As the coronavirus continues to spread, meat is getting more expensive.As meat processing plants become coronavirus hotspots and are forced to shut down, consumers are paying more for poultry, pork and beef at the grocery store. According to IRI’s Inflation Tracker, prices of meat were up 14% the week of May 3, compared to a year before. CoBank reported that there could be almost a third less meat available on grocery stores by Memorial Day — the unofficial beginning of summer grilling season — meaning pork and beef could cost 20% more than lastferric pyrophosphate fssai year.Plant-based meat companies have been working to make their product less expensive for years. And while coronavirus ravages the foodservice side of their business, they’re getting much closer to presenting a value proposition for their retail products.Impossible Foods and Beyond Meat both make products that look, cook and taste similar to conventional meat. But their supplies are steady — and even increasing. Their factories are safer than traditional meat plants, with no coronavirus outbreaks among workers as of yet. And while they’ve traditionally cost more than conventional meat at the grcan you cut ferrous gluconate in halfocery store and restaurant, the companies are taking advantage of the situation to present a bigger value proposition to consumers.Speaking to investors and analysts following Beyond Meat’s most recent earnings report earlier this month, CFO and Treasurer Mark Nelson said that the company has the goal of reaching price parity with conventional meat by 2024. It’s on track to get there without sacrificing its margins, and that may happen faster than expected since the coronavirus pandemic is tightening the meat market and hiking prices, Nelson and CEO Ethan Brown said. Impossible Foods, which cut prices to foodservice distributors by about 15% earlier this year, is also working toward making its product cost closer to that of meat. At a press conference earlier this month, CEO Pat Brown — who is not related to the Beyond Meat CEO — said there are many reasons why the price isn’t falling as quickly as the company would like it to, Pat Brown said, but it is a work in progress.”We are desperately eager to bring down our prices as fast as we possibly can, but we’re selling every pound we can make as fast as we can make it,” Pat Brown said. “So there is plenty of demand from consumers at the current price. And, of course, as the price comes down, eventually it’s going to be game over for the animal ag industry.”Since late last year, Beyond Meat has posferrous fumarate bootsted profits in its earnings reports. For a tech-heavy company that’s just starting up and in a relatively new segment, that’s a daunting feat.Even as the pandemic closed dining rooms, the company, which attributed about 59% of its sales to foodservice at the end of last year, posted $37.7 million in profits — a 38% profit margin. The balance of its business has also shifted with recent consumer habits. At the beginning of this year, nearly 69% of revenues came from retail products. Retail sales were up 190% over the year ago period, Ethan Brown said on the call with analysts after the company’s earnings report went out earlier this month. According to SPINS data he quoted, Beyond Meat’s sales were 233% higher than the year before as consumers stockpiled groceries in March. Beyond Meat has the four top-selling SKUs in plant-based meat, he said, and the company outperformed the plant-based meat category as a whole.Beyond Meat, which started out on grocery shelves, has been aggressively pursuing foodservice. Its products are available at chain restaurants including Del Taco, Carl’s Jr. and TGI Friday’s, and have had well-received test runs at McDonald’s and KFC. While foodservice revenues are up year-over-year, Ethan Brown said it’s because products were sold at more restaurants. If not for the pandemic, sales would have been higher, he said. As it is now, the growth in retail sales has not made up for lost foodservice sales.However, the company continues to launch new retail products, including its Beyond Breakfast Sausairon fumarate vsge.”We believe our dual-pronged approach of aggressively expanding availability of Beyond Meat products in both retail and foodservice outlets served us well and helped to mitigate even more significant COVID-19 related disruptions to our revenues,” Ethan Brown said in the earnings call.As a private company, Impossible Foods doesn’t publicly release its sales statistics. However, the company says its retail sales are booming.The company, which got its start in foodservice and has been moving into grocery stores in the last several months, quickly accelerated its retail rollout during the pandemic. It went from only being sold at a small handful of stores at the beginning of the year to now about 2,700 stores nationwide — including 1,700 Kroger stores and some chains owned by Albertsons on the West Coast. Its retail footprint has increased 18-fold so far in 2020, and officials say it will increase 50-fold by the end of the year.Impossible Foods says that sales are breaking records each month. This is because the company has more items for sale in more locations, plus demand for protein in general is high. “We all know retail sales of groceries are up 20% year over year — which is a huge amount — and the entire protein supply chain has had to evolve to meet that demand. So we are happy to be a part of it, happy to be able to feed Americans,” Dennis Woodside, president of Impossible Foods, said at a press conference at the beginning of May. “Obviously, there’s been a major shift in consumer behavior from people eating out to eating in, and we acted quickly to meet that demand. We expect to roll out with more products in more places throughout the rest of the year.”Meat processing and packing is very labor intensive and hasn’t changed dramatically in decades. Employees stand close together to cut and prepare meat for consumers.But plant-based meat is made very differently.”We would not