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. 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. 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. 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. These days, fewer investors pay attention to fundamentals and the red flags buried in financial filings. Expired Meat: https://youtu.be/ZxCT_D6HBd8, https://www.forbes.com/sites/greatspeculations/2020/09/14/competition-will-eat-beyond-meat-alive/#9d646992946b, https://www.cnbc.com/2019/08/21/whole-foods-ceo-john-mackey-plant-based-meat-not-good-for-your-health.html, https://www.cnbc.com/2020/09/14/beyond-meat-is-launching-meat-free-meatballs-in-grocery-stores.html, Female Entrepreneur. 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. Competitors, Serious Uphill Battle for Beyond Meat to Improve Profitability. 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. Lets have a look at their most serious competitor: Impossible Foods. Made from "soy powder, gluten-free flour, carrot fiber and other ingredients", they used a food extrusion machine to create a chicken-like texture. Moral of the story? Beyond Meat Inc. BYND, -7.36% 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 . Looking ahead to 2021, consensus earnings estimates are a much higher $0.47/share. What can you learn from this? The companys marketing strategy is multiple layers one and has evolved over time, to keep up with the market trend. Beyond Meat and Impossible Foods have many common points. 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. Its stock value gained 163% on the day of its stock introduction. Does this make the stock expensive considering the recent volatility in the stock price? Plus, they created a new category by being one of the first to do it and do it right. However, its reasonable to assume that as Beyond Meats business gains scale and the company expands aggressively, it can boost margins to the levels of Tyson Foods in the next few years, so we estimate roughly 6% margins by 2023. A year ago, the consumer discretionary upstart's top line reflected the depth of its marketing and supply chain investment in the restaurant business: These sales were nearly identical to their retail counterpart: Source: Beyond Meat. Apart fromtotal debtwhich includes the operating leases noted above, the most notable adjustment to shareholder value was $572 million inoutstanding employee stock options. Beyond Meat has earned a premium name thanks to its marketing strategies, but this premium is too much. However, the fundamentals reveal this stock is more style than substance. The following fund receives an unattractive rating and allocates significantly to BYND. However, we can define the general key aspects: Targeting meat-eaters as well, not only vegans/vegetarians, Identifying the collective reputation of plant-based products, and changing it, Relying on its reputation to appear on restaurant menus and get cheap advertising. 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. According to the Partners In Leadership Happiness at Work survey, when employees are happier at work, 85% take more initiative. Resourceful, strategic, and self-directed leader with a proven record of achievement in global account management, business development and sales strategy leadership. 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). From the beginning Beyond Meat had a vision for its business that was much broader than any of its predecessors. 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. Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. But instead of doubling down and spending millions of dollars more to try and fix a product receiving a lukewarm response at best Beyond Meat chose to pivot. 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. Continue reading your article witha WSJ subscription, Already a member? Beyond Meat, a producer of plant-based meat substitutes, was founded in 2009 in Los Angeles, California. Create a great product. 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. To make the world smarter, happier, and richer. Beyond Meats profitability ranks at the bottom of this peer group. While consumer interest in protecting the environment or having a healthier lifestyle continues to grow it doesnt always mean consumption follows. Plant-based meat alternatives are on the rise and not just with vegans. There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. *Average returns of all recommendations since inception. And if this happens, you need to have others you can roll out. Purchase Decision- When consumers are informed of the evaluation of options, information is readily available, and they have recognized a problem, it is so easy for consumers to make a newly informed decision. Net revenues decreased 1.2% to $100.7 million in the fourth quarter of 2021, compared to $101.9 million in the year-ago period. 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. Figure 10 shows the implied values for BYND assuming Kraft Heinz wants to achieve an ROIC on the acquisition that equals its WACC of 4.4%. Beyond Meat, therefore, accomplished something huge: its name is enough to make people reassured about the quality and taste. Therefore, they have a lot of time and competitive advantage before others to create the most well-known category before all other competitors. Beyond Meat, the company that is making eating plant-based protein mainstream continues to grow at a fast pace. 