Sep 28, 2023 · 40m · catalyst
Reviving the stagnant plant based meat market
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Host Shayle Kann and Mizuho Securities equity research analyst John Baumgartner analyze the stagnation of the plant-based meat industry, exploring the causes behind multi-year volume contractions, consumer adoption ceilings, flawed market sizing assumptions, and the technological roadmap needed for long-term category recovery.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Shayle holds 26.6% of the talking time here. How this is scored →
Shayle as informed peer 4.6 Guest teaching 5.4 Guest disagreement 1.2 Shayle pushing back 0.9
speaking balance: gold is Shayle, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 21:00 Guest dismisses tech-style iterative food development
John forcefully rejects treating plant-based meat like software upgrades, asserting that food is not an iPhone and consumers will not return for a version 2.0 if their first impression is bad.
Hardest push from Shayle ▶ 8:22 Host challenges assumptions on foodservice retail transitionShayle questions why restaurant partnerships failed to translate into sustained habituation and repeat purchases once consumers returned from COVID lockdowns.
Biggest teaching moment ▶ 31:20 Guest dismantles flawed addressable market sizingJohn provides a masterclass on market analysis errors, explaining why transferring plant-based milk market share models to meat overlooked fundamental volume-versus-value differences and medical driver disparities.
Shayle holds their own ▶ 3:07 Host frames the breakdown of standard technology adoption curvesShayle articulates a clear macroeconomic and venture perspective, diagnosing how alternative protein broke away from standard S-curve adoption models into an atypical slump.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Shayle as informed peer | Guest teaching | Guest disagreement | Shayle pushing back | Why |
|---|---|---|---|---|---|---|
| Upcoming Climate and AI Conferences Announcements | 0 | 0 | 0 | 0 | Introductory announcements, conference promotions, sponsor messages, and podcast teaser. No analytical dialogue between host and guest takes place. | |
| Technology Adoption Curves vs. Plant-Based Meat Reality | 7 | 1 | 0 | 0 | Shayle lays out a detailed framework on classic S-curve technology adoption and contrasts it with the reality of plant-based meat sales declines and venture down-rounds. | |
| Historical Sales Trajectory and Post-COVID Slump | 4 | 7 | 1 | 1 | John educates Shayle with granular historical data, explaining how the 2020 40% COVID bump distorted industry expectations before triggering 33 consecutive months of volume decline. | |
| Food Service Channel Headwinds and Operational Hurdles | 5 | 6 | 1 | 2 | Shayle probes why foodservice distribution failed to sustain growth after initial hype. John explains QSR trial failures, grill segregation logistics, and fast food operator economics. | |
| Consumer Penetration Ceilings and Health Perceptions | 5 | 7 | 2 | 2 | Shayle questions whether adoption stalled beyond coastal markets. John provides survey data on household penetration caps, the one-third 'under no circumstances' consumer block, and health-based pushback. | |
| Incumbent Market Share Shifts and Grocery Merchandising | 5 | 6 | 1 | 1 | John unpacks market share shifts, pointing out Impossible's gains at Morningstar's expense and explaining why frozen alternatives outperform refrigerated products merchandised next to animal meat. | |
| Form Factor Limitations and Consumption Frequency | 4 | 7 | 3 | 1 | John critiques the category's over-reliance on ground meat and dismisses treating food like software, noting consumers won't stick around for multiple iterative versions if their first taste is poor. | |
| Mid-Roll Sponsor Messages: Bloom Energy and Engie | 5 | 6 | 1 | 1 | Following mid-roll sponsor reads, Shayle asks about pricing hurdles. John breaks down absolute price premiums versus animal meat and relative pricing structures compared to plant-based beverages. | |
| Addressing Health Criticisms and Formulation R&D | 5 | 6 | 2 | 1 | John stresses that reformulations require a 20-year generational timeline and points out that nearly 60% of plant-based meat consumption actually substitutes non-beef meals rather than traditional beef. | |
| Venture Capital Shifts and Market Sizing Flaws | 6 | 8 | 2 | 1 | Shayle contextualizes venture capital pullbacks while John rigorously dismantles flawed 2019 TAM estimates, explaining the differences in value versus volume share and allergy demographics. | |
| Cultivated Meat Horizons, Fermentation, and Cost Curves | 5 | 5 | 1 | 1 | Shayle asks about consumer sentiment and cost parity timelines for cultivated meat. John uses the analogy of brewing beer to explain how consumers could overcome initial aversion. | |
| Future Market Projections, B2B Models, and Category Evolution | 4 | 6 | 0 | 0 | John summarizes near-term category outlooks, predicting growth in B2B technology licensing and private label expansion before concluding with light banter about oat milk. |
Statements from this episode (21)
Plant-based meat sales fell before reaching expected market penetration levels.
