Costco stores in six Western states, H-E-B locations in Texas and other retailers will soon be selling a plant-based Better Than Beef Burger made by Don Lee Farms, the former Beyond Meat co-packer said in a release.
The California-based family-owned company said the new product is made from non-GMO plant protein, is gluten-free and vegan, and is designed "to fill a void for a nutritious and satisfying beef alternative in the plant-based burger market."
Donald Goodman, president of Don Lee Farms, told Barron's the company has been a Costco vendor since the early 1980s and this is another of the plant-based products it has developed with the retailer since last year. He added consumers can expect more products in both the deli and freezer sections in coming months.
While Don Lee Farms may not be a household name to most consumers, it's been around since 1982 and has been making vegan food products for more than 15 years. In addition to the Better Than Beef Burger, the company makes veggie burgers from sweet potato and sunflower seeds or quinoa, kale and almonds, along with chipotle black bean burgers.
Earlier this year, Don Lee launched an organic plant-based burger that it claims mirrors beef’s aroma, texture, flavor and juiciness. In an April press release, the company said more than a million of them had been sold in fewer than 60 days, making them the fastest-growing product in its category. Don Lee has spent several years working with plant-based products and the ingredients that go into them to create a more meat-like texture, taste and appearance — a lengthy history that has likely given it valuable insight into crafting a better product.
Perhaps because of Costco's long-term relationship with Don Lee and the current product development partnership, the company is not selling the Beyond Burger or the Impossible Burger — two of the most popular plant-based beef-like burgers on the market. Costco does offer a Harvest Burger under its Kirkland Signature house brand, although that product is a more veggie-style burger containing oats, brown rice, soy protein and mozzarella cheese.
Don Lee has been in litigation with Beyond Meat, whose Beyond Burger it manufactured until it became concerned over the safety of the ingredients Beyond supplied. The incidents prompted escalating disagreements. According to Bloomberg, Beyond dropped Don Lee as its co-packer in 2017, and Don Lee sued for alleged fraud, negligence and breach of contract. Beyond then countersued for alleged breach of contract. Both companies have denied the other's charges, and a trial is scheduled for May 2020.
Meanwhile, Don Lee has moved forward with its own plant-based products and reportedly has several more in the pipeline. In addition to Costco, the burgers will likely be available at Whole Foods, Albertsons, H-E-B and Publix under the Don Lee Farms label, private brands and brands of the company’s partners, Food Business News said. Don Lee also makes plant-based and meat proteins for retail, club, foodservice and school foodservice markets.
Due to the demand for plant-based burgers and other meat alternative products, it's possible Costco will eventually carry veggie-style and meat-style burgers or other items made by Hormel Foods, Tyson Foods, Nestlé or even Impossible Foods. Sales of plant-based meat alternatives jumped 42% between March 2016 and March 2019 to $888 million, according to Nielsen figures cited by AP, while conventional meat sales only increased 1% to $85 billion during that period.
This crowded field will inevitably lead to a shakeout in the category, and only those products that do the best job replicating meat at a reasonable cost with easy availability are likely to survive. It's uncertain whether the low-profile Don Lee's will have lasting power on the market, but this coming boost from Costco and its estimated 770 nationwide stores certainly can't hurt.