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. 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. Asit Sharma has no position in any of the stocks mentioned. Plant-based burgers have existed for decades before Beyond Meat. Figure 4: Expenses as % of Revenue: Beyond Meat 2Q19 vs. 2Q20, BYND Operating Expense As Of Revenue 2Q19 Vs. 2Q20. Sustainable Competitive Advantage- Beyond Meats formula for the perfect flavoring to taste just like a real burger. If yes (which is the most common case), you can sell them to way more people and have an even greater impact. Acquisitions completed at these prices would be truly accretive to Kraft Heinzs shareholders. At the end of 2Q20, Beyond Meat had $222 million of cash and cash equivalents on its balance sheet. Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. Attracted by Beyond Meats impressive growth rates and soaring market value, multiple competitors are entering the alternative meat industry. Beyond Meats case also shows that a marketing strategy is not fixed: it has to evolve along with the companys positioning. It may even get heavier as more people understand healthy food from non-healthy food. Beyond Meat stated that its mission is to push boundaries and disrupt. Beyond Meat, the company that is making eating plant-based protein mainstream continues to grow at a fast pace. If youre always innovating and looking towards the future, youll rarely be caught off guard. As of December 31, 2020, Beyond Meat had products available at approximately 122,000 retail and foodservice outlets in over 80 countries worldwide. The redistribution of cash flow to its investors is a challenge. How it Turned an Ugly Shoe into a Hot Commodity, 10 Ways of Marketing Outside of Facebook & Instagram for Retailers, 10 Inexpensive Marketing Ideas for Retailers, Learn more about me at: www.triciamckinnon.com, Customer Experience, eCommerce, Strategy & Growth, tried to get funding to expand his company. BYND revenues saw a rise of 36.6% y-o-y in 2020, which was sharply lower than historical growth rates. I also assume Beyond Meat achieves an 8% NOPAT margin, which equals the average of Beyond Meats and Kraft Heinzs TTM NOPAT margins. 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. Having the largest natural and organic food retailer in the United States take a chance on this relatively unknown brand gave other grocery retailers an incentive to try the same product placement in their stores. 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). 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. We're here to help brands make better marketing decisions by delivering world-class, scalable insights. However, the improvement in Beyond Meat's margins has been eye-popping. Finally, in 2021, Beyond Meat began supplying Taco Bell with plant-based meat products and partnered with PepsiCo to develop and market plant-based drinks and snacks. For example, Tyson Food, one of the biggest and earliest investors in Beyond Meat, which had a 5% stake in 2016 exited in 2019. 4. Eating plants is the best thing you can do for your diet. This would be unreadable! If you do subscribe to our retail trends newsletter to get the latest retail insights & trends delivered to your inbox. Do you like this content? As of 2020, the Beyond Meat company sells: Cookout Classic (10 plant-based burgers). In total, the global market for meat substitutes is set to grow to $23.4 billion by 2024, according to market research company Euromonitor. Eat What You Love 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. However, given the low margins and overvalued stock price, I think it would be unwise for a larger firm to acquire Beyond Meat at current levels. This copy is for your personal, non-commercial use only. Going forward, Beyond Meat will find it even more difficult to grow revenue and profits as competitors flood the market. Instead, due to theproliferation of noise traders, the focus tends toward technical trading tends while high-quality fundamental research is overlooked. Engineered plant-based burger patties from food, company Beyond Meat are visible on shelves among other meat alternatives at a grocery store in San Ramon, California, August 28, 2019. 8 Facts About Pelotons Marketing Strategy You Need to Know, Dirty Lemons Marketing & Growth Strategy, How it Became a Success, Crocs Marketing Strategy. Some of the largest consumer food brands have followed suit. Further, consensus estimates for Beyond Meats 2020 earnings are now $0.07/share. Things Are Only Getting Worse for Beyond Meat Stock. 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. Making the world smarter, happier, and richer. In 2021 Beyond Meat's revenue increased by 14.2% to reach $464.7 million. If you think about the first time you heard about Beyond Meat it very well many have been when the product launched at a large fast food chain. Firstly, the gradual lifting of lockdowns in recent months will help the restaurant segment register strong growth along with sales from retail chains.
