Briefing

Is plant-based meat a failure?

Vegetarian 'meats' have been all the rage, but are consumers starting to get weary?

Over the past several years, plant-based meat substitutes have taken the United States by storm — but the outwardly successful industry has recently experienced a quiet downward trend. Here's everything you need to know: 

What is plant-based meat? 

Exactly what it sounds like. Plant-based meat is a meat substitute that is made from plants instead of animals. These products are made to mimic the look, taste, and feel of actual meat. There are numerous forms of plant-based meat on the market, including nuggets, sausages, and burger patties, among others.

Plant-based meat can be made from a variety of different base ingredients, including soy protein, pea protein, coconut oil, beans, and more, FoodPrint.org reports. What started as a fledgling industry with just a few companies has grown to encompass a wide variety of options. While plant-based meats were originally relegated to specialty grocery stores, meat substitutes are now almost ubiquitous in supermarkets, according to Insider

Today, a quick search on Walmart's website for "plant-based meat" generates hundreds of different results. A key element of these foods is that, like actual meat, most of them can be frozen, allowing for a significantly longer shelf life. 

What started the plant-based product trend? 

A few initial companies got into plant-based meats on the ground floor in the early 2010s. By far the most successful and most well-known is Beyond Meat. Founded in 2009, Beyond Meat launched its first product, a plant-based chicken, in Whole Foods in 2012, and the brand went national the next year. Continuing to build on its early success, Beyond Meat developed a broad line of plant-based meats. In 2019, it became the first plant-based meat company to go public and was valued at the time at nearly $4 billion. 

While Beyond Meat is the most recognizable name in the space, there are a number of other standouts that have jumped onto the plant-based bandwagon, including Amy's Kitchen, Maple Leaf Foods, and Sunfed.

As the plant-based trend began to gain more traction, large companies — some of them even known for their meat products — introduced meat alternatives. In partnership with another high-profile brand, Impossible Foods, Burger King oversaw the launch of their Impossible Whopper, a plant-based spin on their staple menu offering. Following the burger's initial success, Burger King has collaborated with Impossible Foods on additional products, including an Impossible chicken sandwich.

Why has plant-based meat been so successful recently? 

The short answer is that people seem to be getting more health conscious. There are a variety of reasons for this, but The Washington Post reported that the potential health benefits of vegetarianism in the era of COVID-19 have played a large role in the sudden popularity of plant-based meats. 

The Post noted that a majority of American households bought plant-based foods during the height of the pandemic, with the greatest sales coming from meat and milk alternatives. Research cited by the Post from the International Food Information Council found that one in four Americans now eats more plant-based protein than in 2020. 

Whether or not plant-based meat can actually help protect someone from COVID has been debated by scientists. However, one study by the Harvard-affiliated Massachusetts General Hospital found that people who prioritized plants in their diets had a "9 percent lower risk of developing COVID-19 and a 41 percent lower risk of developing severe COVID-19," The Harvard Gazette reports.

COVID is just one factor that has contributed to the rise in plant-based enthusiasm among consumers. Other reasons include the growing awareness about the environmental impact of the meat industry, as well as the expanding appeal of meatless products to people beyond vegetarian circles. Vox reported that while vegetarians and vegans make up less than 10 percent of the U.S. population, meat-eaters are also willing to try alternative protein options. 

What is causing the decline of plant-based meat? 

While plant-based meats have been riding high these past few years, there are signs of dampening enthusiasm. One of the largest drop-offs has been seen by the market leader, Beyond Meat.

The New York Times reported that Beyond Meat's once-skyrocketing stock fell 83 percent in 2022, and that the company's year-to-year sales increase is also likely to fall far short of its 33 percent goal. Beyond Meat partnered with McDonald's for a pilot run of its own plant-based burger, the McPlant; however, the fast-food giant has since discontinued the sandwich and reportedly has no plans to put it back on the menu. Beyond Meat has also undergone a series of layoffs and mounting losses. Photos from a Beyond Meat factory obtained by Bloomberg appeared to show widespread mold, and internal documents viewed by the outlet revealed their products had tested positive for Listeria on multiple occasions. 

Beyond Meat is not the only plant-based company going through a rough patch. One startup, JBS, pulled the plug on its American operations entirely. Part of the reason for the overall decline, according to The Guardianis that plant-based meats are typically just as expensive, if not more expensive, than actual meat. Additionally, while more consumers are health conscious, The Guardian noted that the number of vegetarians and vegans in the U.S. has remained relatively stable over the last 20 years. 

Another obstacle for the industry may be the hesitancy of many conservative-majority states to embrace meat alternatives. Republicans have decried plant-based meat as evidence of a "woke" agenda, and at least 10 GOP-led states have actually outlawed labeling any food as "meat" if it does not come from an animal. 

Can the plant-based meat industry recover? 

There are varying opinions. The Washington Post reported that it would be a mistake for investors to write off plant-based companies altogether, given the large role meat alternatives will likely play in the future ecosystem

The Post also noted that the price of conventional meat is continuing to go down, and inflation has hurt the plant-based meat industry as companies struggle to turn a profit. However, inflation comes and goes with the market, and per the Post, "many analysts predict that, soon enough, prices will swing back in favor of animal-free proteins." Add to this the rising cost of livestock production, the Post said, and consumers will eventually be paying a discount for plant-based products instead of a premium.

Additionally, not all plant-based protein companies have struggled; some, in fact, have even done surprisingly well. Bloomberg reported that Impossible Foods, responsible for Burger King's plant-based trend, saw its retail sales increase 70 percent in 2022. The brand has seen a wide expansion in American supermarkets throughout the year, a sign that the plant-based meat market may not be on its last legs after all. 

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