This competitive disadvantage only makes Beyond Meats path to sustainable profitability that much more difficult. Problem Recognition- Consumers did not know about the conditions of the animals that are actively being slaughtered to create meat. The design softened. Creating effective ad campaigns is every marketers struggle but thats where customer data comes in. BEYOND MEAT ANNOUNCES NEW . Beyond Meat Is Down 93% From Its High. Our goal is to give you the key to understanding Beyond Meats rapid success, to show you the hidden reasons for their success. People are able to do extensive research on problems after recognizing that there is an issue. Therefore, the future will be bright, but they need to continuously gain market share by introducing new products and innovation within the plant-based space. 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. Showing that meat is not necessary to enjoy the same flavors while reaping more plant-based benefits. 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. 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. Fiduciaries should avoid Beyond Meat Inc. (BYND). Beyond Meat positioned its products as similar to animal meat as they could. + Follow. Could they suit flexitarians, meat-eaters? Information Search- Consumers using this new information to do their own research on the history of slaughter houses and the conditions in which animals are being tortured and killed to create meat. From the beginning Beyond Meat has viewed itself as a company that could take a typical meat eater and get them to consider a tasty alternative. Production Supervisor - 2nd Shift. Plant based burgers are not new but Beyond Meat has been able to capture more of the . Beyond Meat Narrows Its Losses. At its TTM FCF burn rate, the firm has enough cash to operate for just over 16 months before needing additional capital. Beyond Meat also has big contracts with fast-food chains, as mentioned before, which is a distribution canal bringing lots of cash flow. In this scenario, Beyond Meat grows revenue by 37% compounded annually (which results in NOPAT growing 42% compounded annually) for the next 12 years. We can perceive more confidence from the company, in line with its media and advertising strategy. However, by now its clear that plant-based meat alternatives are here to stay and theyre gaining traction every year. For non-personal use or to order multiple copies, please contact We can spot changes in the design since their arrival. These sales represent 5% of shares outstanding. By 2015, even Walmart was selling Beyond Meats plant-based products! In 2021 Beyond Meats revenue increased by14.2%to reach $464.7 million. In order to increase its manufacturing capacity, in June 2018, Beyond Meat opened a second production facility in Columbia, Missouri and a third in El Segundo, California. Its difficult to imagine the product or service that got your brand on the map might not be the one that helps you achieve further growth. Concentrating on the health market, they were able to target a broad range of people seeking a better meat option than real meat. Asit Sharma has no position in any of the stocks mentioned. This has come from the increased consumer-knowledge on healthy products, plant-based diets,. Why? The main difference is that Impossible Foods takes its proteins from soy whereas Beyond Meat extracts it from peas. Without having that partnership in the beginning Beyond Meat may have floundered for many years trying to build a customer base on its own. Competition- Beyond Meat has created competition by completing innovating meat and how meat is viewed. The mission of the company is focused on plant-based meat alternatives, using pea and other plant protein isolates. Beyond Meat was one of the most successful IPOs (Initial Public Offerings) of 2019. Opinions expressed by Forbes Contributors are their own. But what if youre looking for a more balanced portfolio instead? Per Figure 6, Beyond Meats TTM adjusted EBITDA of $45 million is well above core earnings of $4 million. Furthermore, many of the firms in Figure 2 have other key advantages multi-year relationships and existing distribution networks with grocery stores and quick-serve restaurants such asTyson, or in the case of Kroger, direct control of distribution and the end-consumer relationship. Word of . Their products are now sold in 17,000 grocery stores and 12,000 eateries.
Beyond Meat Has Completely Altered Its Go-to-Market Strategy Beyond Meat entered into a partnership with PepsiCo. People are perfectly happy eating vegan food as long as they dont know thats what theyre doing,saysCarol J. Adams, author ofThe Sexual Politics of Meat. This is one of the biggest first-day pop-ups in recent history. Economic earnings, which account for the unusual items on the income statement and changes to the balance sheet, are negative $6 million and declining over the TTM, even as adjusted EBITDA is positive and rising. Stage of Market Lifestyle- The stage of the market lifestyle will influence the company on a few different categories. 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. Considering our revenue projections of roughly $1.1 billion and 6% margins, almost $66 million in net income is possible by 2023. What are your predictions for the future of this company? Insider Trading and Short Interest Indicate Market Skepticism. Instead, they persevered. It has put them in a competitive sustainable advantage position because others will have to spend a lot of money on research and development to get their plant-based burger to taste like theirs.
