Demand for plant-based meat substitutes like the burgers from Beyond Meat (NASDAQ:BYND) is already strong, but the growth outlook might be brighter than investors thought.
Kroger (NYSE:KR) on Thursday revealed that a few modest tweaks to its marketing approach helped those sales rise more than 75% in recent months compared with stores that were not participating in the study. Specifically, the supermarket giant moved meat substitutes over to the meat section of its stores rather than keeping them in the traditional refrigerated food sections. This shift helped sharply increase the number of customers who tried out the products. On average, consumers purchased 23% more plant-based meat products under this approach.
That's good news for Beyond Meat and competitors like Impossible Foods, but it's also good news for Kroger, which sells its own selection of brands in the niche. The retailer said its Simple Truth franchise jumped 32% in the most recent quarter and was a key contributor to its booming sales growth during the early days of the COVID-19 pandemic.
Kroger might also use the merchandising opportunity to bolster its selection at a time when some traditional beef and pork products are suffering from uneven supply and spiking prices.