With sharp growth in revenues, margins have increased from -89% in 2017 to -9.4% over the last twelve months. While consumer interest in protecting the environment or having a healthier lifestyle continues to grow it doesnt always mean consumption follows. Instead of drawing attention to a product that consumers didnt love, they simply discontinued it and slowly fazed it out of supermarkets. Before the advent of the COVID-19 pandemic, Beyond Meat's "go-to-market" strategy -- its plan for marketing and promoting its brand, coupled with its framework for product distribution -- relied heavily on foodservice penetration. Production Supervisor - 2nd Shift. Beyond Meat also has big contracts with fast-food chains, as mentioned before, which is a distribution canal bringing lots of cash flow. By focusing on their fresh foods, like their Beyond Burger patties which many agreed pulled off the meatless meat trick more convincingly they were able to put their time and effort into a product that was going to make them more successful in the long run. Also, seeing that a lot of slaughter houses will absolutely not let anyone come see the inside conditions that animals are facing. Figure 10: Implied Acquisition Prices for Value-Neutral Deal. Briana Chen - Digital Marketing Intern - Beyond Meat | LinkedIn Big brands have started plant-based meats and substances that are more healthy in order to show that Beyond Meat is not the only plant-based guys in town and gain some market share. Beyond Meat Announces New Executive Leadership Appointments to If Beyond Meat created the healthiest plant based products that dont taste very good then it wouldnt be in business very long. Catalyst: Others Success Could Come at Beyond Meats Expense. Beyond Meat was the first company to sell plant-based burgers in grocery stores meat sections. *Average returns of all recommendations since inception. Sounds too good to be true, right? Time to Buy? When grocery stores resisted this in the beginning Beyond Meat declined to place its product in those stores and decided to wait until a grocery store embraced its vision. Beyond Meat Announces Global Strategic Partnership with Yum! Brands to Plant based burgers are not new but Beyond Meat has been able to capture more of the . Beyond Meat's Price Approaches That of Real Beef Net revenues decreased 1.2% to $100.7 million in the fourth quarter of 2021, compared to $101.9 million in the year-ago period. They knew that vegans and vegetarians would use and love the product regardless if they targetted them because the products were so superior to what they were used to. The promises of Beyond Meats burgers: they produce 90% less greenhouse gas emissions and require 93% less land, 99% less water, and 46% less energy than a traditional beef patty. Beyond Meat Inc stock (NASDAQ: BYND), a leading-edge food company that produces meat directly from plants an innovation that provides taste and texture of animal-based meat products along with nutritional benefits of plant-based products has seen its stock rise by over 160% from the lows seen in March 2020. Buy These 2 Stocks in 2023 and Hold for the Next Decade, 2 Growth Stocks to Buy Before the Big Bull Rally, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. The QSR is looking to get the lion's share of the meat substitute market with Beyond Meat. Option grants and RSUs directly align executives interests with the price of the companys shares and not necessarily with creating shareholder value. This is one of the biggest first-day pop-ups in recent history. In the first scenario, the estimated revenue growth rate is 61% in year one, 55% in year two, and 47% in year three, or equal to consensus. Therefore, they have a lot of time and competitive advantage before others to create the most well-known category before all other competitors. Find out how 3 brands use customer data to find success! Beyond Meat Continues to Strengthen its Global Innovation Capabilities And this failure didnt break them for a few reasons most importantly, because they already had new products in the works. Over the TTM, Beyond Meat removed $23.7 million (6% of revenue) in share-based compensation and $7.5 million in restructuring expenses (2% of revenue) when calculating adjusted EBITDA. Rising beef prices, coupled with the overwhelming at-home food consumption trend, present an unforeseen opportunity for the company to entice new customers by doubling down on grocery sales. Competition Will Eat Beyond Meat Alive - Forbes Problem Recognition- Consumers did not know about the conditions of the animals that are actively being slaughtered to create meat. To show that Beyond Meats protein is just good as alternative protein on the market the brand has partnered with NBA players like Kyrie Irving and Chris Paul who are not only brand ambassadors but are also investors in the company. But just how do these brands fare when it comes to brand awareness and consideration. Considering these competitors are already supplying plant-based protein products, Beyond Meat faces an increasingly uphill battle to reach the size it needs to match the cost efficiencies of larger competitors like these two established firms. In this scenario, Beyond Meat grows NOPAT by 36% compounded annually over the next decade and the stock is worth just $44/share a 67% downside to the current price. Our goal is to give you the key to understanding Beyond Meats rapid success, to show you the hidden reasons for their success. We visited . 