Beyond Meat Reports Fourth Quarter and Full Year 2021 Financial In 2021 Beyond Meats revenue increased by14.2%to reach $464.7 million. Beyond Meat, a producer of plant-based meat substitutes, was founded in 2009 in Los Angeles, California. Figure 9: BYND Has Large Downside Risk: DCF Valuation Scenario. Devault, PA Operations - DEPA Production On-site. Considering these competitors are already supplying plant-based protein products, Beyond Meat faces an increasingly uphill battle to reach the size it needs to match the cost efficiencies of larger competitors like these two established firms. Is It Time to Buy? This is the market drive for Beyond Meat. This scenario represents the minimum level of performance required not to destroy value. Beyond Meat Continues to Strengthen its Global Innovation Capabilities Now, lets proudly assume what they are: a plant-based burger, extracting plant proteins to make a tasty and healthy burger. Beyond Meat Is On Its Path To Irrelevance - SeekingAlpha Even though the firm doesnt necessarily hold logistical or technological advantages over its competitors, I think it helps to quantify what, if any, acquisition hopes are priced into the stock. We're here to help brands make better marketing decisions by delivering world-class, scalable insights. our Subscriber Agreement and by copyright law. Plant based meats are not filled with dead animals which include bacteria growth and can contain other substances such as feces. Beyond Meat's Competitive Advantage, Market Driver, and The - Medium Lets have a look at their most serious competitor: Impossible Foods. Also, because of technology, people are becoming more and more informed about problems with big brands and the cancerous chemicals used in products for decades. Do you like this content? Full Year 2020 Financial Highlights1. If you do subscribe to our retail trends newsletter to get the latest retail insights & trends delivered to your inbox. 3. It looks like meat, tastes like meat, and even feels like meatbut its made entirely of plants. Why? However, the poultry producer exited earlier this year . There are limits on how much Kraft Heinz should pay for Beyond Meat to earn a proper return, given the NOPAT or free cash flows being acquired. Beyond Meat Announces New Executive Leadership Appointments to Accelerate and Support the Company's Vision for Strategic Growth. Critical Details Found in Financial Filings by My Firms Robo-Analyst Technology. The QSR is looking to get the lion's share of the meat substitute market with Beyond Meat. 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. Read the full post on my retail trends blog by clicking here. The emphasis on the grocery channel will now almost certainly evolve into a long-term focal point for Beyond Meat. Beyond Meat's Branding Helped Take Plant-Based Mainstream Leverage partners with larger platforms to expand reach. It began trading at $25/share on the Nasdaq stock exchange and ended the day at $65.75. The promises of Beyond Meats burgers: they produce 90% less greenhouse gas emissions and require 93% less land, 99% less water, and 46% less energy than a traditional beef patty. Figure 3: Operating Expense as % of Revenue: Beyond Meat vs. Tackle stereotypes about who your customers should be. They clearly prioritize innovation. Even in the most optimistic of scenarios, Beyond Meat is worth less than its current share price. In 2019, they partnered up with Dunkin Donuts to supply their Meatless Sausage for the breakfast chains sandwiches nationwide. Opinions expressed by Forbes Contributors are their own. Sounds too good to be true, right? By 2015, even Walmart was selling Beyond Meats plant-based products! Consensus estimates expect revenue will grow 61% YoY in 2020, and just 17% YoY by 2025, per Figure 1. We hope this article helped you understand how crucial a good marketing strategy is for a companys success. At its TTM FCF burn rate, the firm has enough cash to operate for just over 16 months before needing additional capital. And if this happens, you need to have others you can roll out. Measuring Brand Awareness As Told By Marketing Experts, journalists who actually tasted the chicken reported. And if youre looking to follow in this impressive brands footsteps, keep our above tips in mind and consider adding brand tracking software to your lineup because, without insight into how consumers feel about your brand, you wont know where to grow next. One of the ways it did this was by creating burgers that look like meat burgers down to the meat actually bleeding. The Impossible Foods start-up was founded in 2011 in California by Patrick O. on July 4th, eating a hot dog with your family. This does not boil down to just knowledge on slaughter houses, animal conditions, bacteria etc. No more comparison with animal meat products: Beyond Meat has nothing more to prove, its products are famous, recognized as good for the palate and for our health. 