The COVID-19 pandemic has exposed meat processing plants as a weak link in the supply chain,
giving plant-based meat products an opportunity to rapidly expand their exposure to consumers
By John Biers and Juliette Michel / AFP, NEW YORK
Champions of plant-based meat see an opportunity to make inroads with American shoppers in the wake of COVID-19 outbreaks at US slaughterhouses that have pressured meat supply.
Prices of conventional protein have surged in the past several weeks following the temporary closure of at least 18 meat processing plants in the US at a time of already elevated demand due to panic buying and pantry loading.
The upshot is that producers of plant-based steaks, nuggets and sausages see a chance to win over shoppers from a broader set of consumers.
“Relative to higher prices in the protein market today, we can make significant inroads into consumers and help them expand their choices of proteins,” Beyond Meat Inc CEO Ethan Brown said this week.
The company plans “heavier discounting” of some products to make them more competitive with old-fashioned meat, he said.
Another emerging player in plant-based meat, Impossible Foods Inc, also from California, this week launched in Kroger Co stores, the nation’s biggest grocery chain.
The move expands its retail footprint 18-fold to 2,700 retail locations, said Impossible Foods, which boasts that its products can be used in stews, sauces or on a barbecue.
“We are moving as quickly as possible to expand with additional outlets and in more retail channels,” Impossible Foods president Dennis Woodside said.
Part of the opportunity is that disruptions from the novel coronavirus come on the heels of the effects of African swine fever, which has hit Asia’s pork supply.
“Agricultural challenges in commodity crop production and processing will be slower to percolate into the food chain, meaning plant-based burgers and chicken alternatives have a window of opportunity right now to present themselves as more reliable alternatives — or potentially the only choice — next to empty meat cases in grocery stores,” Lux Research Inc director of research Sara Olsen said.
Although growing fast, alternative meat accounts for just a tiny portion of the current market.
Beyond Meat estimated that its products have reached just 3.6 percent of US households.
The company’s revenue last quarter more than doubled to US$97.1 million, but that is still a pittance compared with the US$10.1 billion reported by Tyson Foods Inc in the same period.
However, COVID-19 has exposed the meat processing plants as a weak link in the supply chain, denting supply at a time of intense demand.
Fresh beef sales rose by more than 45 percent and chicken by more than 40 percent over the past eight weeks, compared with last year, Nielsen Corp said.
US slaughterhouses have emerged as outbreak hot spots in several states, compelling plant closures, especially for pork and beef. Crowded workspaces are common at the plants, making social distancing difficult.
The American Farm Bureau Federation has estimated that pork processing capacity has been reduced by as much as 20 percent and beef processing capacity as much as 10 percent.
Costco Wholesale Corp this week became the latest big grocer to limit consumer meat purchases, joining Kroger and Wegmans Food Markets Inc.
On Wednesday, fast-food chain Wendy’s said that some of its restaurants have stopped offering beef products online because of tight supply, prompting it to shift to marketing chicken, for which supplies are more robust.
However, alternative meat companies have not been immune from upheaval amid the COVID-19 pandemic.
Beyond Meat withdrew its financial forecast for this year due to COVID-19 uncertainty and said that it had seen a big drop-off in demand from restaurants and other food service customers that had led it to reroute products to retail stores, where sales have been strong.
The company is also to go slow on some new product launches, such as a breakfast sausage offering, it said.
Yet, Brown expressed confidence in the company’s prospects
“There is an opportunity for the consumer to become more aware of a different model of doing this,” he said. “And we want to be as aggressive as we can to provide the consumer with that additional option.”
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