Beyond Meat Announces Global Strategic Partnership with Yum! Brands to This adjustment represents 7% of Beyond Meats market cap. 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. After tying up with Dunkin soon after its IPO, Beyond Meat entered China in 2020. The professors had been working on perfecting their formula for years, and the first Beyond Meat product launched in 2012 was their Chicken-Free Strips. Beyond Meats R&D in 2019 was just $21 million compared to $56 million for ConAgra and $97 million for Tyson over the same time. In 2021 Beyond Meat's revenue increased by 14.2% to reach $464.7 million. This additional expense, one that is much lower for many competitors (as they already have profitable business lines to offset any marketing of new products), makes it even more difficult for Beyond Meat to improve its profitability in such a competitive market. A new marketing strategy will play up the health and sustainability benefits of Beyond Meat, Brown said. And if this happens, you need to have others you can roll out. Like Comment Share . Figure 9 compares the firms implied future NOPAT in this scenario to its historical NOPAT. Plant based meats are not filled with dead animals which include bacteria growth and can contain other substances such as feces. Conference: 2021 3rd International Conference on Economic Management and Cultural . Over the past twelve months, insiders have purchased 700 thousand shares and sold 4 million shares for a net effect of 3.3 million shares sold. Your brand, too, needs the liberty to change. We visited . (Photo Illustration by Drew Angerer/Getty Images). People tend to associate meat with strength, with muscles. Even in the most optimistic of scenarios, Beyond Meat is worth less than its current share price. 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. 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. Clearly, vegan meat alternatives were no longer a fad. The mattress. To make the world smarter, happier, and richer. Although its products are plant based Beyond Meats marketing does not explicitly call that out. Brands. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. 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. The Double Distribution Canal: A Major Strength. Resourceful, strategic, and self-directed leader with a proven record of achievement in global account management, business development and sales strategy leadership. As Kroger invests further in its Simple Truth brand, wed expect the firm to allocate more shelf space to its own in-house brands, rather than a competitor such as Beyond Meat. By Christopher Lombardo. You can see all the adjustments made to Beyond Meats income statementhere. I believe this drive will continue and not stop. This report helps investors of all types see just how extreme the risk in BYND is based on: Growth Will Slow Down, but Competitors Wont. More than simply providing a case study of a successful plant-based start-up, this analysis can provide your plant-based business with a complete understanding of the market. 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. Beyond Meat was originally founded in 2009 by Ethan Brown, who worked with two University of Missouri professors, Fu-hung Hsieh and Harold Huff, to develop meatless, plant-based protein The professors had been working on perfecting their formula for years, and the first Beyond Meat product launched in 2012 was their "Chicken-Free Strips". Beyond Meat, Inc. (NASDAQ: BYND) is one of the fastest growing publicly-traded food companies in the United States, offering a portfolio of revolutionary plant-based proteins made from simple ingredients without GMOs, bioengineered ingredients, hormones, antibiotics or cholesterol. For this analysis, I choseKraft Heinz as a potential acquirer of Beyond Meat since it doesnt have a pea-protein based product like Beyond Meats and has a history of acquisitions. This year also saw Beyond Meat break into the international market partnering with the likes of Tesco in the UK to A&W in Canada). Since going public, four of its six quarters have shown improvement from. Get the latest information and insights into the world of brand. Many people can not even tell the difference between real meat and Beyond Meat. To do so, employees need to very clearly understand the companys priority: is it safety, profits, brand fidelity? Therefore, they have a lot of time and competitive advantage before others to create the most well-known category before all other competitors. Often the largest risk to any bear thesis is what I call stupid money risk, which means an acquirer comes in and buys Beyond Meat at the current, or higher, share price despite the stock being overvalued. 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. Focus Strategy- Beyond Meats strategy was to focus on creating meat that isnt actually meat, but tastes just like the real thing to replace meat in peoples diets. 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. Below are specifics on the adjustments I make based on Robo-Analyst findings in Beyond Meats 10-Q and 10-K: Income Statement: I made $33 million of adjustments, with a net effect of removing $21 million innon-operating income(5% of revenue). However, one of the biggest deal breakers for potential. 