Beyond Meats profitability ranks at the bottom of this peer group. 2023 Latana GmbH. Competitors. Beyond Meat might be the pioneer in this segment, but now it faces fierce competition. Balance Sheet: I made $290 million of adjustments to calculate invested capital with a net decrease of $228 million. If you do subscribe to our retail trends newsletter to get the latest retail insights & trends delivered to your inbox. Figure 7 compares the firms implied future NOPAT in this scenario to its historical NOPAT. We are providing energy for the body and we can pull it from a lot of different places. It represents what we feel is the first product that mainstream omnivores are willing to seek out and put at the center of their plate.. Beyond Meat positioned its products as similar to animal meat as they could. To illustrate, the company repackaged a portion of its slow-moving food service inventory for retail consumption. Another key marketing vehicle for the company is its partnerships with big brands likeMcDonalds, KFCand Pizza Hut. Instead, it avoids labelling its products as vegan even though they are. This makes a lot of sense since only2.7%of packaged meat sales in the United States are 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. Market Drivers- Market drives come from the availability of knowledge on healthy products vs. mass marketing for bad products. Figure 11: Implied Acquisition Prices to Create Value. For example, evaluating the conditions of the animals before death, the process in which the meat is processed, the drugs and antibiotics that the animals were treated with before getting slaughtered. 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. strategy uncovers and shares the "bold vision, . The first six months of 2020 have visibly transformed Beyond Meat 's ( BYND -0.58%) approach to marketing its plant-based, meat substitute products. Do you like this content? Impossible Foods sells slightly different products: Impossible Burger, Impossible Pork, Impossible Sausage. But thats what BYNDs investors are betting will not happen! 2 Reasons to Avoid a Roth 401(k) for Your Retirement Savings, Warren Buffett's Latest $2.9 Billion Buy Brings His Total Investment in This Stock to $66 Billion in 4 Years, Want $1 Million in Retirement? Opinions expressed by Forbes Contributors are their own. If Beyond Meat created the healthiest plant based products that dont taste very good then it wouldnt be in business very long. In any case, I view recent moves as encouraging as Beyond makes moves to improve its footing to grow as a . We can perceive more confidence from the company, in line with its media and advertising strategy. Sustainable Competitive Advantage- Beyond Meats formula for the perfect flavoring to taste just like a real burger. Considering our revenue projections of roughly $1.1 billion and 6% margins, almost $66 million in net income is possible by 2023. Inside Beyond Meat's lab, where the company transforms plants into faux meat with microscopic analysis and robot mouths. People tend to associate meat with strength, with muscles. Below is a short list of some of Beyond Meats alternative meat competitors: This list is not exhaustive and doesnt include any of the traditional meat products that continue to garner a large share of consumer dollars. 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. 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. This created a need for plant-based foods to replace the broken system of meats. The Motley Fool owns shares of and recommends Beyond Meat, Inc. Baseball player David Wright was the first celebrity to sign a contract with the brand. Figure 9: BYND Has Large Downside Risk: DCF Valuation Scenario. And if this happens, you need to have others you can roll out. Even with that success, Brown continues to think big . Since going public in early May, Beyond Meat's stock has soared more than 450 percent and its market value is over $8 billion. 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 success comes partially from the fact that it has been able to evolve alongside or prior to consumer demand. If yes (which is the most common case), you can sell them to way more people and have an even greater impact. Theres no actual blood,instead beet juice isused but it does the trick. Made from "soy powder, gluten-free flour, carrot fiber and other ingredients", they used a food extrusion machine to create a chicken-like texture. Remember the man-ish look of the burger boxes, the focus on the amounts of protein? With low margins and little control over the majority of distribution, I think shares can fall sharply from current levels. Though the firms revenue has improved from $298 million in 2019 to $401 million over the trailing-twelve-months, Beyond Meatscore earnings[1]have fallen from $6 million to $4 million over the same time. 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. Production Supervisor - 2nd Shift. 