They did not service the vegan and vegetarian markets as traditional players did. Baseball player David Wright was the first celebrity to sign a contract with the brand. 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. Part of this shift happened without much intervention by management, as consumption in restaurants and other institutional foodservice outlets has plummeted since the spring, while at-home consumption has soared. Also, seeing that a lot of slaughter houses will absolutely not let anyone come see the inside conditions that animals are facing. 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 key variables are the weighted average cost of capital (WACC) and ROIC for assessing different hurdle rates for a deal to create value. From the beginning Beyond Meat had a vision for its business that was much broader than any of its predecessors. This copy is for your personal, non-commercial use only. Plant based meats are not filled with dead animals which include bacteria growth and can contain other substances such as feces. Now, information and videos are easily assessable to people of all ages to make a truly informed decision on healthy options such as plan-based meat. This competitive disadvantage only makes Beyond Meats path to sustainable profitability that much more difficult. Devault, PA Operations - DEPA Production On-site. Each implied price is based on a goal ROIC assuming different levels of revenue growth. Brands. Brown. 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. Beyond Meat also has big contracts with fast-food chains, as mentioned before, which is a distribution canal bringing lots of cash flow. Learn More. Beyond Meat's marketing strategy is to convert carnivores into occasional vegans. By paying attention to all the details of a real burger the taste, texture, smell, feel, and consistency Beyond Meat has been able to break into a target audience that had yet to be cracked: mainstream consumers interested in healthier forms of meat. Conference: 2021 3rd International Conference on Economic Management and Cultural . These days, fewer investors pay attention to fundamentals and the red flags buried in financial filings. In the second scenario, I use 61% growth (2020 consensus estimate) for all years to illustrate a best-case scenario where I assume Beyond Meat could grow revenue faster within the larger distribution network, resources, and customer base of Kraft Heinz. Inside Beyond Meat's lab, where the company transforms plants into faux meat with microscopic analysis and robot mouths. See the math behind this reverse DCF scenario. This Beyond Meat Burger in particular cooks like a burger and looks like one,saidJoe Wood, who was the mid-Atlantic meat coordinator for Whole Foods Market at the time. the stock is worth just $30/share today - a 57% . And while their Chicken-Free Strips were sold at big-name stores like Whole Foods all across the US, they were later discontinued in 2019. With a sound marketing strategy, Beyond Meat may be able to make its product cool again. For example, Tyson Food, one of the biggest and earliest investors in Beyond Meat, which had a 5% stake in 2016 exited in 2019. By 2015, even Walmart was selling Beyond Meats plant-based products! To justify its current price of $135/share, Beyond Meat must immediately improve its NOPAT margin to 5% (same as Tyson and more than double its current margin of 2%). Beyond Meat Has Completely Altered Its Go-to-Market Strategy These launches create a lot of buzz and put Beyond the Meat on the map. Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. But what if youre looking for a more balanced portfolio instead? Also, these meat products are offered by themselves at the grocery stores. 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. A lot of people are trading so I know a lot of people are interested in the future of this company. Things Are Only Getting Worse for Beyond Meat Stock. We visited . Economic earnings, which account for the unusual items on the income statement and . This created a need for plant-based foods to replace the broken system of meats. 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. Critical Details Found in Financial Filings by My Firms Robo-Analyst Technology. How Beyond Meat's Marketing Strategy Set it Apart . Dollar figures in millions. Beyond Meat, which went public in the spring of 2019 and whose shares have fallen 16 percent this year, said it had completed a comprehensive greenhouse gas analysis that would be released in. The coronavirus pandemic put a halt to the companys fast-growing revenues as shutting down of restaurants due to the lockdown significantly affected the companys restaurant and foodservice business, which was the fastest growing segment for BYND until 2019. What Could Beyond Meat Look Like In 2023? - Forbes With the high expectations of consumers and the competition they were about to create, knowing that they got in during the right time