Alternative Meats – Normalising Production Costs &
Partnership Scalability – 14 September 2021
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Specialist:
Title:
Moderator: Nyree Hinton (NH), Third Bridge Sector Analyst
Ryan Phillips (RP)
Former Director, Strategic Partnerships at Beyond Meat Inc
Agenda:
1. Production costs across alternative meats segments
2. Consumer perception surrounding types of alternative meats
3. Partnerships between alternative meat and foodservice companies – successes and challenges
4. Growth outlook across alternative meat segments
Contents
Q: Can you give an overview of how the plant-based products industry has evolved? What are some trending
4
categories that have opportunities?
Q: Why do you think the industry is so saturated for burgers and sausages, and why hasn’t there been a more
rapid expansion into other categories? Are there bottlenecks around taste and formulation to make these
products? Are companies with plant-based products not interested or don’t expect the demand there?
5
Q: How has the competitive landscape for plant-based products changed over the years? It seems like the
industry has been dominated Impossible Foods and Beyond Meat. What do you think of newer entrants or
the much tougher competitive environment?
Q: How has consumer perception or demand for plant-based products evolved? Is the demand sticking and
what are some pain points around taste and cost? As you said, there’s much more awareness of these
products.
Q: How has the pandemic impacted plant-based meat products? Has it accelerated trends or shifted their
focus to different areas?
5
5
6
Q: How has the alternative meats foodservice and retail channel evolved? It seems as if there has been some
continuing price war among many players.
6
Q: What do you think of key players in foodservice and the success or failure of their partnerships? Where is
overall pricing of plant-based meat products headed? Impossible was in discussions with McDonald’s at one
point but that fell through in January 2020, and there have been a number of different partnerships from the
7
big players.
Q: What are issues have key players faced subsidising plant-based protein products through promotional
activities? What production factors are suppressing profitability for plant-based products? New entrants
have been making alternative meat through lab-grown proteins in a much more scalable and affordable way.
How might this impact the broader category?
7
Q: Can consumers tell the difference between different plant-based products? If a consumer sees plant-
based meat in a shop, they might not think it’s any different than an Impossible Foods burger that may have
more emphasis on plant-based protein. Consumers may think they’re one and the same.
8
Q: Could you discuss the saturation in the plant-based products market and how that may confuse
consumers?
8
Q: How can a player differentiate to be successful in the plant-based meat sector and are channel dynamics a
factor? Some start out in retail, then move to foodservice, while some companies are starting in foodservice. 8
Q: How significant is the quality gap between alternative and traditional meats? How quickly is the taste gap
9
closing since it’s still a source of hesitancy for customers?
Q: How processed are some of these alternative meats compared to traditional sources of meat? Some can
say an alternative meat product is more processed than eating traditional poultry from a Tyson. What about
the higher demand for the overall traditional meat category and its impact on alternative meat players and
their ability to take share?
9
Q: What has been the impact of increased demand for traditional poultry and beef from large players such as
Tyson and Cargill on the alternative meat category? Are these legacy alternative meat players doing anything
different to drive higher traffic, are they re-innovating or are they just benefiting from overall category
growth?
10
Q: How does consumer acquisition strategy operate within foodservice and how may that differ from retail?
Why are big foodservice companies rolling out some of these plant-based products? Are they doing it just to
give the consumer more options or is it because they find value-add in some of these products?
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Q: Could you discuss the risk of a prolonged recovery in foodservice and its impact on the success or
strength of the partnerships between alternative meat players and QSRs or other types of foodservice
players? There’s been a big drop-off in foodservice as a whole because of the pandemic.
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Q: Where is the centre of control for securing partnerships in foodservice? Are alternative meat providers or
manufacturers driving more of the discussions and the pricing discussions with large QSRs? Are the big
competitors desperate for any type of partnership?
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Q: What are your thoughts on the sustainability and rationale of the price cuts around plant-based meats? It
11
seems like every day someone is cutting their prices or driving more promotional activity.
Q: Could you discuss the impact of marketing on changing customer perception around taste and also the
health halo surrounding some of the big players? It seems like there is a huge marketing cost associated with
putting your protein-based meat product out there. How marketing-driven is this industry compared to
other categories?
