Beyond Meat, the plant protein, traditional meat alternative brand, has a value equation problem.
A value equation is the internal mind-set that customers have when assessing the worth of a brand. A value equation is a mental perception that assesses value prior to a purchase. A customer-perceived value equation is what you get for what you pay multiplied by trust.
When we think about a brand purchase, we calculate its value based on the total brand experience (functional, emotional social benefits, brand character) relative to total brand costs (money, time, effort) multiplied by trust. The total brand experience is the numerator of this equation and the brand’s total costs are the denominator of the equation. Then, we consider trust. In other words, a trustworthy brand value equation.
Beyond Meat is a troubled brand. On August 5, 2022, Beyond Meat announced that it missed Wall Street expectations. This was the seventh quarter out the past eight quarters that Beyond Meat disappointed analysts and investors. It was also the seventh time that Beyond Meat posted “wider than expected” losses. On September 19, 2022, Barron’s reported that Beyond Meat had just experienced five days of falling stock price. Then, on September 21, 2022, Barron’s highlighted a stock price rise due to a partnership with Taco Bell. (Taco Bell will begin offering a Carne Asada Steak quesadilla at the same price as its “traditional” steak quesadilla.)
This is not the first time that Beyond Meat has partnered with a restaurant brand. But, positive results have never been long-lasting. Beyond Meat partnered with McDonald’s on a McPlant burger that has been a flop. Partnerships that work are good. But, the problems at Beyond Meat are bigger than a Carne Asada Steak quesadilla. Furthermore, Beyond Meat partnerships are only about 30% of sales. Beyond Meat needs more customers who purchase its products more frequently, who are more loyal and more profitable.
Beyond Meat needs to fix its trustworthy brand value equation.
Yes, Beyond Meat needs to make money, get profitable, eliminate waste, improve productivity. And, yes, Beyond Meat needs to delight customers so they look forward to purchasing more from the brand. This involves continuous improvement with renovation and innovation. Putting financial discipline and operational excellence aside, Beyond Meat’s trustworthy brand value equation is completely out-of-whack.
First, let’s look at Beyond Meat’s total brand experience; the numerator of the trustworthy brand value equation.
Beyond Meat has a great idea that has never been articulated in a relevant, differentiated experience. Beyond Meat has not communicated its total brand experience to customers and prospective customers. Sure, if you visit the Beyond Meat website you understand the mission of the brand. But, the brand has not spent a lot of time making this mission an effective lever for increasing sales, frequency of sales and profitable loyalty.
This has been an on-going problem from the brand’s inception.
Beyond Meat never relevantly differentiated itself from Impossible Foods, its main competitor before all of the big food companies started introducing their own non-meat protein offerings. Beyond Meat and Impossible Foods have very different but relevant propositions (Impossible Foods is technology and science-based; Beyond Meat is environmentally, ethically and socially responsible). And, two brands began by using two different distribution strategies (Impossible Foods chose restaurants; Beyond Meat chose retail).
Beyond Meat has not helped customers and prospective customers really understand the brand’s promise, its relevant, differentiated experience.
Brand promise is not the same as brand mission. A brand’s mission is its intent. A brand’s mission is all about what it wants to be in the future. To successfully move towards its purpose, a brand must create the experience it promises to deliver to its customers every day, everywhere and every time. Beyond Meat has not successfully let customers and potential customers know its functional, emotional and social brand benefits. Beyond Meat has not successfully let customer and potential customers know the brand’s character: the values that reflect the customer’s values and the brand’s personality.
Beyond Meat’s mission is laudable. But, a research study cited in The Guardian shows that even when people learn that huge reductions in meat consumption are essential for climate-change avoidance, people are reluctant to change behaviors when the environment is “the sole beneficiary”. Self-interest overcomes altruism. A different study from Purdue University shows that even when confronted with information about meat’s carbon footprint, people still prefer meat over plant-based alternatives.
Beyond Meat needs to provide a relevant and differentiated message about the benefits to people in addition to the benefits for the planet. For example, Beyond Meat’s products are labeled 35% less saturated fat. What is the benefit of consuming 35% less saturated fat?
Recently, the Wall Street Journal printed an opinion piece, “Beyond Meat is Beyond Hope”. The author indicated that Beyond Meat’s problem has been that there are just too few people who will eat its products.
The writer asks: Who is going to eat this? Telling us that the pool of vegetarians and vegans is too small for profitability. Only 5% of Americans say they are vegetarian while 3% identify as vegan.
However, as The Guardian points out, the non-dairy milk category is booming. “Dairy alternatives now make up 15% of the market and are worth $2.5 billion. A third of Americans drink some kind of non-dairy milk weekly.” The prospective people are out there: just give them relevant, differentiated reasons to buy.
Now, let’s look at Beyond Meat’s total costs: money, time and effort; the denominator of the trustworthy brand value equation.
Beyond Meat is very expensive, sold at a steep premium to meat. The average price of ground beef is $4.90 a pound. The average price of Beyond Meat’s ground plant protein is $8.35 a pound. At a time when inflation is forcing people to skip traditional meat, this should be an opportunity for Beyond Meat. But, instead of making the products more affordable, Beyond Meat is not allowing customers and prospective customers to become users. One reason non-dairy milk products are such a growing business is prices are affordable, below the price of organic diary milk.
Bloomberg writes that shoppers are turning towards vegetarian diets to avoid the high price of meat and chicken. Shoppers interviewed said they recognized that plant protein products were even more expensive than meat and chicken. This should be a golden opportunity for Beyond Meat. High prices and very few customers makes for a niche brand.
Now, add in the effort and time when it comes to availability of all of Beyond Meat’s offerings and the total costs of the value equation overwhelm the total brand experience. Some stores have the full array of offerings. But, not all stores. Further, Beyond Meat has its own sections in the freezer aisle. In many stores, Beyond Meat products are not situated near other plant-based protein, most notably, items from big food brands. Customers cannot compare ingredients and prices. When the denominator of the value equation is “larger” than the numerator, the brand is not considered to be a good value.
Then, there is the trustworthiness of the brand. Is the brand a trustworthy brand? Do we trust the brand to deliver its total brand experience? Without trust, brands have little value. If trust in the brand is high, then the brand has great value. But if trust in the brand is low, then the brand has little value.
If there is zero trust, there is zero value, as zero times anything is zero. If you do not know about the brand’s benefits and you have to exert effort to figure that out, you probably will not have a lot of trust in the brand. Big food companies have their own brands and customers are familiar with those big food brand names; they trust those big food brands.
Has Beyond Meat generated trust based on its mission? Do customers perceive the brand to be trustworthy? Does Beyond meat even measure its trustworthiness?
Whatever the case, Beyond Meat’s problems are bigger than its trustworthy brand value equation. But, until the trustworthy brand value equation is improved, Beyond Meat will continue to suffer. A brand cannot generate enduring profitable growth with a damaged value equation. If there is no customer-perceived value there is no brand value.
Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
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