Shulou(Shulou.com)11/24 Report--

After the boom of the past few years, artificial meat, which focuses on environmental protection and health, seems to have lost its growth momentum and fallen into a cooling trough. With high prices, different tastes and health questions, artificial plant meat is still a long way from public acceptance, and it is still out of reach to completely replace raw meat.

The artificial meat in the supermarket goes to the supermarket to buy food on weekends as usual. Although prices have soared in the past two years, the price of meat in the United States is not expensive. After all, it is a major animal husbandry country in the world. Supermarkets often offer discounts and can even buy $1 a pound of chilled pork with clubs, while minced beef usually costs $3.99 a pound.

Next to the cold fresh meat freezer, I saw an artificial meat counter. Inside are frozen-packaged artificial meat, which belongs to the industry's two major brands, Impossible and Beyond Meat. The meat in the freezer looks more firewood, and it has an obvious Q-play feel when pinched, which is obviously different from the real meat on the side.

The packaging of artificial meat highlights its main selling point: saturated fat is 35% lower than real meat. I also noticed a detail that the price of artificial meat is in ounces (1 pound equals 16 ounces), which may seem cheaper. But even if the supermarket is on sale, artificial meat costs the equivalent of $8.80 a pound, significantly higher than the price of chilled ground beef.

Frankly speaking, when artificial meat and fresh meat are put together, it is difficult for me to have the enthusiasm to try, let alone replace the raw meat that I eat every day. Although I have eaten Impossible's artificial meat hamburger at Burger King, it doesn't taste good when sandwiched between a bunch of ingredients and sauces, but it tastes different.

As can be seen in supermarkets, the main artificial meat products in the US market come from two major brands, Beyond Meat and Impossible Foods. Interestingly, both companies are in California, and their founders are surnamed Brown, but they are not related. Ethan Brown founded Beyond Meat in Los Angeles in 2009, and Patrick Brown, a biochemist at Stanford University, founded Impossible Foods in Silicon Valley two years later.

The two founders come from different industries and have different backgrounds, but they both share a common interest-environmental protection. The original intention of the two men to start the man-made meat company is to find a sustainable way of survival, meet the protein needs of human survival, reduce greenhouse gas emissions, and help alleviate the climate change crisis. Over the past decade, the two companies have launched products such as artificial beef, pork, chicken and fish, which are sold on shelves in mainstream supermarkets and into fast food chains such as Burger King.

Around 2020, the artificial meat industry ushered in a small growth of the best part. After the listing of Beyond Meat, the stock price soared, celebrities such as Bill Gates openly created a campaign to bring goods, and mainstream supermarkets and fast food restaurants introduced artificial meat products one after another. In 2020, global artificial meat sales rose 45% from a year earlier, breaking the $1 billion mark for the first time. In 2021, the market reached $1.4 billion.

Investors in the artificial meat industry include not only meat giants like Tyson Foods and well-known venture capitalists such as KPCB, but also green stars, including Microsoft founder Bill Gates, Oscar-winning actor Leonardo DiCaprio, action star Arnold Schwarzenegger and NBA star Kyrie Irving. Their publicity with goods, but also let more ordinary consumers know this novel ingredient.

In 2021, Brown, founder of Impossible Foods, even proudly announced that traditional animal husbandry would die in 2035, not because of the policy ban, but because there are better products directly from plants to meet the needs of consumers, and the economic incentive for livestock to eat meat will disappear. He resigned as CEO last year and hired Peter McGuiness, president of the yogurt brand Chobani, to run the company.

The biggest selling point of the promotion of artificial meat for environmental protection and emission reduction is environmental protection and emission reduction to deal with the climate crisis. Over the past decade, the founders of the two artificial meat companies have stressed on various occasions that the world is facing a serious climate crisis and that animal husbandry is a major polluter of global greenhouse gas emissions. They believe that artificial meat will replace traditional animal husbandry in the future, which is not only beneficial to health, but also to the environment.

At the 2013 Wired Business Conference, Ethan Brown, the founder of Beyond Meat, said impassively that the world is facing a serious climate crisis, and investors making meat can help fight the climate crisis better than investing in solar energy. At the Goldman Sachs Innovation Summit in 2019, Brown even suggested that the United States needed to deal with the development of artificial meat with a greater sense of urgency in the face of World War II.

