One of my favorite words is ersatz, which refers to something artificial that is an inferior imitation or substitute, such as ersatz coffee made of chicory. In that regard I ask, is cauliflower rice really rice? And what about Almond Milk? Non-meat hamburgers for vegans I can understand, just don’t put one on my plate. Let’s talk about the fact that Americans seem to be going crazy over ersatz foods.
There’s a company named Beyond Meat that had its debut on Wall Street recently. The company produces vegetable-based burgers and sausages that are remarkably close in taste, smell, texture and appearance to real meat, or so says the Wall Street Journal. Over the first three trading days after its initial public offering was listed, the company’s shares nearly tripled from the opening price of $25 apiece, raising the total value for the company to $4.4 billion.
According to WSJ, that valuation is a juicy 50 times the company’s 2018 sales of $87.9 million — a multiple that could prove hard to sustain over the long run, especially since Beyond Meat already faces competition from rivals like Impossible Foods. No, I’m not making this up.
Beyond Meat’s prospectus nonetheless contains some interesting insights. The company has successfully marketed its product to meat eaters, not just vegetarians, noting the latter make up less than 5% of the U.S. population. In the U.S. today there are many people who will never give up meat entirely but who are still interested in reducing their meat consumption somewhat, for health or environmental reasons.
Thinking of their product in this way enables Beyond Meat to target a much larger market, giving investors more long-term growth to expect. The company reports that, over a 26-week period, 93% of customers who purchased Beyond Meat burgers at Kroger also bought animal proteins (meat).
A similar trend is being seen in the dairy aisle, where the typical purchaser of almond or soy milks these days often consumes regular milk as well. Which is a good thing for milk producers, who are facing not only declining milk consumption but also lower prices for their output. Moreover, the makers of Vegan Milk package it in containers just like the ones used for dairy milk. Some shoppers may not notice that they purchased soy milk until they get home.
However, ersatz milk has been around a very long time, and I don’t think many consumers are confused about it. The word “milk” has been used to refer to “milk-like plant juices” since about 1200 AD. Recipes from the 13th century describe almond milk as an ingredient, and the Chinese have been using soy milk since the 14th century.
On the other hand, I can see why farmers in Louisiana are asking their legislature to protect a trademark dish like spicy red beans and rice against the confusion resulting from health-food gurus who come up with ersatz names like “Cauli Rice.” It’s important for consumers to understand what they are purchasing.
One WSJ reader posted the following comment: “I learned my lesson a few years ago when I purchased ‘mayo’ at Costco. I thought it tasted terrible and it didn’t spread like mayo. I looked at the ingredients and it was NOT mayo. I read the front label more carefully and in fine print found a statement that it was something other than mayo. Why not call it ‘something other than mayo’ then? It was a fraud clearly meant to deceive consumers.”