Kroger Enters Meatless Fray with Store-Branded Patties
By Jaewon Kang
Kroger Co. is jumping into the meatless business.
The largest U.S. supermarket chain said Thursday that it will
roll out plant-based burger patties, grinds and other products,
seeking to capitalize on consumer interest in new meat replacements
that have recently been added to menus at big fast-food chains and
Cincinnati-based Kroger is one of the biggest retailers to
introduce a store-branded line of meatless products, part of its
effort to reinvigorate sales as it faces tough competition from
online services and discount grocers.
Kroger -- which also sells Beyond Meat Inc.'s meat-replacement
patties and sausages -- will put its own plant-based deli slices,
sausages and other products on shelves at 1,800 of its 2,800 stores
this fall. Kroger's patties are pea-based, designed to resemble
The company said those products will be priced below plant-based
products from Beyond Meat but wouldn't say by how much. Beyond
Meat's two-pack of patties sells for roughly $6.
Gil Phipps, Kroger's vice president of branding, marketing and
private brands, said the company was appealing to the one-third of
its customers that identify as so-called flexitarians, eating meat
and fish only occasionally. Such diners have driven sales for
Beyond Meat and competitors such as Impossible Foods Inc.
Shares of Beyond Meat have more than doubled since its initial
public offering in May, giving the meatless-burger company a
valuation of nearly $10 billion. Impossible Foods Inc. has raised
more than $750 million from investors including rapper Jay-Z and
basketball player Paul George.
"We've been tracking this for a number of years, and the growth
has been very, very strong," Mr. Phipps said.
The plant-based meat market is estimated to hit $85 billion by
2030, according to a recent report by UBS. Meat companies, too, are
introducing plant-based alternatives to their core beef, pork and
chicken products. Hormel Foods Corp. on Wednesday said it is
introducing a plant-based protein brand, and Tyson Foods Inc. said
Thursday it invested in a producer of plant-based shellfish.
Retailers including Safeway, Publix Super Markets Inc. and
Sprouts Farmers Market Inc. sell Beyond Meat products. Few have
recently introduced new meat-replacement brands of their own.
Trader Joe's has carried a range of veggie patties for years.
Kroger, which owns Harris Teeter, Fred Meyer and Ralphs stores
among other chains, is trying new products and focusing on
e-commerce, delivery and consumer data. Rivals including discounter
Aldi and Walmart Inc. have increased their share of the U.S.
grocery market in recent years.
Store brands like the new meatless products have been a bright
spot at Kroger. They made up nearly 20% of the chain's total sales
last year, generating about $22 billion in sales.
Kroger, which is expected to report earnings for its latest
quarter next week, posted a slight decline in total sales last
quarter. Shares are down about 23% over the past year.
Write to Jaewon Kang at firstname.lastname@example.org
(END) Dow Jones Newswires
September 05, 2019 12:59 ET (16:59 GMT)
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