Could Beyond Meat Be a Millionaire-Maker Stock?

Could Beyond Meat Be a Millionaire-Maker Stock?

There remains a world of opportunity for growth, but whether it can be done profitably is the question.

Rich Duprey


Jan 5, 2021 at 8:45AM

After a disappointing third-quarter earnings report from Beyond Meat (NASDAQ:BYND), investors are questioning whether the growth story is already over. Shares of the plant-based meat alternative manufacturer have fallen 36% from their October highs.

While the stock soared 65% in 2020 and has risen nearly fivefold from its initial public offering price, undoubtedly creating quite a few millionaires who bet on the business early on, growth seems to have faltered significantly in a time when it should be expanding, so let’s see whether Beyond Meat still has what it takes to be a millionaire-maker stock in the future.

The elephant in the room

So why did Beyond Meat stumble? President and CEO Ethan Brown says consumers were still “freezer loading,” or bulk-buying products to ensure they had plenty of food available, but they simply weren’t doing it at the same rate as they had earlier on in the pandemic.

Sales tailed off dramatically in the latest period, rising only 2.7%, compared with 69% in the second and a 141% surge in the first. Coupled with a food service business that has been damaged by COVID-19-related shutdowns and reduced capacity limitations, Beyond Meat suffered a setback.

Yet another meat shortage like the one that hit early on in the coronavirus outbreak may be on the horizon, which could lead to a new round of panic buying. JBS, for example, the world’s largest meat supplier, has sent home about 8% of its U.S. workforce over rising COVID-19 cases. Beyond Meat could see consumers turn to its products once more.

The need for new and better products

Yet Beyond Meat can’t grow if all it’s doing is lurching from one crisis to another; that’s not a viable long-term strategy. It needs to continuously attract new customers to its products, who then become repeat customers.

To do so, it needs to continually innovate and look at all areas of protein substitution, including pork and chicken, which is allowing the plant-based meat alternative maker to enter new partnerships beyond just burger chains and the beef section of the supermarket.

Moreover, it plans to bring more production in-house to both lower its costs as well as allow it to expand distribution. It just completed the acquisition of a former co-manufacturing facility in Pennsylvania while also expanding capacity in Europe and China, all of which should help lower the cost of its products to be more competitive with “real” meat.

International expansion opportunities

International markets give Beyond Meat new avenues for growth as well. For example, it recently developed a new pork product specifically for the China market — a plant-based minced pork.

As China is the world’s largest consumer of pork, this represents a rich opportunity, though whether a plant-based alternative can shake cultural norms surrounding pork consumption remains to be seen. Rival Impossible Foods is also tackling the Chinese market.

This past summer, it also entered the Brazilian market of Sao Paulo with burgers, sausages, and ground beef substitutes. Brazil is the third largest meat-consuming country in the world, but Beyond Meat will have to face JBS and Mafrig, which also have plant-based alternatives.

That may be part of the problem. For as much as analysts forecast meat substitutes are becoming a multibillion-dollar opportunity in the years ahead, the expanding market has attracted numerous competitors, including international giants such as Nestle and home-grown rivals such as Tyson Foods. The list of consumer goods companies developing their own plant-based products is actually quite large and growing.

A rich future?

Analysts are famous for extrapolating out in an ever rising straight line the growth prospects of a fad or trend. All too often those forecasts turn out to be wildly exaggerated. Yet even if they’re right about plant-based meat alternatives, the field is crowded.

Beyond Meat as an early mover in the space still has a lot of growth left in it, and it has arguably tapped into consumer demand for plant-based meat alternatives better than the competition. Yet there also seems to be a finite market for its product — and only a certain subset of consumers are likely to be regular repeat customers.

Its stock is also quite pricey, it needs to show that it can have sustained growth outside of a global pandemic, and can rise above the competition. So while Beyond Meat has a long future in front of it, its ability to be a millionaire-maker stock looks constrained.

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Tyson Foods invests in plant-based shrimp company

TA-FC CLIPBOARD: This is old news, but I still haven’t seen any place in or around Cleveland claiming to serve this product. It sure looks like shrimp and if it is as promised one might think it would soar. So where’s the ‘soar’ happening?

Doesn’t Tyson Foods know that vegans are suspicious of the ‘natural flavors’ category on labels? Come on. Do better. Make it all plant and tell us the details.

Tyson Foods invests in plant-based shrimp company


UPDATED THU, SEP 5 2019 11:36 AM EDT

Amelia Lucas

KEY POINTS After selling its stake in Beyond Meat in the spring, Tyson Foods’ next bet is on plant-based shellfish.

Its venture capital arm is making the investment in New Wave Foods.

