{"id":13875,"date":"2016-11-04T17:54:50","date_gmt":"2016-11-04T21:54:50","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/plant-based-burgers-a-big-missed-steak\/"},"modified":"2016-11-04T17:54:50","modified_gmt":"2016-11-04T21:54:50","slug":"plant-based-burgers-a-big-missed-steak","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/plant-based-burgers-a-big-missed-steak\/","title":{"rendered":"Plant-Based Burgers \u2013 A Big Missed Steak?"},"content":{"rendered":"

Why Meatless Burgers?<\/strong><\/p>\n

We all know the importance of reducing fossil fuels in addressing climate change, but the effects of livestock production are often overlooked. Consisting primarily of poultry, pigs, cattle and buffalos, livestock discharge intestinal gases and manure through a digestive process that releases harmful gases in the atmosphere.[1]<\/a> Combined with the human activities related to their production (i.e., fertilization usage, manure management, and meat processing), livestock contributes to 18% of global greenhouse gas emissions and 37% of global methane emissions (25x more potent than carbon dioxide).[2]<\/a><\/p>\n

Cattle are the largest offenders, producing 5x the amount of greenhouse gas emissions than pork, the most consumed animal protein in the world.[3]<\/a> The U.S. is a major market for cattle consumption and production \u2013 America consumes 25 billion pounds of beef a year and exports 10% of total beef production.[4]<\/a> Reducing beef consumption will have a major impact on reducing dangerous gas emissions. Domestically, burgers seem like a good place to start \u2013 3 out of every 4 Americans eat at least one a week.[5]<\/a><\/p>\n

Beyond Meat, Inc. <\/strong><\/p>\n

Worried about this depressing trend, Ethan Brown took action. In 2009, he founded Beyond Meat, Inc., a start-up aimed at reducing meat consumption and ultimately America\u2019s carbon footprint by providing a competitive alternative to meat using 100% plant-based proteins.[6]<\/a> With no artificial ingredients, Beyond Meat transforms plant protein, oils, water, and other natural flavors into ground \u201cmeat\u201d and \u201cchicken\u201d through a proprietary cooking and pressurization process. The Beast Burger, released in February 2015, is the company\u2019s most compelling product to date in terms of rivaling the coveted beef patty in both price and taste.[7]<\/a><\/p>\n

Beyond Meat has already started to gain traction. Last month, the company closed a Series F round with General Mills and Tyson Foods investing alongside Bill Gates and other venture capital firms.[8]<\/a> Their products are currently distributed in 100+ Wholefoods stores throughout the Northeast and Midwest and, most importantly, you can find their ground \u201cbeef\u201d alongside their authentic counterparts in the Wholefoods meat aisle, which is key.[9]<\/a> Beyond Meat is tactfully attempting to differentiate from the slow-growing and small-sized $394 million U.S. market for meat substitutes, which consist mainly of soy- and gluten-based alternatives that carnivores often criticized for their lackluster taste, look, and feel.[10]<\/a><\/p>\n

By positioning itself as \u201cmeat\u201d rather than a \u201cmeat-like,\u201d Beyond Meat appeals to a much broader consumer base and expands their potential for environmental impact. While another direct competitor, Impossible Foods, recently entered the market, the threat is low: right now the pie is big enough for multiple entrants as more players only increase awareness of this unique product. Moreover, Beyond Meat has a first mover advantage and with it, the empirical knowledge from consumer testing that inform creative ways to increase trialability, particularly amongst staunch carnivores. [11]<\/a><\/p>\n

Will Fake Meat Go Mainstream?<\/strong><\/p>\n

The future success of Beyond Meat hinges on its ability to appeal to meat lovers and vegetarians alike. Herein lies the challenge: meat consumption preferences and trends are the biggest underlying driver and right now the message is mixed. While domestic beef consumption is modestly slowing, global demand for beef is on the rise.[12]<\/a> These mixed signals extend to consumer trends: consumers are ingredient conscious, although meat lovers have demanding standards for what alternatives should taste like. Skepticism and ingrained preferences are hard to change.<\/p>\n

