Plant-based meat isn’t dead, but it is in a reset

Plant-based meat may have slowed, but it hasn’t stopped and some investors and brands see opportunities to reignite growth by realigning pricing, technology and market strategy.

Major CPG players like Beyond Meat’s pivot into protein beverages while other brands shuttered their businesses or scrambled to raise capital have prompted questions about the sector’s future. Yet some investors and brands see opportunities if pricing, technology and market strategy can be realigned to create a new wave of opportunity

Price remains the biggest barrier

The challenge with plant-based meat is “purely on price,” argues Steve Simitzis, founder of investment firm Replicator VC.

“If you look at interest rates and what happened in the macro economy, and you compare that to the graph of Beyond Meat stock, there’s a pretty close to one-to-one correlation” where “everything became less affordable,” he said.

However, consumers’ willingness to try plant-based products hasn’t disappeared – so if plant-based meat is capable of being cheaper than its animal meat counterpart, then the segment can rebuild itself, Simitzis said.

Sustainability, while often highlighted by brands and industry advocates, has never been the main driver for consumers, he said.

“Consumers need to see some sort of benefit, whether it’s to their pocketbook, to their health, to taste, or something like that. And then if it’s sustainable, then that’s fine,” but not as the leading attribute, he added.

Foodservice: The front door to trial and lower price points?

Foodservice can offer a growth engine for plant-based meat, with choice architecture on menus boosting sales when plant-based meat is placed as the default even when animal meat is offered, Simitzis said.

Plant-based meat brand Redefine Meat’s approach mirrors this strategy. The company developed its products with knowledge from the meat industry and Michelin chefs to launch into foodservice, explained Edwin Bark, SVP of Redefine Meat.

“We strongly believe that the foodservice channel is a key pillar of our strategy to bring more versatile and qualitative products to the market. Once a plant-based product served in a restaurant, steakhouse, or company canteen delivers a great experience, you immediately lower the barrier to buying in retail and trying at home,” Bark said.

Redefine also leverages chefs’ feedback to improve products across its pipeline. “They are probably the most critical audience one can imagine, and they help us improve our products every six, nine or 12 months,” he said.

Plant-based meat “got validation from the foodservice industry” which could pave the way to smarter commercialization with the aim to lower the price, added Eran Mizrahi of Source 86, a global sourcing and private label solutions company.

Retail hesitation and product design

Yet, retail remains challenging for plant-based meat brands.

Redefine Meat addresses retail friction by designing products that integrate seamlessly into everyday cooking.

“We design products that are as straight-forward to cook with, using the utensils and techniques you would need for an animal-based steak or burger so that it’s incredibly easy for the end-consumer,” Bark said.

Creating recipes “remains one of our most effective tools to drive conversion both online and offline at retail,” he said.

Innovation, new manufacturing and the next phase

Production techniques also may be the sector’s next area of promise, according to Simitzis.

Rebellyous Foods, for example, has invested in its own patented continuous, automated manufacturing which aims to cut down on labor and costs while driving output.

Another example is New School Foods’ plant-based meat and seafood products, which are manufactured via a proprietary scaffolding and cold-based freezing process that connects plant-based muscle fibers and connective tissues to replicate the appearance, texture and cooking behavior of whole-cut meat and fish.

Price parity, or even undercutting meat, remains critical, Simitzis emphasized.

If novel manufacturing methods can lower price, especially as meat prices rise, plant-based meat could “look like the hero of affordability” instead of “driving food inflation,” he said.

Supply chain and market realities

Sourcing specific ingredients required for plant-based meat formulations also present structural challenges, according to Mizrahi. The rising cost of pea protein and other imported inputs, for example, did not match the lower demand, said Mizrahi.

Consumer adoption did not meet the rate of production leading to dwindling capital and “when the capital evaporates, the companies evaporate,” he said.