Several of Beyond Meats competitors, including Hormel, Nestle, Kellogg, Tyson, Kroger, ConAgra, and Kraft Heinz, enjoy key competitive advantages: These advantages are very important and very difficult, if not impossible, for new entrants like Beyond Meat to match or overcome in the near term, if ever. 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).
Beyond Meat's Price Approaches That of Real Beef Over the TTM period, FCF is -$164 million. 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). However, the poultry producer exited earlier this year . For example. Information Search- Consumers using this new information to do their own research on the history of slaughter houses and the conditions in which animals are being tortured and killed to create meat. Beyond Meat might be the pioneer in this segment, but now it faces fierce competition. While I think a plethora of competitors have already developed a competing product, its plausible that a competitor could decide to buy Beyond Meat rather than continue building its own plant-based protein brand. With such high expectations, nearly any negative news could place Beyond Meats future earnings in doubt and cause shares to fall.
Beyond Meat is Wasting Its Advertising - Better Marketing Back in 1988 when John Mackey, co-founder of Whole Foodstried to get funding to expand his companyhe was rejected by many venture capitalists. Fourth Quarter 2021. Combine revenue growth with the fact that Beyond Meats net income margins (net income, or profits after all expenses and taxes, calculated as a percent of revenues) are on an improving trajectory. And while there are a few ways to do this, brand monitoring software is your best bet, as it allows you to track your chosen brand KPIs for the target audiences that matter. Beyond Meat, which went public in the spring of 2019 and whose shares have fallen 16 percent this year, said it had completed a comprehensive greenhouse gas analysis that would be released in. But just how do these brands fare when it comes to brand awareness and consideration. Beyond Meat, therefore, accomplished something huge: its name is enough to make people reassured about the quality and taste. Balance Sheet: I made $290 million of adjustments to calculate invested capital with a net decrease of $228 million. Lets take a look at data from Germany. Figure 5: Beyond Meats Revenue & Core Earnings Since 2017. Should Kellogg continue to push the marketing of Incogmeato and swiftly gain customers, investors may kiss the ultra-high expectations baked into BYND goodbye. Beyond Meat just IPOd last year, it is very interesting to me to see that it is a 9.30B company as of today. Plant based burgers are not new but Beyond Meat has been able to capture more of the . This report helps investors of all types see just how extreme the risk in BYND is based on: Growth Will Slow Down, but Competitors Wont. Beyond Meat founder, Ethan Brown, understood the place of meat in the collective perception very early on. Instead, it avoids labelling its products as vegan even though they are. With a sound marketing strategy, Beyond Meat may be able to make its product cool again. 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 The professors had been working on perfecting their formula for years, and the first Beyond Meat product launched in 2012 was their "Chicken-Free Strips". 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. Invest better with The Motley Fool. Also, seeing that a lot of slaughter houses will absolutely not let anyone come see the inside conditions that animals are facing.
Leverage partners with larger platforms to expand reach. With a sound marketing strategy, Beyond Meat may be able to make its product cool again.
Some of the largest retailers in the world including Zara and H&M are in the fast fashion business which is not environmentally friendly. Instead, due to theproliferation of noise traders, the focus tends toward technical trading tends while high-quality fundamental research is overlooked. Beyond Meats case also shows that a marketing strategy is not fixed: it has to evolve along with the companys positioning. There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. Consensus estimates expect revenue will grow 61% YoY in 2020, and just 17% YoY by 2025, per Figure 1.
