What’s going on here?

• Beyond Meat, the plant-based meat company, reported earnings yesterday for the first time since its IPO.
• It beat Wall Street expectations with:
  • quarterly net revenue of $40 million;
  • forecast juicy sales of over $210 million for the whole year;
  • net losses of $6.6 million for the quarter.

A lot has happened since the IPO

• Beyond Meat has done remarkably well, up almost 300% from its IPO price.
• To appeal to more customers, fast food restaurants like:
  • Tim Hortons has announced partnerships with the brand;
  • Burger King launched its Impossible Whopper with Beyond Meat rival Impossible Foods;
  • Some think McDonald’s is coming for Beyond next.
• JPMorgan analyst Ken Goldman said the sky is the limit for the industry, saying:
  • the overall fake meat sector could do over $100 billion in sales in 15 years.
  • Beyond’s share of that veggie patty: 5%.

Zoom out

Optimism: Those projections are so optimistic because customers are getting more concerned about:

• their health, although some in the industry say the fake meat burgers aren’t the healthiest choice;
• climate change. Meat production accounts for millions of metric tons of greenhouse gas emissions every year.

Problems: One is the best kind.

• Beyond is having trouble filling all of its orders (a challenge Impossible ran into after it launched with Burger King).
• Making plants “sizzle, sear and even bleed” like meat requires high-tech production, which means meatless burgers are and will probably stay pricier than traditional ground beef.

Bottom line:

• Beyond is clearly riding a meatless wave;
• It has set the gold standard for 2019 IPOs.

Optional reading: The WaPo has a great look at it here if all this leaves you curious about the meat-that-was-once-an-animal industry and its efforts to thwart the plant and lab versions.

Content source: Freyman. N. (2019) "Beyond’s Stock Is Red Meat". Morning Brew. Available from: https://www.morningbrew.com/stories/beyonds-stock-is-red-meat/ [Accessed 13 June 2019]