Beyond Meat, plant-based protein players must focus on premium opportunity - BTIG
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Beyond Meat (NASDAQ:BYND) and plant-based food companies need to streamline their focus on upscale consumers and committed vegetarians, according to BTIG.
The firm offered a number of thoughts to clients after a conversation with former Kelloggâs VP of Foodservice Sales Matthew Perry. Included in these thoughts were critiques of Beyond Meatâs (BYND) effort to crack into the QSR space and its focus on low-end products like beef jerky.
âWe left the conversation believing that the plant-based industry including Beyond Meat (BYND) should pivot back to a premium brand position, and away from chasing volume with convenience and quick-service operators,â the firm said. âOur view is anchored by the fact that beef jerky has been met with a lukewarm or even cold reception and McPlant failed to generate enough sales in its market tests earlier this year.â
The analysts noted that Perry previously worked on a plant-based jerky product that did not find much success. He noted that consumers are not keen to spend on a high-priced product in the snacking category, a category that would be better off ignored in his view. The same logic applies to product offerings from Beyond Meat at McDonalds (MCD), Dunkinâ Donuts, Subway, Yum! Brands (YUM), and more. 
âIn our view, this suggests the best path forward for Beyond Meat is to pivot back to premium brand positioning, and away from chasing volume with the mass market and quick service efforts of recent years,â BTIGâs analysts wrote.
Instead, the firm reported that Perry advised seeking penetration into more premium restaurants that court younger consumers. He added that the companies in the space should target âvegans, vegetarians, as well as K-12 and college-age consumersâ to build market share rather than attacking the mass market. Starbucks (SBUX) and Chipotle (CMG) are seen as âbetter fitsâ for the focus of Beyond Meat (BYND).
âWhile this might shrink the potential sales opportunity, it focuses on a more affluent consumer that is more receptive to messages on health, animal welfare and sustainability,â the note concluded. âAdditionally, this could give the company some pricing power, which it currently does not have.â
Read more on the earnings results from plant-based food company The Tattooed Chef (TTCF) released on Tuesday evening.