Well, strikingly authentic plant-based burgers and sausages don't even raise an eyebrow anymore.
In just five short years or so, they've become accepted and pretty commonplace.
You might say wow, okay.
That industry has gone up the mountain.
They've conquered the big thing.
The hard part may be coming next and that is differentiating in a market that suddenly becomes big and noisy with lots of competitors and a whole lot of different storylines.
Now, what
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Ethan Brown will know.
He's founder and CEO of Beyond Meat, one of the very few household names in plant based-burgers, sausages and such.
And he's here with us today to unveil two new burgers for the first time there will be not just one Beyond burger, but two distinct Beyond burgers.
Ethan top line on your new formulation or I guess in this case formulations.
The thing it's so exciting about these platforms in front of me is the ability-
You just said platforms, [LAUGH] Instead of burgers.
We see burgers, but you say platforms decode that first.
Sure, so the way we think about this is we have an asset here at the army, which is an understanding of protein and lipids from plants.
And how to get them to behave and structure in the form and architecture of animal protein, or meat.
And so we have three different platforms.
We do that across.
We have beef, pork, and poultry.
And in this case, what we've done is created some variation within our beef platform.
So that you can consume different levels of saturated fat as you have a product as you would in 80 20 or 90 10 beef.
And why that's so important to me and to our company is it I don't think it's enough to simply say, here's a great tasting burger, good for the environment, eat it.
What we really want to drive home to people is that you can have a delicious burger that's great for your body as well as great for the planet.
And this is one step further in our journey.
They taste really good.
We did extensive testing with consumers.
The point where it scored higher than our existing burger in the market.
And it delivers health benefits above and beyond what we currently have in the market today as well as competitors maybe 20.
To my eyes as a consumer, I see one is healthier and one is maybe juicy or is that kind of the rough perception someone's gonna have?
So if you think about what I'll just call today, Beyond Burger 55 that has 55% less saturated fat than its animal protein equivalent in 80, 20 beef than a lot of the competitors on the market.
And then you think about Beyond Burger 35, which has 35% less saturated fat.
And so you get a range.
So if you're somebody that just wants a really juicy session experience, go for the Beyond 35.
If you have something that you're thinking about from athletic performance or potentially heart healthy in, you want a little less saturated fat you can go with the version that 55% less saturated fat and 80, 20.
And so we're just trying to create that distinction.
That choice that consumers have in animal protein to start giving him that choice in beyond protein.
Is one of these two new product the same as the previous single burger you had or are they both a diversion from it?
So they're both a diversion in a couple important ways.
The beyond burger 35 which has 35% less saturated fat than animal protein.
Also has an enhanced flavor system.
So it's, there's over 4,000 molecules that make meat tastes like meat.
And the game is there's not one single part of meat that makes meet so satiating and delicious to the human sensory experience.
There's all these different factors coming into play under heat, that give you that incredible aroma and taste that we're used to.
So it's like a combinations problem in math.
How do you find the right combination of molecules that are gonna give that sensory experience the consumer is looking for?
And we've been just iterating, iterating, iterating year after year getting closer and closer.
And this is the closest we've gotten.
It is a mouth-watering taste.
And I think it's a improvement over the existing burger in the market today.
What will these be called?
You're referring to them as the 35 and the 55 product.
What's your go to market name?
What am I gonna see on the label?
Yeah, so there's an early tease.
We're gonna have to reveal that a little bit later.
But the way to think about it is regular burger.
And then a lean burger.
You're a highly branded product.
And you compete against what's typically sold as a pretty generic product.
It's ground beef.
Most people don't know where it comes from.
It's my grocery stores ground beef.
And the they may know about different grinds and fat mixes.
But for the most part, it's always been a generic product with some exceptions.
You are being very specific and intentional now about this brand and this particular model of that brand if you know where I'm going, is it a help or a hindrance to have to deal with that?
I enjoy it because I think the Beyond brand stands for something.
And I think it stands for a promise to consumers that we're gonna help them with their health and we're gonna help them make a contribution to the issues that they care about, whether climate or water conservation or energy conservation or animal welfare.
And so to be able to encapsulate and enclose all of that in a brand and then offer that to the consumer, I think is really powerful.
And that's a different proposition than some of our competitors, it's a different proposition than obviously animal protein.
And so I'm very loyal to that brand and the use of it in the market, and encourage our customers to use it because it's about a movement, it's got an ethos, it's not necessarily just about the product.
The product follows, and so every year we try to make the product better and better.
We are the first to acknowledge that this is not exactly the same as animal protein, but we're getting closer.
And the best thing about this, and this is from a technology perspective, something that I enjoy a lot.
I came out of the fuel cell industry, I worked for a terrific company that was a leader in proton exchange membrane fuel cells.
And the challenge there was that diesel engines kept getting more efficient at the time that I was working at the company.
Animal protein is not getting more efficient, right, and so it's standing still.