be having our workers working in our plant if we didn’t feel like we could ferrous sulfate 7h2o-oral dropprovide a safe working environment,” Pat Brown said at the press conference. “…There’s no comparison [to meat plants].”Pat Brown said Impossible Foods created a safer environment for workers that provides for adequate social distancing. The company staggers shifts so that there aren’t too many workers in the plant at once, workers have enough masks and personal protective equipment, and extra steps were added to sanitize surfaces as work is done. He said in the press conference that the company’s Oakland, California plant was preventatively closed for a few weeks during the onset of stay-at-home orders, even though it is classified as an essential business.Oakland is the only factory Impossible Foods owns, Chief Communications Officer Rachel Konrad told Food Dive, and it is currently producing at capacity. Additional capacity is handled by OSI. Making the Impossible Burger, she said, is a relatively simple turn-key sort of operation. The specialized ingredients — including Impossible’s plant-based heme, which the company says makes its products truly taste meat-like — is made at its corporate headquarters and R&D center in Redwood City, California.The ingredients then go to the different factories — in Oakland and at OSI facilities across the country. The processes to turn them into Impossible Burgers, Konrad said, are conventional and easily replicated: lots of industrial mixing and processing.In the earnings call, Ethan Brown said Beyond Meat is working to keep its manufacturing facilities safe as well. The company owns its own plants in Columbia, Missouri, has relationships with co-packers, and has an innovation center in Southern California — which is currently closed to everything except essential research. The company has an internal task force to prevent coronavirus spread in the plants and has started enforcing greater social distancing among employees.The company has also worked to strengthen its ingredient supply to be able to keep meeting demand. Ethan Brown said Beyond Meat sources ingredients from many suppliers around the world and has improved its backups. “Even with the above considerations and very strict COVID-19 health and safety measures in place like others in our industry, we are still subject to heightened risk of disruption to our supply chain,” Ethan Brown said.Both Beyond Meat and Impossible Foods say they are trying to get their products to consumers who want them, and at a price they are willing to pay.Ethan Brown said on the earnings call that Beyond Meat already spent a lot of money on a marketing campaign about the quality and health value of its products, but the campaign is mostly on hold due to the pandemic. In the meantime, the company is putting money into discounting its products to try to reach more price parity with animal-based meat. And given the 38% profit margin, he said, there is room for the company to make discounts.”We’re in pretty good shape to begin to make some inroads toward not necessarily price parity, but be in the same consideration set for the consumer,” he said in the investor call. “So you will see us spend and have more trade as a result.”However, the opportunity to lower the product cost is not only based on Beyond Meat’s healthy profit margin or the increase in meat prices. The company is increasing efficiencies throughout its supply chain and in ingredients. These changes are helping Beyond Meat’s costs come down, Mark Nelson, the company’s CFO, said on the earnings call.Beyond Meat has also been reconfiguring its products to better serve consumers during the pandemic. The company is offering value packs with more patties — and a lower cost per serving — to try to get consumers to buy more of the product to have at home. Ethan Brown said he believes consumers who are curious about plant-based meat will be more likely to pick up those products now, especially as more and more people are firing up their grills.”I think we have snuck in just in the right amount of time into the national dialogue and consciousness on this. Our aided awareness, brand awareness is about 52%,” Ethan Brown said on the earnings call. “So I think when people think about plant-based meat, they’re thinking about Beyond, and so if they’re going to make any kind of trial during this period, we favor — or we come out pretty well on that because of the familiarity with our brand. So we’re not Campbell’s, right? But we’re not so new that it seems foreign or novel in some regards.”For Impossible Foods, the company is working to decrease its prices by scaling up its manufacturing and distribution. Pat Brown also said the company has been steadily lowering its prices throughout its history. When Impossible Foods was founded, it had the goal of growing two-fold each year for the next 15 — something Pat Brown said it is doing. But, he said, the company will truly be able to get closer to beating the traditional meat industry as it continues to perfect its product. Shelter-in-place orders are slowly being rolled back, and company officials said some R&D has restarted at Impossible’s HQ. As more employees are able to leave homes, Pat Brown said there will be a lot more coming from Impossible Foods.”We’re still a small company that’s growing fast,” Pat Brown said. “Right now, we’re investing in a capacity that is many-fold greater than our current capacity, and we’re putting a huge amount in R&D. Those costs make it difficult for us to be at immediate price parity.”But, Pat Brown said, returning to the lab will herald more discovery and growth. After all, he noted, when workers at the Oakland plant came back after the shutdown, they consistently broke production records.”We are incredibly eager to blast ahead in our mission. We’re full of new ideas and pent-up energy,” Pat Brown said. “We’re going to be going full blast again in a few months.”
Impossible Foods and Beyond Meat highlight cost and safety as they race to catch conventional meat