The start-up makes plant-based shrimp from seaweed, soy protein and natural flavors.

New Wave Foods’ plant-based shrimp

Source: New Wave Foods

After selling its stake in Beyond Meat in the spring, Tyson Foods’ next bet is on plant-based shellfish.Tyson Ventures, the venture capital arm of the meat processing company, is investing in New Wave Foods. Tyson Ventures CFO Tom Mastrobuoni declined to discuss the financial terms of deal but said that Tyson took a minority stake of less than 20% in New Wave.

The start-up, which was founded in 2015, makes plant-based shrimp from seaweed, soy protein and natural flavors.

“I tasted it for the first time in a cafe in Palo Alto, and I had no idea I was eating plant-based shrimp,” Mastrobuoni said.

After shrimp, New Wave is planning to tackle crab and lobster. Shrimp is the most consumed seafood in the world, according to co-founder and Chief Technology Officer Michelle Wolf.

“From a business perspective, it made sense because of the market opportunity,” Wolf said.

While there are a number of companies tackling plant-based fish like salmon or tuna alternatives, New Wave is one of the few trying to sell crustacean substitutes. Mastrobuoni said that the lack of competition made New Wave a more attractive investment.

Tyson will leverage its scale and network to help accelerate New Wave’s growth.

Source: Tyson Foods invests in plant-based shrimp company

Website for NEW WAVE FOODS


U.S. food distributors allege Tyson Foods, rivals fixed chicken prices

U.S. food distributors allege Tyson Foods, rivals fixed chicken prices

Tom Polansek

CHICAGO (Reuters) – Top U.S. food distributors Sysco Corp and US Foods Holding Corp have joined retailer Winn-Dixie Stores [BILODW.UL] and other poultry buyers suing the country’s biggest chicken processors for allegedly conspiring to inflate prices.

REUTERS/Carlo Allegri

The distributors sued companies including Tyson Foods Inc, Pilgrim’s Pride Corp, Sanderson Farms Inc and Perdue Farms in separate complaints filed in federal court in Illinois on Tuesday.

The U.S. chicken sector, which is dominated by these large meat processors, has come under increased scrutiny in recent years as customers and farmers have alleged antitrust violations relating to pricing, production and compensation.“This is a case about how a group of America’s chicken producers reached illegal agreements and restrained trade,” the lawsuits from Sysco and US Foods said.

Tyson, the biggest U.S. chicken company, and Pilgrim’s Pride denied the allegations on Wednesday. Sanderson Farms said it will defend itself against the claims. Privately held Perdue declined to comment.U.S. poultry buyers previously claimed in a 2016 lawsuit that Tyson and its competitors had colluded since 2008 to reduce output and manipulate prices. Winn-Dixie, which operates grocery stores throughout the southeastern United States, sued the chicken companies earlier this month.“We expect the industry to fight the allegations and come out successful,” Mizuho analyst Jeremy Scott said.

Sysco and US Foods allege processors curbed the supply of chickens by colluding to limit breeder birds that produce flocks that are ultimately slaughtered for meat consumption.

Data provider Agri Stats participated in the conspiracy, according to the lawsuits, by distributing information about chicken production that gave processors insights into rivals’ supplies. Agri Stats, which the complaints say is a subsidiary of Eli Lilly & Co, did not immediately respond to a request for comment…

FINISH READING: U.S. food distributors allege Tyson Foods, rivals fixed chicken prices



Tyson Invests in Cultured Meat Maker Memphis Meats

Tyson Invests in Cultured Meat Maker Memphis Meats

By Dave Fusaro, Editor in Chief

Jan 31, 2018

Tyson Ventures, the venture capital arm of Tyson Foods, revealed on Jan. 29 it has invested an unspecified amount in Memphis Meats, one of the startup companies creating “cultured meat,” produced directly from animal cells.

“The investment is an example of Tyson Foods’ commitment to explore innovative, new ways of meeting growing global demand for protein,” the company said in a statement.

While the terms were not disclosed, Tyson Foods investment represents a minority stake in the business. Tyson joins a diverse group of investors in Memphis Meats, including DFJ, Atomico, Cargill, Bill Gates and Richard Branson.“We’re excited about this opportunity to broaden our exposure to innovative, new ways of producing meat, especially since global protein demand has been increasing at a steady rate,” said Justin Whitmore, executive vice president of corporate strategy and chief sustainability officer of Tyson Foods. “We continue to invest significantly in our traditional meat business, but also believe in exploring additional opportunities for growth that give consumers more choices.”

FINISH READING: Tyson Invests in Cultured Meat Maker Memphis Meats

Cultured Meat Info >

Memphis Meats >