And so we are able to collapse the differences year after year through the application of science technology.
But it's really important that we create a distinction in the market as well.
You have to ask yourself not just one question but two questions.
The first is, what can science do?
And we have tons of bright people that are asking that question every day.
How can we make this product better?
But the second one is what really my job is, what should science do?
And just because you can do it, doesn't mean that you should do it, right?
And so we have restrictions on what you could put in our product.
You cannot put in synthetic colorants, you cannot put in GMOs or bio engineered ingredients.
I believe that everything you need to create meat directly from plants is already in nature, you just have to look hard enough to find it.
And that's what our job is, is to go out there and find the ingredients in nature that will allow us to skip the animal and deliver the satiating deliciousness of meat, but do it right from plants.
So I have this pet theory, and maybe I'm too in love with it.
But I see this as a Tesla model three moment.
Moving past the fanboys and early adopters, and now crossing into this chasm of a much bigger market, imminently down the road, but of people who frankly don't care if you nail it or not.
They'll find whatever works for them.
What's that like to be facing, if I've got it right, that future of a much bigger and perhaps more indifferent audience that says, Show me.
This has always been our vision is to appeal to meat consumers.
I grew up eating meat, I loved the experience, I loved KFC and McDonald's and Pizza Hut, and all the folks that work lucky enough to work with today, Carl's Jr, etc, Del taco.
So it's not about denigrating that experience, it's simply about making something that we believe is better.
And so that's the whole goal, is to find folks that are currently consuming animal protein and are willing to give this a try.
And once they do, it really is the tasting is believing.
And so they can walk away from this experience of having this bird, for example, the Beyond 35.
And they know they're having less saturated fat, they know they're having less total calories, they know they're having less total fat.
And so if it tastes just like animal protein, delivers the satiating experience of it, and then provides all these benefits.
And by the way, over time as we drop the price below that of animal protein, in my view it becomes an unusual consumer to say you know what, tastes just like it, provides me with nutritional benefits above and beyond what you can get in animal protein, is cheaper, I'm still not gonna have it.
I think that's gonna be an unusual case.
The folks over at Good Food Institute, who you know, a big advocates and coordinators in the space of replacing animal proteins.
They have this formula where they'll say if the replacement proteins can taste the same or better and cost the same or less, the dominoes fall.
Is there anything missing in that simple formula?
Is there any other factor you think has to go in there to get the dominoes to fall?
Well, I think you have to recognize the important role that animal protein played in our evolution and in our culture.
I often use the mobile phone analogy, but it's really at its core, it's incomplete in a sense.
You don't hear people defending the landline.
[LAUGH] My dad used the landline, I used the landline.
Not many.
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[LAUGH] And it's because the mobile phone is just simply better technology for us, it enables us to do more things, right?
Now, you could say the same about this, but there's a difference.
And the difference is that that we have a visceral and emotional attachment to the occasions around which we use animal protein, right?
And there's that whether it's going to the ball game or it's the the meal afterward or Thanksgiving dinner, Christmas dinner.
All these things have centered around for so long, animal protein.
And you look back on evolution, you and I would not be having this conversation today if it were not for our decisions early on to become more, rather than less carnivorous.
It did things to our brain, allowed them to expand as our.
Next rank, etc.
So there's a cultural adherence to animal protein that we need to start thinking about and working on.
And the goal there is to make sure that people understand that they're getting all the amino acids.
They're getting all the vitality and strength that they might assume they're getting out of animal protein, out of plant protein as well.
Because we've thought through the science and we're actually delivering to their body a healthier form of protein.
That's how we have to think about this.
Big food and big meat, the traditional categories that supply the vast majority of our food, including animal-based meat, seem to both in my incomprehension, they acknowledge yes.
This is an amazing product and product category and it's absolutely here to stay and we don't have any existential fears.
How does that play out?
What do they know or you know,-
I think first of all, the observation that the days of the meat industry are not numbered, is right.
It's a very big industry.
They have enormous amount of market share relative to plant-based meats.
So I think it's premature to suggest that their days are numbered.
I think you have to think about the rate of adoption and there will be a tipping point.
But that's a big one, it's not yet now, right?
As we continue to make the products better, as we continue to get that story across.
And then understanding that this is as a healthy and complete protein, yet delivers these benefits around all the things we can keep out of the product.
I think you'll get more and more consumers than as you deal with that overall long-term pricing structure.
So I think there's gonna be room for multiple players in the market, both animal protein and plant protein.
But I think over time, over a very long period of time, you will see this largely replace animal protein.
But I wouldn't put a date out there.
Okay, and one half of that GF-5 formula is cost the same or less.
Give us an update on when you can put a thumbtack on the calendar and tell us you can cost the same or less.
About two years ago, I set a goal for within five years to go underpriced animal protein in at least one category with one product.
And we're well on our way to that.
