The following report examines both the German market for meat substitutes and Beyond Meat as a company in its self. For this purpose, the report is divided into two large parts. The macroeconomic and the microeconomic analysis. In the second part, Beyond Meat's current strategies for the German and European markets are examined and suggestions for the future are made.
Plant-based food is currently a huge economic trend. 8 percent of the world's population now have a plant-based diet. About 70 percent of the world's population is reducing their meat consumption, so the market for plant-based foods is getting bigger and bigger every year. By 2017, the meat substitute market is expected to grow up to 35.5 billion US dollars.
The IPO of the US company Beyond Meat in May 2019 underlined once again how big the hype around meat substitute products really is. The stock market price grew by several hundred per cent in the meantime, at least temporarily surpassing the IPOs of Amazon, Facebook or Google. The "Beyond Meat Burger" has also been available at Lidl in Germany since 2019.However, demand significantly exceeded the quantity supplied, and so many people went home empty-handed.
TABLE OF CONTENT WJ
1. Introduction
2. Macroeconomic Analysis of Meat Substitute Market in Germany
2.1 PESTEL Analysis
2.2 Porter's Five Forces
2.3 Opportunities and Threats
2.4 Benchmarking
3. Microeconomic Analysis of Beyond Meat
3.1 Main Figures
3.2 Generic Strategy
3.3 Strength and Weaknesses
3.4 Strategies
3.4.1 Current Strategies
3.4.2 Future Proposals
3.4.3 Scenarios
4. Conclusion
References
1. INTRODUCTION
Plantbased food is currently a huge economic trend. 8 percent of the world's population now have a plantbased diet. About 70 percent of the world's population is reducing their meat consumption, so the market for plantbased foods is getting bigger and bigger every year. By 2017, the meat substitute market is expected to grow up to 35.5 billion US dollars (Statista, 2020).
The IPO of the US company Beyond Meat in May 2019 underlined once again how big the hype around meat substitute products really is. The stock market price grew by several hundred per cent in the meantime, at least temporarily surpassing the IPOs of Amazon, Facebook or Google.
The "Beyond Meat Burger" has also been available at Lidl in Germany since 2019. However, demand significantly exceeded the quantity supplied, and so many people went home emptyhanded (Finance.yahoo.com, 2020).
The following report examines both the German market for meat substitutes and Beyond Meat as a company in its self. For this purpose, the report is divided into two large parts. The macroeconomic and the microeconomic analysis. In the second part, Beyond Meat's current strategies for the German and European markets are examined and suggestions for the future are made.
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Figure 1: Forecasted Market Value of plantbased meat worldwide in billion dollars (Statista, 2020)
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Taking all points of the PESTEL analysis into account, Germany as a country provides a good environment for a potentially huge market for meat substitutes.
On the one hand, the huge meat industry with thousands of jobs and the high meat consumption per capita show the high importance of the conventional meat market in Germany.
On the other hand, we see the tremendous increase in the purchase of meat substitutes and a rising health and environmental awareness, especially among younger generations. If we look at the figures for water use and CO2 emissions for meat products and compare them with vegan or vegetarian products, the environmental damage caused by meat consumption becomes obvious.
2.2 PORTER S FIVE FORCES
Threat of new Entrance: HIGH
- Wellknown meat producers in Germany will also öfter meat substitutes in the future
- Barriers are low, which is why numerous startups are entering the market
- The German market has the highest number of new vegan food product launches by country (15 percent of new vegan products are launched in Germany)
- The threat of each new competitor depends mainly on its taste
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Threat of Substitution: MEDIUM
- "Meat"from the laboratory through artificial development (Invitro meat) Looking at Porter's Five Forces analysis, it rapidly becomes obvious how young the meat substitute market still is, and what incredible potential it hides for the future.
Due to the high potential and the relatively low barriers to entry, the threat of new market entry is extremely high (Medium, 2020) .
The power of suppliers, on the other hand, is low, as most ingredients are plantbased and can be supplied in large quantities.
Currently, the shelves of meat substitutes in German supermarkets are often empty, which means that demand exceeds supply. Over time, however, more and more competitors are entering the market and the differences in taste are becoming smaller, which increases the power of the buyer significantly (Finance.yahoo.com. 2020).
The market or products under consideration are a vegetablebased substitute for traditional meat products. Currently, however, some laboratories are working on the artificial production of real meat without animal suffering. Cells are taken from a small tissue sample from the skin of a chicken and multiplied in a nutrient solution. Tiny muscle tissue is formed from this, which finally grows into real meat in a special bioreactor. The first products are expected to be on the market in Germany in 2025. The advantage compared to the plant based substitute product is that it is likely to be real meat without animal suffering.
However, it is not yet possible to make any statements about the quality and health of this meat, which is why this risk is rated medium for the time being (Ayoub, N., 2020).
The rivalry in the market is currently still at a rather low level but will increase continuously over time. The market growth forecasts are fantastically good at just under 10 percent per year. Ultimately, however, this is a food product where the main criteria for purchase is taste, which is why the rivalry depends on the taste capabilities of the competing products (Vegconomics, 2020).
2.3 OPPORTUNITIES AND THREATS
So far, the environmental factors of the German market for meat substitutes have been analysed using the PESTEL and Porter's Five Forces analysis. In the following, the two external parts of the SWOT analysis, opportunities and threats, are used to summarise the most important points. The internal and companyrelated factors, strengths and weaknesses, will be analysed in the microeconomic investigation in chapter 3.2.
OPPORTUNITIES THREATS
- Estimated global market for plant based meat in 2027:35.5 billion US dollars
- Enormous market growth of meat substitutes (average global growth rate of al most 10 percent until 2026)
- Still high meat consumption with 60 kilograms per capita in Germany (meat consumers are potential customers)
- Risingtrends in human health, vegetarianism, veganism and the environment (amounts of vegan restaurants in Germany: 2013: 75; 2020: 242)
- Development of artificial meat in the laboratory (Cooperation between Wiesenhof and Israeli startup "Supermeat")
- Low barriers to entry lead to high market competition
- Powerful (meat) Companies start to invest in meat substitutes
- Restaurant sales drop of 70 percent in April 2020 from previous year due to pandemic crisis
Figure 2: Opportunities and threats of the meat substitute markte in Germany
Considering the opportunities and threats of the meat market, one immediately recognises the potential and enormous size in the future. However, one must also consider that many startups and especially large companies in the meat industry (e.g. Wiesenhof) would like to profit from this trend, as well.
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