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). As investorsfocus moreon fundamental research, research automation technology is needed to analyze all the critical financialdetails in financial filingsas shown in the Harvard Business School and MIT Sloan paper,Core Earnings: New Data and Evidence. Gross profit was $122.3 million, or gross margin of 30.1% of net revenues; Adjusted gross profit was $133.7 million, or Adjusted gross margin of 32.9% of net revenues, reflecting exclusion of expenses attributable to COVID-19. Without having that partnership in the beginning Beyond Meat may have floundered for many years trying to build a customer base on its own. In any case, I view recent moves as encouraging as Beyond makes moves to improve its footing to grow as a . After all, nothing could replace a real burger, could it? If youre always innovating and looking towards the future, youll rarely be caught off guard. Total revenue jumped by 69% against the prior-year quarter to $113.3 million. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Like Comment Share . By paying attention to all the details of a real burger the taste, texture, smell, feel, and consistency Beyond Meat has been able to break into a target audience that had yet to be cracked: mainstream consumers interested in healthier forms of meat. Over the TTM period, FCF is -$164 million. I assume revenue grows 47% in years four and five, the same as year three. Evaluation of Options- Evaluating the options of Beyond Meat vs. regular meat. Data by YCharts Kellogg ( K ) and Conagra ( CAG ) are already big established brands, that . There was also a long standing view which only recently has begun to change that veganism or vegetarianism will only be embraced by a narrow part of society. According to the Partners In Leadership Happiness at Work survey, when employees are happier at work, 85% take more initiative. Entrepreneur, retail expert, strategy consultant and author. The Double Distribution Canal: A Major Strength. So, what can you learn from Beyond Meat's marketing strategy? By July 2019, Beyond Meat could claim a market value of $11.7 billion which was a huge increase from its pre-IPO valuation of $3.8 billion. To fight this incorrect belief, Ethan Brown launched a campaign featuring famous athletes. And by 2020, Beyond Meat had launched an e-commerce site that served as a direct-to-consumers portal, allowing customers to purchase their products individually. Economic earnings, which account for the unusual items on the income statement and . We can spot changes in the design since their arrival. Back in 1988 when John Mackey, co-founder of Whole Foodstried to get funding to expand his companyhe was rejected by many venture capitalists. Beyond Meat Stock: A Competitive Analysis | Nasdaq Acquisitions completed at these prices would be truly accretive to Kraft Heinzs shareholders. The company's vision is for consumers to enjoy a meat-like taste and texture in their favourite dishes while avoiding the many chemicals used in processed meat and reducing the number of animals killed every year. Creating effective ad campaigns is every marketers struggle but thats where customer data comes in. Briana Chen - Digital Marketing Intern - Beyond Meat | LinkedIn Firstly, the gradual lifting of lockdowns in recent months will help the restaurant segment register strong growth along with sales from retail chains. You can see all the adjustments made to Beyond Meats balance sheethere. But just how do these brands fare when it comes to brand awareness and consideration. Beyond Meat has been working with them since February 2019. Further, consensus estimates for Beyond Meats 2020 earnings are now $0.07/share. Attracted by Beyond Meats impressive growth rates and soaring market value, multiple competitors are entering the alternative meat industry. These expenses, and the need to maintain them to support Beyond Meats already declining growth, illustrate that the firm is not approaching economies of scale anytime soon. (Photo Illustration by Drew Angerer/Getty Images). 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. Success of any of Beyond Meats competitors could also further threaten future profit growth for Beyond Meat. The companys marketing strategy is multiple layers one and has evolved over time, to keep up with the market trend. These days, fewer investors pay attention to fundamentals and the red flags buried in financial filings. Each implied price is based on a goal ROIC assuming different levels of revenue growth. Going forward, Beyond Meat will find it even more difficult to grow revenue and profits as competitors flood the market. First, consumers expectations for new products and innovation will rise over time. 2019: A Change In the Branding Strategy With the Arrival of Stun. Does this make the stock expensive considering the recent volatility in the stock price? And this failure didnt break them for a few reasons most importantly, because they already had new products in the works. 