mind to extend the use of the Beyond Meat McPlant burger into more of its diners. This suggests that consumer reaction to the product has been less than expected.
Resilience of traditional meat
Part of the company’s difficulty is that there has been a proliferation of meat substitute products introduced over recent years.
These are coming not just from new entrants, but from the traditional meat processing sector as well, which is investing heavily in these products.
Despite Beyond Meat’s struggles, it would be foolish for farmers to dismiss the challenge from products that are intended to be a substitute for real meat.
The category enjoys huge investment and a positive media profile, as these products are perceived as a better health option and more climate friendly than traditional livestock-based products.
That said, farmers and the meat industry can draw huge comfort from the fact that despite the negative publicity livestock receives, the demand for beef, lamb, pigmeat, poultry and dairy products remains particularly robust.
Undoubtedly, we have reached what might be described as peak meat in the developed world, with significant growth largely confined to the poultry meat category.
However, as the wealth of people in developing Asian economies continues to grow, so also does the demand for beef and lamb.
China has moved from importing negligible quantities of beef a decade ago to the world’s largest importer today, taking 2m tonnes or 20% of all beef that is traded.
Work to be done
Of course, there is no room for complacency and farmers and the meat industry must work to minimise emissions and have the proper place of emissions from livestock in the overall emissions debate recognised.
Similarly, there has to be effective push-back on the promotion of meat as an unhealthy contributor to the diet.
Professor Alice Stanton and a group of other distinguished academics have enjoyed some success in this respect with the Lancet and dissemination of the misleading Global Burden of Disease study, but this work is only beginning and needs to be developed further.