Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, sector, style, or theme. What kind of external factors/changes do you think may have inspired the birth of Beyond Meat? With a market cap of over $9.6 billion, the stock now trades a little over 17x projected 2021 revenues, despite the fact that 2020 was the toughest year for the company due to the pandemic and it also missed analysts expectations for Q1 2021. However, Beyond Meat staunchly defended itself and its food safety protocols, turning the tables on Don Lee and saying: We simply couldnt get Don Lee Farms to meet our standards. Even in 2021, the dispute is still going on, though both sides seem to have claimed victory. 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. Over the past two years, the firm has burned a cumulative $179 million (2% of market cap) in FCF. Especially when competitors will try to introduce products that may be better than the original. Beyond Meat stated that its mission is to push boundaries and disrupt. Figure 10 shows the implied values for BYND assuming Kraft Heinz wants to achieve an ROIC on the acquisition that equals its WACC of 4.4%. Still, it's clear that Brown's idea has caught on: The 10-year old company went public earlier this month at a $1.5 billion valuation. Option grants and RSUs directly align executives interests with the price of the companys shares and not necessarily with creating shareholder value. Leverage partners with larger platforms to expand reach. Should Kellogg continue to push the marketing of Incogmeato and swiftly gain customers, investors may kiss the ultra-high expectations baked into BYND goodbye. Beyond Meat just IPOd last year, it is very interesting to me to see that it is a 9.30B company as of today. Conference: 2021 3rd International Conference on Economic Management and Cultural . While this may seem like a minor detail using beetroot juice to mimic blood it helped the Beyond Burger get one step close to winning over non-vegans. The company has a culture of accountability among its employees: they are all responsible for driving up performances by making suggestions, pointing out what is not working. Total revenue jumped by 69% against the prior-year quarter to $113.3 million. For example, Tyson Food, one of the biggest and earliest investors in Beyond Meat, which had a 5% stake in 2016 exited in 2019. Finally, innovation is another key element of success for Beyond Meat: if they are the leaders, lets not forget that it is also because their products are great, packed with plant-based proteins. If, however, McDonalds chooses to not continue on with the PLT or finds another supplier for its plant-based protein items, BYND could fall even further. This allows consumers to make their own informed decision. Distribution and use of this material are governed by Plant-based burgers have existed for decades before Beyond Meat. BEYOND MEAT ANNOUNCES NEW . This is, in fact, after BYND partnered with Starbucks, Yum Brands, and Sinodis. Measuring Brand Awareness As Told By Marketing Experts, journalists who actually tasted the chicken reported. Beyond Meat, the company that is making eating plant-based protein mainstream continues to grow at a fast pace. 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. We can spot changes in the design since their arrival. If revenues expand 2.7x over the next few years, instead of the P/S shrinking from around 17x presently to less than 10x, a scenario where the P/S metric falls more modestly, perhaps to about 13x looks more likely, considering the fact that profitability is also projected to see sharp improvement. However, Kelloggs appears it is ready to launch Incogmeato and recently partnered with Postmates to deliver free Incogmeato samples to residents of Denver and Dallas. 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. They both rearrange proteins to create their plant-based products. This is a major strength: a high speed-to-market. (Photo by Smith Collection/Gado/Getty Images), BYND Operating Expense As Of Revenue Beyond Meat, BYND Current Valuation Implies Massive Revenue, BYND Implied Acquisition Prices For Value Neutral, BYND Implied Acquisition Prices For Value, See the math behind this reverse DCF scenario, directly correlated with creating shareholder value, The lack of competitive advantages that nearly all competitors possess, Doing the math: stock price implies huge increase in revenue/profits, Incogmeato by Morningstar Farms, owned by Kellogg Co. (K), Simply Plant-Based Meatless Burger, a SYSCO Corp. (SYY) exclusive product, Simple Truth plant-based meat, owned by The Kroger Co. (KR), Sweet Earth Brand, owned by Nestle (NSRGY), Happy Little Plants, owned by Hormel (HRL), Lightlife Foods, owned by Maple Leaf Foods, Shelf space large amounts of space, which can be very difficult to acquire, especially from firms like Kroger who directly control shelf space allocation, Marketing and advertising capacity existing businesses generate lots of cash flow that enables these firms to spend much more on marketing and advertising than Beyond Meat, Strong brand decades-long relationships with