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GLOBALOUTLOOK CORPORATESTRATEGY


COMPANYPROFILE


Ameatychallenge T


BEYOND MEAT IS EYEING CHINA AND EUROPE AS THE GLOBAL APPETITE FOR MEAT-FREE ‘MEAT’ GROWS. JACOPO DETTONI REPORTS


he history of Beyond Meat began with the question – baffling to some – “why do


you need an animal to create meat?” Convinced that alternatives


were possible, founder and CEO Ethan Brown established Beyond Meat in 2009, and embarked on a quest to make and sell food from plant protein that tasted and looked like meat. After a slowstart, the company


began to take off, especially in the past five years. Evolving technology, greater awareness among consumers and increasingly receptive investors led to several rounds of funding that culminated in the company’s Wall Street debut in May 2019. The Covid-19 outbreak has boosted the company’s business case further, as more people become conscious of the health and environmental implications of the food they eat. Today, California-based Beyond


Meat is an $78.3bn company growing at double-digit pace. A widely recognised brand in the US, the company is taking its plant- based burgers overseas, with Europe and China the current focus of its international expansion.


Sustainable aims Unlike many typical vegetarian products, Beyond Meat caters to consumers’ appetite for meat. Its products are plant-based but replicate the taste of meat while being, it says, healthier and more sustainable. Since the company aims to appeal to omnivore consumers, its fortunes are closely tied to those of animal-based meat products. In 2019, as a burgeoning middle


class in China and south-east Asia drove global demand for meat, UK bank Barclays said: “We believe that there is a bigger market opportunity for plant-based (and maybe even lab-grown) protein than was projected for electric vehicles


12


10 years ago.” It estimates that meat alternatives will make up 10% of the global meat market by 2029 – 10 times as much as in 2019.


International expansion While strengthening its presence in the domestic market across its two business lines, retail and foodservice [catering], Beyond Meat has stepped up its international game since the May 2019 initial public offering (IPO). Back then, only 150 stores were selling its products outside the US. Less than 12 months later, that number stood at 18,000 in March 2020, according to company’s figures. Similarly, international foodservice outlets featuring Beyond Meat’s products on their menus grew to 17,000 in March 2020, from1500 in May 2019. Manufacturing capacity in the


US has tripled since the IPO to cater to growing domestic and international demand, but the time has come for the company to build capacity abroad. “It doesn’t make economic sense for the company to keep shipping burgers overseas,” says Alex Frederick, a senior analyst at PitchBook. “It makes more sense to locate capacity closer to the markets they want to reach and try to bring down the price.” In June, the company


announced its first fully owned facility outside the US in Enschede in the Netherlands, expected to be operational by the end of 2020. The company also announced a co-manufacturing facility in partnership with Dutch distribution partner Zandbergen World’s Finest Meat, in Zoeterwoude in the Netherlands. Charles Muth, the company’s


chief growth officer, says: “The combination of these facilities will allowus to roll out our latest innovations at the pace and scale needed to remain highly competitive in the region as we work to bring the nutritional and environmental


benefits of plant-basedmeat to consumers across the Europe, Middle East and Africa region.” Retail sales of plant-basedmeat in


WesternEurope are expected to grow to $305.4min 2022, from234.9m in 2018, according to estimates reported by data provider Statista. “We have strongambitions in


Europe, and localised production will enable us to better serve the growing demand for Beyond Meat’s products throughout Europe,” Mr Muth says.“While the opening of the new Zandbergen co-manufacturing facility is expected to greatly increase the speed, scale and efficiency with which we can reach our retail and foodservice customers across Europe, the Middle East and Africa, we would be open to further expansion as demand increases.” Besides theUSand Europe,


Beyond Meat is looking at China. Already theworld’s biggest meat producer and consumer, its per capita consumption is expected to reachnew highs in the next decade. After strikingmajor distribution deals for the Chinesemarket withthe likes of Alibaba and Starbucks, thecompany is already raising the stakes. “Our goal is to have production


up and running in the [Asia-Pacific] region as quickly as possible so we can compete effectively in this very importantmarket for us overmany years to come,” MrMuth says.


Covid-19 impact The Covid-19 pandemic hasmeant mixed fortunes for the company. While the pandemic has severely hit its foodservice business, Beyond Meat has seen retail sales boosted across the board, and given it the opportunity to take its concept directly to the wider public as the debate around healthy and sustainable lifestyles accelerated. “More than anything, I think


it’s pulled back the curtain a bit around how traditional meat is


www.fDiIntelligence.com August/September 2020


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