Courtesy Beyond Meat
- Beyond Meat shares fell as much as 7% on Wednesday, hitting its lowest point in three months.
- Nestle's Sweet Earth brand launched its "Awesome Burger" in restaurants and stores Wednesday. Impossible Foods also announced its burger is available at East Coast grocers.
- Increased competition in plant-based meat adds extra pressure to Beyond Meat and is one of the reasons Wall Street analysts are neutral or negative on shares.
- Watch Beyond Meat trade live on Markets Insider.
Two major Beyond Meat competitors - Nestle and Impossible Foods - advanced their own plant-based meat fare Wednesday, increasing pressure on the stock market darling of the industry.
Shares of Beyond Meat slid as much as 7% Wednesday to roughly $135 per share, it's lowest price in three months. The fall came after Nestle's Sweet Earth brand launched its own plant-based burger, and Impossible Foods announced that its burger can be bought in stores on the East Coast.
Competition in the plant-based meat space is one of the reasons that analysts have been largely neutral or even negative on shares of Beyond Meat. There's a relatively low barrier to entry, wrote Beyond's latest bear, Mikheil Omanadze of BNP Paribas Exane, especially for larger, established packaged-food companies such as Nestle.
Those companies have large distribution networks that make it relatively easy to compete with Beyond Meat - many have already launched their own competitors.
Until recently, Beyond Meat was the only plant-based meat alternative sold in grocery stores, which it's done since 2016. Having more brands for consumers to purchase in stores could impact Beyond Meat sales. Data from Bank of America Merrill Lynch show that most consumers go to a grocery store to try plant-based meat.
It's also where they're likely to repeat a purchase, which is important for the industry going forward. While Beyond Meat has pushed to establish a number of high-profile partnerships with restaurants, ultimately it needs prime grocery store placement to build a strong consumer base of flexitarians who replace animal protein with plant alternatives.
Multiple players are crowding into the plant-based meat market now because there's clear potential for growth going forward. The market is currently worth $14 billion in the US, and Barclays estimates that it could balloon to $140 billion in the next decade.
Read more: This Silicon Valley startup behind the veggie burger that 'bleeds' just fixed its biggest problem
The Nestle Sweet Earth "Awesome Burger" will be available for a limited time starting September 26 at a Burger Joint in Industry City, Brooklyn, the company announced in a press release Wednesday. Customers can also buy the burger and the Awesome Grounds product beginning on October 1 at a number of grocery stores including Stop and Shop and Wegmans in the US.
On the same day, Impossible Foods announced the launch of its burgers in grocery stores on the East Coast. While Impossible has long had competing partnerships with fast-food chains like Burger King, where it supplies the Impossible Whopper, it was notably missing from grocery store aisles across the US because the FDA had to approve its use of "heme", the ingredient in its burgers that makes them appear to bleed.
After the FDA approval in August, Impossible launched in Gelson's Markets stores on the West Coast earlier this month. Starting Thursday, the Impossible Burger will be available at 100 Wegmans locations in seven states and at two Manhattan Fairways.
Beyond Meat is up 452% year-to-date
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