consumers across multiple brands that engender the trust that enables quicker adoption of newer products, Valuation implies massive improvement in profitability with sustained revenue growth rates, Domini Sustainable Solutions Fund (LIFEX) 3.4% allocation and unattractive rating. June 4, 2021 . What is Beyond Meats marketing strategy? The emphasis on the grocery channel will now almost certainly evolve into a long-term focal point for Beyond Meat. The design softened. With insiders quick to sell their shares and a large and growing short interest forming, it seems that others in the market are also unwilling to bet on the future hurdles Beyond Meat must clear. Opinions expressed by Forbes Contributors are their own. Various trademarks held by their owners. As an emerging growth company, Beyond Meat has opted to comply with the executive compensation disclosure rules applicable to smaller reporting companies, which require less stringent disclosures regarding compensation. Plant-based foods are more than a fad, they are a huge economic trend. I also assume Beyond Meat achieves an 8% NOPAT margin, which equals the average of Beyond Meats and Kraft Heinzs TTM NOPAT margins. Heres a post fromBeyond Meats Facebook page: There is no mention at all that the Even-Better Beyond Burger is plant based. Should Kellogg continue to push the marketing of Incogmeato and swiftly gain customers, investors may kiss the ultra-high expectations baked into BYND goodbye. Even with that success, Brown continues to think big . word of mouth. Therefore, restaurant owners tend to put the Beyond Meat logo on the menu when featuring their products. The future is one where the meat case is going to be called the protein case and consumers will be able to buy plant-based and animal-based protein side by side,saidEthan Brown, founder and CEO of Beyond Meat. Creating effective ad campaigns is every marketers struggle but thats where customer data comes in. Several of Beyond Meats competitors, including Hormel, Nestle, Kellogg, Tyson, Kroger, ConAgra, and Kraft Heinz, enjoy key competitive advantages: These advantages are very important and very difficult, if not impossible, for new entrants like Beyond Meat to match or overcome in the near term, if ever. While I think a plethora of competitors have already developed a competing product, its plausible that a competitor could decide to buy Beyond Meat rather than continue building its own plant-based protein brand. Instead Beyond Meat fought for placement within the meat section of grocery stores. Figure 4: Expenses as % of Revenue: Beyond Meat 2Q19 vs. 2Q20, BYND Operating Expense As Of Revenue 2Q19 Vs. 2Q20. In 2014 they developed their first simulated beef product and expanded their presence from 1,500 to 6,000 stores in the US. Invest better with The Motley Fool. By constantly innovating, pivoting when necessary, and having a real eye for detail, in just under 10 years, Beyond Meat has become one of the biggest names in a previously unheard-of industry. In any case, I view recent moves as encouraging as Beyond makes moves to improve its footing to grow as a . 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. Heres a high-quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. Their products are now sold in 17,000 grocery stores and 12,000 eateries. Beyond Meat will face difficulty maintaining an innovative edge over its peers, who already spend much more on research and development (R&D). The Motley Fool owns shares of and recommends Beyond Meat, Inc. Still, disputes aside, Beyond Meat has been doing very well these past few years. The following table, covering Q2 2020, shows how drastically this dynamic has changed, as management has leaned into winning customers at the grocery shelf during a near-cessation in dining-out activities: Beyond Meat is now incentivizing potential retail customers to try its products via a limited-time offering it dubs the "Cookout Classic" burger value pack. By Christopher Lombardo. Figure 7 compares the firms implied future NOPAT in this scenario to its historical NOPAT. 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. Showing that meat is not necessary to enjoy the same flavors while reaping more plant-based benefits. You can see all the adjustments made to Beyond Meats balance sheethere. Plant-based eaters now account for 8% of the global population. While comprising only 5% of its total revenue, Tyson outspent Beyond Meats SG&A by 20 times over the TTM. Marketing for meat is just showing the happy times with your family eating meat. After tying up with Dunkin soon after its IPO, Beyond Meat entered China in 2020. No more comparison with animal meat products: Beyond Meat has nothing more to prove, its products are famous, recognized as good for the palate and for our health. Letting go of your vision and plans is hard, but if its the right thing to do, you have to be willing to pivot. These sales represent 5% of shares outstanding. Market Drivers- Market drives come from the availability of knowledge on healthy products vs. mass marketing for bad products.
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