2. Therefore, restaurant owners tend to put the Beyond Meat logo on the menu when featuring their products. With a sound marketing strategy, Beyond Meat may be able to make its product cool again. Asit Sharma has no position in any of the stocks mentioned. Create a great product. Additionally, Beyond Meat is introducing its plant-based meatballs in Coles, the second largest supermarket chain in Australia with over 2,500 stores. For reference, Beyond Meats TTM NOPAT margin is 2% and the TTM NOPAT margin of one of the largest food producers in the world, Tyson Foods, is 5%. Fourth Quarter 2021. Placing its hamburgers and breakfast proteins in major quick-service restaurant chains was a logical approach to igniting brand awareness. The main difference is that Impossible Foods takes its proteins from soy whereas Beyond Meat extracts it from peas. Beyond Meat went from very dark and meat-like packagings to a fresher and smoother look. 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 with nutritional benefits of plant-based products has seen its stock rise by over 160% from the lows seen in March 2020. See the math behind this reverse DCF scenario. But thats what BYNDs investors are betting will not happen! If you want to stay up-to-date on the latest news in the plant-based market, to learn about the most recent innovations as they come out, do not hesitate tofollow us. Given that most plant-based protein products are now aiming for the same goal imitating the taste and texture of meat it stands to reason that as the plant-based protein market matures, differentiation between products will diminish as all products begin to taste more and more like meat. The founder, Ethan Brown, said in June that the companys objective is to make plant-based meat cheaper than animal protein. To do so, employees need to very clearly understand the companys priority: is it safety, profits, brand fidelity? If Beyond Meat created the healthiest plant based products that dont taste very good then it wouldnt be in business very long. Investors are beginning to worry whether or not Beyond Meat will be able to sustain the $4 billion valuation in stock it currently has. 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. This copy is for your personal, non-commercial use only. Figure 2: Beyond Meats Profitability vs. In fact, it has been shown that heart disease, cancer, and diabetes, three of the top ten causes of death, are linked to eating too much meat. They only get anxious when they realize that they havent eaten something theyve come to believe they need., Beyond Meat believes that protein is protein and consumers shouldnt care if it comes from a plant or an animal. It is better to create a plant-based meat product, not only because of meat expiration issues, but bacterial issues with animals, mad cow disease, and so many other factors that clearly make eating plants natural to humans and such a better option. KFC, Beyond Meat ready nationwide plant-based chicken rollout Low margins in an increasingly competitive industry leave Beyond Meat with less flexibility to compete on price or invest in marketing and R&D. I would prefer Beyond Meat align executives interests with shareholders interests and link executive compensation with improving ROIC, which isdirectly correlated with creating shareholder value. Before the advent of the COVID-19 pandemic, Beyond Meat's "go-to-market" strategy -- its plan for marketing and promoting its brand, coupled with its framework for product distribution -- relied heavily on foodservice penetration. 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. People are able to do extensive research on problems after recognizing that there is an issue. After adjusting for this liability, I can model multiple purchase price scenarios. Competition Will Eat Beyond Meat Alive - Forbes For example, without any existing shelf space, and only recently announcing an e-commerce platform, Beyond Meat must spend more on not only convincing consumers to try their products, but also on retailers to display their products. While comprising only 5% of its total revenue, Tyson outspent Beyond Meats SG&A by 20 times over the TTM. Insider Trading and Short Interest Indicate Market Skepticism. The first campaign, The Future of Protein, was launched in 2015. In this scenario, Beyond Meat would earn ~$12.5 billion (slightly more thanMarketsandMarkets2019 estimated global plant-based meat market size of $12.1 billion) in revenue in 2031, compared to $401 million TTM. One of Beyond Meat's biggest and earliest investors was Tyson Foods, which had a 5 percent stake in 2016, later raised to 6.52 percent. Instead, it avoids labelling its products as vegan even though they are. 