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. (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. .css-16c7pto-SnippetSignInLink{-webkit-text-decoration:underline;text-decoration:underline;cursor:pointer;}Sign In, Copyright 2023 Dow Jones & Company, Inc. All Rights Reserved, adidas Promo Code - $30 Off 1000s of Best-Sellers + Free Shipping, 60% off running shoes and apparel at Nike without a promo code, Michael Kors promo code First Order: sign up for KORSVIP + Get 10% off. Each of the above scenarios also assumes Beyond Meat is able to grow revenue, NOPAT, and FCF without increasing working capital or fixed assets. Sounds too good to be true, right? Attracted by Beyond Meats impressive growth rates and soaring market value, multiple competitors are entering the alternative meat industry. Nope, its just Beyond Meat. Extensive background in CPG . Although its products are plant based Beyond Meats marketing does not explicitly call that out. Combine revenue growth with the fact that Beyond Meats net income margins (net income, or profits after all expenses and taxes, calculated as a percent of revenues) are on an improving trajectory. Critical Details Found in Financial Filings by My Firms Robo-Analyst Technology. 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). Beyond Meat is seeking a marketing, advertising, regulatory, and trademark attorney with 10-12 years of experience. By shifting from animal-based meat to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare. Figure 4: Expenses as % of Revenue: Beyond Meat 2Q19 vs. 2Q20, BYND Operating Expense As Of Revenue 2Q19 Vs. 2Q20. 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. Stun is a creative branding agency. These sales represent 5% of shares outstanding. Asit Sharma has no position in any of the stocks mentioned. So, what can you learn from Beyond Meat's marketing strategy? How Beyond Meat's Marketing Strategy Set it Apart . While Beyond Meats stock performance is attractive to many momentum traders, investors with fiduciary responsibilities should consider the deteriorating fundamentals, weak prospects to compete at the scale of its competition, and the unrealistic increase in profits implied by the current valuation. This has come from the increased consumer-knowledge on healthy products, plant-based diets,. This created the need for healthy products. Dont become so attached to a product that you arent willing to see when it no longer serves you. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. last yearwhere it will: develop, produce and market snacks and beverages made from plant-based protein bringing together Beyond Meats innovation expertise with PepsiCos marketing and commercial capabilities. PepsiCo is known for its marketing prowess and just working with PepsiCo will expand Beyond Meats reach. With these headwinds Beyond Meat had to convince meat lovers that its products passed the test. This adjustment represents 7% of Beyond Meats market cap. 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. Eating meat has long been associated with masculinity. Ads like this are created to convert the masses instead of targeting a niche market. 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. Tyson Foods (TSN), the largest meat producer in the U.S., sold its stake in Beyond Meat in April 2019 and just a few months laterannouncedthe launch of its plant-based protein brand, Raised & Rooted. It provided Beyond Meat with one of the best forms of advertising, credibility. 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. Beyond Meats massive revenue growth cannot last forever. Acquisitions completed at these prices would be truly accretive to Kraft Heinzs shareholders. Also, seeing that a lot of slaughter houses will absolutely not let anyone come see the inside conditions that animals are facing. https://www.wsj.com/articles/beyond-meat-hires-marketing-executive-revamps-retail-strategy-11675379688. Beyond Meat Announces New Executive Leadership Appointments to Accelerate and Support the Company's Vision for Strategic Growth. Still, disputes aside, Beyond Meat has been doing very well these past few years. Leverage partners with larger platforms to expand reach. Instead, they persevered. It may even get heavier as more people understand healthy food from non-healthy food. Apply. 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 Is Down 93% From Its High. It doesnt matter what industry your brand is in theres always a chance consumers wont take to your product or service. Per Figure 4, Beyond Meats operating expenses as a percent of revenue have actually increased over the past twelve months from 97% in 2Q19 to 107% in 2Q20. Though their first product received positive reviews from some celebrities and PETA named Beyond Meat their 2013 Company of the Year, journalists who actually tasted the chicken reported that the "likeness to real chicken was tolerable, at best". 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. The Impossible Foods start-up was founded in 2011 in California by Patrick O. The plant-based food market will grow bigger and bigger every year. After all, the positive choices we make every day - no matter how small - can have a great impact on our world. 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.
