CHICAGO – Cashing in on rising demand for imitation meat, major retailers including Kroger, Target and Walmart recently began to carry Beyond Meat’s (BYND.O) plant-based burgers and sausages.
Now, several stores are creating similar products that will compete with Beyond Meat.
Kroger Co KR.O, the biggest U.S. grocer, on Wednesday rolled out its own line of plant-based imitation meat burgers nationwide under its Simple Truth in-house brand. The retailer said its pea protein-based products would be sold at “more affordable prices” than competing brand-name imitation meat. A Kroger spokeswoman said a two-patty pack would sell at about $4.99 to loyalty-card-holding customers.
German-owned discount supermarket Aldi U.S., which sells Meatless Meatballs and Chickenless patties in the United States, told Reuters that it keeps its plant-based meat products at prices ranging from $3 to $4.
In comparison, a package of two Beyond Burgers sells for about $5.99 at some major big-box stores.
Aldi, which plans to launch more products this year and is testing a meatless breakfast sausage, told Reuters that sales of its store-brand plant-based meats were up 300% last year.
“It wouldn’t surprise me if it was up 300% again this year,” Scott Patton, who co-heads corporate buying at Aldi, said. “If a customer is going to purchase a competitor’s plant-based product versus an Aldi one, ours will be significantly cheaper.”
For years, major retailers including Target (TGT.N) and Walmart (WMT.N) have invested in their in-house brands, lining up contract manufacturers to produce private-label food ranging from macaroni-and-cheese and toilet paper to ice cream.
As a result, companies including Kraft Heinz (KHC.O) have reported multi-quarter sales losses as they lose share to private-label brands. Retailers generally sell their private-label products at lower prices than well-known brands. They typically do not give own-brand products better shelf-space, preferring to compete on price rather than miss potential sales if customers overlook brands they want.
Albertsons Co Inc, whose grocery store chains include Safeway and Jewel-Osco, told Reuters that it prices its imitation meat at 50 cents to a dollar cheaper than products sold by Beyond Meat or Maple Leaf Foods’ Lightlife – another big plant-based meat maker.
“Anything with our label is as good or better,” said John Beretta, who manages Albertsons meat and seafood merchandising.
Vegan burgers made from beans and other ingredients have been around for decades, but Beyond Meat said its decade-long investment in making peas taste like meat won’t be easy for grocers to replicate. The company’s proprietary food technology helped it list in a splashy initial public offering – the company is now valued at about $5 billion, with its share price having more than tripled from the IPO.
“You can put something in the shape of a patty and put it on a shelf where we are, but the barriers to entry are low and the barriers to success are high,” Beyond Meat Chairman Seth Goldman told Reuters in a recent interview. The company, which was founded in 2009, said it has rebuffed approaches by several U.S. grocers to create plant-based meat sold under their private-label banners. “We’ve seen several retailers launch plant-based burgers that were private label and they just weren’t ready.”
A Kroger spokeswoman said the company’s own-brand plant-based burgers and ground meat were developed by an in-house R&D team and produced by a third-party.
“Really, the pivot-point for the whole industry was the Beyond Meat IPO,” said Danny Goodman from Don Lee Farms, a food maker that has supplied a variety of products to top U.S. retailers over the years, including Kroger, Whole Foods and Albertsons. “I think it made a lot of companies sit up and put more resources into working on my plant-based line.”
The post Grocers roll out plant-based burgers – at prices below Beyond Meat appeared first on Reuters.