With increasing health awareness and public campaigns regarding the adverse effects of processed red meat, consumers are gradually shunning meat-based products for meatless alternatives. The silent yet pronounced shift in dietary preferences has brought to the fore evolving business models from quick service restaurants and startup firms as demand has far outstripped the supply.
As items like meatless burgers are selling like hotcakes, it appears that the trend is here to stay and a vegan revolution is likely to sweep the culinary tastes of the Americans.
What’s Driving the Trend?
Alarming rise in average global temperatures due to adverse climate change has hampered the eco-diversity of several places, risking human wellbeing. Various studies have revealed that beef generates about 41% of livestock greenhouse gas emissions – the largest among livestock. This has led to mass awareness campaigns by environmental activists to preserve natural resources, improve human health and animal welfare by reducing red meat consumption. In 2015, the World Health Organization also pitched in and linked the consumption of processed meat to cancer, branding red meat as a likely carcinogen.
This encouraged firms like Beyond Meat Inc. BYND and start-ups like Impossible Foods to come up with plant-based protein products that are similar to the taste and appearance of meat. The innovative products instantly caught the fancy of consumers with a distinct appeal to their taste buds, and have witnessed exponential growth in the past couple of years.
Growing Market Penetration
Impossible Foods initially partnered with some restaurants to serve the meatless, plant-based burger patty and gradually increased the tally to 7,000 as its products grew immensely popular. In order to cater to the huge demand, the firm increased its production facility with added employee base and even raised $300 million through celebrity funding from Jay-Z, Katy Perry, Serena Williams among others to fuel its growth engine. Impossible Foods has so far generated $750 million to run its business and aims to further extend its operations to bridge the demand-supply imbalance.
Burger King, the second largest burger chain in the United State owned by Restaurant Brands International Inc. QSR, is the latest to partner with this start-up, when it announced that it will offer a vegetarian version of its flagship sandwich using a patty from Impossible Foods. Named the Impossible Whopper, this delicacy will be offered in Burger King’s 7,300 joints across the country. This is likely to further amplify the demand and put the industry on fast track to growth. On its part, Burger King aims to increase footfall to its restaurants by offering the meatless version of its signature burger.
McDonald's Corporation MCD also seems to be eager to join the fray as it started selling a meatless version of its burger in its German restaurants last month. Known as the Big Vegan TS, the company is likely to analyze the response to this item before taking a final call to introduce it in the United States.
With increased publicity, supermarkets like The Kroger Co. KR are mulling to start selling these items through their retail stores this year. That the culinary trend is here to stay is further corroborated by Beyond Meat, a leading competitor of Impossible Foods, which went public last month with $25 IPO price and is currently trading at $79.68 as of May 14, 2019. Beyond Meat has reportedly improved its supply chain and even ramped up production to match the increased demand.
Dewey Warner, a research analyst at Euromonitor International, rightly summarized, "There's a lot of flash-in-the-pan, fast-growing things in the food industry. But growth in the plant-based meat alternative space is accelerating, indicating that this is more than just a fad. This may have some staying power."
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