Does this make the stock expensive considering the recent volatility in the stock price? 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. 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. Their main rival is the company Impossible Foods. 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. on July 4th, eating a hot dog with your family. . With insiders quick to sell their shares and a large and growing short interest forming, it seems that others in the market are also unwilling to bet on the future hurdles Beyond Meat must clear. Per Figure 5, Beyond Meat saw significant improvement in profitability in 2018, but the improvement was short lived. 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. There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. See Figure 8 for details. All rights reserved. the stock is worth just $30/share today - a 57% . 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. It provided Beyond Meat with one of the best forms of advertising, credibility. Competitive Advantage- Because Beyond Meat was one of the first to actually create a meat patty from plant proteins, they were able to turn it into the now known Beyond Burger. A year later, Beyond Meat developed its first beef product made from plant proteins, which later morphed into its now-famous Beyond Burger in 2016. This is introducing the category and it was picked up by Burger King. 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. Now, if Beyond Meats revenues grow 2.7x, the P/S multiple will shrink by more than 60% from its current level, assuming the stock price stays the same, correct? Beyond Meat is Wasting Its Advertising The company's strategy promotes plant-based meat as a category, not as a brand, which is ideal for its competitors Hermes Rivera via Unsplash From one perspective, Beyond Meat could hardly be in a better position. 1. This does not boil down to just knowledge on slaughter houses, animal conditions, bacteria etc. There are several lessons to be learned from Beyond Meats story. Word of . However, some investors have growing concerns about the companys ability to maintain these results. We can spot changes in the design since their arrival. Furthermore, Beyond Meat has a history of significant free cash flow (FCF) burn that is unlikely to change anytime soon. In 2020, they even signed a deal to open another production facility in Shanghai! Figure 2: Beyond Meats Profitability vs. 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. Catalyst: Others Success Could Come at Beyond Meats Expense. There have been many stories of grocery story employees getting told by their bosses to take the expired meat and mix it with regular meat and put it back out there on the shelf. This competitive disadvantage only makes Beyond Meats path to sustainable profitability that much more difficult. This is, in fact, after BYND partnered with Starbucks, Yum Brands, and Sinodis. Eating meat has long been associated with masculinity. 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). Economic earnings, which account for the unusual items on the income statement and . Instead, they persevered. Beyond Meat - Corporate Counsel - IP, Marketing & Brand Management In 2021 Beyond Meat's revenue increased by 14.2% to reach $464.7 million. Having the largest natural and organic food retailer in the United States take a chance on this relatively unknown brand gave other grocery retailers an incentive to try the same product placement in their stores. Here's how KFC is marketing its updated Beyond Meat faux - Ad Age strategy uncovers and shares the "bold vision, . BYND revenues saw a rise of 36.6% y-o-y in 2020, which was sharply lower than historical growth rates. Apart fromtotal debtwhich includes the operating leases noted above, the most notable adjustment to shareholder value was $572 million inoutstanding employee stock options. Full Year 2020 Financial Highlights1. Impossible Foods sells slightly different products: Impossible Burger, Impossible Pork, Impossible Sausage. Moral of the story? What is Beyond Meats marketing strategy? Though the firms revenue has improved from $298 million in 2019 to $401 million over the trailing-twelve-months, Beyond Meatscore earnings[1]have fallen from $6 million to $4 million over the same time. But what if youre looking for a more balanced portfolio instead? They clearly prioritize innovation. Balance Sheet: I made $290 million of adjustments to calculate invested capital with a net decrease of $228 million. The mattress. Nowadays, certain celebrities do more than advertise for the brand, some have become ambassadors for Beyond Meat, such as Byrie Irving, from the Boston Celtics. Beyond is working to streamline its operations and reverse declining sales. 