12
Q: How is private label entry impacting saturation, price or just the overall competitive landscape? Is the
private label entry a significant risk or do you think they can’t compete on production capabilities and taste?12
Q: What do you think of the trend of plant-based products developing outside the US? What are the
implications for corporations that are struggling domestically and are seeking international sales growth? 12
Q: Is there anything investors should be mindful of for alternative meats over the next 2-3 years? What are
investors overlooking that deserves much more attention?
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Alternative Meats – Normalising Production Costs &
Partnership Scalability
Transcription begins at 00:00:03 of the recorded material
NH: Welcome to Third Bridge Forum’s Interview entitled Alternative Meats – Normalising Production Costs
& Partnership Scalability. I’m Nyree Hinton. I’ll be facilitating today’s Interview with Mr Ryan Phillips,
Associate at Greenleaf Foods Inc.
Ryan, before we get started with today’s Interview, please say I agree or I disagree to the following statement:
You understand the definition of material non-public information and agree not to disclose any such
information, or any other information which is confidential, during this Interview.
RP: I agree.
NH: Could you give a brief introduction of your background?
RP: Good morning, good afternoon everyone, depending on your location, and thank you, Nyree. Yes, I’ve
been in the foodservice industry for coming up on 30 years and have been on the sales and marketing side of
the manufacturing side of the business for the duration of my career. I started out my career with Oscar Mayer
Foods and became very familiar with what we call now in the plant-based space animal proteins, as a
foundation. Then, I moved on and worked in various higher level sales roles and marketing roles at Smucker’s
before setting in at Simplot for 10 years and really becoming what I hoped to be, a valued resource in the food-
service national account arena. Calling on multi-unit operators, what some folks might consider the
Technomic top 50 multi-unit global chains across various segments of the industry and really just trying to
bring value to those folks through product offerings, menu solutions, marketing and innovation. That’s really
an overall background about me and my career.
The last couple of years I have spent in the plant-based space where I’ve been able to combine my previous
experiences in sales and marketing across geographic markets, and really tie that into the learning that has
been gained in the plant-based space, which continues to grow and be top of mind for a lot of folks in the
industry.
[00:02:34]
Q: Can you give an overview of how the plant-based products industry has evolved? What are some trending
categories that have opportunities?
RP: I think, just from a consumer perspective, it’s, I don’t want to say obvious, but the awareness is obviously
high around, I would say, burger and sausages in the both retail and foodservice space. I feel that those are two
areas that are pretty well-penetrated and, I’m not going to say saturated, but they’re definitely not saturated,
but they have been penetrated as the initial points of entry from a product offering standpoint. I think those
two categories, there may be a little bit more maturity. Again, still a lot of room for growth, but as far as
categories that may be on trend right now or where some of the more emerging opportunities may be, I would
say, from my opinion, those opportunities really lie around future innovation tied to really chicken products,
pepperoni products, pizza toppings across the board really. Then, also innovation in other parts of the food
category, other food categories besides just animal protein equivalents. Let’s say, in the beverage industry or
dairy and egg, obviously, those are tied to the animal protein industry, but really just the main areas that I
think that growth is on the horizon really would be around those categories.
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[00:04:30]
Q: Why do you think the industry is so saturated for burgers and sausages, and why hasn’t there been a more
rapid expansion into other categories? Are there bottlenecks around taste and formulation to make these
products? Are companies with plant-based products not interested or don’t expect the demand there?
RP: That’s a great question. I would say that, really, why I feel these two areas have been penetrated a little bit
further to date is really just the fact that they were the first products offered in the marketplace. As the plant-
based industry that we know today and that we know in the last several years, a lot of the initial innovation
and consumer adaption was around burgers, and then into sausages. I think that some of the other innovation
that’s forthcoming around chicken or pepperoni, pizza toppings, dairy, egg, beverage, etc, I think that
innovation lags only from the standpoint of those initial products that were launched. Let’s say burger and
sausage category products, really provided so much initial growth to the industry that it took a little bit of time
for innovation to catch up and for others to decide, “This is a place we want to play in,” but perhaps maybe
choosing their niche, whether that be one of the other categories that we mentioned. I really think it’s just the
initial wave of products being offered as well as the initial consumer acceptance of those initial offerings.