when consumers would take it as a positive and embrace this new way to eating meat, or meat substitute.. Per Figure 2, Beyond Meats NOPAT margin and return on invested capital (ROIC) are below each of the competitors listed above, and well below the market-cap-weighted average of all the Food Processing firms under coverage. Could they suit flexitarians, meat-eaters? This all ended with Beyond Meats new look. illustration, packages of Beyond Meat "The Beyond Burger" sit in a refrigerator, June 13, 2019 in the Brooklyn borough of New York City. Although its products are plant based Beyond Meats marketing does not explicitly call that out. One venture capitalist even told Mackeythis: you know, John, I see you have got a pretty good business here, but it looks to me I looked at all the stores like you are a just a bunch of hippies and you are just selling food to other hippies and I dont think that is a very big market. He passed on investing in Whole Foods and ten years later that very same venture capitalist told Mackey that not investing in Whole Foods was the worst decision he had ever made. Beyond Meats profitability ranks at the bottom of this peer group. Opinions expressed by Forbes Contributors are their own. Beyond Meat burgerseven have grill marks further convincing consumers that maybe it really is like meat. 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. Beyond Meat and the Competitive Landscape | Toptal Figure 9 compares the firms implied future NOPAT in this scenario to its historical NOPAT. Beyond Meat Lab Where It Develops Plant-Based "Meat" - Business Insider In order to get ahead of the competition, never stop innovating. See Figure 8 for details. Meditation apps have seen a boom in popularity over the past few years in the US but does their growth extend to Europe? Beyond Meat, the company that is making eating plant-based protein mainstream continues to grow at a fast pace. Are they only for vegans? Beyond Meatis one of them for the plant-based segment. 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. With a sound marketing strategy, Beyond Meat may be able to make its product cool again. Apart fromtotal debtwhich includes the operating leases noted above, the most notable adjustment to shareholder value was $572 million inoutstanding employee stock options. After adjusting for this liability, I can model multiple purchase price scenarios. 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. And this failure didnt break them for a few reasons most importantly, because they already had new products in the works. 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. Founder and Tech Inventor at Princess Technologies. When the Chicken-Free Strips failed, it wasnt only about the taste something was just off. By Tricia McKinnon. 2 1 Comment. Despite less transparency, I know that Beyond Meats executive compensation plan consists of a cash bonus, option grants, and restricted share units (RSUs). Like Comment Share . Beyond Meat has earned a premium name thanks to its marketing strategies, but this premium is too much. 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. As revenue slides, Beyond Meat CEO outlines strategy to improve The founder, Ethan Brown, said in June that the companys objective is to make plant-based meat cheaper than animal protein. Production Supervisor - 2nd Shift. Especially when competitors will try to introduce products that may be better than the original. KFC, Beyond Meat ready nationwide plant-based chicken rollout Heres a high-quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. You can see all the adjustments made to Beyond Meats balance sheethere. Beyond Meat Reports Fourth Quarter and Full Year 2021 Financial Beyond Meat (NASDAQ: BYND) was founded in 2009 by Ethan Brown, a Californian entrepreneur with an interest in environmental topics, who is also a vegan. Beyond Meat - Corporate Counsel - IP, Marketing & Brand Management Beyond Meat founder, Ethan Brown, understood the place of meat in the collective perception very early on. 3. A staff member at Business Insider that cooked and reviewed a Beyond Meat burger at homesaidthis about it: overall, it was tasty and juicy, unlike most veggie burgers which can often taste closer to cardboard than beef. Marketing is always easier when you have a great product because you dont have to try quite as hard to get people to try it as consumption spreads more organically over time via. February 1, 2022 . Asit Sharma has no position in any of the stocks mentioned. The company's vision is for consumers to enjoy a meat-like taste and texture in their favourite dishes while avoiding the many chemicals used in processed meat and reducing the number of animals killed every year. We can perceive more confidence from the company, in line with its media and advertising strategy. One of the most notable adjustments was $11 million inoperating leases. Time to Buy? If Beyond Meat created the healthiest plant based products that dont taste very good then it wouldnt be in business very long. However, some investors have growing concerns about the companys ability to maintain these results. Beyond Meat was one of the most successful IPOs (Initial Public Offerings) of 2019. Beyond Meat: Changing Consumers' Meat Preference | Harvard Business Beyond Meat Continues to Strengthen its Global Innovation Capabilities 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. Now, lets proudly assume what they are: a plant-based burger, extracting plant proteins to make a tasty and healthy burger. 