What he said is not unreasonable. Perhaps many people do not realize that the traditional animal husbandry is a seriously polluted industry. According to the report of the United Nations Food and Agriculture Organization, 14.5% of the world's greenhouse gas emissions come from animal husbandry, which is even higher than automobile exhaust emissions, which are commonly thought of as the main source of pollution. However, compared with high emission industries such as transport energy, the public pays little attention to the pollution of animal husbandry.

65% of greenhouse gas emissions from animal husbandry come from cattle farming. The greenhouse gas effect of methane caused by rumination in the digestive tract of cattle is more than 20 times that of carbon dioxide. At the same time, animal husbandry also needs to consume a lot of water resources, and livestock manure will also pollute the environment. However, because animal husbandry and agriculture are essential for human survival, the growing world population needs more meat supply.

What is more sensitive is that if the development of animal husbandry is directly curbed, it will also affect the election votes of many countries. Therefore, in dealing with greenhouse gases and climate change, policy makers of various countries will "tacitly" avoid the pollution problem of animal husbandry and are unwilling to take action in this regard. The nationally owned contribution of the Paris Climate Agreement does not mention the field of animal husbandry.

It is unrealistic for people to give up eating meat for the sake of environmental protection, especially in developed countries in Europe and the United States, which has the highest meat consumption in the world. According to the Economic Cooperation Organization, the United States consumed 101.6 kilograms of meat per capita in 2020, making it the most meat-eating country in the world. Australia and Argentina ranked second or third in animal husbandry, while China only consumed 44.4kg.

Although China is the world's largest meat producer (the United States ranks second), producing 75.4 million tons of meat in 2020, accounting for 22.5 percent of the world's total output, China eats far less meat per capita than the United States because of its large population and cost problems. When it comes to specific meat, China is the world's largest pork producer, while the United States is the world's largest producer of beef and chicken.

In terms of consumption, Americans eat the most chicken, beef and pork. According to USDA statistics, Americans consume an average of 51 kilograms of chicken and 26.2 kilograms of beef each year, while China consumes only 14.2 kilograms of chicken and 4.2 kilograms of beef per capita. Chinese people only eat more mutton than Americans, mainly because Americans seldom eat mutton.

Note: Americans have been eating more meat over the past decade, although vegetarianism has become a fashion in Europe and the United States in recent years, but ordinary people are not buying it. A 2022 market survey conducted by vegetarian resources (Vegetarian Resource Group), an industry group, found that only 5% of Americans were vegetarians, little changed from a decade ago.

Massive layoffs and share prices plummeted however, just over a year later, the market outlook for the artificial meat industry seems to be in trouble. Sales of artificial meat products in US supermarkets fell 14 per cent in December from a year earlier, according to market research firm IRI.

Of the two leading companies, Beyond Meat fared even worse, with net sales falling 22.5% in the third quarter of last year and a net loss of $101 million, which nearly doubled from a year earlier. Beyond Meat lost more than 3/4 of its market value throughout 2022 and now has a market capitalization of just $1.1 billion, down from the pre-IPO valuation of $1.8 billion four years ago. At the end of last year, Beyond Meat announced 20 per cent layoffs.

Impossible Foods fared relatively well, saying its revenue grew 65 per cent last year, but recently slashed its 2023 revenue forecast to $470 million-520 million from the original $560 million-620 million range, and also announced layoffs of 20 per cent. Based on Beyond Meats's current market capitalization, it is difficult for Impossible Foods to maintain its 2021 valuation of as much as $7 billion. It is rumored that founder Brown may resign as Impossible Foods CEO in the near future.

Why did the artificial meat industry suddenly cool down? According to market research firm Good Food Institute, the price of artificial meat is much higher than that of traditional meat. Beef is twice as expensive, pork is twice as expensive and chicken is three times as expensive. 20% of consumers said they would not buy artificial meat because of price.

Perhaps this is also the dilemma facing the artificial meat industry: why should consumers buy artificial meat that is expensive, tastes different and tastes different when raw meat is not expensive? According to Brian Yarbrough, a consumer analyst at market research firm Edward Jones, artificial meat is only a product aimed at a minority, but it is difficult to promote it to most consumers.