[00:06:26]
Q: How has the competitive landscape for plant-based products changed over the years? It seems like the
industry has been dominated Impossible Foods and Beyond Meat. What do you think of newer entrants or the
much tougher competitive environment?
RP: There are obviously some larger players in the plant-based space that are a little bit more established
from a brand awareness standpoint, clearly. Again, I think that that was from an initial entrance and efforts by
those folks in the space going back a handful of years. The way I really look at the competitive landscape, is
really three silos, if you will, and don’t want to confine it to three, certainly, but you have the larger players
that you referenced that are existing in plant-based and seem to be driving really awareness and interest in the
overall category. Then, you have other folks that are traditionally more aligned with processing animal
proteins, or what we would call meat companies, that are engaging in plant-based offerings as well, and they
decided to market plant-based products as well.
Then, thirdly, there are a lot of what we might consider start-ups out there in the space that are coming in and
really have identified their niche and where they might want to play in the space, whether that be in some of
the new products and new organisations that we may see like, let’s say, seafood, for example. Not everybody
coming into the competitive landscape is looking to compete within the same product categories. I think that
the landscape overall, from a competitive standpoint, I think it’s diverse. I think it’s very intriguing as you have
different people coming into it with different experiences, and then new people coming into it really looking to
carve out their own portion of the category.
[00:08:54]
Q: How has consumer perception or demand for plant-based products evolved? Is the demand sticking and
what are some pain points around taste and cost? As you said, there’s much more awareness of these products.
RP: I certainly can’t speak for consumers broadly, but as it pertains to the demand side of things, what we’ve
all witnessed over the last 5-7 years or so are really folks that, whether they be vegetarians or vegans or
flexitarians, or whether they may have dietary restrictions, whether they may have health implications that
lead to dietary restrictions, whether there’s a religious affiliation, or just folks that want more, that are just
into health and wellness specifically, I think that a lot of that, those factors combined over the last several
Private and confidential 5
years have led to really the demand for plant-based products and that it continues to grow. I think, really, the
groups that I’ve mentioned, and I don’t mean to put folks in groups, but some of the call-outs that I mentioned
for vegetarians or vegans or flexitarians, etc, those folks want more options. While those folks may have been
out there for a long while historically, as this category has expanded, those folks really are demanding and they
want and they deserve more options. I think that that has led to growth overall.
As far as forward growth, I think that a lot of forward growth, again, this is my opinion, I think there’s a lot of
growth ahead of the plant-based industry as a whole. There are a lot of areas in the business, both foodservice
and retail, that have yet to be fully penetrated. There are also other opportunities or other channels that offer
growth as well, whether those be home meal replacement or what we might refer to as meal kits, and also in
the prepared meals sections of retailers. There’s a lot of growth that remains, I think, still in the industry, for
sure.
[00:11:33]
Q: How has the pandemic impacted plant-based meat products? Has it accelerated trends or shifted their
focus to different areas?
RP: Just generally speaking about the demand as well, just jumping back to the last question if I may for a
second, just one other point I wanted to put in there as well is, obviously, Gen Z and the Millennials and their
interest and their curiosity around plant-based and the category as a whole, and the product offerings that
continue to evolve, that’s certainly a driving factor for growth in plant-based as well. That certainly shouldn’t
be overlooked, and it’s been a big part of the growth engine to date as well. As far as some of the longer-lasting
impacts or some of the impacts around COVID on the category, I would say that, from a health and wellness
standpoint and some of the health halos that are around plant-based, I’d say that the awareness has gone up
significantly just around health and wellness and how plant-based meats or plant-based products may or may
not benefit consumers in that area. The other thing that I think specific to COVID that has been a big driver is
really a focus on convenience, and really a demand by consumers for convenience.
One of the, I think, lasting impacts we may see, again, just my opinion, is really just this focus that has been
put on convenience for the consumer based on consumer demand and preference of really just more delivery
options, more outlets to order products, whether those be on mobile apps or via website, etc. Then, really,
some of the increase in sales mix that we’ve seen at drive-throughs across the industry. I think that some of
those things have been certainly, I don’t want to say elevated, but some of those things, the frequency of those
things has obviously been increased due to COVID, the desire for convenience, taking advantage of mobile
apps and alternative delivery methods as well as the increase in drive-through. Also, grab-and-go, I would put
grab-and-go options in there as well as one of the other options that we have seen people migrating towards as
a result of COVID specifically.
