Costco to sell plant-based burger made by Beyond Meat's former co-packer

Dive Brief:

Costco stores in six Western states, H-E-B locations in Texas and other retailers will soon be selling a plant-based Better Than Beef Burger made by Don Lee Farms, the former Beyond Meat co-packer said in a release. The company also makes veggie burgers from sweet potato and sunflower seeds or quinoa, kale and almonds, along with chipotle black bean burgers.
The California-based family-owned company said the new product is made from non-GMO plant protein, is gluten-free and vegan, and is designed "to fill a void for a nutritious and satisfying beef alternative in the plant-based burger market."
Donald Goodman, president of Don Lee Farms, told Barron's the company has been a Costco vendor since the early 1980s and this is another of the plant-based products it has developed with the retailer since last year. He also said consumers can expect more products in both the deli and freezer sections.

Dive Insight:

While Don Lee Farms may not be a household name to most consumers, it's been around since 1982 and has been making vegan food products for more than 15 years. Costco's long-term relationship with Don Lee and the current product development partnership could be one reason the wholesale club is not selling the Beyond Burger or the Impossible Burger — two of the most popular plant-based products on the market that are making their way to grocery stores.

In addition to Costco, Don Lee's Better Than Beef burgers will likely be available at Whole Foods, Albertsons, H-E-B and Publix under the Don Lee Farms label, private brands and brands of the company’s partners, Food Business News reported. Don Lee also makes plant-based and meat proteins for retail, club, foodservice and school foodservice markets.

Don Lee has been in litigation with Beyond Meat, whose Beyond Burger it manufactured until it became concerned over the safety of the ingredients Beyond supplied. The incidents prompted escalating disagreements, according to Bloomberg. This could be another explanation as to why Costco isn't carrying the better-known brand.

Due to the demand for plant-based burgers and other meat alternative products, Costco could eventually carry veggie-style and meat-style burgers or other items made by Hormel Foods, Tyson Foods, Nestlé or even Impossible Foods. Sales of plant-based meat alternatives jumped 42% between March 2016 and March 2019 to $888 million, according to Nielsen figures cited by AP, while conventional meat sales only increased 1% to $85 billion during that period.