Beyond Meat's home in the meat aisle sets off a food fight

NEW YORK (Reuters) – To compete directly with ground beef and pork sausages, Beyond Meat Inc is the world's first herbal burger sold in the US grocery store.

However, interviews with nine American grocery chains show that retailers are still looking for Beyond Meat's best solution on their shopping shelves – and that could be closer to the vegan section than the refrigerated meat section. Beyond Meat wished.

The stakes are high in the battle for real estate in supermarkets, while Beyond Meat is looking to quickly take its place in the meat sector in the face of resistance from meat producers before the summer. arrival of new competitors of Impossible Foods and Nestlé SA, of vegetal origin.

Natural Foods, of Vitamin Cottage Inc., which owns some 150 stores in 19 US states, told Reuters that it is placing Beyond Meat in a chilled section with other alternative proteins like tofu, not cardboard. to meat, in order to avoid any confusion, Kemper Isely, said.

At the 35 Kings Food Markets and Balducci Food Lover's markets in New York, New Jersey, Connecticut and Washington D.C., Beyond Meat products are sold in the dairy and meat sectors.

"Sales in both areas have been excellent and customers generally see it as a new category of food products," said Stephen Corradini, director of sales at KB US Holdings Inc, the store-owner investment firm.

Other chains of retailers across the United States, including Town & Country Markets Inc. in the Pacific Northwest, New York-based Morton Williams supermarkets, and the fresh thyme growers market in the United States. Midwest, echoed Corradini, saying the demand was strong, regardless of where Beyond Meat was. the products are placed.

Beyond the meat and its new rivals of the meatless burger, they intend to face the meat in the shops. They avoid terms such as vegan or vegetarian and ask the stores not to place their products in the veggie shelves of supermarkets, where non-meat consumers traditionally buy tofu, tempeh and other food-based products. plants.

Presenting its hamburger as designed to look, feel and taste traditional ground beef, Beyond Meat caters to traditional consumers who wish to reduce their meat consumption in the face of growing concerns about health risks, animal welfare and the environmental risks associated with industrial farming.

"Find it in the meat aisle," says the company's website about sausages and burger patties, which are made from yellow pea protein, coconut and canola oil.

Beyond Meat declined to comment prior to the release of its first earnings report scheduled for Thursday afternoon.

In regulatory filings, the company warned that changes to the retail investment could hinder growth by not attracting new customers and competing with proteins of animal origin. Analysts believe that Beyond Meat's strategic positioning is a "considerable advantage" over its competitors and a differentiator to reach the largest possible market in the United States, which it estimates to be $ 100 billion. here 2035.

Investors are optimistic about the business model, raising Beyond Meat's valuation to more than $ 6 billion, up from $ 1.5 billion when it went public on May 2, even though the California firm said she could never make a profit.

However, while Beyond Meat Demand stores sell their products alongside real meat, there is no contractual obligation for product placement, according to interviews with nine retail chains. Some grocers, such as The Fresh Market Inc., which operates some 160 stores in 22 states, place Beyond Meat in the freezer with other veggie burgers or even the dairy section when they evaluate sales and decide on a marketing strategy. long-term investment.

"The freezer section is our first destination because our customers would not intuitively know where to find the product," said Dwight Richmond, director of Fresh Market's grocery store.

Kroger Co, Target Corp., Whole Foods of Amazon.com, Walmart Inc., Ahold Delhaize, Shop Rite, Stater Brothers and Wegmans, all of whom sell Beyond Meat, neither responded nor declined to comment on their investment strategy.

Sean Saenz, chief meat and seafood operations manager at Gelson, which owns 28 stores in southern California, said the retailer did not record strong sales when it first put Beyond Meat freezer.

Since the hamburger came out of the freezer, sales of Beyond Meat have increased 60%, said Saenz, while sales in the vegan section overall have increased by 20%.

"We still weigh on probably 60 to 70% of Beyond Meat's production sold from the vegan site," Saenz said, calling the "fresh meat" purchases "more than one impulse purchase" .

"I do not think it will ever be as big as meat, but it certainly adds sales growth, which all retailers are looking for," he said.

CONSUMER CONFUSION?

The case of fresh meat is one of the most limited places in a supermarket because of the limited number of places and the need to refrigerate perishable food, according to Rick Stein, vice president of fresh food at the Food Marketing Institute, the retail association.

He has seen retailers create space for herbal meat substitutes in the packaged meats section, alongside bacon, sausages and ham, an investment aimed at increasing sales.

This decision provoked the opinion of the US Cattlemen's Association, which wants the meat case to be exclusively reserved for real meat and claims that the new products are confusing and erode the confidence that consumers give this case.

"These plant-based businesses rely on the beef industry, which has spent decades building a healthy brand of trust for consumers," said Lia Biondo, director of policy and outreach for the province. USCA.

COMPETITIONS TO COME

The debate is about to get noisier as Beyond Meat, which began selling its burger pies to retailers about three years ago, is starting to face increased competition in its herbal stores.

"Competition around investing is skyrocketing as everyone is fighting for a spot in the meat business," said Phil Lempert, an expert in retail food trends, who advises businesses. on branding and consumer behavior.

Canadian packaged meat producer Maple Leaf Foods Inc., which sells plant-based meat substitutes such as vegan ground beef under its LightLife brand, expects its products to be on display in the meat display. American retailers here this summer.

Impossible Foods, which has long focused on restaurant supply, plans to sell its Impossible Burger product in supermarket crates by the end of the year.

Nestle, the largest packaged food group in the world, is looking to sell a pea-based vegetable pie, Awesome Burger, under the US Sweet Earth herbal brand, in the fall.

Tyson Foods Inc., the largest meat processor in the United States, is also working on its own line of alternative protein products after selling its stake in Beyond Meat in April.

John Beretta, vice president of the meat and seafood merchandising group at Albertsons Companies Inc., owner of Safeway Inc., Lucky and Randalls, said the meat case would change based on consumer demand, herbal products that can replace some meat products.

"We are at a point where herbal meats have become a full-fledged segment, and by the end of the year, we will have a section dedicated exclusively to these products within the meat department," he said. said Beretta.