“Generally, you have to pay ... for the retail shelf space. You're battling with a lot of other brands out there, and you're battling with the fact that most retailers have reduced the space available for plant-based meats,” O’Malley said. “It's very complex, and ...that's why we actually pulled back a little bit. We do have our products in retail, but we haven't pushed really hard because we're waiting for things to settle down a little bit.”
A blended approach to growing a plant-based meat company
In 2019, Before the Butcher moved beyond its foodservice roots into retail, but shortly after faced market challenges due to the COVID pandemic. The alt-meat company then shifted its business strategy even further to add a private-label manufacturing side of its business coming out of the pandemic, O'Malley explained.
"We've mixed it up really nicely, and that blend as we got into 2023 has really helped us grow, especially in the second half of 2023,” he said. "In retail, it's quite challenging for all brands, but foodservices remain strong and [growing] for us, and of course, on ... the private-label side, it's been really good for us, and we've opened our doors to food-service operators and retail operators that are looking to brand these type of products."
Before the Butcher sees many advantages to focusing on private-label business, including spending less on marketing and PR compared to their named brands, O'Malley said.
“The best part of it all for a manufacturer is we know what our bottom line is on that product. We don't have to worry about PR, marketing, bill backs, spoiled products, all that kind of thing generally is built right into the price,” he said “If there's PR and marketing behind that product for the retailer or the foodservice operator, they're paying for it because it's their product, their brand. We’re making it for them. It's really been a great avenue for us to help build a portion of our business and secure products and moving on a consistent basis that we know are going to continue to move for years to come.”
Additionally, retailers launching private-label products have learned lessons from the named brands that came before it, ensuring that the product has a better chance for success on the market, he added.
“When [retailers] dive in and say, ‘Hey, look, I want my own burger. I want my own chicken nugget, or I want my own this or that.’ They're diving into something that they've already become very familiar with because the risk was risk-free for them. They allowed the branded manufacturers to go out there and find out whether or not there was a targeted market that was big enough for their private-label brand.”
Innovating in private label and foodservice, navigating retail challenges
As it grows out its private-label and foodservice channels, Before the Butcher is finding opportunities to innovate and develop new products. The company will launch a plant-based, gluten-free, soy-free, and non-GMO pepperoni for pizzas and other private-label and foodservice products in the new year, O'Malley said.
"The restaurant industry to me is really exciting right now ... that is where I see the best opportunity and growth outside of what we do on the industrial and private-label side. The retail section of the industry is pretty stymied right now; it's really stagnant. ... Oversaturation is a good part of that, and then just exhaustion and fatigue by the consumer."
Before the Butcher hasn’t entirely abandoned its retail plans and will launch several new products in 2023 and a new brand look and feel.
“We'll continue to focus on [foodservice and private label] for continued growth and money making and profitability, whereas retail is just an opportunity for us to continue to expand our portfolio and grow but not as profitably as we can grow on the other areas. We're not pulling out, but we're not diving in 100% and we're waiting it out a little bit to see how the industry falls out on the retail side.”