[00:14:33]
Q: How has the alternative meats foodservice and retail channel evolved? It seems as if there has been some
continuing price war among many players.
RP: As far as really retail and foodservice, there have been, I think, offerings in the retail space which is not
my area of expertise. There have been plant-based offerings in the retail space for a long while, for decades. I
think what really has changed, specific to your question with regards to partnerships or things within
foodservice, is really how these things have benefited the category is that they continue to build interest, and
they continue to drive curiosity. They continue to enhance awareness of plant-based, so I think when you have
things going on with certain players in the industry, whether it be foodservice or retail, or any of the plant-
based suppliers, I think it’s all good. I think it’s all very good for the space and it offers growth, based on some
of the drivers that I mentioned already, of interest, curiosity and then, of course, increased awareness.
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I think that the brands that offer or market plant-based products, I think they’re expecting to attract new
consumers, new users, potentially younger consumers. I know that any business really that you talk to, doesn’t
necessarily have to be the food industry, that’s for sure. A lot of folks out there are looking to attract Gen Z or
looking to attract the Millennials, and I think plant-based is clearly no exception to that.
[00:17:28]
Q: What do you think of key players in foodservice and the success or failure of their partnerships? Where is
overall pricing of plant-based meat products headed? Impossible was in discussions with McDonald’s at one
point but that fell through in January 2020, and there have been a number of different partnerships from the
big players.
RP: I would say, again, around partnerships, I think it’s all good based on the factors that I’ve already
mentioned, but as far as some of the success out there, obviously, Burger King has been very successful with
the innovation around their Whopper offerings and how that applies to plant-based. I think that when brands
do that, they’re obviously creating new news, they’re creating a refresh. It doesn’t necessarily have to be an
enormous campaign, but there is some sense of a brand refresh when perhaps a traditional player such as that
enters the plant-based space with an iconic menu items such as the Whopper. I think that that speaks
volumes. As far as what makes some of these things successful, really, I think that with plant-based as a whole,
the news and the messaging needs to be frequent and it needs to be fresh. I think it needs to be continuous,
and also, at times, it needs to be, or certainly can be, promotionally driven to make sure that consumers
understand that, “Okay, this is not just something that’s here today, but this is something that’s ongoing and
something that’s going to be part of our menu and our offerings going forward,” in an effort to attract new
consumers and appeal to a broader customer base.
[00:19:22]
Q: What are issues have key players faced subsidising plant-based protein products through promotional
activities? What production factors are suppressing profitability for plant-based products? New entrants have
been making alternative meat through lab-grown proteins in a much more scalable and affordable way. How
might this impact the broader category?
RP: Just for clarity, I’m not speaking directly to any issues around scalability or production capabilities, but
more generally speaking, clearly, around the issue of scalability for plant-based proteins, I would say that it’s
really more fundamental than some might think in that there are a lot of unique ingredients that go into plant-
based products. It’s really a newer supply chain, so it’s not as mature of a supply chain as some of the other
goods to market take. Also, there are some unique complexity and nuances in manufacturing products and
bringing the components together. It’s a complex process, so I think as the industry continues to build scale
and there continues to be broader acceptance and adaption to plant-based products, I think that that all leads
to good news on the horizon from a scalability and, hopefully, cost standpoint as well as far as plant-based.
Specific to your question around lab-grown proteins, if you will, I think the biggest question that I have there
is really what will consumer acceptance look like of those to-be-determined offerings? That’s really the
underlying unknown for that area, what will consumer acceptance look like? Also, I think that there may be
some concerns with regards to lab-grown proteins around what issues is it addressing or maybe not
addressing? For example, if there is a consumer who has concerns around animal welfare or has concerns
around consumption of animal products, is this truly going to be an alternative for them? Then, really, just the
other thought that I have, just really the last thought around your question, is really what regulatory hurdles
may exist around some of these offerings, whether those be around standard of identity or naming
nomenclature or whatever it may be? I think there’s still a lot more to learn around those alternative protein
offerings.
