While Rome wasn’t built in a day, and Beyond Meat has bold global ambitions, said Ken Goldman, managing director at JP Morgan Equity Research, the near-term numbers are causing some consternation.
“Your sales were up 1% year on year in the quarter and your SG&A [selling, general, and administrative expenses] was up 93%, and some investors I’ve talked to are saying, look, it’s great to hear your vision for a better future… but how do you think about balancing long-term opportunities and some of the shorter-term considerations for your shareholders?”
He added: “You’ve said on many occasions that your product is superior to the competition on a number of levels. If this is the case, why do you need to follow your competitors down on price to this degree?”
Analyst: If prices are coming down, why isn’t plant-based meat doing better?
What everyone is now wondering, added Credit Suisse senior equity analyst Robert Moskow, is whether price is the main factor holding the plant-based meat category back, or whether other factors are limiting the category’s potential.
“We’re in a time of unprecedented price inflation in conventional meat,” said Moskow, “and your strategy has been to reduce prices for plant-based burgers. And I guess what I’m surprised about is that that hasn’t yet brought in more consumers to the category.
“So I’m wondering if you’ve done any research to indicate that [a lower] price will be the trigger that increases the trial and repeat, or could there be other factors that drive this?”
Price is not the only lever plant-based brands must pull to increase household penetration
Brown - who pointed out that volumes at Beyond Meat were up in double digits in the quarter, despite sluggish dollar sales growth - said bringing prices down was key to expanding the market, but not the sole lever brands in the space must pull in order to increase household penetration.
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