The Popularity Momentum of Beyond Meat amid Volatile Trade

The contemporary society is gearing up for a sustainable future, which is going to be full of lab-grown meat. The rise of faux-meat producers, suppliers and marketers is moving ahead, with no sign of a slowdown. International concerns surrounding animal cruelty, ban of slaughterhouses, presence of animals in nature to maintain sustainability in the environment and increasing health consciousness of people globally, have all triggered the meat industry to undergo a transformation.

In the article on Clean Meat Revolution, we stated that The US Department of Agriculture (USDA) and the Food and Drug Administration (FDA) had recently approved the manufacturing of cell-cultured food products after they are obtained from livestock and poultry.

What is Cultured Meat?

Interchangeably referred to as Clean Meat, lab-grown meat or in-vitro meat, Cultured Meat is a concept of cellular agriculture and can be explained as the meat produced by in-vitro cultivation of animal cells, rather than the traditional form of obtaining animal meat from slaughtered animals.

The below image had been released by the Organisation for Economic Co-operation and Development (OECD) in a report of Mosa Meat, a Dutch food technology company, which explains the pictorial concept of Cultured Meat and the way clean meat players produce it:

Cultured Meat Concept (Source: OECD)

According to the report, one cell sample taken from a living animal could create tons of cultured beef. The progress in the field of Cultured Meat would prove to be significant as the demand for meat is going to rise by 2050 by approximately 70 per cent.

What are the Benefits and Shortcomings of Cultured Meat?

Food is staple, and perhaps tops the chart of human needs. The concept of cultured meat has given an all-together new tangent to the food industry and is a significant depiction that technology has come a long way.

Like other technological advancements, cultured meat comes with a baggage of advantages and disadvantages. The first advantage of clean meat is that it is a huge leap towards conservation of the environment and would add on to sustainable development. Secondly, the revolution would reduce and eventually stop animal slaughter. Thirdly, farms and slaughterhouses consume a lot of space, which would be free, given that the clean meat can be processed in the labs. Last, but not the least, clean meat has numerous health benefits and has a potential to carve away the drawbacks of traditional meat consumption on human health.

On the disadvantages of Cultured meat front, the first would be acceptance. With the society used to consuming meat in a fairly traditional manner, technological, injected and lab grown meat would require some time and convincing before being served. Secondly, taste buds would need some acquiring, as lab grown meat is deemed to be fat-free, which might be a drawback for many consumers. Thirdly, once the mass production of clean meat commences, cheaper and fast means would be implemented by the laboratories, which may have an adverse impact on human health and lead to disorders. Last, but not the least, the Clean Meat Revolution would kill a lot of job opportunities across the world. Farm workers, slaughterhouse workforces and other labourers related to the meat industry might be the sufferers of this transition.

Who are the Players of the Cultured Meat Industry?

With the rise in demand of the cleaner version of meat, a lot of companies have stepped their foot into the business and are minting good business. A Few of these include Memphis Meat, Balletic Foods, Clean Meat, New Age Meats, Aleph Farms, Future Meat Technologies, Appleton Farms, SuperMeat, Higher Steaks and Mosa Meat.

Beyond Meat

Regarded amongst the most successful IPO’s of 2019, Beyond Meat is focussed on the concept of creating The Future of Protein®. The company believes in the transition from animal meat to plant-based meat and produces plant-based crumbles, sausages and burgers, made directly from the plant-based ingredients. The company was founded in 2009 by Mr Ethan Brown and has its headquarters in California.

Beyond Meat products are available in over 33,000 grocery stores, restaurants, hotels and universities. Kroger, Safeway, Publix, TGI Fridays and Carls Jr. are some of the places one can find the company products.

In Australia, Woolworths (ASX: WOW) supermarkets and Coles (ASX: COL) have these products and related options on their shelves.

Beyond Meat’s sausages (Source: Company’s Website) 

The Sensational IPO That Topped the Media Charts

Beyond Meat debuted in the trade market on 2 May 2019, with its initial public offering at $25 per share. It raised approximately $240 million at a valuation, after selling almost 9.63 million shares. The US saw the best-performing public offering in almost two decades through the company, with the share prices rising up to $65.75 by the end of the trading session (as on 2 May 2019), surging up by almost 163 per cent.

 

Another stock offering after three months of IPO?

On 29 July 2019, the company’s shares slumped by almost 12 per cent. On the same day, the company had also expressed its plans of another stock offering of approximately 3.25 million shares. The proceeds of this offering would cater towards the expansion of the company’s manufacturing facilities and marketing activities, given the increased demand of Beyond Meat’s products. Since the booming debut in the share market in May this year, the stock of the company has sky-rocketed by over 780 per cent, placing it in the category of growth stocks.

What do the Financials say?

The company released its earnings for the second time after going public, posting a revenue of ~$67 million, soaring up by 67 per cent on a q-o-q basis, outpacing the analyst forecasts. The revenue guidance bar has been raised, maintaining the bullish approach of both the investors and shareholders, as the company expects the net revenue to increase by more than 170 per cent to $240 million in 2019, up from the prior estimate of $210 million it had predicted in June 2019.

Besides, in second quarter 2019, Beyond Meat incurred a net loss of $9.4 million, compared to a loss of $7.4 million incurred during 2018.

What do the experts say?

Plant-based meat alternatives have seen a growing inclination from consumers and restaurants. Amid rising competition from start-ups like Beyond Meat, food tycoons like Tyson Foods Inc, Impossible Foods and Perdue Foods are also rising up in the game. Market experts believe that there were no signs of the meat alternatives market slowing down, as people across the globe aspire to add more plant-based protein to their diet.

However, rising competition and increased demand indicate that supply needs to be diverse. Manufactures would have to step up and provide options to keep consumers interested, and investors keen on their operations.

Stock Performance:

The company trades on the NASDAQ under the code BYND. On 30 July 2019, the shares of the company, by the end of the trading session, were priced at US$194.76, down by 12.32 per cent, relative to its last close. The market capitalisation of the company is stands at ~US$11.71 billion.

The world has been transitioning through the change taking place in the various sectors, be it the telecom’s 5G Boom, the information technology related Artificial Intelligence and Blockchain, the rise of the Electric Vehicles in the Automotive industry, Satellite industries taking over the technological advancement or the Clean Meat revolution in the Food and Beverages industry.

It can be concluded that change is constant and the change in these industries would further grow ahead, keeping the market and its participants engrossed about the developments and events that influence the business world. Especially for investors and advisors, vigilance amid these times of change is the key to tap the right markets, at the right time and place.


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