Beyond Meat: Vegan Hype Or Actual Substance?
Roman Krutyanskiy | Aug 28, 2019 13:31
The US company Beyond Meat is a supplier of plant-based meat substitutes, which are produced on a purely vegan basis, including pea protein, beetroot and vegetable oils, which are currently available in more than 53,000 retail and grocery stores, chain restaurants and more.
Far from any ideology and the question of whether or not one prefers traditional meat, the following is the result of a study by the University of Michigan, which compared the production of traditional burger patties with the production of Beyond Meat Burger patties in 2017. According to this study, a "Beyond Burger" generates 90 percent less CO2 emissions, requires 46 percent less energy, 99 percent less water and 93 percent less agricultural land. In addition, no animal comes to harm.
Partnerships increase the pace - new sales markets increase the potential
Beyond Meat (NASDAQ:BYND) is also accelerating the expansion with partnerships in order to be able to produce the plant-based products even faster in Europe. In this case, they entered into a partnership with "Zandbergen World's Finest Meat", which will start production in the first quarter of 2020 in Zoeterwoude, the Netherlands. This will be Beyond Meat's first non-US production facility and will help to quickly eliminate Europe's delivery bottlenecks. For example, when the "Beyond Burger" sold out quickly in German food retailers in Lidl and Metro stores, the potential of the "meatless burgers" was further recogniS
ed.
With new manufacturing facilities in Europe, delivery times, delivery costs and the current carbon footprint can be dramatically reduced. In addition to the Metro in Germany, Albert Heijn in the Netherlands, Delhaize in Belgium or Tesco (LON:TSCO) in the UK you can buy the "Beyond Burger" and some other products from Beyond Meat not only in European Union countries, but also in Australia and New Zealand, Chile, Hong Kong, Taiwan, South Korea, Israel and also the Middle East.
This alone shows the meanwhile enormously high sales market. Partnerships such as "Zandbergen World's Finest Meat" are also boosting sales, as the business partner's already existing infrastructure helps boost additional demand.
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Beyond Meat is gradually conquering the greats of system and mass catering
Also in the field of partnerships within the food industry and gastronomy, as well as system gastronomy has done a lot at Beyond Meat (NASDAQ:BYND). The partnerships with restaurant chains and grocery delivery services have been consistently expanded in recent months, because nothing is more important for continued success than developing a network and growing together with it.
Beyond Meat's products include McDonalds, Tim Horton, Del Taco, Dunkin 'Brands, Blue Apron, Famous Dave's, A & W, TGI Fridays, Bareburger, Carl's Jr. and BurgerFi. Also new was Subway, which will be launching the new plant-based "meatballs" or better meatless "meatballs" from September and offering them to customers in 685 stores in the US and Canada.
Additional sales opportunities were provided by recent partnerships with caterers and similar vendors who provide food in offices, stadiums, major events or even in hospitals, schools and universities. In the USA, for example, there are two particularly large caterers, such as Sodexo (PA:EXHO) or Aramark. For example, the Aramark Group produces around 2 billion meals a year, and Beyond Meat is now a partner of the company. In the future, Aramark's distribution channels will include "Beyond Burgers" and "Beyond Sausages". A corporation like Aramark is not known in public like McDonald's, but for Beyond Meat Aramark means more of a step into the mass business. If the deal goes to Beyond Meat, it means additional production volumes and thus additional sales.
For Beyond Meat and Aramark, it could also be a "win-win" situation as Beyond Meat increases sales tremendously and Aramark can broaden its portfolio of offerings to better meet the growing demand for meatless foods.
Beyond Meat - one of the most successful IPOs of 2019
The Group is headquartered in El Segundo, California, and is led by CEO Ethan Brown. The company was founded on April 8, 2011 under the name "J Green Natural Foods Co.", then changed to "Savage River Incorporated" and ultimately changed on September 7, 2018 to "Beyond Meat (NASDAQ:BYND) Incorporated". The shares of Beyond Meat have been listed on the NASDAQ since the IPO on May 01, 2019 with the trade symbol "BYND". The IPO price was $ 25.00, the first day trading low was $ 45.00, the year to date high of $ 239.71 - a true price rocket.
On August 5, a second tranche of shares was launched at a price of $ 160.00 through a public offering on the NASDAQ. A total of 3,737,500 shares were placed. The fiscal year for Beyond Meat is also the calendar year and the Group is accounted for in accordance with US GAAP accounting standards.
Impressive growth rates
On 29 July 2019 Beyond Meat (NASDAQ:BYND) published the quarterly report for the second quarter. Net sales climbed 287 percent year-over-year to $ 67.251 million. At $ 33.131 million, the company generated nearly half of its net sales from restaurants, caterers, caterers and caterers. In the first half of the year, net sales were $ 107,457 million. Compared to the first half of 2018, this is an increase of around 257 percent.
In addition to announcing its Q2 quarterly results, the Executive Committee also raised its full-year outlook for 2019 to $ 240 million in net revenue. Based on these figures, it can be seen that the "vegan hype" is gradually becoming an "actual substance" with impressive growth rates.
Conclusion
Of course, a veritable veggie hype drove the stock of Beyond Meat (NASDAQ:BYND) skyrocketing in the early months since the IPO, but if you look at the $ 1.4 trillion global marketplace meat market, you can see the potential for one Group as well as Beyond Meat with all the sales channels and business partners listed here can still offer in the future, because all in all, the demand for "plant-based meat alternatives" continues to grow rapidly.
According to CNBC news agency, a prospect of "Euromonitor" for the US alone suggests that the market for meat replacement products could increase to around $ 2.5 billion by 2023. Globally, it is expected to reach $ 6.4 billion by 2023. According to "Nielsen", about 98 percent of those who buy these meat substitutes are not vegetarians, but rather consumers who want to reduce their traditional meat consumption. Beyond Meat could have quite a good chance of conquering a good deal of this volume. The company is growing rapidly and could already show a positive EBITDA in the financial year 2019.
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