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. One of the most important pieces of furniture we own. The alternative meat producer is reportedly focusing its retail . Beyond Meat Stock (NASDAQ:BYND): Looking Beyond the Headwinds Valuation: I made $757 million of adjustments with a net effect of decreasing shareholder value by $513 million. This all ended with Beyond Meats new look. For this analysis, I choseKraft Heinz as a potential acquirer of Beyond Meat since it doesnt have a pea-protein based product like Beyond Meats and has a history of acquisitions. Impossible Foods sells slightly different products: Impossible Burger, Impossible Pork, Impossible Sausage. Many people do not know that eating meat is not only eating meat, but eating the history in which the meat came from. It has put them in a competitive sustainable advantage position because others will have to spend a lot of money on research and development to get their plant-based burger to taste like theirs. Published May 20, 2021. Theres no actual blood,instead beet juice isused but it does the trick. While Tyson Foods posted almost 5% margin in FY2020 (ending 3rd Oct, 2020), the company is a dominant force in the market with its size being significantly larger in comparison, which makes it probably unreasonable to expect similar margins for Beyond Meat, which has still not made any profits. Beyond Meat: Analysis of a Successful Marketing Strategy There are countless advertisements with men barbequing burgers or hanging out with their friends as they bond over their favourite protein, read meat. However, it hasnt always been smooth sailing for Beyond Meat in March 2019, Don Lee Farms filed a civil suit against its former business partner. 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. Figure 5: Beyond Meats Revenue & Core Earnings Since 2017. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Learn how you can use Latana to improve your brand marketing and grow faster. It doesnt matter what industry your brand is in theres always a chance consumers wont take to your product or service. When vegan meat alternatives first started to appear on the market, many people saw them as a fad. BYND revenues saw a rise of 36.6% y-o-y in 2020, which was sharply lower than historical growth rates. This competitive disadvantage only makes Beyond Meats path to sustainable profitability that much more difficult. Beyond Meat burgerseven have grill marks further convincing consumers that maybe it really is like meat. I conservatively assume that Kraft Heinz can grow Beyond Meats revenue and NOPAT without spending any working capital or fixed assets beyond the original purchase price. Moral of the story? If yes (which is the most common case), you can sell them to way more people and have an even greater impact. Figure 10: Implied Acquisition Prices for Value-Neutral Deal. revenue grows 24% a year from 2023-2027 (continuation of 2023 consensus), then. This Beyond Meat Burger in particular cooks like a burger and looks like one,saidJoe Wood, who was the mid-Atlantic meat coordinator for Whole Foods Market at the time. Plant-based meat alternatives are on the rise and not just with vegans. To make the world smarter, happier, and richer. The first six months of 2020 have visibly transformed Beyond Meat 's ( BYND -0.58%) approach to marketing its plant-based, meat substitute products. However, the fundamentals reveal this stock is more style than substance. Beyond is working to streamline its operations and reverse declining sales. Beyond Meat: The Keys To Disrupting An Enormous Market - Forbes Competitors. Part of Beyond Meats strategy is to redefine what the best source of protein is. 4. This created the need for healthy products. Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. This is one of the biggest first-day pop-ups in recent history. The implied stock values in this scenario are significantly below Beyond Meats current price. Its stock value gained 163% on the day of its stock introduction. This article will take a deep dive into Beyond Meats journey to success and provide some tips other brands can use to fuel their own growth stories. Therefore, they have a lot of time and competitive advantage before others to create the most well-known category before all other competitors. Meditation apps have seen a boom in popularity over the past few years in the US but does their growth extend to Europe? Learn More. This wasn't a cheap decision -- Beyond Meat incurred a charge of nearly $6 million to repack and reroute this inventory in response to consumer demand. Landing in Whole Foods which takes the brands it allows in its doors seriously was a signal to both consumers and retail customers that Beyond Meat was a brand worth giving a chance. But what has allowed them to be so successful despite their setbacks? Corporate Governance | Beyond Meat, Inc. Beyond Meat Hires Marketing Executive, Revamps Retail Strategy Are they only for vegans? As of 2020, the Beyond Meat company sells: Cookout Classic (10 plant-based burgers). As the industry becomes more commoditized, economies of scale will be even more important for firms seeking profitability, which doesnt bode well for smaller firms such as Beyond Meat. Beyond Meat was originally founded in 2009 by Ethan Brown, who worked with two University of Missouri professors, Fu-hung Hsieh and Harold Huff, to develop meatless, plant-based protein.