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. While there are numerous brands that have popped up over the years whove thrown their metaphorical hats into the meat alternatives ring such as Impossible Foods and Quorn Beyond Meat is still one of the most successful and well-known. Given that most plant-based protein products are now aiming for the same goal imitating the taste and texture of meat it stands to reason that as the plant-based protein market matures, differentiation between products will diminish as all products begin to taste more and more like meat. (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. Theres no actual blood,instead beet juice isused but it does the trick. Moreover, the existing plant-based burgers had a disastrous reputation, they were ironically said to have as much flavor as the box they were in. Beyond Meat had to position itself as different from them as possible. DOI: 10.2991/assehr.k.211209.003. At the end of 2Q20, Beyond Meat had $222 million of cash and cash equivalents on its balance sheet. While the market hasnt liked this news, both the CEOs of Beyond Meat and McDonalds have stated that there isno changein the relationship between the two companies. our Subscriber Agreement and by copyright law. Plant-based burgers have existed for decades before Beyond Meat. Measuring Brand Awareness As Told By Marketing Experts, journalists who actually tasted the chicken reported. Therefore, restaurant owners tend to put the Beyond Meat logo on the menu when featuring their products. After all, nothing could replace a real burger, could it? Without significant increases over the margins and revenue growth assumed in this scenario, an acquisition of Beyond Meat at its current price destroys significant shareholder value. 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. When it comes to social causes brands still need to remember if the product isnt good no social cause, no matter how important can save it.
Beyond Meat Continues to Strengthen its Global Innovation Capabilities 2 1 Comment.
Beyond Meat vs. Impossible Foods: The fight for market share in meat 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. When I use myreverse discounted cash flow (DCF) modelto analyze the expectations implied by the stock price, BYND appears significantly overvalued. 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. And by 2020, Beyond Meat had launched an e-commerce site that served as a direct-to-consumers portal, allowing customers to purchase their products individually. Figure 7: Current Valuation Implies Drastic Profit Growth. Things Are Only Getting Worse for Beyond Meat Stock. 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. Competitive Advantage- Because Beyond Meat was one of the first to actually create a meat patty from plant proteins, they were able to turn it into the now known Beyond Burger. A year later, Beyond Meat developed its first beef product made from plant proteins, which later morphed into its now-famous Beyond Burger in 2016. This is introducing the category and it was picked up by Burger King. Acquisitions completed at these prices would be truly accretive to Kraft Heinzs shareholders. When vegan meat alternatives first started to appear on the market, many people saw them as a fad. Beyond Meats successes have inspired the giants to create new categories. Over 2Q20, Beyond Meat removed $1.5 million (1% of revenue) in other expenses when calculating adjusted EBITDA. These features also convince consumers that Beyond Meat burgers are not your average veggie burgers which were never popular with mainstream consumers. BYND entered into a partnership with Alibaba Group, whereby its products will be available in Freshippo stores (Alibabas supermarkets) in Shanghai. Eating meat is associated with strength and power while a plant based diet is not, at least not for now. While Tyson Foods posted almost 5% margin in FY2020 (ending 3rd Oct, 2020), the company is a dominant force in the market with its size being significantly larger in comparison, which makes it probably unreasonable to expect similar margins for Beyond Meat, which has still not made any profits. Even though the firm doesnt necessarily hold logistical or technological advantages over its competitors, I think it helps to quantify what, if any, acquisition hopes are priced into the stock. But just how do these brands fare when it comes to brand awareness and consideration. Whos to say that its red meat? Each of the above scenarios also assumes Beyond Meat is able to grow revenue, NOPAT, and FCF without increasing working capital or fixed assets. What can you learn from this? You can see all the adjustments made to Beyond Meats balance sheethere. Does this make the stock expensive considering the recent volatility in the stock price? 1. Total revenue jumped by 69% against the prior-year quarter to $113.3 million. Devault, PA Operations - DEPA Production On-site. Beyond Meat founder, Ethan Brown, understood the place of meat in the collective perception very early on.
Beyond Meat: Analysis of a Successful Marketing Strategy 4. Beyond Meat burgerseven have grill marks further convincing consumers that maybe it really is like meat. Plant-based meats look like an attractive bet to play the future of food.