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[00:22:56]
Q: Can consumers tell the difference between different plant-based products? If a consumer sees plant-based
meat in a shop, they might not think it’s any different than an Impossible Foods burger that may have more
emphasis on plant-based protein. Consumers may think they’re one and the same.
RP: As far as seeing the products on the shelf and what that’s going to speak to the consumer, I think a lot of
that is unknown at this point based on some of my earlier points as far as what regulations will be put in place,
may or may not be put in place. I, of course, have no idea, but what that’s going to look like, what is the
message going to be to the consumer? What’s going to be the consumer-facing message around these
products? Right now, a lot of the products out there say plant-based. Will those products be under the same
naming silo? I’m not sure. I don’t have that information or that foresight, but I do think that, like I said earlier,
there will be learnings coming from that when we get there.
[00:25:16]
Q: Could you discuss the saturation in the plant-based products market and how that may confuse
consumers?
RP: Yes, I think that that really depends. It depends on what the individual consumer is seeking or what they
choose to eat. What I mean by that is that, as I mentioned, the category continues to expand and the products
continue to evolve. By evolve, I mean the products continue to get better and better and better. The learnings
that the manufacturers are gaining and implementing lead to higher-quality products and, hopefully, that will
lead to a higher level of trial and then, eventually, adaption. I would say that there’s really, right now, as we
talked about initially, there are obviously the main drivers, the main categories around burger or sausage, but
there are so many other offerings that are coming out, as we’ve seen. On Instagram, I’m on VegNews and I’m
on Plant-Based News pretty frequently, and I’m not necessarily going directly to those sites, if you will. I know
they’re not sites on Instagram, but going to those profiles, but they’re jumping out. They’re showing up on the
feed, of course, and every day it’s somebody new. It’s a new product, it’s a new brand, it’s a new company, it’s a
new offering.
I would encourage anyone who is curious about new entrants to the marketplace, they’re countless. They really
seem to be countless when you get on some of these feeds like I mentioned, VegNews or Plant-Based News,
and see some of the product offerings that are out there. Is it saturated? I don’t think it’s saturated, I don’t. I
think that there are categories, product categories, that are further penetrated that have been out there longer
that were some of the lead categories as we’ve mentioned. The opportunities and the options for people to
really pick and choose, whether it be dayparts where they want to engage plant-based, let’s say flexitarians
specifically, maybe they want to choose an option for breakfast that is plant-based, and that’s their go-to as it
applies to plant-based. Others may have a different routine or a different daypart where they tend to migrate
towards plant-based. I think that’s one of the most exciting things about the space, is that as these offerings
and options and choices expand and more people find, or have the ability to pick and choose what they want, I
think that’s only going to lead to continued growth.
[00:27:54]
Q: How can a player differentiate to be successful in the plant-based meat sector and are channel dynamics a
factor? Some start out in retail, then move to foodservice, while some companies are starting in foodservice.
RP: I would say that really the thing that we tend to, as an industry, fall back on quite a bit is taste is king. At
the end of the day, taste is king in that if it tastes good and people like it, in all likelihood they’re going to
repurchase it again. When I think about plant-based companies and new folks coming into the space, I think
that the way that somebody could distinguish themselves is to have an outstanding product and to have the
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best product in that space and in that offering. As we see through social media, as well as other forms of
communication, word travels fast, especially among folks that may be seeking some of the same alternatives or
some of the same choices. Let’s say vegans, for example, so if somebody out there likes something, I’ve learned
over the last couple of years that news travel fast, especially within plant-based so if I had to put my finger
onto one thing as to how a new entrant could really distinguish themselves, I would say by really being best-in-
class in their product offering and making sure that that messaging is frequent and consistent so that folks
know about it.
[00:29:55]
Q: How significant is the quality gap between alternative and traditional meats? How quickly is the taste gap
closing since it’s still a source of hesitancy for customers?
