Our goal is to give you the key to understanding Beyond Meats rapid success, to show you the hidden reasons for their success. This would make growth in Beyond Meats stock price a real possibility in the next two years, taking its stock price to $200. The plant-based food market will grow bigger and bigger every year. This makes a lot of sense since only2.7%of packaged meat sales in the United States are plant based. The company launched the Impossible Burger in 2016. 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. How did Beyond Meat become the leader it is today? Beyond Meat positioned its products as similar to animal meat as they could. Does this make the stock expensive considering the recent volatility in the stock price? 4. Figure 8: Current Valuation Implies Massive Revenue Growth, Significant Downside in a More Realistic Scenario. The bottom line is that even if Beyond Meat can grow revenue by 51% compounded annually for five years at an 8% NOPAT margin, the firm is worth much less than $135/share. This is very rare: imagine if menus displayed all the product brands they use to cook the dishes you eat. The Impossible Foods start-up was founded in 2011 in California by Patrick O. Ads like this are created to convert the masses instead of targeting a niche market. What can you learn from this? Theres no actual blood,instead beet juice isused but it does the trick. Instead of drawing attention to a product that consumers didnt love, they simply discontinued it and slowly fazed it out of supermarkets. 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. The QSR is looking to get the lion's share of the meat substitute market with Beyond Meat. While consumer interest in protecting the environment or having a healthier lifestyle continues to grow it doesnt always mean consumption follows. And now the ravenous race for market share begins, with Beyond Meat and Impossible Foods (which has raised nearly $500 million in debt and equity) in prime position to . Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. In 2014 they developed their first simulated beef product and expanded their presence from 1,500 to 6,000 stores in the US. So, what can you learn from Beyond Meat's marketing strategy? These days, fewer investors pay attention to fundamentals and the red flags buried in financial filings. While I chose Kraft Heinz, analysts can use just about any company to do the same analysis. But at this stage of Beyond Meat's growth, converting new customers remains the utmost priority. But beneath these numbers, the dynamics of Beyond Meat's business model have been radically altered by its response to the COVID-19 pandemic. This scenario represents the minimum level of performance required not to destroy value. Beyond Meat Inc. is revamping its retail sales strategy to center on five major grocers and hiring a new marketing executive as part of an effort to reinvigorate the plant-based food. Nonetheless, Beyond Meat's earnings press release observed that the value packs, which hit grocery stores only in the last two weeks of the quarter, were responsible for 16 percentage points of volume growth for the entire period. Since going public in early May, Beyond Meat's stock has soared more than 450 percent and its market value is over $8 billion. Well, when Beyond Meat chose to switch suppliers, they allegedly shared details of Don Lees manufacturing process which Don Lee saw as a breach of contract. Low margins in an increasingly competitive industry leave Beyond Meat with less flexibility to compete on price or invest in marketing and R&D. We visited . Inside Beyond Meat's lab, where the company transforms plants into faux meat with microscopic analysis and robot mouths. This created the need for healthy products. Their products are now sold in 17,000 grocery stores and 12,000 eateries. It provided Beyond Meat with one of the best forms of advertising, credibility. 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. At the end of 2Q20, Beyond Meat had $222 million of cash and cash equivalents on its balance sheet. If youre always innovating and looking towards the future, youll rarely be caught off guard. Fiduciaries should avoid Beyond Meat Inc. (BYND). Resourceful, strategic, and self-directed leader with a proven record of achievement in global account management, business development and sales strategy leadership. 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. January 2021. For example, without any existing shelf space, and only recently announcing an e-commerce platform, Beyond Meat must spend more on not only convincing consumers to try their products, but also on retailers to display their products. The ideal candidate must have substantial knowledge and experience in counseling on marketing and advertising matters for food and/or beverage companies, including review of packaging, labeling, and promotional . 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. 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.. Plant-based meat alternatives are on the rise and not just with vegans. Stun is a creative branding agency. 