Issue No. 93: Meat vs. “Meat”

Courtney Powell

As the pandemic persists, plant-based meat is gaining momentum. More than ever, consumers are eating up protein alternatives. At the same time, investors are doubling down on the space.

Are we destined for a meat-free future? Not so fast.

Leading the Way

Beyond Meat and Impossible Foods are mainstreaming replacement meat.

In 2019, Beyond Meat successfully IPOed, sending shares soaring 163% from the $25 opening price. BYND is currently trading at $126 with a market cap hovering around $8B.

Impossible Foods has also been on quite the run. Earlier this month, Impossible added $200M investment on top of a $500M funding round that closed back in March. Since its founding in 2011, the company has raised $1.5B and is valued north of $4B.

As they battled it out, both companies nailed product-zeitgeist fit – tapping celebrities, athletes, and rappers to shift culture and reshape eating habits. The result? Avoiding meat is cool. More importantly, opting out isn’t an all-or-nothing proposition.

While less than 5% of Americans identify as vegan or vegetarian, almost 40% of the population is actively trying to eat more plant-based foods. Plus, according to Impossible Foods, nine out of 10 consumers of its animal-free burgers eat meat. Clearly, the company is winning over meat-eaters.

COVID’s Impact

Pre-COVID, consumers were warming up to the idea, and taste, of plant-based meat. Then, a global pandemic shined a spotlight on meatpacking plants.

With the appalling conditions on full display and meat shortages hitting close to home, consumers were forced to confront the ethics of Big Meat in a manner not seen since Upton Sinclair’s 1906 novel The Jungle caused widespread backlash.

Personal health, religious beliefs, environmental concerns, and animal welfare were always part of the equation. They weren’t deal-breakers, though.

But when meatpacking plants became coronavirus hot spots—as 43,700 workers tested positive and 184 died—the true horrors revealed themselves. As millions of pigs, chickens, and cattle are euthanized, the flaws of the existing food system are becoming too big to ignore.

Plant-based food makers are hoping to seize this moment. And consumers are signaling an appetite for animal alternatives.

During the nine-week period ending May 2, grocery sales of plant-based meat alternatives were up 264%. Meat aside, retail sales of plant-based foods outpaced total food sales during the pandemic.


With companies like Beyond Meat representing what’s possible, and as COVID accelerated consumer demand, investors and startups are going all in on plant-based foods.

  • The alternative meat market could be worth $140B by 2030.
  • Meat consumption could cost the global economy $1.6T annually by 2050.
  • Switching to a plant-based diet could save 8M lives by 2050 while reducing greenhouse gas emissions by two thirds.

Eyeing this expansive opportunity, more than 20 plant-based meat startups raised about $1.4B from venture investors in the first seven months of 2020. And that was before Impossible Foods added another $200M. As the year goes on, the number could easily surpass $2B, dwarfing the $534M invested in 2019.

While plant-based protein paved the way, lab-grown meat, seafood alternatives, plant-based dairy companies are gaining traction. Already this year, a number of funding rounds speak to this trend:

Meat: Memphis Meats raised $161M for cell-based meat, Nature’s Fynd landed $80M to grow meat from volcanic microbes, and plant-based chicken nugget company NUGGS received $4.1M.

Seafood: Good Catch added $32M, cell-based seafood maker BlueNalu raised $20M, and Shiok Meats raised $3M to make cell-based shrimp, lobster, and crab.

Dairy: Califia Farms landed $225M, Perfect Day secured $300M, and Oatly raised $200M. [More from Fitt Insider: The Quest for Cow-Free Milk]

Meat is King

There’s no denying the potential of plant-based alternatives. But, for now, meat still dominates the dinner table.

  • The global meat market is valued at $1.4T, expected to reach $2.7T by 2040.
  • Global meat production has more than quadrupled since 1961.
  • Plant-based meat accounted for 2% of retail packaged meat sales in 2019.

While the upside certainly benefits the plant-based disruptors, it’s still an uphill battle. Among the potential hurdles, consumers cite cost, convenience, and taste as barriers to eating more plant-based foods.

In response to a national survey by the Yale Program on Climate Change Communication, close to 60% said plant-based alternatives are too expensive. Half of the respondents think plant-based meals are more expensive than meat-based entrees. And more than 60% said they would choose plant-based foods more often if the taste improved.