RP: I’d say that the taste and flavour is very subjective. It’s very subjective so one individual may think that
something is great and somebody else may decide that, “You know what, I’m just not into this. This isn’t for
me,” so I think it’s very subjective to determine or to try to determine how far we are specifically or what the
gap looks like today from plant-based offerings to, let’s say, for example, animal protein equivalents. As I
mentioned earlier, the innovation continues and the organisations that are engaged in plant-based
manufacturing are continuously working to close that gap across the board, both in quality, in taste and
texture and mouth-feel experience, the overall complete experience of consuming and eating the products as
well as price. I think that the industry as a whole recognises that there are some gaps to close and specifically
around the areas that I’ve mentioned and specifically when being compared to, let’s say, an animal protein
equivalent, for example. Not everybody that has an offering is looking to replicate the exact same experience as
one might get from an animal protein equivalent. Yes, they still want to bring plant-based products to the
market for a lot of the reasons that we’ve discussed here today but not everyone’s goal and not every product’s
goals necessarily is to be on par with animal protein. If you’re doing a burger, let’s say, for example, that’s
probably your goal but if you’re doing something else, I think some folks that entered the marketplace
understand, and I think consumers understand to a certain degree as well, that there’s still some space in
between those offerings.
[00:32:31]
Q: How processed are some of these alternative meats compared to traditional sources of meat? Some can say
an alternative meat product is more processed than eating traditional poultry from a Tyson. What about the
higher demand for the overall traditional meat category and its impact on alternative meat players and their
ability to take share?
RP: As far as, I think part of it was initially Nyree, what problems, if you will, are being solved for consumers
with plant-based. I think one of the many great things about the category and about the space is that whether
your needs are dietary or whether you have concerns related to animal welfare or whether you have ambition
to do your part to improve the environment, I don’t want to say that there’s something for everybody, although
I don’t think that’s a bad thing to say, but I think that there are a lot of different solutions that plant-based
proteins offer the consumer. How that’s assigned or aligned with a specific consumer is really based upon what
that consumer is hoping or looking to get out of it, I should say. Not hoping but looking to get out of
consuming plant-based products. As I mentioned, it could be animal welfare. It could be they just want to be a
flexitarian. They may be more health and wellness minded and feel that higher protein is something that
they’re after or it could be environmental. I think that there are a lot of different solutions that plant-based
proteins offer. Then if you could repeat the second part of your question that’d be great.
[00:34:53]
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Q: What has been the impact of increased demand for traditional poultry and beef from large players such as
Tyson and Cargill on the alternative meat category? Are these legacy alternative meat players doing anything
different to drive higher traffic, are they re-innovating or are they just benefiting from overall category
growth?
RP: I would say that the first part of your question is around the increased demand for animal protein
equivalents, whether that be chicken or pork or whatever that product may be, how that may impact the plant-
based. I think that that could bode well for plant-based. Simple supply and demand. If demand is higher and
supply is potentially, in this example, lagging, that could possibly create an opportunity for plant-based from
the supply side so I think that there is a correlation there. Do I know what exactly that equates to? Of course
not, but based on your question I think that there certainly is some correlation there based on increased
demand for animal protein and the positive impact that that actually could have on plant-based protein. Then
as far as your second part of your question, as far as some of the legacy companies, are you referring to legacy
folks, if you will, in plant-based?
NH: Yes.
RP: Yes. Okay, so I think that I certainly can’t speak for any organisation but I would say that the plant-based
manufacturers, as I mentioned earlier a couple of times, they are continuing to innovate. They are continuing
to reinvigorate the category and they’re continuing to improve their business across the board. Operationally,
cost, ingredients, nutritionally, etc. I don’t think that they’re necessarily just benefiting or sitting back and
looking to benefit off of organic growth within the category. I think that they continue to have messaging out
there and continue to innovate and continue to look to acquire new consumers.
[00:37:56]
Q: How does consumer acquisition strategy operate within foodservice and how may that differ from retail?
Why are big foodservice companies rolling out some of these plant-based products? Are they doing it just to
give the consumer more options or is it because they find value-add in some of these products?
