Beyond Meat — Cow Burger or Plant Burger? Which One Will Win?
Beyond Meat is just not a company. It’s a cultural phenomena, happening all across the nation, a shift in the way people are starting to see food. CEO, Ethan Brown, came up with the idea of developing safe and healthy protein from plants to make burgers, (steaks?), patties, and sausage links to get non-vegetarians to slowly give up eating red meats, by giving them healthier food options. Technology has enabled Beyond Meat to make plant-based meats that are getting closer each day to tasting like actual meat. In 2009, he launched Beyond Meat.
CEO, Ethan Brown believes that you don’t need animals to produce the meat on our plates. All meats consists of “amino acids, lipids, carbohydrates, trace minerals, and water.” He realized that all these components are also present in plants. He saw that texturized soy products tasted similar to meat. Ethan Brown so believed in his idea that he was willing to sell his house to fund the making of this product. Kleiner Perkins was the first institutional investor in the product.
You often hear parents, grandparents, uncles and aunts, say countless times at the dinner table,
“Eat Your Veggies, they are good for you!”
And you never once took them seriously! Until Beyond Meats happened.
Veggies Included:
Beyond Meat uses Peas, Mung Bean, Faba Bean, and Brown Rice for protein. It uses Cocoa Butter, Coconut Oil, and Canola Oil to create the sizzle-effect on the pan, to simulate real meat burgers. Minerals like Potassium Chloride, Iron, Salt, and Calcium are blended with Beet juice and Apple Juice Extracts to give the plant-based meat its visual and flavor profiles. Potato Starch and another plant fiber derivative, Methylcellulose, helps bind the burgers, sausage patties, and sausage links, together. Other ingredients are Sunflower Lecithin, a natural emulsifier to help improve meat-like texture and prevent separation among ingredients, similar to the binding properties of egg white; Calcium Alginate is a plant-based casing to house the protein for hot dogs, made with seaweed; Yeast Extract adds ‘B’ Vitamins and food flavoring properties, which is the same Yeast used to make bread and ferment beer.
Beyond Meat’s Mission:
Beyond Meat realizes that the roads to everyone’s dining table may not be reached. However, their Mission Statement is resonating an universal chord.
“We believe there is a better way to feed our future and that the positive choices we all make, no matter how small, can have a great impact on our personal health and the health of our planet. By shifting from animal to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources, and animal welfare.”
Issues this Planet Faces that Beyond Meat Products Solve:
- Over-population of Cattle and poultry in farms have given rise to unsanitary conditions of raising animals for meat consumption across the world. This is an extensive subject to write about, suffice to say, that Botulism and Mad Cow Disease are real.
- Health Issues that Humans face inside their bodies, due to prolonged and unbalanced meat eating have given rise to various cancers of the body.
- Economic Factors (poor people cannot afford meat products) meat products are priced so high per pound or kilogram, that many of the poor have to go without eating meat. Sustainable protein through plants can be a healthy, viable alternative.
- Contaminated Meat — meats are easily susceptible to viral and bacterial contamination before packaging at the meat plants. Additionally, they are injected with antibiotics, hormones, and preservatives that make factory meat unsafe to consume. To counter this, people are trying to buy meats locally from farms nearby.
Plant based Meat was something unheard of. Beyond Meat has been offering “like meat” products with similar look, feel, and texture with safer and healthier options, with no cholesterol, less saturated fat, no antibiotics, or injected hormones that are usually found in meat products.
Health Conscious Eaters:
Most have heard this saying, “My body is my temple.” They are super conscious of what they eat. They are aware of the calories they eat daily, sodium levels, carbs and protein intake per serving.
Beyond Meats is aware of this requirement of healthy meat alternatives. It is scaling its pea and bean meat products to meet the growing demand for “like meat” products in the market.
Environmental Impact of the Foods We Eat
Millennials and Generation Z’ers are leading this movement in assessing the environmental impact. They are choosing food products that are animal cruelty free, making food eating decisions by calculating the impact of such foods on the environment. They are going one step further by opening the eyes of the rest of the world, boldly announcing their food choices, why they eat it, how healthy it is, and how they save animal cruelty in the process, through their social media pages. This movement is gaining traction, and people are fast turning into vegetarians and vegans, for their own health sake.
They are also highly conscious about the reduction in the Carbon footprint of growing sustainable foods for this planet. The population of planet Earth is now bursting at the seams at close to 8 billion people. Questions posed by economists, experts are “How do we feed this population?” Whilst some are turning to eating exotic foods, bugs, insects, others are turning to plant based meats, like the ones Beyond Meat and others in the industry are producing.
Growing Niche in the Food Industry
This is a strong, established niche in the food industry. Vegetarians and Vegans are gaining ground, and fast. The whole world is seeing this food revolution gain momentum like the Bitcoin craze. The naysayers and the unbelievers will be left in the dust.