As lab-grown options become more widely available, cell-based meat will face similar barriers. In 2013, cultured meat was about $1.2M/pound. Now, it’s closer to $50/pound. But that’s still too high, preventing companies from bringing cell-based meat to market.

Better for You?

Ultimately, the promise of plant-based foods is that they’re better for you and better for the environment. But, that’s not always the case.

On the proposed benefits to the environment, plant-based options lessen the impact of livestock farming. But researchers worry that companies like Beyond Meat and Impossible Foods paint with a broad brush, positioning their products as a cure-all for climate change.

As Marco Springmann, a senior environmental researcher at the University of Oxford, put it: “Beyond and Impossible go somewhere towards reducing your carbon footprint, but saying it’s the most climate-friendly thing to do — that’s a false promise.”

Similarly, the sales pitch for supposed health benefits blurs the line between marketing and misleading.

Plant-based burger makers would have you believe their patty is healthier than an all-meat burger 100% of the time. But is an Impossible Whopper from Burger King better for you than a lean, locally sourced grass-fed burger? We know what we’re having.

The problem extends past meat to the entire “alt” food category. Plant-based is quickly becoming a buzzword. Like gluten-free before it, marketers hope plant-based becomes synonymous with healthy. And it’s working.


Plant-based foods, including protein alternatives, will help solve some of the numerous issues we’re facing — all while building massive businesses in the process. But like most things, it’s complicated. For now, as we look to reinvent our food system, Big Meat is on notice.

💭 On Second Thought...

Like any fitness business reliant on exercising in-person, ClassPass has been crippled by the pandemic. Complicating matters, one backer recently reneged on its commitment to fund the company.

News: Hilton Worldwide Holdings Inc. is backing out of a 2019 agreement to invest $17M into ClassPass’s $285M Series E funding round.

  • Hilton agreed to the investment in December of last year, with a provision allowing for the cancellation of the payment. Hilton pulled the plug in July.
  • In response, ClassPass is suing Hilton, alleging that the hotel chain’s decision to bail wasn’t in good faith.

The big picture: Both travel and fitness have been hit hard by COVID. With its own business in trouble, Hilton is looking to conserve capital by forgoing an investment in another struggling sector.

Unicorn status: For its part, ClassPass started the year with a billion-dollar valuation. It has been a rough ride ever since.

In his appearance on the Fitt Insider podcast, ClassPass CEO Fritz Lanman told us that the company’s revenue dried up as “95% of our gyms and studio partners had to close their locations down.” Soon thereafter, the company laid off or furloughed just over half its employees.

An attempt to remain relevant, ClassPass relaunched its digital platform, enabling at-home workouts. The company also added personal training. Meanwhile, there’s a battle brewing with Apple over commission ClassPass owes to the tech company for virtual classes.

Punchline: As gyms slowly reopen, it’s a long road back to full occupancy — and pre-COVID revenues. In the end, the slowdowns may strip ClassPass of its unicorn status.

🔑 Top Secret

Quarantine can’t keep fitness seekers from breaking a sweat. Enter the rise of speakeasy gyms.

Hush-hush: From LA to New Jersey, underground gyms are popping up across the country — a development that’s akin to Prohibition-era bars. Like past attempts to ban alcohol, cutting off access to gyms has forced exercisers into the shadows.

Speaking to NPR, Jeffrey Miron, an economist at Harvard University, explained the development, saying: “Prohibitions don’t eliminate things. They drive them underground.” And gyms are no exception.

Sold out: Sneaking into the gym isn’t the only result of COVID shutdowns. Another unintended consequence of prohibition, black markets begin to emerge. In fitness circles, this fact is best represented by equipment shortages.

When quarantine started, we covered the rush on workout gear. From dumbbells to kettlebells and even Peloton bikes, there was no equipment to be had. Months on, the problem persists.

Companies like Rogue Fitness and SPRI aren’t fully stocked. Likewise, DICK’S Sporting Goods has near zero availability. Meanwhile, what is available on sites like Craigslist or eBay is priced with mind-blowing markups.

Takeaway: When gyms get back to business, will at-home workouts become a thing of the past? Time will tell, but for now, underground gyms and equipment manufacturers will continue to cash in.

📰 News & Notes

💰 Money Moves

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