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How Far Can Beyond Meat Go?

Written by Monica Savaglia
Posted June 11, 2019

At the end of April, I wrote to Wealth Daily subscribers about plant-based protein company Beyond Meat’s (NASDAQ: BYND) initial public offering (IPO). Since its IPO on May 2, the company's stock has seen a massive surge.

Before the company went public, it priced its offering at $25 per share. As of Monday’s open, Beyond Meat was at $130 per share. That is a 420% surge on its shares since its public debut a little over a month ago! That’s unbelievable.

I knew the company was going to have a successful IPO, but at the time, I didn’t know how successful it was going to be. Not only that, but the demand for the stock seems to be growing every day. Investors are becoming enthralled by Beyond Meat’s story.

One of the reasons investors are interested in Beyond Meat's stock is because the company is operating in an entirely new industry — one it’s currently dominating... for now.

However, this company isn’t new. It’s been around for a little more than a decade, working at improving its products to appeal to not just vegan and vegetarian consumers but also consumers who enjoy eating meat from animals.

That has been the biggest hurdle for a lot of vegan and vegetarian food companies — trying to reach one of the biggest demographics of eaters. And right now, Beyond Meat is excelling at reaching that larger market.

Beyond Meat’s executive chair Seth Goldman recently said:

It feels like this breakthrough moment. It’s not like all of a sudden we came out of nowhere... in the consumer’s mind, it’s definitely been a step-change in terms of awareness and acceptance.

The company has been around for more than a decade, and its products have already been available at your favorite grocery store, but you probably didn’t even notice. It was probably a small display or only a few products. But all of that has changed...

The next time you go into a grocery store to do some shopping, stop by the meat department and look for Beyond Meat’s products. I guarantee you'll see some meatless burger patties.

After writing about the company's IPO, I started noticing its products more and more. I walked into the Safeway near my apartment the other day and saw an entire section for Beyond Meat products. It's very visible and on display with the other popular animal meat products like chicken. 

Beyond Meat Has Come a Long Way

Beyond Meat has come pretty far, and over the years, the company has worked really hard to get supermarkets on board. Again, this idea of plant-based protein products that look similar to animal-based products was a whole new world. Beyond Meat has put in a lot of effort to try and convince grocery store chains that its business and the plant-based protein market as a whole would be the future. 

A lot of consumers weren’t ready for it. Supermarkets weren’t ready for it. But Beyond Meat refused to give up, and that's why the company worked very hard at making its products look and taste like meat.

Beyond Meat needed to gain the appeal of meat eaters in order to really have a future. If Beyond Meat’s products tasted similar to or even better than animal-based meats, that would mean it could easily convert people into customers. Then you mix in facts like how consuming a plant-based diet could be healthier and how it could be better for the environment — two topics that have become very important to humans — and this would make converting people into committed customers even easier. 

Nielsen data shows that Beyond Meat has just 2% household penetration in the U.S. This figure may seem low to you now, but what you need to understand is that this category of the food industry has been untapped. People are just now learning about Beyond Meat and its competitors. A company that provides meatless products that taste and look like meat products is game changing.

This percentage is surely going to grow as more consumers become aware of their protein options. And that percentage will keep growing the more attention that Beyond Meat gets.

And over the past week, the company has received a lot of attention.

Beyond Meat’s Stock Is Soaring

On Friday, June 7, Beyond Meat reported its 2019 first quarter earnings. This is the company’s first earnings call as a publicly traded company, and it exceeded expectations.

One of the figures that really stood out was the company’s growth. Nick Cooney, Lever VC’s managing partner, had this to say about Beyond Meat’s growth:

Food services sales [were] nearly six times higher from a year ago — and that’s because of companies like Carl’s Jr. and Del Taco now featuring Beyond Meat products. All of the attention and buzz they got post-IPO, if that’s going to translate to more food service companies bringing them in, that’s not even reflected in their current $210 million projection.

During the earnings call, the company reported sales of $40.2 million — up 215% from the same period the previous year.

Beyond Meat is thriving in the U.S., the country with the highest level of animal-based meat consumption per person on a global basis. Not to mention it’s doing business in one of the largest categories in the food industry — a $270 billion business to be exact.

And if we’re talking growth, then it’s worth mentioning that Beyond Meat has the chance at a global opportunity for the market it’s in. Meat is estimated to be a $1.4 trillion market — the moneymaking opportunities are just getting started for the company and its investors.

Beyond Meat’s stock soared to almost 40% on Friday after revealing that it did better than expected on its first earnings as a public company. It closed out Monday, June 10, at $168.10!

We can’t deny the opportunity that’s happening right now in this plant-based meat market. One thing to keep an eye on is one of Beyond Meat’s competitors, Impossible Foods. It could be IPO-ing soon, which will without a doubt create some strong competition for Beyond Meat.

What we do know today is that investors have a big appetite for this market.

Until next time,

Monica Savaglia Signature Park Avenue Digest

Monica Savaglia

Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.

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