RP: For foodservice, I think that where one of the bigger differences in vs let’s say the retail segment is from
the foodservice side, we are really a supplier so yes, we’re out generating interest and looking to increase
demand and drive demand and offer innovations to menu offerings, etc, but there also obviously has to be
interest and desire and an appetite for menuing these types of products by, let’s say, a large national or global
chain. It takes two to tango to a certain extent. You have to have the supply and you have to have a partner that
wants to be in the space. Then once that bond is formed, to answer your question as far as why are they doing
that or why they would pursue that or be interested in that, I think a lot of it is based upon consumer demand
and consumer preference and people changing their dietary habits for a lot of the reasons that we’ve talked
about today already. There are a lot of things going on out there. A lot of people that are being driven or are
now migrating to plant-based based on the offerings and some of the innovation that we’ve talked about and
the multiple categories, product categories and product offerings that we’ve talked about. I think some of these
larger foodservice companies, some of these larger foodservice operators, chain operators, they know that
consumer demand is changing and I think some of them recognise that in order to continue to attract new
consumers and continue to maintain their relevancy with new consumers, whether those be Gen Z or
millennials, etc, plant-based is certainly a vehicle to do that and something that is very appealing to them as a
result.
[00:40:53]
Q: Could you discuss the risk of a prolonged recovery in foodservice and its impact on the success or strength
of the partnerships between alternative meat players and QSRs or other types of foodservice players? There’s
been a big drop-off in foodservice as a whole because of the pandemic.
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RP: Yes. I think what I can speak to around that, Nyree, is really just the fact that I think the model may just
be shifting a little bit as we’ve talked about. Let’s say for example, there may be a change in sales mix for a
large QSR of patrons dining in or patrons going through the drive-through, or there may be a shift in overall
sales mix of how orders are being placed as we’ve talked about. Some of the mobile and some of the electronic
opportunities that there are to place orders now online, etc, I think that that’s really where we’re seeing some
of the impact of COVID. Some of these may be habit-forming as well. For example, a consumer who may have
typically done something one way, they may find convenience or the same level of satisfaction by doing
something a different way with the same end result. I used to pick up the phone and call and order my pizzas
but now I just get on the app and order it and I’m going to do it that way now going forward. Or I used to go
into the restaurant and pick up but now I’m going to switch over to a delivery app or service. I think those are
some of the changes that we have seen and that we may continue to see but I certainly can’t quantify any drop-
off from COVID or what that might look like going forward from a resurgence standpoint, etc.
[00:43:18]
Q: Where is the centre of control for securing partnerships in foodservice? Are alternative meat providers or
manufacturers driving more of the discussions and the pricing discussions with large QSRs? Are the big
competitors desperate for any type of partnership?
RP: Yes, I would say that that’s a pretty broad question. I would say, as I mentioned earlier, it really take two
to tango. I think that I wouldn’t say that one side is driving more so than the other. Obviously, the plant-based
suppliers want to have plant-based on the menus and some of the large chain operators are wanting to explore
and learn more about plant-based as well and how that might be something that they could introduce to their
consumers and to their menu offerings. I wouldn’t say really that it’s one vs the other being more dominant as
far as that connection. As far as some of the other plant-based folks how do you approach, or I’m paraphrasing
your question, but what do some of these strategic partnerships potentially look like for other folks besides
some of the larger players that exist, I think it goes back to product offering as I mentioned. There’s a lot of
curiosity around plant-based products. There are a lot of people that want to try plant-based products and it’s
important when you have that opportunity to share your product, it’s important that the product is good and
that the product is a winner and that the product can offer a solution to the customer. I think that’s really
where the opportunity exists.
[00:45:47]
Q: What are your thoughts on the sustainability and rationale of the price cuts around plant-based meats? It
seems like every day someone is cutting their prices or driving more promotional activity.
RP: I really can’t speak to the sustainability of it from an individual company’s perspective but I will say
obviously that along with any other product, whether it be, let’s say, animal protein hot dogs, there are
certainly specific promotional windows where if you have a plant-based burger or you have a plant-based
sausage or you have a plant-based hot dog, there are obviously certain windows where you have the
opportunity to capitalise on seasonality, whether that be Memorial Day, 4 July, Labour Day, all the above.
