May 5, 2020 / 10:40 PM / 23 days ago

UPDATE 1-Beyond Meat plans U.S. discounts, hopes to replace beef on summer grills

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By Martinne Geller and Siddharth Cavale

May 5 (Reuters) - Plant-based burger maker Beyond Meat plans to offer large value packs and discounts to some U.S. retailers this summer, hoping to grab a greater share of the market as prices for beef rise amid production disruptions caused by the coronavirus pandemic.

The value packs, which will be frozen, and the greater-than-normal discounts are aimed at narrowing the price gap between Beyond’s plant-based burgers and beef, an issue some financial analysts see as slowing widespread adoption of Beyond’s burgers.

“It’s putting us closer within range, and we’re going to try to further reduce that gap,” CEO Ethan Brown told Reuters on Tuesday. He added, however, that the discounts would be temporary.

“We’re not going to do anything on long-term pricing,” he said.

Beyond Meat’s premium in the market can be pronounced. During the first quarter, Beyond’s ground beef and beef patty alternatives were priced at around double and triple the price per pound of traditional ground beef, according to Wells Fargo.

Beyond posted better-than-expected quarterly sales on Tuesday.

The coronavirus crisis has idled U.S. meat plants and slowed production. Some processors shut large slaughterhouses as the respiratory illness spread among workers. Prices for beef shipped to wholesale buyers in large boxes have climbed to record highs, just as consumers want to start grilling hamburgers and steaks for seasonal outings and as restaurants seek to reopen.

At U.S. retail stores, fresh meat prices rose 8% in the week that ended on April 25, according to Nielsen data.

The El Segundo, California-based company had been working to reduce product prices even before the pandemic’s economic fallout, which will likely lead consumers to tighten their purse strings.

“We will continue to keep pace on our steady march for our long-term objective of being able to underprice animal protein in certain product lines,” Brown said on a conference call.

Wells Fargo said price was a factor keeping about one-quarter of people in a survey from trying plant-based products. Taste concerns were a factor for more than a third.

Reporting by Martinne Geller; Editing by David Gregorio and Aurora Ellis

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