Where's the plant-based beef? Grocers uncertain about Beyond Meat placement

Dive Brief:

The addition of Beyond Meat in grocery stores has caused some disagreement about where plant-based meat should be placed, according to an article in Reuters that interviewed nine U.S. grocers.
Beyond Meat, which aims to compete directly with real meat and avoids the labels "vegan" and "vegetarian," states on its website that it can be found in the meat section. Grocers told Reuters there is no contractual obligation for them to do this. The plant-based burger company did not comment, but noted in its regulatory filings that its growth could be stunted depending on placement.
Some retailers like Natural Grocers place Beyond Meat in an alternative protein section to avoid confusion, while others such as Kings Foods Markets sell the products in the dairy and meat sections. The Fresh Market has placed Beyond Meat burgers near veggie burgers in the freezer aisle.

Dive Insight:

According to research from Nielsen in partnership with the Plant Based Foods Association, plant-based food retail sales totaled $3.3 billion in 2018, up 20% from the previous year. Plant-based meat sales accounted for $670 million of that total. With rapid consumer adoption of Beyond Meat and similar products, the potential added sales could offer a big boost to grocers' profits during a time when every dollar counts.

Beyond Meat’s highest priority in its grocery store placement is which section will draw the most traffic and drive the most sales for the company. While the product is vegan and vegetarian, the company isn't marketing itself that way because it wants to attract a broader customer base, including those who eat animal-based protein.

There's logic behind Beyond Meat's argument that placement will affect sales, though the meat section may not be the only hot spot. California's Gelson's Market told Reuters that when placed in the freezer section, Beyond Meat didn’t sell well, but since being moved to the vegan section, sales of the product are up 60%.

For retailers, it may be worth the potential confusion to place Beyond Meat products where the company wants them to be. While it's too early to say just how much Beyond Meat will generate in grocery sales, its highly successful IPO and subsequent stock performance indicates promising results.

The plant-based meat company is also looking to earn prime placement before other plant-based burger makers go to retail. The space is only getting more crowded, and the sooner Beyond Meat can solidify brand loyalty among shoppers and satisfactory performance for grocers, the stronger position it will have as Nestlé, Impossible Burger and others reach grocery aisles.

Beyond Meat just reported its first earnings since becoming a publicly traded company, exceeding investors' expectations, with shares jumping as high as 23% in after-hours trading.