The company\u2019s emphasis on product endorsements by athletes suggest Beyond Meat is managing these challenges by trying to appeal to the health conscious consumer. While a potentially effective, it could be even more effective to layer on a targeted youth strategy. Relative to 20-69 year-old Americans, one study found that those between 12-19 years old tended to eat less meat and one could assume them to be less sticky in their food preferences as well.[13]<\/a> This would necessitate a new distribution channel \u2013 the school cafeteria \u2013 and much more competitive prices at the wholesale level, but the potential longer-term benefits every new young, customer won over could be immense.<\/p>\n

The other route Beyond Meat could take is to target specialty burger chains that either brand themselves as environmentally conscious or messaging ingredient sourcing to their consumers. Potential partnerships could include Five Guys or Shake Shack or even Chipotle who is exploring burger concepts.[14]<\/a> It matters as quick service hamburger restaurants drive 70% of ground beef sales \u2013 entering this channel would be a game changer but would take time and require massive scaling.[15]<\/a><\/p>\n

 <\/p>\n

[1]<\/a> World Watch Institute<\/em>. \u201cLivestock and Climate Change.\u201d November\/December 2009. http:\/\/www.worldwatch.org\/files\/pdf\/Livestock%20and%20Climate%20Change.pdf<\/p>\n

[2]<\/a> Steinfield, Henning. United Nations Report. \u201cLivestock’s Long Shadow: Environmental Issues and Options.\u201d November 2006. ftp:\/\/ftp.fao.org\/docrep\/fao\/010\/a0701e\/a0701e03.pdf<\/p>\n

[3]<\/a> Smithsonian Magazine. \u201cRaising Beef Uses Ten Times More Resources Than Poultry, Dairy, Eggs, or Pork.\u201d July 2014. http:\/\/www.smithsonianmag.com\/science-nature\/beef-uses-ten-times-more-resources-poultry-dairy-eggs-pork-180952103\/?no-ist<\/p>\n

[4]<\/a> U.S. Department of Agriculture: Economic Research Service \u2013 Statistics and Information on U.S. Beef Industry http:\/\/www.ers.usda.gov\/topics\/animal-products\/cattle-beef\/statistics-information.aspx<\/p>\n

[5]<\/a> The NPD Market Research Group. \u201cRestaurant Burgers Had a Banner Year in 2014.\u201d January 27, 2015. https:\/\/www.npd.com\/wps\/portal\/npd\/us\/news\/press-releases\/2015\/restaurant-burgers-had-a-banner-year-in-2014\/<\/p>\n

[6]<\/a> Company website. http:\/\/beyondmeat.com\/about<\/p>\n

[7]<\/a> Company website.<\/p>\n

[8]<\/a> Crunchbase. Beyond Meat, Inc. https:\/\/www.crunchbase.com\/organization\/beyond-meat#\/entity<\/p>\n

[9]<\/a> Company website.<\/p>\n

[10]<\/a> Wall Street Journal. \u201cMeatless Burgers Make Their MLB Pitch.\u201d June 25, 2014. http:\/\/www.wsj.com\/articles\/meatless-burgers-make-their-mlb-pitch-1403736799<\/p>\n

[11]<\/a> Ibid.<\/p>\n

[12]<\/a> Steinfield, Henning. United Nations Report. \u201cLivestock’s Long Shadow: Environmental Issues and Options.\u201d November 2006. ftp:\/\/ftp.fao.org\/docrep\/fao\/010\/a0701e\/a0701e03.pdf<\/p>\n

[13]<\/a> Daniel CR, Cross AJ, Koebnick C, Sinha R. Trends in meat consumption in the United States. Public health nutrition. 2011;14(4):575-583. Table retrieved from: https:\/\/www.ncbi.nlm.nih.gov\/pmc\/articles\/PMC3045642\/table\/T1\/<\/p>\n

[14]<\/a> CNN Money. \u201cChipotle will now make burgers.\u201d July 28, 2016. http:\/\/money.cnn.com\/2016\/07\/28\/investing\/chipotle-burger-chain-tasty-made\/<\/p>\n

[15]<\/a> The NPD Market Research Group. \u201cRestaurant Burgers Had a Banner Year in 2014.\u201d January 27, 2015. https:\/\/www.npd.com\/wps\/portal\/npd\/us\/news\/press-releases\/2015\/restaurant-burgers-had-a-banner-year-in-2014\/<\/p>\n","protected":false},"excerpt":{"rendered":"

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