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. A lot of people are trading so I know a lot of people are interested in the future of this company. 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. Going forward, Beyond Meat will find it even more difficult to grow revenue and profits as competitors flood the market. Our marketing speaks very much to the ability for the highest-performing people in our society to perform not just as good, but better as result of the consumption of plant-based meat, particularly, our plant-based meat.. Per Figure 6, Beyond Meats TTM adjusted EBITDA of $45 million is well above core earnings of $4 million. Plants come directly from the sun and reap the energy created from the sun. This is one of the biggest first-day pop-ups in recent history. Plant based burgers are not new but Beyond Meat has been able to capture more of the mainstream market. Additionally, Beyond Meat is introducing its plant-based meatballs in Coles, the second largest supermarket chain in Australia with over 2,500 stores. 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%. As we touched on earlier, not everything was easy for Beyond Meat they made their fair share of mistakes along the way. As in all markets, there are leaders. In 2019, they partnered up with Dunkin Donuts to supply their Meatless Sausage for the breakfast chains sandwiches nationwide. This is not by accident but instead by design. 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. For example, Kelloggs delayed the launch of itsfirst roundof Incogmeato products due to the COVID-19 pandemic. Success of any of Beyond Meats competitors could also further threaten future profit growth for Beyond Meat. 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. Is It Time to Buy? I would prefer Beyond Meat align executives interests with shareholders interests and link executive compensation with improving ROIC, which isdirectly correlated with creating shareholder value. With a sound marketing strategy, Beyond Meat may be able to make its product cool again. Lets have a look at their most serious competitor: Impossible Foods. They have sharply improved from -93.3% in 2016 to -4.2% in 2019. Sign up for our Newsletter to receive free, insightful tips on all things brand! This is one of the biggest first-day pop-ups in recent history. The following fund receives an unattractive rating and allocates significantly to BYND. Like Comment Share . See allTrefis Featured AnalysesandDownloadTrefis Datahere. Are they only for vegans? In this scenario, Beyond Meat would earn ~$12.5 billion (slightly more thanMarketsandMarkets2019 estimated global plant-based meat market size of $12.1 billion) in revenue in 2031, compared to $401 million TTM. What are your predictions for the future of this company? 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. These features also convince consumers that Beyond Meat burgers are not your average veggie burgers which were never popular with mainstream consumers. Beyond Meat was the first company to sell plant-based burgers in grocery stores meat sections. We can spot changes in the design since their arrival. See the math behind this reverse DCF scenario. It began trading at $25/share on the Nasdaq stock exchange and ended the day at $65.75. They began targeting not only vegetarians and vegans, but also and mainly meat-eaters; flexitarians. 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. We believe Beyond Meat Revenues have the potential to rise close to 2.7x from the level of $407 million in 2020 to $1.1 billion by 2023, representing a growth rate of roughly 40% per year (for context, the compounded annual growth rate was a very healthy at 164% between 2016 and 2019). For reference, Beyond Meats invested capital has increased by an average of $84 million (28% of 2019 revenue) over the past two years. BEYOND MEAT ANNOUNCES NEW . Production Supervisor - 2nd Shift. KFC and Beyond Meat are partnering with YouTube star and influencer Liza Koshy to help reveal the debut. You can see all the adjustments made to Beyond Meats income statementhere. First, consumers expectations for new products and innovation will rise over time. Beyond Meat stated that its mission is to push boundaries and disrupt. Measuring Brand Awareness As Told By Marketing Experts, journalists who actually tasted the chicken reported. Valuation: I made $757 million of adjustments with a net effect of decreasing shareholder value by $513 million. Beyond Meats real breakthrough is not landing in the meat aisle or having celebrity endorsements but creating a plant based product people actually want to eat. Digital Marketing @ Beyond Meat | Award-Winning Author | Driving Success Through Tech, Creativity, & Strategy Pittsburgh, Pennsylvania, United States 631 followers 500+ connections 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. You can find Beyond Meat in many places from small restaurants to national chains but what really accelerated its growth in the beginning was its partnership with Whole Foods.
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