Many people do not know that eating meat is not only eating meat, but eating the history in which the meat came from. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Success of any of Beyond Meats competitors could also further threaten future profit growth for Beyond Meat. Made from "soy powder, gluten-free flour, carrot fiber and other ingredients", they used a food extrusion machine to create a chicken-like texture. This is a major strength: a high speed-to-market. 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%. And the organization continues to spill a slight amount of red ink, generating a loss of $10.2 million over the last three months versus a loss of $9.4 million in the second quarter of 2019. Attracted by Beyond Meats impressive growth rates and soaring market value, multiple competitors are entering the alternative meat industry. Beyond Meats profitability ranks at the bottom of this peer group. 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 . As an emerging growth company, Beyond Meat has opted to comply with the executive compensation disclosure rules applicable to smaller reporting companies, which require less stringent disclosures regarding compensation. However, by now its clear that plant-based meat alternatives are here to stay and theyre gaining traction every year. The main difference is that Impossible Foods takes its proteins from soy whereas Beyond Meat extracts it from peas. But what has allowed them to be so successful despite their setbacks? While Beyond Meats SG&A (which includes marketing and advertising expenses) represents a large percentage of the firms TTM revenue, the firms total dollars spent on SG&A pales in comparison to larger competitors. on July 4th, eating a hot dog with your family. Another key marketing vehicle for the company is its partnerships with big brands likeMcDonalds, KFCand Pizza Hut. While this may seem like a minor detail using beetroot juice to mimic blood it helped the Beyond Burger get one step close to winning over non-vegans. 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%. Buy These 2 Stocks in 2023 and Hold for the Next Decade, 2 Growth Stocks to Buy Before the Big Bull Rally, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. In 2019, they partnered up with Dunkin Donuts to supply their Meatless Sausage for the breakfast chains sandwiches nationwide. The Motley Fool owns shares of and recommends Beyond Meat, Inc. Evaluation of Options- Evaluating the options of Beyond Meat vs. regular meat. When vegan meat alternatives first started to appear on the market, many people saw them as a fad. Plant based options are the obvious choice. We are providing energy for the body and we can pull it from a lot of different places. It represents what we feel is the first product that mainstream omnivores are willing to seek out and put at the center of their plate.. Devault, PA Operations - DEPA Production On-site. Focus Strategy- Beyond Meats strategy was to focus on creating meat that isnt actually meat, but tastes just like the real thing to replace meat in peoples diets. A staff member at Business Insider that cooked and reviewed a Beyond Meat burger at homesaidthis about it: overall, it was tasty and juicy, unlike most veggie burgers which can often taste closer to cardboard than beef. Marketing is always easier when you have a great product because you dont have to try quite as hard to get people to try it as consumption spreads more organically over time via. This assumption is highly unlikely but allows us to create best-case scenarios that demonstrate how high expectations embedded in the current valuation are. To make the world smarter, happier, and richer.
The Audacious (and Risky) Strategy That Made Beyond Meat a Billion Beyond Meat strategy Figure 9: BYND Has Large Downside Risk: DCF Valuation Scenario.
Beyond Meat - Corporate Counsel - IP, Marketing & Brand Management (Photo by Smith Collection/Gado/Getty Images), BYND Operating Expense As Of Revenue Beyond Meat, BYND Current Valuation Implies Massive Revenue, BYND Implied Acquisition Prices For Value Neutral, BYND Implied Acquisition Prices For Value, See the math behind this reverse DCF scenario, directly correlated with creating shareholder value, The lack of competitive advantages that nearly all competitors possess, Doing the math: stock price implies huge increase in revenue/profits, Incogmeato by Morningstar Farms, owned by Kellogg Co. (K), Simply Plant-Based Meatless Burger, a SYSCO Corp. (SYY) exclusive product, Simple Truth plant-based meat, owned by The Kroger Co. (KR), Sweet Earth Brand, owned by Nestle (NSRGY), Happy Little Plants, owned by Hormel (HRL), Lightlife Foods, owned by Maple Leaf Foods, Shelf space large amounts of space, which can be very difficult to acquire, especially from firms like Kroger who directly control shelf space allocation, Marketing and advertising capacity existing businesses generate lots of cash flow that enables these firms to spend much more on marketing and advertising than Beyond Meat, Strong brand decades-long relationships with consumers across multiple brands that engender the trust that enables quicker adoption of newer products, Valuation implies massive improvement in profitability with sustained revenue growth rates, Domini Sustainable Solutions Fund (LIFEX) 3.4% allocation and unattractive rating. In any case, I view recent moves as encouraging as Beyond makes moves to improve its footing to grow as a . Opinions expressed by Forbes Contributors are their own. 2 Reasons to Avoid a Roth 401(k) for Your Retirement Savings, Warren Buffett's Latest $2.9 Billion Buy Brings His Total Investment in This Stock to $66 Billion in 4 Years, Want $1 Million in Retirement? strategy uncovers and shares the "bold vision, . Time to Buy? Plus, they created a new category by being one of the first to do it and do it right. As in all markets, there are leaders. Catalyst: Others Success Could Come at Beyond Meats Expense. 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. Conference: 2021 3rd International Conference on Economic Management and Cultural .
Beyond Meat: Analysis of a Successful Marketing Strategy 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. The company launched the Impossible Burger in 2016. 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. In order to increase its manufacturing capacity, in June 2018, Beyond Meat opened a second production facility in Columbia, Missouri and a third in El Segundo, California. Now, information and videos are easily assessable to people of all ages to make a truly informed decision on healthy options such as plan-based meat. 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. Highlighted by Beyond Meat 's stunning public debutwhich recorded a jaw-dropping 163% gain in its first daythe vegetarian alternatives category of foodtech is blowing up.
