Plant-based food and beverage sales in the U.S. have been on the decline over the last couple of years, given a less appealing value proposition for consumers.
In a recent Seeking Alpha poll, nearly 69% of the over 1,800 respondents said they rarely or never bought plant-based meat and dairy alternatives.
U.S. plant-based sales boomed from 2019 to 2021, but moderated in 2022, and then declined in 2023 and 2024, according to the Good Food Institute.
What caused the slowdown? A major factor has been pricing, as plant-based products are pricier than their conventional counterparts.
Another barrier is taste, with consumers preferring products that more closely replicate the taste and texture of conventional counterparts.
The slowdown has prompted a string of M&A deals in the market, including Unilever’s sale of plant-based meat brand The Vegetarian Butcher and the private equity buyout of plant-based pizza maker Blackbird Foods.
Turning to other players, Beyond Meat (NASDAQ:BYND) has become a meme stock for retail investors, rallying 16.4% in the past month. But the underlying picture isn’t so bright, with the stock down ~68% over the past year, losing nearly all its value since it first went public in 2019.
“BYND’s fundamentals remain weak, and the recent rally appears disconnected from reality, risking a return below $1 per share,” said SA analyst Pacifica Yield, pointing to its declining sales and negative profitability.
Oat drink maker Oatley (NASDAQ:OTLY) has fared relatively better, with its shares down 1.8% over the last year. “Oatly is a strong brand with high-quality products in a growing category that went through an intense transitional phase,” SA analyst Atilla Zambito wrote in a recent analysis.
However, he pointed to risks such as the company not being profitable, and its significant cash burn and debt. NASDAQ:OTLY is down 96% since its IPO in 2021, as the company conducted a 1:20 stock split earlier this year.