1 – Meat prices are surging

First, let’s have a look at the impressive surge in beef prices in the US. This is due to a combination of factors:

• Less livestock in the US due to increasing production costs
• Environmental factors in other markets (droughts, parasites…)
• Rising demand

The last factor may be the most surprising: we often hear about a decline in meat consumption. However, over the past decades, while meat production has decreased in most developed economies, overall demand has not declined. Instead, people have shifted their preferences from one type of animal protein (beef) to others, such as eggs, fish, and poultry.

However, the mass adoption of weight-loss GLP-1 drugs combined with the rising appetite of consumers for “anything with protein inside” is creating an increasing demand for beef itself. Consumers who are eating less are indeed spending more on some categories, including meat.

This price surge has multiple consequences, such as steakhouses in both the US and the UK shrinking portions and increasing prices. More broadly, it leads to three questions:

1. In the current context of increased “food nationalism” and tariff barriers, can we expect anything other than this trend to continue and even to expand to other markets?
2. If consumers are returning to meat, especially beef, this could prompt governments to increase production subsidies. Then, could it be another dent in an already compromised climate strategy? If we look at our latest insight into what we should eat versus what we actually eat, meat shouldn’t be a big part of the equation.
3. Will this trend reduce the price gap with plant-based meat and other alternatives, hence creating more appetite for those products?

2 – Consumers’ first reaction is not really to switch to plant-based

When asked, consumers’ first reaction is to buy less beef or to switch to another type of animal protein. However, 37% of them (in the US) would still consider purchasing plant-based products.

At first glance, this graph could look like bad news for plant-based alternatives: it seems consumers are not really keen on them. But I really think this validates the strategy of most players to go for “analogue” products that mimic the taste and texture of meat products. Then, the jump from meat to plant-based is much easier than going from meat to something radically different (such as tofu). Maybe this time, consumers will also experiment with better products than those available during the latest “plant-based opportunity phase” between 2020 and 2022. Nowadays, supermarket shelves are free of the worst products, which have left many consumers with a bad impression.

3 – Is Beyond Meat benefiting from this situation?

Beyond Meat remains the only major plant-based meat startup to have gone public. What could have been an opportunity to be the beacon of the ecosystem is now probably a burden, as it has to be the only player to release quarterly updates on its revenues.

It is doing really badly. As shown in the graph above, since its stock market debut, it has had only two profitable quarters. The past five years have been a succession of losses, combined with a declining revenue.

The stock price has similarly suffered, losing more than 90% of its value. It even went into “penny stock” territory (less than $1 a stock, a somewhat shameful state for a company) early this month.

However, as shown in the graph below, the company’s stock has risen by 900%. But that’s not due to any good reason or to any impact on its revenue from the price of meat. The company has become a “meme stock”, a company whose share price skyrockets due to viral attention from individual investors on social media.

Beyond this already fading hype, the company will get better and benefit from the demand for protein-rich products.