GFI's 2021 statistics show that even in the United States, where artificial meat is the cheapest, there is a significant price gap between artificial meat and real meat. Beef burger patties cost about $5 a pound in the American market, while artificial meatloaf costs more than $10.

Perhaps frustrating for the meat-making industry, ordinary consumers are not yet receptive to their promotion. Consumer surveys conducted by GFI show that most consumers care more about the taste and freshness of meat than about the nutrition, health and environmental protection advertised by artificial meat.

Photo Note: surveys show that Americans are more concerned about taste than healthy taste differences are also important reasons. A market survey of 2000 people conducted by OnePoll last year showed that only 21% of people had tried artificial meat, but 63% of respondents said they valued taste more than whether artificial meat had more health advantages. In fact, more than half of the respondents admitted that pizza was not healthy, but they just like to eat it.

Steffen Jahn, a marketing professor at the University of Oregon who studies consumer choice, said, "the artificial meat industry has been trying to simulate real meat, trying to prove that it is almost real, but the result is to make consumers more concerned about real and fake, and it turns out that (artificial meat) is not like real meat."

More importantly, many consumers still believe in the health risks of "overprocessed fake meat" and prefer natural and fresh ingredients. There are not a few people who hold this view. According to a recent market survey by Citi Global Insight, half of respondents thought artificial meat was a healthy food in 2020, but now only 38 per cent think so.

David Katz, director of Yale University's Center for Preventive Research, acknowledges that the artificial meat industry can bring advantages in environmental protection and animal welfare, but it is still doubtful whether artificial meat is really healthy because it is a super-processed food with legume protein, potato starch and potassium chloride.

Chipotle, a US-Mexico fast-food chain, insists on rejecting artificial meat ingredients, saying it is not in line with their "authentic taste". Even John Mackey, the founder of Whole Foods, the supermarket that first sold artificial meat, admitted that he didn't like artificial meat, calling it "overprocessed food."

In February 2020, the Consumer Freedom Center (The Center for Consumer Freedom), an anti-artificial meat group, even advertised in the Super Bowl, denouncing artificial meat as fake meat made up of complex chemicals. "if you can't even pronounce the name of the complex ingredients on the package, maybe you shouldn't eat it."

Perhaps the artificial meat industry will have to wait for new technological breakthroughs to improve its taste and, more importantly, to reduce costs before it can usher in a new wave of growth peaks. Last month, Impossible CEO McGuinness announced an increase in marketing spending this year to let more American consumers know their brand. According to him, only 17% of American consumers have heard of Impossible artificial meat products.

Beyond Meat also has good news. McDonald's announced yesterday that it will launch an artificial meat version of McNuggets McPlant Nuggets; in Germany next week, which will be made from peas, corn, wheat and tempura flour.

Note: McDonald's is about to launch its second artificial meat product, which is also the second artificial meat product jointly developed by fast food giant McDonald's and Beyond Meat. However, McDonald's did not disclose plans for the future listing of the new artificial meat product, saying it would decide whether to go public according to market demand.

Relatively speaking, consumers in Europe seem to be more receptive to artificial meat products than in the United States. McDonald's launched its vegetable meat hamburger McPlant as early as 2021, which is fully available in the UK, Ireland, Austria and the Netherlands, but only in some restaurants in the United States.

At the end of last year, Beyond Meat suffered a public relations crisis because of the impulsive behavior of its executives. The company's COO, Doug Ramsey (Doug Ramsey), was forced to drive home after watching a ball game at the stadium when a car was forced to jam. Furious, Ramsay got out of the car and went straight to the other driver for a good beating, threatening to kill him, and even opened his mouth and bit him on the nose. Ramsey pleaded guilty this week to wounding charges and could face three years' probation and a $1000 fine.

Immediately after the incident came to light, Beyond Meat announced the termination of its contract with Ramsey. Ramsey, who was previously the head of McDonald's chicken business at US meat giant Tyson Foods, was crucial to the development of Beyond Meat sales channels and was the project director of the two sides' joint development of artificial meat McNuggets.

But artificial meat executives actually opened their mouths to bite, which also sparked a wave of banter on the Internet. Many netizens mocked, "has he been in the artificial meat company for a long time and wants to eat meat like crazy?"

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