Why People Crave “Faux Meat?”
The first reason why people turn to plant-based meat is for health reasons. Second, if the flavor and texture matches real meat, they make repeat purchases. The third reason is “Curiosity.” Many people are simply curious to taste and see if Beyond Meat products taste like meat. Taste differs from tongue to tongue, so “Taste is on the tongue of the eater,” like the saying, “Beauty is in the eyes of the beholder.”
An UBS survey found out that 36% of people have tried plant-based burger meat for the first time, while 57% of that group made a repeat purchase. That is an encouraging sign.
Is eating plant-based meat truly healthy? Studies have compared saturated fats and sodium levels between real burgers and plant-based and found them to be almost the same. Plant based burgers however offer easier digestion and certainly eliminates the risks of cancers associated with eating meats.
News Media Outlets have been praising the efforts of plant-based meat manufacturers, especially Beyond Meat.
“It tastes like a burger.” — CNN Money.
“It looks, tastes, and feels like real ground beef.” — Tasting Table.
The Beyond Meat’s, “Beast Burger,” looks like a real pre-cooked hamburger patty. There are several hundreds of media accounts on Beyond Meat’s progress as an alternative meat.
Beyond Meat Products
“Beyond Meat, Inc. offers products in a range of categories, such as The Beyond Burger, Beyond Sausage, Beyond Beef Crumbles, and Beyond Chicken Strips. It also sells a range of plant-based meats across the three main meat platforms of beef, pork and poultry: Beyond Mushroom Bacon Cheeseburger, Chef Spike’s Original Brat, Roasted Garlic & Italian Sausage Pasta, Beyond Beef Tacos, and April Ross’ Butternut Squash Mac-N-Cheese. The Company also offers Beyond Spring Burger, Beyond Nacho Burger, Beyond Sausage Stuffed Peppers, Tuscan Style Beyond Sausage Pasta, Beyond Brat Breakfast Burrito, Beyond Beef Fiesta Power Bowl, Beyond Beef Nachos, Truffle Mac & Cheese Beyond Burger, Love & Lemons Guacamole Beyond Burger and Beyond Burger Tostada With Marinated Kale.” — Beyond Meat.
How does Beyond Meat create their products?
“Using heating, cooling, and pressure, we create the fibrous texture of meat from plant-based proteins. Then, we mix in fats, minerals, fruit and vegetable-based colors, natural flavors, and carbohydrates to replicate the appearance, juiciness, and flavor of meat.” — Beyond Meat.
Beyond Meat’s products have in their research labs developed the look, feel, and texture of real meat, their “meatless burgers.” They are now going one step further to position themselves right next to the meat aisles at grocery stores, to catch the eye of non-vegetarians. Perhaps, they may give Beyond Meat a try, get hooked, and stop eating meat, or reduce eating meat. Who knows? Time will tell.
Restaurants Signing Up With Beyond Meat
The menus at many private and chain restaurants are making available a percentage of their food choices to carry Beyond Meat products. KFC, Pizza Hut, Subway, Dunkin Brands, McDonald’s are some of the restaurants that are now carrying an exclusive line of plant-based meats to serve its vegetarian and vegan crowd. Beyond Meat’s patty is on the menu at TGI Fridays, Carl’s Junior, and A&W.
About 11,000 Grocery stores including Target, Walmart, carry ground beef, and burger patties for families to add it to their weekly food choices.
“As of September 26, 2020, Beyond Meat had products available at approximately 122,000 retail and foodservice outlets in over 80 countries worldwide.” — BZ Newswire.
Strengthening Manufacturing & Distribution
Beyond Meat is still growing and has a long way to go. It has invested in factories to Scale production of its products, Research & Development efforts, and Distribution. These are the major challenges that it faces, besides Sourcing plant products and Flavoring agents to make the plant-based meats taste like real meat.
“Beyond Meat is currently distributed internationally to through local partners in Australia, Brazil, Chile, the European Union, Hong Kong, Ireland, Israel, the Middle East, New Zealand, South Korea, Taiwan and the United Kingdom, markets where the company said it “received strong inbound interest for our plant-based products.”
As plant-based meat products by Beyond Meat get consumed, what is required in the equation are repeat buyers. If this happens and everything clicks into place, it will mean better and stronger sales, which is directly related to the company’s growth and further expansion.
Expansion Plans
Beyond Meats is setting its eyes on the Asian market abroad, especially China. It’s also simultaneously expanding to London, Canada, and Europe. It’s hiring for positions in Amsterdam. Beyond Meat is working with tech-giant, Alibaba in China to expand distribution of its products to the Chinese population.
“Beyond Meat has expanded its European production capacity by opening a new co-manufacturing facility and acquiring a new production site, both located in the Netherlands. The co-manufacturing facility is located in Zoeterwoude, the Netherlands, and is owned and operated by Zandbergen World’s Finest Meat.”