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. Heres a high-quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. This would be unreadable! This new knowledge of healthy vs. unhealthy created a new market drive for healthy products. Stun is a creative branding agency. By constantly innovating, pivoting when necessary, and having a real eye for detail, in just under 10 years, Beyond Meat has become one of the biggest names in a previously unheard-of industry. Baseball player David Wright was the first celebrity to sign a contract with the brand. They knew that vegans and vegetarians would use and love the product regardless if they targetted them because the products were so superior to what they were used to. More and more meat-eaters and flexitarians are looking to plant-based products to offset their carbon footprints and help them live a more sustainable lifestyle. However, by now its clear that plant-based meat alternatives are here to stay and theyre gaining traction every year. 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. However, Beyond Meat staunchly defended itself and its food safety protocols, turning the tables on Don Lee and saying: We simply couldnt get Don Lee Farms to meet our standards. Even in 2021, the dispute is still going on, though both sides seem to have claimed victory. However, the lack of fervor for their first product did nothing to stop Beyond Meat from trudging forward. Beyond Meat entered into a partnership with PepsiCo. Instead of drawing attention to a product that consumers didnt love, they simply discontinued it and slowly fazed it out of supermarkets. Fourth Quarter 2021. However, the poultry producer exited earlier this year . With such strong momentum and triple-digit year-over-year revenue growth, traders may push this stock higher. The larger the firm gets, the more difficult it becomes to achieve large year-over-year (YoY) growth rates. The following fund receives an unattractive rating and allocates significantly to BYND. How Beyond Meat's Marketing Strategy Set it Apart - Indigo9 Digital Inc. Even in the most optimistic of scenarios, Beyond Meat is worth less than its current share price. The QSR is looking to get the lion's share of the meat substitute market with Beyond Meat. Therefore, restaurant owners tend to put the Beyond Meat logo on the menu when featuring their products. Beyond Meat was one of the most successful IPOs (Initial Public Offerings) of 2019. Beyond Meat: No more mystery for the plant-meat brand - BMB Fiduciaries should avoid Beyond Meat Inc. (BYND). 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.. 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. Beyond Meat Inc. is revamping its retail sales strategy to center on five major grocers and hiring a new marketing executive as part of .css-1h1us5y-StyledLink{color:var(--interactive-text-color);-webkit-text-decoration:underline;text-decoration:underline;}.css-1h1us5y-StyledLink:hover{-webkit-text-decoration:none;text-decoration:none;}an effort to reinvigorate the plant-based food makers business. This is a major strength: a high speed-to-market. Beyond Meat has been working with them since February 2019. In this scenario, Beyond Meat grows revenue by 37% compounded annually (which results in NOPAT growing 42% compounded annually) for the next 12 years. Going forward, Beyond Meat will find it even more difficult to grow revenue and profits as competitors flood the market. While many consumers are not willing to pay an average of $3 more a pound for a. Plant based options are the obvious choice. The plant-based food market will grow bigger and bigger every year. In2016 Whole Foods decided to give the company a chance by placing Beyond Meat in its meat section. Its worth noting that any deal that only achieves a 4.4% ROIC would not be accretive to shareholder value, as the return on the deal would equal Kraft Heinzs WACC. In 2014 they developed their first simulated beef product and expanded their presence from 1,500 to 6,000 stores in the US. 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. our Subscriber Agreement and by copyright law. Beyond Meat had originally been sold in retail shops across the USA, then worldwide. The coronavirus pandemic put a halt to the companys fast-growing revenues as shutting down of restaurants due to the lockdown significantly affected the companys restaurant and foodservice business, which was the fastest growing segment for BYND until 2019. 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. What kind of external factors/changes do you think may have inspired the birth of Beyond Meat? Beyond Meats case also shows that a marketing strategy is not fixed: it has to evolve along with the companys positioning. Beyond Meat uses a robot to imitate the process of chewing. + Follow. Although its products are plant based Beyond Meats marketing does not explicitly call that out. A lot of people are trading so I know a lot of people are interested in the future of this company. They have sharply improved from -93.3% in 2016 to -4.2% in 2019. 