eResearch | Beyond Meat Inc. (NASDAQ: BYND; “Beyond Meat”) is a plant-based protein (“meatless”) food production company headquartered in California, United States. The Company designs alternative food products to replace chicken, beef, and pork, and are on shelves in 4,500 stores and in 27,000 restaurants.
In May 2019, Beyond Meat went public with an IPO at US$25 per share followed by their first quarterly financials in June 2019, in which they announced that the Company is on track to grow revenues by more than 140 percent, year-over-year, to more than US$210 million in 2019. This beat analyst expectations and Beyond Meat has since rallied up as high as US$161 per share with a market capitalization of US$11.2 billion.
Beyond Meat has two main revenue streams: grocery stores (58%) and restaurants (42%). Revenue has been growing aggressively with a 170% increase from 2017 to 2018 but expenses grew faster with an operating loss after tax of US$19 million in 2018 compared with US$13 million in 2017.
As Beyond Meat’s revenue increases, there is evidence of economies of scale as gross margins increased year-over-year with gross margins turning positive for the first time in 2018 at 20% which is already higher than Tyson Foods (NYSE: TSN), the largest meat producer in the United States. There is no sign of slowing down for Beyond Meat as they tripled its production capacity over the past year with expected gross margins of 25% moving into 2019.
There is a strong perception of additional health benefits from plant-based proteins compared with meat proteins as companies are constantly pushing this perception with their marketing and advertisements. Beyond Meat uses 100 percent natural ingredients and puts out non-GMO products, but the macronutrients are lower in protein, similar in fat content, and five times as much in sodium when compared to an unseasoned 85% lean-beef burger (comparison with USDA National Nutrient Database).
A health benefit from Beyond Meat products is that they have no cholesterol and consuming an excess of red meat has been associated with increased risk of colorectal and other cancers. Gina Keatly, a certified dietary nutritionist, stated that Beyond Meat is similar in nutrition to a regular 80 percent lean meat burger and that 90% lean meat options are available at most grocery stores which are lower in saturated fat and cholesterol compared with Beyond Meat burgers.
According to Barclays, the alternative food industry is expected to reach US$140 billion over the next decade, which would account for 10% of the US$1.4 trillion global meat industry. Multiple industry leaders such as Restaurant Brands International, Loblaws, and Maple Leaf Foods are now starting to invest in either developing their own plant-based meat processors or acquiring alternative meat products from suppliers such as Beyond Meat Inc. or Impossible Foods Inc.
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Beyond Meat Inc. (NASDAQ: BYND)
Headquartered in California, United States, Beyond Meat is a plant-based protein food producer that supplies both retailers and restaurants. On May 2019, Beyond Meat made their product available at 4,500 grocery stores in Canada. BYND currently trades at US$149.71 with a market capitalization of US$9 billion.
Restaurant Brands International Inc. (NYSE: QSR)
Headquartered in Toronto, Canada, Restaurant Brands International is a multinational fast food holdings company that was formed in 2014 through the merger of Burger King and Tim Hortons. QSR recently rolled out its alternative meat products, the Impossible Whopper at Burger King and the Beyond Meat breakfast sandwich at Tim Hortons. QSR is currently trading at C$91.19 with a market capitalization of C$42.39 billion.
Maple Leaf Foods Inc. (TSX: MFI)
Headquartered in Mississauga, Canada, Maple Leaf Foods is consumer packaged meats company that was founded in 1927 through the merger of several major Toronto meat packers. On June 2019, through its subsidiary Greenleaf Foods, Maple Leaf Foods partnered up with Pizza Pizza Royalty Corp. (TSX: PZA) to provide them with their first plant-based product offering. MFI is currently trading at C$28.81 with a market capitalization of C$3.59 billion.
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