Meat consumption is huge in China. But Beyond Meat didn’t win the market even it has a local factory.
In November’s q3 earnings call, Beyond Meat says it is doing “a review and potential restructuring of our operations in China”.
A local factory in Shanghai can’t solve Beyond Meat’s problems globally.
Why Beyond Meat didn’t work?
1) Price is too high. Retail price could be ~$10 per pound, or 40+% higher. In earnings releases, Beyond Meat in 23q3 sold 7.199 mn pounds of meat through US retail for 30.518 mn, which translates to $4.23 per pound (the price Beyond Meat sells to retailers). And Beyond Meat is mostly making gross profit loss at these prices. Not to mention the high interest rate and inflation pressure that lead to consumer trade-down.
Beyond Meat patties in Walmart – $9.68 / lb
normal beef patties in Walmart – $5.6 – $7 / lb
Products sold in China is actually at similar price in the US (40 rmb, or $5.6 for 2 patties; 60 rmb, or $8.45 for 4 patties, or 1 lb) – expensive compared with other meat options in China.
Pork (main protein) is ~$1.3 / lb in China.
Beef price is ~$4.6 / lb in China.
2) In restaurants (fast-food chains), the products didn’t take off – not welcomed by consumers. McDonald’s discontinued McPlant in mid-2022, which is a Beyond Meat burger. Burger King, the early adopter of vegan burger (from Impossible Burger) now says “it’s not a big part of the current focus.”
3) There are some fundamental issues with the product: e.g. plant- based protein is less likely to be absorbed compared with real meat.