2. Since going public, four of its six quarters have shown improvement from. The following fund receives an unattractive rating and allocates significantly to BYND. the stock is worth just $30/share today - a 57% . For example, Kelloggs delayed the launch of its first round of Incogmeato products due to the COVID-19 pandemic. Further, consensus estimates for Beyond Meats 2020 earnings are now $0.07/share. If you do subscribe to our retail trends newsletter to get the latest retail insights & trends delivered to your inbox. By Tricia McKinnon. Even though the number of vegans and vegetarians was increasing in 2013 when the company launched its first products, the market for plant-based burgers was small: only 0.5% growth in this category. But how they handled it is what makes them a successful brand. According to the company, this package of 10 plant-based patties reduces the price of its burgers from nearly twice that of conventional burgers to a 20% premium. 2019: A Change In the Branding Strategy With the Arrival of Stun. More and more meat-eaters and flexitarians are looking to plant-based products to offset their carbon footprints and help them live a more sustainable lifestyle. Beyond Meatis one of them for the plant-based segment. There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. Low margins in an increasingly competitive industry leave Beyond Meat with less flexibility to compete on price or invest in marketing and R&D. To justify its current price of $135/share, Beyond Meat must immediately improve its NOPAT margin to 5% (same as Tyson and more than double its current margin of 2%). Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. A lot of people are trading so I know a lot of people are interested in the future of this company. The difference with other plant-based patties is that their name is a synonym of quality for their clients. Though BYNDs margins remained negative at close to -13% in 2020 (due to the impact of the pandemic), the companys operations are expected to improve and turn profitable in 2022, with projected margins of 3%. But what has allowed them to be so successful despite their setbacks? This is, in fact, after BYND partnered with Starbucks, Yum Brands, and Sinodis. Nowadays, certain celebrities do more than advertise for the brand, some have become ambassadors for Beyond Meat, such as Byrie Irving, from the Boston Celtics. Do you like this content? First, investors need to know that Beyond Meat has a large liability that makes it more expensive than the accounting numbers would initially suggest. Per Figure 6, Beyond Meats TTM adjusted EBITDA of $45 million is well above core earnings of $4 million. Plant-based foods are more than a fad, they are a huge economic trend. The first campaign, The Future of Protein, was launched in 2015. . If you want to stay up-to-date on the latest news in the plant-based market, to learn about the most recent innovations as they come out, do not hesitate tofollow us. Though the stock is likely to remain volatile in the near term, the strong growth outlook will help it once again reach the $200 level once the current crisis abates. A lot of that clothing ends up in landfills which proves that the product often matters more than the social cause a customer is interested in. Despite less transparency, I know that Beyond Meats executive compensation plan consists of a cash bonus, option grants, and restricted share units (RSUs). If yes (which is the most common case), you can sell them to way more people and have an even greater impact. They both rearrange proteins to create their plant-based products. Entrepreneur, retail expert, strategy consultant and author. . What kind of external factors/changes do you think may have inspired the birth of Beyond Meat? After all, the positive choices we make every day - no matter how small - can have a great impact on our world. Jurgens brings over 20 years of experience with a proven record of growing sales and profit through strategy, branding, marketing, operational excellence and innovative approaches. And if this happens, you need to have others you can roll out. As of December 31, 2020, Beyond Meat had products available at approximately 122,000 retail and foodservice outlets in over 80 countries worldwide. These expenses, and the need to maintain them to support Beyond Meats already declining growth, illustrate that the firm is not approaching economies of scale anytime soon.