Taco Bell CEO: We got "mixed reviews" for plant-based meat alternatives
Taco Bell's temporary plant-based meat products have gotten “mixed reviews,” and customers shouldn't count on a national rollout anytime soon, CEO Mark King tells Axios.
Why it matters: The plant-based meat industry has encountered a series of setbacks in 2022, undermined by inflation, underwhelming restaurant test results and troubles at industry innovator Beyond Meat.
- “This has been the toughest year for the plant-based meat industry since its inception really,” CFRA Research analyst Arun Sundaram tells Axios. “It’s not just a Beyond Meat problem. It’s an entire category problem.”
The big picture: Taco Bell, one of the largest fast-food chains in the world with more than 7,000 U.S. locations, is known for its willingness to test out a wide variety of new products.
- Any moves it makes in the plant-based space could be particularly influential, and it's tried a variety of plant-based meat alternatives in various places.
They include: The Crispy Melt Taco, a proprietary blend of soy and pea protein tested in Birmingham, Alabama, in August.
- The Beyond Carne Asada Steak, based on wheat gluten and faba bean protein, developed in cooperation with Beyond Meat and tested in Dayton, Ohio, in August.
- The Naked Chalupa with Crispy Plant-Based Shell, a proprietary blend of pea protein tested in Irvine, California, in June 2021.
What they’re saying: “We’re very committed” to exploring more plant-based items, King says, but “I do think it would work better if it was in areas that are much more open and interested in” them.
- In short, they seem to work best as regional products.
- CFRA's Sundaram says they are more popular in urban and suburban markets than in rural areas.
Be smart: Part of the challenge, King said, is that regional items can’t be included in Taco Bell’s national advertising: “The question, is how do you market it?”
Catch up fast: Taco Bell’s fast-food counterpart McDonald’s had high hopes for its McPlant burger, but it underperformed in tests and it’s not likely to roll out on a national basis.
- And Beyond Meat recently flagged what it called "ongoing softness in the plant-based meat category.” The company, which has suffered a stock decline of more than three-quarters in 2022, recently cut about 1 in 5 jobs amid declining revenue.
💭 Our thought bubble: It’s a particularly challenging time to be selling an imitation product that costs more than the real thing while inflation batters consumers.
- “These items are priced at a premium, so people are trading back down to animal meat,” Sundaram says.
Yes, but: Prices for meat alternatives have been coming down, and analysts believe the long-term prospects are positive as innovation improves taste and lowers costs.
The other side: Fast-casual chains like Qdoba and Chipotle have already introduced plant-based meats.
- Beyond Meat in October introduced Beyond Steak: "Early feedback on taste and texture has been very positive, so we’re confident this is a product consumers are going to be very impressed with,” a Beyond Meat spokesperson told Axios’ Jennifer A. Kingson.
- And an Impossible Foods spokesperson told Kingson it’s projecting "hyper-growth, with over 60% year-over-year sales growth in retail alone."
The bottom line: Plant-based meat alternatives might still be the future. But they’ll have a hard time in the present until giants like Taco Bell and McDonald’s jump on board.