How Beyond Meat became a $550 million brand, winning over meat-eaters with a vegan burger that ‘bleeds’
In 2018, U.S. consumers ate roughly 13 billion burgers, according to data from consumer trends market research company NPD Group. And burgers are consistently one of the most popular items on menus across the country.
Yet eating too much red meat can increase your risk of everything from heart disease to certain cancers, and the beef industry has a huge impact on the environment.
Still, people love it.
So what is it about burgers? Maybe it’s the juiciness people can’t resist, or that distinctive savory umami flavor. Maybe it’s the American-ness of it all.
Plant-based “meat” producer Beyond Meat is betting on it: The company is taking on the beef burger with Beyond Burger, a vegan veggie-based patty that is meant to look, cook, taste and even “bleed” like red meat, but that is healthier and more sustainable.
“The burger is something people love,” Ethan Brown, founder of Beyond Meat, tells CNBC Make It. “And so we went after that core part of the American diet.”
It’s working in a big way.
The company has famous investors like Bill Gates, Leonardo DiCaprio and even former McDonald’s CEO Don Thompson and America’s largest meat processor, Tyson Foods.
And since their debut at Whole Foods in May 2016, Beyond Burger patties have made their way into tens of thousands of supermarkets (from Kroger and Safeway to Whole Foods), restaurants (from TGI Friday to Carl’s Jr.), hotels (like The Ritz Carlton, Hong Kong) and even sports stadiums (like Yankee Stadium).
Beyond Meat says it has sold 25 million Beyond Burgers worldwide. The company recently filed for an IPO and is reportedly worth more than half a billion dollars.
A vegan burger that ‘bleeds?’
Just don’t call Beyond Burger a veggie burger. It may be 100 percent plant-based (and GMO-, soy- and gluten-free), but this vegan patty is meant for meat-eaters too.
“[W]e’re reaching mainstream consumers that are interested in healthier forms of meat,” Brown tells CNBC Make It.
To accomplish a juicy, meat-tasting product that carnivores will crave, Beyond Meat biophysicists figure out, at a molecular level, what it is that makes meat taste and behave like meat. They then identify plant materials that behave the same way, to replicate it.
So “we like to think of meat, not from its origin — say from a chicken or a cow — but in terms of … the proteins, the carbohydrates, the lipids, the minerals and vitamins, all of which are available — except for cholesterol — in the plant kingdom,” says Beyond Meat biophysicist Rebecca Miller.
The lab technicians at Beyond Meat’s research and development lab in El Segundo, California, are even trained meat sommeliers, and they are constantly innovating on the product.
The main ingredients in the original Beyond Burger are pea protein, beet coloring and beet juice to make it “bloody,” and potato starch and coconut oil to create juiciness. Beyond recently launched its 2.0 burger (available only at Carl’s Jr. and A&W restaurants for now), which also includes brown rice and mung bean proteins, for a meatier taste and texture, according to the company’s website. Each 4-ounce Beyond Burger patty has 20 grams of protein and about 20 grams of fat, which is comparable to a beef patty.
Many are huge fans of Beyond Burger, which like a beef burger, can take grill marks, cooks slightly pink in the middle and releases juices when you bite in.
“It’s so meaty, it’s almost kind of freaky,” says vegan mom Emily Landry on her @mrs.modernvegan Instagram, after trying Beyond Burger at a Carl’s Jr. drive through.
“I’m not vegan … but I promise, this is actually really good,” says meat-eating music producer That Orko after taste-testing Carl’s Jr. Beyond Burger on pop singer Miss Krystle’s YouTube channel.
Two CNBC Make It staffers who tried Beyond Meat products also liked the burger but were even more impressed with its Beyond Sausage. “The burger is very tasty,” but the sausages, “they could be real,” says producer Mary Stevens.
Still, Beyond Burger is processed (the plant ingredients are put through heating, cooling and pressure to turn them into a meaty substance), no more than vegan junk food, say some critics. (“It’s a process we’re proud of, and one we feel consumers are more comfortable with vs. the process of traditional livestock production,” says Allison Aronoff, Beyond Meat’s senior communications manager.)
And although eating a plant-based “meat” is healthier than red meat in many ways, it can be higher in sodium than beef, says dietitian Jen Bruning. (One Beyond Burger patty has 380 milligrams of sodium according to the company website; for comparison, Wegmans 80/20 ground beef patties have 90 milligrams per patty; the average fast food single patty burger has 378 milligrams of sodium.)
Beyond big business
Whatever your burger pleasure, targeting meat-eaters is a smart move — there are way more of them than there are vegans and vegetarians. Only 5 percent of Americans identify as vegetarian and 3 percent vegan, according to a 2017 Gallup poll. Those numbers haven’t changed much in the last decade or so.
Brown says the company found that 93 percent of the consumers in conventional grocery stores that are buying a Beyond Meat product are also putting animal meat their basket. “So they’re buying not only plant based meat, but they’re buying animal meat and that’s a really important breakthrough for us,” Brown tells CNBC Make It.
One tipping point in bringing plant-based “meat” to the masses has been the increase in product quality thanks to brands like Beyond Meat, James Kenji López-Alt, chef/partner at Wursthall restaurant in San Mateo, California, tells CNBC Make It.
“Tens of millions of dollars have been invested into researching this product and making it better and making it more real meat-like. And I think we are … 99 percent of the way there,” he tells CNBC Make It. “It’s close enough that people eating it enjoy it the same way that they enjoy actual ground beef.”
Plus, he says, prices have “reduced drastically” to about the same amount as meat. (At Bareburger restaurant in the Hell’s Kitchen neighborhood of New York City, a Beyond Burger costs $12.95 and a comparable beef burger is $11.99. At the grocer, Beyond retails for about $5.99 for two patties, while four Wegmans patties retail for about $5.44 online.)
All this has made Beyond Meat big business.
Beyond Meat products are in more than 32,000 grocery stores, including Kroger, Safeway, Publix, Target and Wegmans. And Beyond Burger has menus from Fridays and Del Taco to Hamburger Mary’s Bar and Grill to upscale Brasserie Ruhlmann in New York City; they’re served at universities from Ohio State to Harvard and even theme parks like Legoland.
While TGI Fridays declines to share sales data, its senior director of food and beverage innovation David Spirito tells CNBC Make It that Fridays has guests saying they came to Fridays specifically for the Beyond Burger.
And burgers are not the only plant-based “meat” Beyond Meat sells. It also sells sausage, chicken strips and beef crumbles, and has other products in the works.
“We want to make bacon, we want to make steak, we want to make the most intricate and beautiful pieces of meat,” says Brown.
In November, Beyond Meat filed for a $100 million initial public offering, reporting a 167 percent increase increase in revenue (to $56.4 million) for the first nine months of 2018 from the same period in 2017.
The company has grown from a $4.8 million valuation in 2011 to $550 million in November 2017, when Beyond Meat closed its latest ($55 million) round of funding, according to private market data company PitchBook. In addition to Gates, DiCaprio and Tyson, notable investors include Twitter co-founders Biz Stone and Evan Williams, Honest Tea founder Seth Goldman, venture capital firm Kleiner Perkins and the Humane Society of the United States.