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UPDATE 2-Blue Apron beefs up menus with Beyond Meat burgers, shares rise 33%

(Adds background, data on market size, updates shares)

July 16 (Reuters) - Blue Apron Holdings Inc said on Tuesday it would include Beyond Meat Inc's plant-based burgers on its menus next month, betting on a multi-billion-dollar meat alternative market to lure new customers.

Shares of Blue Apron, which have fallen 95% since their debut in 2017, rose 33% as investors hoped that the move would help it better compete with peers like HelloFresh and grocers selling their own ready-to-eat meals.

California-based Beyond Meat is the U.S. stock market's poster child for a swing towards plant-based substitutes that has come courtesy of a rise in the number of Americans choosing vegan or vegetarian diets on environmental or health grounds.

It has already signed deals with U.S.-based Del Taco to include its plant-based crumbles in the Mexican food chain's vegan tacos, while burger chain Carl Jr has a Beyond Meat cheeseburger.

Blue Apron said its Signature Two-Serving Plan - a curated meal plan subscription - would now include recipes using the Beyond Burger, a four-ounce patty with 20 grams of plant-based protein, which does not contain genetically modified organisms, soy, or gluten.

"We know a growing number of customers are interested in plant-based proteins, whether as an alternative to meat, a desire to explore a new ingredient, or an opportunity to make more sustainable food choices," Blue Apron Chief Executive Officer Linda Kozlowski said in a statement.

Analysts estimate that the U.S. alternative meat market will be worth $100 billion by 2035, as consumers seek to reduce meat consumption amid growing concerns over health risks and environmental hazards of industrial animal farming.

U.S. retail sales of plant-based foods grew 11% in the past year, bringing the total market value to $4.5 billion, according to new data from Good Food Institute and trade organization Plant Based Foods Association. (Reporting by Tamara Mathias in Bengaluru; Editing by Rashmi Aich)