Competition to Beyond Meat
As soon as Beyond Meat stock raced in a matter of weeks to $240 per share, people’s eyes were opened. They began realizing that they were sitting on an untapped gold mine. They began realizing that a large chunk of meat eaters were slowly changing direction of their eating habits to slowly curb red meats to eating more plant based foods, due to increased health-related incidences like heart disease, cancers, and diabetes.
Other companies started coming up with similar ideas. Some of the new comers are Impossible Foods who signed up with Restaurant Brands International, Tyson Foods, Maple Leaf Foods, and Kroger, the grocery chain, all of whom are beginning to develop plant-based meats for the vegan and vegetarian crowds.
In the U.S, the plants-based meat market is at $165 billion. And everyone’s rushing to get their piece of the pie. But competition as we know will only make you stronger, if you have the will to stick on and stay on the path to success, without giving up.
Stock IPO & Ticker
Beyond Meat’s stock went public in May 2019. The ticker is $BYND. It took the stock market by fire. Many of the early investors became millionaires just by investing in this stock. The stock climbed as high as $241.22 on July 26 of 2019. Then it fell 40% losing share value, to $70.60 on Dec 16, 2019, a share.
Then with the onset of COVID, share value plunged again on March 18, 2020 to $48.18, recorded as the lowest ever, since the IPO launched at $25.00 on Wednesday, May 28, 2019. However, on Thursday, the very next day, the first public share traded at $46 at 12:18 P.M, an increase of 84% above the IPO price. (source: Market Watch)
Current Value of Stock
Beyond Meat’s current market cap is at $7.3 Billion. (as of 1/11/2021). The price per share is $116.76. About 41.20% of the stock is held by institutions. There is however, a short interest of 24.61%, people who are betting against the stock. This horde of shorting investors have also become millionaires.
Beyond Meat has the ability to climb back up to $250 or more. But it would need more product offerings, texture, flavor, and quality enhancement in these products for repeat sales to happen, and sign ups with more restaurants. If this happens and Beyond Meat shows profitability, in subsequent quarters, investor sentiment would turn bullish and the stock would start to sky-rocket.
Product Withdrawal:
Robert Moskow, Credit Suisse Analyst, says this of Beyond Meat’s development of Chicken Strips, which it quietly discontinued, due to the lack of demand.
“It’s a company that’s in the very early stages of developing meat alternatives in all kinds of segments of the market. Not every single one of them is going to get it exactly right the first time.”
Not all products will become hits, because this is the first time any food company is trying to get the texture of meat right. So there will be missteps and miscalculations, but it’s a learning process that Beyond Meat is presently going through, on its way to find a sustainable meat source for this planet.
Future Growth Projections:
Investment Bank Analysts at UBS project the demand for Beyond Meat at $1.2 Trillion. Amazon’s market cap is at 1.6 Trillion (as of Jan 11, 2021). UBS is further projecting that Beyond Meat’s sales will hit $1.8 billion by 2025. UBS is stating that Beyond Meat will capture 13% of the plant-based meat market.
As of January 15, 2021, “Beyond Meat has signed a 12-year lease at 888 North Douglas St., in a building adjacent to Los Angeles International Airport that its developer expects to complete this year. Beyond Meat’s 300,000-square-foot space in the new building will include room for its research workforce to triple or quadruple, the company said.”
Motley Fool states that Beyond Meat is significantly ahead in performance and gross profit margins in the Plant-based meats sector than its meat rival, Tyson Foods. Read more: Where will Beyond Meat Be in 10 Years?
Listen to: 30 Minutes BEYOND MEAT NPR Podcast (With CEO Ethan Brown)
Watch: 40 Minutes Beyond Meat Morphing Into A Movement
Above Video Release Date: May 26, 2018. Take some time to watch this video to understand the history, vision, and direction of Beyond Meat’s CEO, Ethan Brown.
CEO Ethan Brown knows that this is a silent revolution in the making. He is aware he has an obligation to deliver great taste to his plant-based audience, and great returns to his investors and share holders. In this matter, he does not have the luxury of time. He knows that he has to deliver results, in terms, of gaining a bigger market share, by switching meat eaters to plant eaters. In the meantime, competitors are rushing in, trying to get a piece of the market. But Beyond Meat has the advantage of a few miles lead in this marathon, on its competitors who are scrambling to set up their operations and distribution.
Do let me know if you have tasted any of Beyond Meat’s products and let me know how they taste. If you are a Non-vegetarian, let me know how the texture and flavor profiles match to actual meat. If you are a Vegetarian or Vegan, (identify yourselves separately)let me know how their products taste.
Thank you for reading. I look forward to your comments. Join my Facebook page @MoneyTradeStocks :)
Disclaimer: I own shares of Beyond Meat stock, $BYND. Do you own research and invest only if it suits your investment style and needs.
