Beyond Meat is betting that a move into protein drinks will turn around sales and bring consumers back to plant-based meat.
President and CEO Ethan Brown said in an earnings call last week that the company is uniquely positioned to compete in the rapidly expanding functional beverage market because of its experience with formulating plant-based protein.
Earlier this year, the company announced Beyond Immerse, a protein-packed sparkling beverage, which was made available for a limited time through Beyond’s e-commerce site. Immerse is launching across New York this summer, through Beyond’s partnership with distributor Big Geyser.
On the call last week, Brown said the beverage is meant to tap into consumer demand for drinks with added fiber, vitamins and electrolytes in addition to the high-protein content.
Beyond Immerse is the first product to launch under Beyond’s broadened scope, with the company recently changing its name to Beyond The Plant Protein Company to reflect its ambitions outside of alternative meat. After early success, the company expanded Immerse to include more flavors.
Brown said Beyond has been acting as “a beverage company in hiding,” and the company has a board of “tremendous expertise.” Board members include former Coke CFO Kathy Waller, Honest Tea founder Seth Goldman, and Boston Beer founder and CEO Jim Koch.
The company is "leveraging that expertise" to ensure the move into beverages is done "in the smartest way possible," Brown said.
In its 18-year history, Beyond has faced lawsuits over trademark and labeling concerns, among other issues. It has also dealt with financial challenges as demand for plant-based meat has significantly fallen.
During its first quarter, Beyond’s net revenue fell 15% to $58.2 million.
Consumer skepticism around plant-based meat never truly faded, and Brown said that Beyond has innovated with plant-based protein "under more scrutiny than any other company ever.” That could make it easier for the company to develop in adjacent product categories like protein drinks, which is more palatable to shoppers, Brown said. The company is looking to move out of what Brown called a “cloud of misinformation” that he claims impeded its growth.
“I believe that because we've chosen to confront challenges, criticism, and incumbent industry campaigns against us by innovating more intensely, taking perceived weakness and seeking to create strength from it, we've developed disciplines and capabilities that allow us to produce winning products in adjacent categories,” Brown said.
The expansion into beverages could also convince consumers to try Beyond's core category of plant-based meat.
Brown said the company is working to stabilize the plant-based meat segment by expanding distribution and building its frozen retail brand. Beyond has struggled with a hit to sales after some retailers began moving products from the fresh refrigerated section to the frozen aisle.
“I believe that introducing consumers to our brand and our foundational commitment to great taste, clean ingredients, and plant-based nutrition in less controversial applications, we will bring back many to the center of the plate,” Brown said.
