US plant-based company Beyond Meat has seen its sales drop by almost a third as shoppers cut back due to the cost-of-living crisis, the BBC reported.
The company, which co-developed McDonald’s McPlant vegan burger, reported a drop in sales of 30.5% for the three months to the end of June, compared to the previous year, the 8 August report said.
Beyond Meat was quoted as saying it had been affected by “softer demand in the plant-based meat category, high inflation, rising interest rates and ongoing concerns about the likelihood of a recession”.
The company said it now expected annual revenue of between US$360M-US$380m, down from earlier estimates of as much as US$415M.
The global rise in consumer demand for plant-based foods has opened up new markets for oils and fats which are used to add flavour, moisture and texture to new meat alternatives, according to a report by The Independent.
Coconut oil is used extensively in the plant-based protein market and, for example, the Impossible brand’s range of pig-free pork – Impossible Pork – combines soya with sunflower and coconut oil and the soya-derived heme protein.
However, after several years of rapid expansion driven by private equity investment, sales of meat substitutes have fallen, with sales in the UK dropping by 6% last year, according to a report by The Guardian on 9 August.
The Vegan Society was quoted as saying in the BBC report that the cost-of-living crisis in the UK was having a “big impact” on shoppers’ purchasing choices, while vegan food company Meatless Farm said the market for alternative meat had become crowded.
In June, Meatless Farm stopped trading and let its staff go, while sausage producer Heck recently reduced its vegan range due to lack of consumer demand, the BBC wrote.
Beyond Meat’s chief executive said demand had also been hit by increased scrutiny of the health benefits of vegan products.
“This change in perception is not without encouragement from interest groups who have succeeded in seeding doubt and fear around the ingredients and process used to create our and other plant-based meats,” Brown was quoted as saying in the BBC report.
In October, the company said it would cut around 200 jobs to save an estimated US$39M in costs over 12 months, the report said.