Via Financial Times

The battle for European market share among plant-based meat groups is set to heat up, as Beyond Meat embarks on an “aggressive” pricing strategy and talks with fast-food chains about offering its products in the region.

The US plant-based meat company will officially launch its first European manufacturing facility on Thursday in the Netherlands, which is owned and operated by Zandbergen, its distribution partner. The plant will boost its output capacity in the region as well as offer products in a more timely manner to customers.

Ethan Brown, chief executive, has already announced that the company will discount its products in the US market this summer aimed at competing with real meat, but said it would pursue a similar strategy across the Atlantic. “We will have a more aggressive pricing in Europe as well this summer . . . We are bullish on market share,” he said.

The company is in discussions with several fast-food chains in Europe to offer Beyond Meat products, although he would not disclose their names. Earlier this year the company announced a tie-up with Starbucks in China, and this month said it would partner with Yum China to trial its burgers in selected KFC, Pizza Hut and Taco Bell outlets.

Line chart of $ per share showing Beyond Meat shares sizzle

“If you look at our modus operandi, we look for marquee customers in each of the markets we enter, and we probably wouldn’t be making this level of investments in Europe if we didn’t think that there was something there for us in terms of large, quick-service restaurants,” Mr Brown said.

READ ALSO  Glenn Greenwald Resigns From The Intercept After Editors Refuse To Publish Biden Criticism

Beyond Meat also announced the acquisition of its first self-owned European plant, also in the Netherlands. This will be the first facility outside of Missouri to handle the company’s patented process of texturising plant proteins and is expected to be operational by the end of this year.

There is more competition among plant-based meat brands on supermarket shelves in Europe, with companies including Beyond Meat and start-ups vying for space. Large food conglomerates such as Unilever and Nestlé are also jostling for market share. US group Impossible Foods has also applied to the region’s food safety authority for permission to sell its plant-based burgers. 

Sales of plant-based meat substitutes jumped in western markets amid the pandemic. This was partly reflected in Beyond Meat’s first-quarter figures, as strong retail demand boosted sales, helping to offset the effect of the closure of restaurants in the US. It reported a 141 per cent rise in first-quarter revenues to $97m, net income of $1.8m compared with a loss a year ago and gross margins of 39 per cent.

Beyond Meat shares have more than doubled since the start of the year to $159 a share on the back of tight meat supplies caused by US slaughterhouses becoming Covid-19 hotspots, as well as its partnerships in China.

Arun Sundaram, analyst at CFRA, who has a sell rating on the shares with a target of $95, said shareholders had been “excessively rewarded” by what was going on in the conventional meat market. “Already capacity [in the real meat industry] is improving and the situation is normalising quicker than people think,” he said.

READ ALSO  Wall Street cautiously optimistic ahead of Big Tech earnings day