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. 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. Eating plants is the best thing you can do for your diet. However, one of the biggest deal breakers for potential. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently. The Motley Fool has a disclosure policy. 4 Challenges That Could Hurt Beyond Meat Stock | The Motley Fool 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. The company's second-quarter 2020. 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. This would make growth in Beyond Meats stock price a real possibility in the next two years, taking its stock price to $200. Impossible Foods, Beyond Meat battle to achieve price parity - CNBC But just how do these brands fare when it comes to brand awareness and consideration. + Follow. Eating meat has long been associated with masculinity. Beyond Meat constantly reinvests their earnings in further research and development, as well as in marketing, and in scaling up production and distribution. The paper empirically shows that my firms data is superior to Operating Income After Depreciation and Income Before Special Items from Compustat, owned by S&P Global (SPGI). Beyond is working to streamline its operations and reverse declining sales. Beyond Meat Is Down 93% From Its High. Their main rival is the company Impossible Foods. strategy uncovers and shares the "bold vision, . 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. Figure 11: Implied Acquisition Prices to Create Value. It began trading at $25/share on the Nasdaq stock exchange and ended the day at $65.75. This article will take a deep dive into Beyond Meats journey to success and provide some tips other brands can use to fuel their own growth stories. But beneath these numbers, the dynamics of Beyond Meat's business model have been radically altered by its response to the COVID-19 pandemic. 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. Beyond Meat entered into a partnership with PepsiCo. BEYOND MEAT ANNOUNCES NEW . One of the most important pieces of furniture we own. Beyond Meat Inc. is revamping its retail sales strategy to center on five major grocers and hiring a new marketing executive as part of .css-1h1us5y-StyledLink{color:var(--interactive-text-color);-webkit-text-decoration:underline;text-decoration:underline;}.css-1h1us5y-StyledLink:hover{-webkit-text-decoration:none;text-decoration:none;}an effort to reinvigorate the plant-based food makers business. Why? This is the market drive for Beyond Meat. June 4, 2021 . Now, if Beyond Meats revenues grow 2.7x, the P/S multiple will shrink by more than 60% from its current level, assuming the stock price stays the same, correct? Competitors, Serious Uphill Battle for Beyond Meat to Improve Profitability. What is Beyond Meats marketing strategy? The company launched the Impossible Burger in 2016. 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. 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. Competitors. This vision can be found throughout Beyond Meats marketing collateral. Valuation: I made $757 million of adjustments with a net effect of decreasing shareholder value by $513 million. See the math behind this reverse DCF scenario. For comparison, this scenario implies Beyond Meat would generate more sales than incumbent competitors such as Pilgrims Pride (PPC), ConAgra Foods (CAG), and Hormel Foods (HRL) in their last fiscal years. Instead, it avoids labelling its products as vegan even though they are. Research on Beyond Meat's Profitability Problems and Strategies. Resourceful, strategic, and self-directed leader with a proven record of achievement in global account management, business development and sales strategy leadership. Is It Time to Buy? 