2 1 Comment. Then, followed by J.J. Redick, Maya Moore, April Ross, Eric Bledsoe, Maggie Vessey, and Tia Blanco. Previously, people were limited to information they see on television which is in the best interests of companies that can afford those ad campaigns. Figure 7: Current Valuation Implies Drastic Profit Growth. Beyond Meat Inc. is revamping its retail sales strategy to center on five major grocers and hiring a new marketing executive as part of an effort to reinvigorate the plant-based food. Eat What You Love 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. In this scenario, Beyond Meat grows NOPAT by 36% compounded annually over the next decade and the stock is worth just $44/share a 67% downside to the current price. 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. So, what can you learn from Beyond Meat's marketing strategy? Further, consensus estimates for Beyond Meats 2020 earnings are now $0.07/share. So, when leaders take time and money to connect their employees sense of purpose to the firms organizational goals, it is the beginning of a virtuous circle, where employees tend to be happier and more productive, enabling better results for the company. Beyond Meat founder, Ethan Brown, understood the place of meat in the collective perception very early on. Also, these meat products are offered by themselves at the grocery stores. (Photo Illustration by Drew Angerer/Getty Images). Find out how 3 brands use customer data to find success! The future is one where the meat case is going to be called the protein case and consumers will be able to buy plant-based and animal-based protein side by side,saidEthan Brown, founder and CEO of Beyond Meat. In the second scenario, I use 61% growth (2020 consensus estimate) for all years to illustrate a best-case scenario where I assume Beyond Meat could grow revenue faster within the larger distribution network, resources, and customer base of Kraft Heinz. Leverage partners with larger platforms to expand reach. See allTrefis Featured AnalysesandDownloadTrefis Datahere. Opinions expressed by Forbes Contributors are their own. This is one of the biggest first-day pop-ups in recent history. Plants come directly from the sun and reap the energy created from the sun. Each of the above scenarios also assumes Beyond Meat is able to grow revenue, NOPAT, and FCF without increasing working capital or fixed assets. Beyond Meat Narrows Its Losses. 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". 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. This created a need for plant-based foods to replace the broken system of meats. A lot of that clothing ends up in landfills which proves that the product often matters more than the social cause a customer is interested in. Jurgens brings over 20 years of experience with a proven record of growing sales and profit through strategy, branding, marketing, operational excellence and innovative approaches. Showing that meat is not necessary to enjoy the same flavors while reaping more plant-based benefits. With the high expectations of consumers and the competition they were about to create, knowing that they got in during the right time when consumers would take it as a positive and embrace this new way to eating meat, or meat substitute.. 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. What are your predictions for the future of this company? Your brand, too, needs the liberty to change. Eating meat is associated with strength and power while a plant based diet is not, at least not for now. However, one of the biggest deal breakers for potential. People are able to do extensive research on problems after recognizing that there is an issue. For instance, over the TTM, ConAgra spent 15 times more on SG&A than Beyond Meat. Back in 1988 when John Mackey, co-founder of Whole Foodstried to get funding to expand his companyhe was rejected by many venture capitalists. Opinions expressed by Forbes Contributors are their own. Beyond Meat: Changing Consumers' Meat Preference | Harvard Business Beyond Meats R&D in 2019 was just $21 million compared to $56 million for ConAgra and $97 million for Tyson over the same time. February 1, 2022 . You can see all the adjustments made to Beyond Meats balance sheethere. But thats what BYNDs investors are betting will not happen! 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. Time to Buy? Along with continued marketing investment, the plant-based company strikes partnerships with McDonald's and Yum! After all, the positive choices we make every day - no matter how small - can have a great impact on our world. Beyond Meat Stock: A Competitive Analysis | Nasdaq
Kubota 3 Cylinder Diesel Injection Pump, Gu Zoning Brevard County, Articles B