Investors want another helping of Beyond Meat Inc. stock, with shares up another 12.6% in Wednesday trading, but competition in the plant-based and meat-alternative categories could take a bite out Beyond Meat’s stratospheric growth.
But Beyond Meat isn’t the only plant-based meat on the market, and it’s facing risks from the competition.
According to data provided by SEMrush, a content-marketing platform, for the year spanning April 2018 to April 2019, “Impossible Burger,” another plant-based burger option from Impossible Foods Inc., was searched on Google an average of 171% more than “Beyond Burger.”
And just as talk about the Beyond Meat IPO was picking up steam in April, “Impossible Burger” was searched 400% more than “Beyond Burger.” Beyond Meat began trading on May 2.
“Based on our search volume data, it is clear that the Impossible Burger is much more popular among consumers than the Beyond Meat burger,” said Olga Andrienko, head of global marketing at SEMrush. “While search volume cannot determine causation, the significant difference in consumer interest for one of its main competitors, the Impossible Burger, points to a larger long-term risk for Beyond Meat in addition to its recent losses on Wall Street.”
Beyond Meat closed Tuesday down 25%. Beyond Meat stock is up 78% for the past month while the S&P 500 index
is about breakeven for the period.
Impossible Foods said it welcomes Beyond Meat into the meat-alternative fray because Impossible Foods only has one competitor: animal protein.
“Our competition 100% is the cow,” said Rachel Konrad, chief communications officer at Impossible Foods. “Impossible Foods has the mission of eliminating the need for animal products.”
In the meantime, it’s generating millions of dollars in funding from investors and getting play on fast-food menus across the country.
On May 14, Impossible Foods, which is privately held, announced it completed a $300-million round of funding, bringing total funding to $750 million. Investors include Jay-Z, Serena Williams and husband Alexis Ohanian, Katy Perry and Questlove, as well as Bill Gates, UBS and Google Ventures.
Since January, Impossible Foods products have popped up on menus at chains such as White Castle, Red Robin Gourmet Burgers Inc.
, Qdoba and Little Caesars, where the Impossible Supreme pizza, featuring Impossible Sausage, is available in three markets in Washington, New Mexico and Florida.
In total, Impossible Foods is on 9,000 menus in the U.S., Hong Kong, Singapore and Macau.
Data from Earnest Research, a business insight company, shows a 36% spike in April sales versus March at St. Louis Burger King locations since the addition of the Impossible Whopper, with only a portion explained by the $1 increase in price.
Impossible Foods’ Konrad emphasized the versatility of Impossible Foods products, and its ability to make the leap from pizza to burgers to Vietnamese pho and Italian Bolognese without sacrificing taste, the number one thing that diners who aren’t vegan or vegetarian are looking for in a meat alternative.
“If you don’t have a product that’s just as delicious and craveable as meat from cows you’re not even allowed to play in this space,” she told MarketWatch.
Konrad also talked up the science behind Impossible Foods, a factor that’s highlighted on the company’s website and has been talked up by others in the meat-alternative industry, which is now also populated by animal protein purveyors like Tyson Foods Inc.
In many ways, the plant-based meat company with the best science will win.
“Let’s really end the fantasy that our food is untouched by science,” she said. “It’s the ultimate science product.”
Among the more than 100 scientists working with Impossible Foods are molecular biochemists, geneticist, and a nuclear physicist who was responsible for the texture and “chew down” of the Impossible Burger.
Beyond Meat certainly isn’t standing still, with the company announcing a new, “meatier” burger coming for summer.
With the meat industry valued at about $1 trillion, there’s plenty of room for growth, and customers are seeking out animal alternatives for a variety of reasons, from health to environmental concerns. Other plant-based meat companies facing off in the space include Before the Butcher; Rebellyous Foods, makers of plant-based chicken nuggets; and Good Catch, makers of plant-based tuna.
“Differences between the plethora of companies offering plant-based meat products are mainly reflected in their varied taste and composition,” said Isaac Thomas, chief executive of VeganNation, an organization that brings together businesses, diners and organizations for vegan goods.
“We are on a race for the best vegan meat substitute, and Beyond Meat serves as an important catalyst in promoting plant-based meat products. Beyond Meat’s glorious IPO is attracting a lot of necessary and healthy competition, shining a beam of light on the immense financial opportunity stored in the vegan consumer base while drawing the attention of key financial players worldwide.”
“As we wrote last week, ‘At some point, the extraordinary revenue and profit potential embedded in [Beyond Meat]…will be priced in’ — we think this day has arrived,” JPMorgan wrote.