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. Beyond Meat Stock: A Competitive Analysis | Nasdaq What can you learn from this? Beyond Meat's Branding Helped Take Plant-Based Mainstream Beyond Meat: Focus List: Short Winner That Will Fall Further Beyond Meat is a Los Angeles-based producer of plant-based meat substitutes, including vegan versions of burgers and sausages. I assume revenue grows 47% in years four and five, the same as year three. To make the world smarter, happier, and richer. Theres no actual blood,instead beet juice isused but it does the trick. In the second quarter, U.S. retail sales (mostly through grocery channels) almost tripled to $90 million, while foodservice sales in the U.S. plunged by 61% to $6.5 million. Even more impressive is that Beyond Meat is, well, a food company (it develops plant-based meat products) and the sales for 2018 were only $87.9 million (and yes, the company has yet to post a . Beyond Meats successes have inspired the giants to create new categories. This does not boil down to just knowledge on slaughter houses, animal conditions, bacteria etc. Not knowing what is in the hot dog, not knowing where the hot dog came from, the conditions of the animals at the house in which the meat was slaughtered. Its an era of growth for the still young start-up. They exploit their established brand engagement to build more brand equity, at a low cost, because they dont pay a cent for restaurants to make this kind of indirect advertising for them. The Motley Fool owns shares of and recommends Beyond Meat, Inc. 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. Since going public, four of its six quarters have shown improvement from. The Audacious (and Risky) Strategy That Made Beyond Meat a Billion Lets take a look at data from Germany. Beyond Meat revamps its retail strategy, hires new marketing executive Tackle stereotypes about who your customers should be. There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. And if this happens, you need to have others you can roll out. on July 4th, eating a hot dog with your family. 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. After all, nothing could replace a real burger, could it? 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. 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. Gross profit was $122.3 million, or gross margin of 30.1% of net revenues; Adjusted gross profit was $133.7 million, or Adjusted gross margin of 32.9% of net revenues, reflecting exclusion of expenses attributable to COVID-19. Eating meat is associated with strength and power while a plant based diet is not, at least not for now. The larger the firm gets, the more difficult it becomes to achieve large year-over-year (YoY) growth rates. In this scenario, Beyond Meat grows revenue by 37% compounded annually (which results in NOPAT growing 42% compounded annually) for the next 12 years. 2. Digital Marketing @ Beyond Meat | Award-Winning Author | Driving Success Through Tech, Creativity, & Strategy Pittsburgh, Pennsylvania, United States 631 followers 500+ connections If Beyond Meat can improve its NOPAT margin to 5% (equal to Tysons TTM margin) and grow revenue at 61% in 2020, 55% in 2021, and 47% in 2022 (consensus estimates) and by 20% compounded annually thereafter, the stock has significant downside risk. Many undercover operations are conducted to get footage and investigate what is really going on inside the slaughter houses. Many people do not know that eating meat is not only eating meat, but eating the history in which the meat came from. Beyond Meat positioned its products as similar to animal meat as they could. Beyond Meat: The Keys To Disrupting An Enormous Market - Forbes This created the need for healthy products. Beyond Meat ( NASDAQ: BYND) is streamlining its sales strategy, according to internal documents reviewed by the Wall Street Journal. How Beyond Meat's Marketing Strategy Set it Apart - Indigo9 Digital Inc. 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). 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. Beyond Meats success comes partially from the fact that it has been able to evolve alongside or prior to consumer demand. Plant-based burgers have existed for decades before Beyond Meat. But thats what BYNDs investors are betting will not happen! Beyond Meat Is On Its Path To Irrelevance - SeekingAlpha The original packaging did not display vegetables, and the words meat and best in the products names were not chosen randomly. However, the improvement in Beyond Meat's margins has been eye-popping. Over the TTM period, FCF is -$164 million. 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. They have sharply improved from -93.3% in 2016 to -4.2% in 2019. Sounds too good to be true, right? Another key marketing vehicle for the company is its partnerships with big brands likeMcDonalds, KFCand Pizza Hut. 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. By Christopher Lombardo. As we touched on earlier, not everything was easy for Beyond Meat they made their fair share of mistakes along the way. In any case, I view recent moves as encouraging as Beyond makes moves to improve its footing to grow as a . However, it hasnt always been smooth sailing for Beyond Meat in March 2019, Don Lee Farms filed a civil suit against its former business partner. Briana Chen - Digital Marketing Intern - Beyond Meat | LinkedIn Buy These 2 Stocks in 2023 and Hold for the Next Decade, 2 Growth Stocks to Buy Before the Big Bull Rally, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. 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.