Baseball season, barbecues, picnics, etc, so I think historically, there has always been promotional activity
around the animal protein equivalents and I think we’re seeing the same type of activity around some of those
same promotional opportunities and windows for plant-based equivalent offerings. That’s really the first thing
I would say as far as promotions. I think that, let’s say, a limited-time offer or a buy-one, get-one, I think that
that type of promotional activity also helps drive awareness and hopefully gain trial for plant-based products
as well. Those are really the main things that jump out to me when thinking about promotional activity in this
space. I’m not as familiar with the retail category as we discussed so I’m not able to really speak specifically to
any type of pricing or pricing activity or anything along those lines.
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[00:48:00]
Q: Could you discuss the impact of marketing on changing customer perception around taste and also the
health halo surrounding some of the big players? It seems like there is a huge marketing cost associated with
putting your protein-based meat product out there. How marketing-driven is this industry compared to other
categories?
RP: I think it’s somewhat fundamental in that because it is a new, or newer in some instances, I think because
it is a newer category, there are specific marketing allocations that are made form a budget standpoint to help
promote and grow the brand to introduce new products and to get consumer trial. I think that there certainly
is perhaps, just like I would think any new business, that it is a little bit marketing lopsided, if you will, out of
the gate or initially, potentially, in order to achieve those things. In order to bring new products, to promote
your brand, to get your brand in front of consumers and to gain that ever precious trial of plant-based
products.
[00:49:36]
Q: How is private label entry impacting saturation, price or just the overall competitive landscape? Is the
private label entry a significant risk or do you think they can’t compete on production capabilities and taste?
RP: I’m not sure about that quite yet. I’m not sure what the future will look like as it applies to private label
products and it depends, of course, also what that private label is. There are some private label or in-store
brands that have emerged over the last several years so that it’s not so private any more, if you will. There are
some store brands that are preferred by consumers over branded products or what we would traditionally call
branded products. I’m not sure what the future is in plant-based for private label as of yet. I don’t think that
that truly has been defined but I would not expect that to be a significant drop-off from a quality standpoint
because if it is, I’m not sure how successful it would be.
[00:51:14]
Q: What do you think of the trend of plant-based products developing outside the US? What are the
implications for corporations that are struggling domestically and are seeking international sales growth?
RP: I could speak to the first part of that. Definitely, or probably couldn’t speak to the second part of that.
Obviously, it’s up to individual organisations to determine what their path for growth is going to be. As far as
from a global standpoint, there is a tremendous amount of demand. If you look at some of the countries out
there for plant-based consumption and some of the populations associated with those countries like Canada or
Germany, plant-based continues to grow. The impact that it’s had on those consumers and those markets
where you go in and you see that a certain percentage of their consumers in those nations are buying plant-
based products, it tells you where the growth is and that there are certainly opportunities for companies both
here domestically and abroad. From a global standpoint, there are a lot of players globally as well. There are a
lot of players, whether you’re in Thailand or whether you’re in the Netherlands or anywhere in between, there
are in-country suppliers or folks that are entering the plant-based space on a very consistent basis and this is
not obviously just, the interest in plant-based is not just focused in North America or the markets that we all
may be familiar with or most familiar with. It’s definitely a global demand that continues to grow. There are
some tighter restrictions or regulations around ingredients, potentially around naming, etc, in other markets
in Europe and other parts of the world and as those things continue to gain traction, some of those things may
have implication on the plant-based markets here domestically. It’s yet to be determined.
[00:53:55]
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Q: Is there anything investors should be mindful of for alternative meats over the next 2-3 years? What are
investors overlooking that deserves much more attention?
RP: I would just, what I mentioned earlier. I know it sounds very basic but to really just monitor the plant-
based market and the fact that there are, as I’ve mentioned a couple of times, there are new entrants coming in
on a daily basis. There are new products being introduced by existing players on a daily basis. There are
companies out there that may not be household names today but they are working and innovating to become
such down the road. I keep the pulse on, as I mentioned, plant-based and vegetarian-based newsfeeds or
websites or news trends, etc, and it’s been amazing to, even myself being in the space, the names and the
numbers of players that are coming forward and entering the space. I think it’s definitely an opportunity for
growth.
[00:55:22]
NH: We will now end the Interview. Thank you, clients, for joining Third Bridge Forum’s Interview. If you
would like to speak with Ryan in a private meeting or call, please contact your relationship manager.
Transcription ends at 00:55:31 of the recorded material
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