Meat substitutes
IMAGO / AFLO 
Beyond Meat gave a rather weak outlook in its quarterly report - and received the receipt from investors for it.
GERMANY, Frankfurt. Food manufacturers are not having an easy time on the stock markets at the moment - even when it comes to the trendy veggie products: US manufacturer Beyond Meat of meat-free alternatives crashed last week, Oatly is bobbing along and German vegan pioneer Veganz also had to accept losses after its initial listing this week.
Investors didn't quite like Veganz on the day of its IPO: On Wednesday evening, the share was worth just under five percent less than when it was issued. Veganz CEO Jan Bredack was not very impressed by this: he and his employees were "thrilled and flashed", said Bredack. "We are not interested in the share price itself today, because we think long-term." Not only does he want to invest the investors' money in setting up his own production and expansion, but he also expects the IPO to give his brand more visibility.
In the stock market, Bredack is a pioneer, as he was when he founded his vegan brand ten years ago. Time and again, food startups like Mymuesli have flirted with going public, but postponed the plans. So far, there have been no comparable IPOs on the German stock market. That's because the industry is struggling with investors: on the New York Stock Exchange, meat substitute maker Beyond Meat plunged as much as 20 percent on Wednesday night after a weak quarterly outlook. Oat drink maker Oatly has also taken a sobering turn after initially soaring.
While experts say the substitute category has enormous growth potential, they also point to clear risks in its development. "The products are often too expensive compared to others and some are not yet mature in terms of taste," says Maria Castroviejo, senior analyst at Raboresearch Food and Agri. She also criticizes the high processing levels of the substitute products, "which do not match the supposed health effect." Nevertheless, the expert considers Germany to be a particularly interesting market for meat and milk substitutes. "The share of these products is already relatively high, and yet there is still a lot of potential due to the size of the market." 
A study by the Dutch Rabobank says that despite strong growth, substitute products will remain niche for a long time. As afz reported, the bank expects each to account for a significant single-digit share of volumes by 2035. From the year 2030, for example, plant-based drinks are expected to be priced at the same level as their substitutes. They are still often more expensive. "Those who reach for milk or meat alternatives hardly pay attention to the price," says Pascal Lanquillon, who is responsible for purchasing at Edeka Niemerszein. In the Niemerszein stores in Hamburg, the sales share is already significant. For milk versus milk substitute, the ratio is 80 to 20 percent.
In this environment, Veganz is positioning itself as a kind of sales service provider that passes on products from contract manufacturers to retailers under its own brand. Experts doubt that this principle will be economically viable in the long run. "The model has a certain expiration date," says Werner Motyka, food specialist at consultancy Munich Strategy. "Retailers recognize which products are doing well and can then quickly identify suppliers and launch their own products with them."
Motyka also expects a shortening of the value chain for vegan products. "So far, prices are also so high because numerous upstream suppliers are involved and also want to earn," says Motyka. With increasing volumes and more experience in production, this is just changing, he adds. "In milk substitutes, development is particularly advanced and there are already products for less than one euro," he says. These cost advantages could then be exploited, especially by the big players in the market. Should inflation significantly increase the cost of living in the coming year, "it may become tight for more sophisticated, more expensive products". The shares of Veganz are also a bet on the future: with a turnover of around 27 million euros, the company made a loss of almost five million euros last year. Veganz wants to achieve the turnaround "as quickly as possible", but without naming a specific target. According to the company, the construction of the production hall in Brandenburg, which cost around 12.6 million euros, is underway. Among other things, the new location is expected to increase sales from its own production from the current 0.3 percent to up to 30 percent by 2024. In this way, the company says it wants to secure "additional autonomy in the face of expected rising demand".
This article first appeared on fleischwirtschaft.de sister platform www.lebensmittelzeitung.net.
In the stock market, Bredack is a pioneer, as he was when he founded his vegan brand ten years ago. Time and again, food startups like Mymuesli have flirted with going public, but postponed the plans. So far, there have been no comparable IPOs on the German stock market. That's because the industry is struggling with investors: on the New York Stock Exchange, meat substitute maker Beyond Meat plunged as much as 20 percent on Wednesday night after a weak quarterly outlook. Oat drink maker Oatly has also taken a sobering turn after initially soaring.
While experts say the substitute category has enormous growth potential, they also point to clear risks in its development. "The products are often too expensive compared to others and some are not yet mature in terms of taste," says Maria Castroviejo, senior analyst at Raboresearch Food and Agri. She also criticizes the high processing levels of the substitute products, "which do not match the supposed health effect." Nevertheless, the expert considers Germany to be a particularly interesting market for meat and milk substitutes. "The share of these products is already relatively high, and yet there is still a lot of potential due to the size of the market."
Imago / Panthermedia
A study by the Dutch Rabobank says that despite strong growth, substitute products will remain niche for a long time. As afz reported, the bank expects each to account for a significant single-digit share of volumes by 2035. From the year 2030, for example, plant-based drinks are expected to be priced at the same level as their substitutes. They are still often more expensive. "Those who reach for milk or meat alternatives hardly pay attention to the price," says Pascal Lanquillon, who is responsible for purchasing at Edeka Niemerszein. In the Niemerszein stores in Hamburg, the sales share is already significant. For milk versus milk substitute, the ratio is 80 to 20 percent.
In this environment, Veganz is positioning itself as a kind of sales service provider that passes on products from contract manufacturers to retailers under its own brand. Experts doubt that this principle will be economically viable in the long run. "The model has a certain expiration date," says Werner Motyka, food specialist at consultancy Munich Strategy. "Retailers recognize which products are doing well and can then quickly identify suppliers and launch their own products with them."
„So far, the prices are also so high because numerous upstream suppliers are involved and also want to earn.“
Motyka also expects a shortening of the value chain for vegan products. "So far, prices are also so high because numerous upstream suppliers are involved and also want to earn," says Motyka. With increasing volumes and more experience in production, this is just changing, he adds. "In milk substitutes, development is particularly advanced and there are already products for less than one euro," he says. These cost advantages could then be exploited, especially by the big players in the market. Should inflation significantly increase the cost of living in the coming year, "it may become tight for more sophisticated, more expensive products".
Veganz still in the red
This article first appeared on fleischwirtschaft.de sister platform www.lebensmittelzeitung.net.
Source: lebensmittelzeitung.net, fleischwirtschaft.de / dfv media group