We're taking the protein as fast to our different plants.
We're running it through a system of heating, cooling, and pressure.
It's skipping that process of going through the animal.
And any micro economics course or operations class will talk about the bottleneck and how to eliminate.
And then once you do that, you can be more efficient and with efficiency you can drop cost structure and then price, etc.
We're doing that a very big way, we're taking the biggest bottleneck out of agriculture, which is the animal.
So we should be cheaper, right?
But we're not today because we're not at scale.
We will get to scale and within that timeframe I've talked about, we'll underprice at least one animal product.
And speaking of pricing, some of the pricing of animal meat comes from not only being, as you say, at scale and having many decades of efficiency and tuning.
But also, and I'm no expert in this, various degrees of price supports and various economic supports.
Do you think that would ever happen in your category, that would ever be made available in your category?
I think the biggest thing that government can do in our case is to level the playing field.
Is to allow us to compete with animal protein processors on a fair basis.
So eliminating subsidies.
I don't think we need them necessarily.
But we do take issue with, we're competing against a sector that is subsidized.
But I'll tell you this, I'm not against subsidies to agriculture.
But the new subsidy structure shouldn't be about what it is today.
We have enormous capacity here in the United States to handle this question of climate change.
If you start thinking about farmers differently and not just as providers of food, but rather stewards of our climate and stewards of our ecosystems.
They should be getting paid to handle these climate issues, to help plant the type of crops and and cover that allow us to sequester more carbon.
To do agricultural practices that are more beneficial from a carbon and natural resource perspective.
And we have a history of doing that in a very small way.
We should expand those programs and bring the farmers into the solution for climate.
We're not doing that currently, and we should.
Here we are at late 2020, Gen Z is really coming on right now.
This is just about to be their era.
We've got awareness of really good plant-based foods, meats, and other alternatives.
And we have a pandemic making a whole lot of people very aware of, hey, wait a minute.
I want clean food.
I want things that are, the microbes are not gonna get to me.
Those three things are all coming at once.
And yet at the same time, USDA still seems confident that per capita meat consumption is gonna keep gradually climbing in the USA.
Is there a dissonance there?
Yeah, I mean I would never look to the government to predict market trends.
I mean, I think that the history of that is pretty dismal.
And my sense is that disruption is the right word in this case.
And it's very hard to predict.
I've always said in my career that.
Technology has no regard for your career.
It's going to be ready when it's ready, right?
And people have trouble predicting not only the rate at which technology matures, but also the rate at which the consumer adopts technology.
Things can turn overnight with the right breakthrough, and so I know those projections are out there, but they are often built on.
Models have changed very swiftly, and my sense is this Pretty quickly.
Let's finish up with a little piece of fun futurism here.
Some folks who are aware of the concept of what is often called cultured meat that is grown from meat sells without using the entire sentience animal.
I know it's not eminence many guesses as to when it will hit the market.
Let's just play a game and say it hits the market next year.
It can go out there and it can say.
We are meat, and yet have also been tuned because we come from an industrial process to have a whole bunch of benefits that maybe animal meat doesn't have.
How would you if you had to today, I know you don't, how would you position your products against a future cultured meat, that is meat?
So I mean a lot, a lot of that sector, I looked at a lot of technology and in sort of the mid 2000s that was taking that approach and talk to some of the scientists in the space.
And the thing that I wasn't able to come for with was the sense that it was a science project that did not have a definite endpoint to in terms of commercialization, speaking to what I just said before around not knowing the timeline as well as I wanted to understand it.
But there's some great companies working on it, Memphis meats is one of them.
And, sort of respect what they're doing and I do hope they get to market.
I'm not somebody that, I'm not an engineer, so I'm not particularly wedded to any specific approach to how you do things.
If there's a technology that comes along, it's better than what we use today to replace the animal with plant-based material, I'll use it.
And in this case, if it's something so radically different and better, I would consider it.
But my concern with that is one, getting people to feel comfortable eating it.
Because ultimately we're conservative that we put in our mouths.
We're not concerned about the gadgets we use.
We are conservative put in our mouths and that's why I have these strict guardrails here.
We wanna eat like our grandparents, we just wanna eat healthier, and there's an evolutionary component to that if you aren't careful about what you put in your mouth that could kill you.
But, there's also the question of nutrition right?
If it is animal protein, And you read all the literature about animal protein, and this is not from PETA or some sort of left leaning animal rights group but just go to NIH, go to Harvard medical, go to UCLA.
It seems like a quarter doesn't go by without some piece of feasibility.
Some some study coming out that suggests that there's a high correlation between the consumption of animal protein and certain chronic diseases.
So even if you're creating it, without using the whole animal, you're gonna run into some of those issues.
And those are the ones that would concern me the scale, the time and we can get to market to health implications of the continued use of animal protein.
And consumer acceptance.
Ethan Brown is CEO of beyond me.
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