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NEW YORK: In an effort 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 determining the best choice of Beyond Meat in their shopping shelves – and this may be closer to the vegan section than the refrigerated meat aisle if desired by Beyond Meat.
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 & # 39; s Food Lover markets in New York, New Jersey, Connecticut and the Washington DC area, Beyond Meat products are sold in the dairy and dairy sectors. the meat.
"Sales in both spaces have been excellent and customers generally see a new category of food products," said Stephen Corradini, director of sales at KB US Holdings Inc., the owner-owned investment firm of the stores.
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 department," says the company's website about its sausages and burger patties, which are made of 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 Beyond Meat's strategic positioning is a "significant advantage" over its competitors and a differentiator to reach the largest possible market in the United States, which it estimates to be $ 100 billion by 2035.
Investors are optimistic about the business model, raising the valuation of Beyond Meat to more than 6 billion US dollars, against 1.5 billion US dollars during its IPO on May 2, even if the California company has announced that she could never generate 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, Rite Shop, Stater Brothers and Wegmans, all of whom sell Beyond Meat, have not responded or declined to comment on their strategy. placement.
Sean Saenz, senior director of meat and seafood operations at Gelson & # 39; s, who owns 28 stores in Southern California, said the retailer had not seen any strong sales when it was sold. he initially put Beyond Meat in the 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 believe that 60 to 70% of Beyond Meat's production is to be sold at a vegan site," said Saenz, noting that purchases in the fresh meat store "were more of an impulse purchase".
"I do not think it will ever be as big as meat, but it definitely increases sales, which every retailer is 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 ire 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 meat. confidence that consumers are giving to this case.
"These plant-based companies rely on the beef industry, which has spent decades building a healthy brand that consumers trust," said Lia Biondo, Director of Policy and Outreach. from the 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.
"The competition around the investment is skyrocketing while everyone is fighting for a place in the meat business," said Phil Lempert, an expert in retail food trends, who advises companies in 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 so far focused on restaurant supply, plans to sell its Impossible Burger product in the supermarkets' meat crates by the end of the year. ;year.
Nestle, the largest packaged food group in the world, is looking to sell a pea-based vegetable pie, Awesome Burger, under the American brand Sweet Earth herbal, 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 dedicated section dedicated to these products within the meat department. "said Beretta.
(Report by Tina Bellon, edited by Anna Driver and Edward Tobin)
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