“They were offered at fast food chains, companies went public, et cetera, and then the traditional curve bent downward, which is to say that sales have actually declined, and we're not nearly yet at the level of penetration where that's what you would expect.”
Alt-meat venture funding drop severely outpaced the broader private market downturn.
“It's also had a bunch of downstream effects on the next generation of alternative meat companies Where funding in the private markets and venture funding is down dramatically from previous years, well beyond the overall market downturn trend.”
Plant-based beverage volume softened in 2023 following mid-teens price hikes.
“I think what you've seen more recently in the past six to nine months, you've also seen volumes in consumption soften for plant-based beverages. We think really because of just elasticity, and you've seen, you know, mid-teens price increases having been taken …”
Plant-based meat retail volume has suffered 33 consecutive months of declines.
“And what's happened since then is about, I think, 33 consecutive months now of volume declines. The category was down three percent in twenty-twenty-one. It was down eight or nine percent in twenty-twenty-two, and then this year so far in twenty-twenty-three, …”
Beyond Meat's fast-food pilots failed to stick, unlike Impossible at Burger King.
“I think Impossible has made some of the, you know, the stickiest gains, you know, with Burger King there. You know, I think Beyond Meat's been, it's been more disappointing, you know, in the sense that there were a couple of trials with you know, A&W up in Can…”
Mizuho survey: Only 10% of consumers would order plant-based restaurant meat.
“Even in our consumer surveys, there's only about, you know, maybe 10% of consumers that say, you know, I, you know, I'm likely to purchase a plant-based meat product in a restaurant, you know, rather than an animal-based traditional, you know, beef, you know, …”
Plant-based meat household penetration is 20%, compared to 40% for plant milks.
“Right now, household penetration for plant-based meat is about 20%. You look at where household penetration is for plant-based beverages, you know, plant milk, it's about over 40%. And in Europe, you know, plant-based beverages have a penetration of 50%.”
Survey: One-third of consumers refuse to buy plant-based meat under any circumstances.
“There's about one third of consumers out there tell us they're not buying plant-based meat, They're not interested. There's about 20% of consumers that are not interested in plant-based beverages.”
Impossible Foods captured 11% of the retail plant-based meat market by 2023.
“I mean, you've seen impossible go from not even in the retail market, you know, three, four years ago to about a, you know, 10 or 11% share of the market right now.”
Morningstar Farms lost 10% market share as Impossible Foods entered retail.
“The bulk of that share has come at the expense of Morningstar, which is owned by Kellogg. You've seen Morningstar's share go from, you know, 30% leading the category to about 20% now.”
Frozen plant-based meat is currently outperforming fresh refrigerated products in retail.
“But what's interesting is if you look at frozen versus fresh, you've actually seen The frozen part of the category outperforming the refrigerated fresh part of the category.”
Tech limitations confine plant-based meat to low-value ground formats, missing premium steak.
“If you look at the innovation in plant-based meat, look at the products that are out there. It's ground beef. It's sausage. It's meatballs. It's patties. It's all ground beef product, and a big part of the issue is you have technological constraints up to this…”
Software-style version iterations fail in food because poor first impressions are permanent.
“But with, you know, Beyond Meat, for example, launching Beyond Burger version, two point oh, three point oh, four point oh it's not an iPhone. You know, this is not a situation where you hook somebody on basic functionality, and they stick with you one, two, t…”
Plant-based meat commands a 20% to over 100% premium against animal meat.
“Depending on the level of price promotion and discounting, I mean, you can see plant-based meat anywhere from a 20 to 30% price premium per pound over animal meat all the way up to over double the price.”
Even consumers earning over $100,000 require price parity to buy plant-based meat.
“When we talk to consumers in our consumer surveys, you know, about You know, call it 40% of consumers, you know, even in the higher income, so a hundred K annual income and higher even 40% of those consumers are looking for price parity with animal meat. And a…”
Plant-based meat growth will require a 20-year generational horizon, not three years.
“We speak to investors, and we say, look, we're positive on the long-term growth of this plant-based category. We literally mean Generational. 20 years. This is not going to happen in, you know, a two or three, you know, year investment horizon for a lot of fol…”
Nearly 60% of plant-based meat buyers are not substituting it for beef.
“What we hear from consumers is that about almost 60% of consumers who are buying plant-based meat are not substituting for beef. It's for a food other than beef, whether it's poultry, pork, seafood, eggs, non-meat, you know, pasta, pizza.”
Plant-based milks hold 15% retail value share but only 8% volume share.
“Yes, plant-based beverage is 15% value share of the category, but because it's priced at a premium, it's about an eight or nine percent volume share.”
Cultivated meat may be an easier psychological leap than processed plant-based meat.
“You know, in some respects, I would argue that maybe it's even an easier mental move for folks than it is consuming soybean or wheat products that Taste like beef.”