Here's how KFC is marketing its updated Beyond Meat faux - Ad Age The difference with other plant-based patties is that their name is a synonym of quality for their clients. Considering our revenue projections of roughly $1.1 billion and 6% margins, almost $66 million in net income is possible by 2023. Competitors. 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. Beyond is working to streamline its operations and reverse declining sales. But keep in mind to do this, youll need data on how consumers are responding to your competitors. This is the market drive for Beyond Meat. However, the fundamentals reveal this stock is more style than substance. In2016 Whole Foods decided to give the company a chance by placing Beyond Meat in its meat section. The organizational goals have to be settled and explained. (Photo Illustration by Drew Angerer/Getty Images). Furthermore, Beyond Meats current valuation implies it will generate sales equal to 29% of Tysons 2019 revenue a level that places it as thesixth largestmeat and poultry processor in the world in 2019. Probably not, considering that revenues are likely to grow almost 2.7x by 2023, with net income turning positive in 2022 and growing steadily thereafter, generating continued returns for shareholders. 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 and the Competitive Landscape | Toptal By shifting from animal-based meat to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare.
Beyond Meat Lab Where It Develops Plant-Based "Meat" - Business Insider Ads like this are created to convert the masses instead of targeting a niche market. From the beginning Beyond Meat has viewed itself as a company that could take a typical meat eater and get them to consider a tasty alternative. With low margins and little control over the majority of distribution, I think shares can fall sharply from current levels. To illustrate, the company repackaged a portion of its slow-moving food service inventory for retail consumption. By shifting from animal to plant-based meat, we can positively affect the planet, the environment, the climate and even ourselves. Lets have a look at their most serious competitor: Impossible Foods. Beyond Meat entered into a partnership with PepsiCo. They began targeting not only vegetarians and vegans, but also and mainly meat-eaters; flexitarians. 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. Beyond Meat Is Down 93% From Its High. There are several lessons to be learned from Beyond Meats story. In the first quarter of 2019, Beyond Meat's first as a public company, its gross profit was just 26.8% of net revenue. Since going public, four of its six quarters have shown improvement from. We visited . What can you learn from this?
How Beyond Meat's Marketing Strategy Set it Apart - LinkedIn Without significant increases over the margins and revenue growth assumed in this scenario, an acquisition of Beyond Meat at its current price destroys significant shareholder value. Figure 4: Expenses as % of Revenue: Beyond Meat 2Q19 vs. 2Q20, BYND Operating Expense As Of Revenue 2Q19 Vs. 2Q20. Extensive background in CPG . Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. This is one of the biggest first-day pop-ups in recent history. Beyond Meat was one of the most successful IPOs (Initial Public Offerings) of 2019.
Beyond Meat revamps its retail strategy, hires new marketing executive With sharp growth in revenues, margins have increased from -89% in 2017 to -9.4% over the last twelve months. Per Figure 6, Beyond Meat's TTM adjusted EBITDA of $45 million is well above core earnings of $4 million.
Beyond Meat Has Completely Altered Its Go-to-Market Strategy With a market cap of over $9.6 billion, the stock now trades a little over 17x projected 2021 revenues, despite the fact that 2020 was the toughest year for the company due to the pandemic and it also missed analysts expectations for Q1 2021. Per Figure 4, Beyond Meats operating expenses as a percent of revenue have actually increased over the past twelve months from 97% in 2Q19 to 107% in 2Q20. Market Drivers- Market drives come from the availability of knowledge on healthy products vs. mass marketing for bad products. The Double Distribution Canal: A Major Strength. In order to get ahead of the competition, never stop innovating.
Beyond Meat Announces New Executive Leadership Appointments to Figure 8: Current Valuation Implies Massive Revenue Growth, Significant Downside in a More Realistic Scenario. People are perfectly happy eating vegan food as long as they dont know thats what theyre doing,saysCarol J. Adams, author ofThe Sexual Politics of Meat. What kind of external factors/changes do you think may have inspired the birth of Beyond Meat? 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. Heres a post fromBeyond Meats Facebook page: There is no mention at all that the Even-Better Beyond Burger is plant based. Before joining Beyond Meat, Mr. Oghoghomeh served as Senior Vice President, Brand Marketing at Red Bull from 2021 to February 2023. Especially when competitors will try to introduce products that may be better than the original. 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. In 2021 Beyond Meat's revenue increased by 14.2% to reach $464.7 million.