beyond meat marketing strategy

Instead, it avoids labelling its products as vegan even though they are. However, its reasonable to assume that as Beyond Meats business gains scale and the company expands aggressively, it can boost margins to the levels of Tyson Foods in the next few years, so we estimate roughly 6% margins by 2023. The ideal candidate must have substantial knowledge and experience in counseling on marketing and advertising matters for food and/or beverage companies, including review of packaging, labeling, and promotional . 2023 Latana GmbH. In total, the global market for meat substitutes is set to grow to $23.4 billion by 2024, according to market research company Euromonitor. The larger the firm gets, the more difficult it becomes to achieve large year-over-year (YoY) growth rates. Like Comment Share . 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. Tyson Foods (TSN), the largest meat producer in the U.S., sold its stake in Beyond Meat in April 2019 and just a few months laterannouncedthe launch of its plant-based protein brand, Raised & Rooted. To show that Beyond Meats protein is just good as alternative protein on the market the brand has partnered with NBA players like Kyrie Irving and Chris Paul who are not only brand ambassadors but are also investors in the company. This additional expense, one that is much lower for many competitors (as they already have profitable business lines to offset any marketing of new products), makes it even more difficult for Beyond Meat to improve its profitability in such a competitive market. Over the past two years, the firm has burned a cumulative $179 million (2% of market cap) in FCF. Beyond Meat Is Down 93% From Its High. Why did it work for them? Learn how you can use Latana to improve your brand marketing and grow faster. To justify its current price of $135/share, Beyond Meat must immediately improve its NOPAT margin to 5% (same as Tyson and more than double its current margin of 2%). After adjusting for this liability, I can model multiple purchase price scenarios. Attracted by Beyond Meats impressive growth rates and soaring market value, multiple competitors are entering the alternative meat industry. Letting go of your vision and plans is hard, but if its the right thing to do, you have to be willing to pivot. Figure 3: Operating Expense as % of Revenue: Beyond Meat vs. Dont become so attached to a product that you arent willing to see when it no longer serves you. 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. Nestl, JBS, and Tyson have all recently launched plant-based burgers. According to the Partners In Leadership Happiness at Work survey, when employees are happier at work, 85% take more initiative. Plant based burgers are not new but Beyond Meat has been able to capture more of the . There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. 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. strategy uncovers and shares the "bold vision, . Expired Meat: https://youtu.be/ZxCT_D6HBd8, https://www.forbes.com/sites/greatspeculations/2020/09/14/competition-will-eat-beyond-meat-alive/#9d646992946b, https://www.cnbc.com/2019/08/21/whole-foods-ceo-john-mackey-plant-based-meat-not-good-for-your-health.html, https://www.cnbc.com/2020/09/14/beyond-meat-is-launching-meat-free-meatballs-in-grocery-stores.html, Female Entrepreneur. When I use myreverse discounted cash flow (DCF) modelto analyze the expectations implied by the stock price, BYND appears significantly overvalued. The organizational goals have to be settled and explained. . Plant-based eaters now account for 8% of the global population. See Figure 8 for details. last yearwhere it will: develop, produce and market snacks and beverages made from plant-based protein bringing together Beyond Meats innovation expertise with PepsiCos marketing and commercial capabilities. PepsiCo is known for its marketing prowess and just working with PepsiCo will expand Beyond Meats reach. 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. This has come from the increased consumer-knowledge on healthy products, plant-based diets, and understanding what goes into the food we as consumers eat. Whos to say that its red meat? 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. These features also convince consumers that Beyond Meat burgers are not your average veggie burgers which were never popular with mainstream consumers. The original packaging did not display vegetables, and the words meat and best in the products names were not chosen randomly. What are your predictions for the future of this company? A new marketing strategy will play up the health and sustainability benefits of Beyond Meat, Brown said. A vegan burger that bleeds. For reference, Beyond Meats invested capital has increased by an average of $84 million (28% of 2019 revenue) over the past two years. Find out how 3 brands use customer data to find success! While consumer interest in protecting the environment or having a healthier lifestyle continues to grow it doesnt always mean consumption follows. 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.. We're here to help brands make better marketing decisions by delivering world-class, scalable insights. Additionally, when their Chicken-Free Strips were finally taken off the market in 2019, they did so quietly. The redistribution of cash flow to its investors is a challenge. Net revenues decreased 1.2% to $100.7 million in the fourth quarter of 2021, compared to $101.9 million in the year-ago period. Remember the man-ish look of the burger boxes, the focus on the amounts of protein? Additionally, Beyond Meat is introducing its plant-based meatballs in Coles, the second largest supermarket chain in Australia with over 2,500 stores. As of December 31, 2020, Beyond Meat had products available at approximately 122,000 retail and foodservice outlets in over 80 countries worldwide. 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. Stun is a creative branding agency. Asit Sharma has no position in any of the stocks mentioned. But what has allowed them to be so successful despite their setbacks? With such strong momentum and triple-digit year-over-year revenue growth, traders may push this stock higher. Digital Marketing @ Beyond Meat | Award-Winning Author | Driving Success Through Tech, Creativity, & Strategy Pittsburgh, Pennsylvania, United States 631 followers 500+ connections 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. And now the ravenous race for market share begins, with Beyond Meat and Impossible Foods (which has raised nearly $500 million in debt and equity) in prime position to . January 2021. Between 2013-2016, Beyond Meat was funded by the likes of Tyson Foods, Bill Gates, and the Humane Society and by 2018, theyd raised $72 million in venture financing. Devault, PA Operations - DEPA Production On-site. Increased U.S. foodservice and international channel net revenues were more than offset by reduced U.S. retail channel net revenues, which decreased 19.5% compared to the year-ago period. Some of the largest consumer food brands have followed suit. This pivot on management's part is undergirded by a continuing commitment to building out manufacturing and distribution capacity -- even in the middle of a pandemic, Beyond Meat more than tripled its capital expenditures in the second quarter against the prior year, to $26 million. Links: https://zaap.bio/lillytalavera. Beyond Meat, therefore, accomplished something huge: its name is enough to make people reassured about the quality and taste. People tend to associate meat with strength, with muscles. After tying up with Dunkin soon after its IPO, Beyond Meat entered China in 2020. And this failure didnt break them for a few reasons most importantly, because they already had new products in the works. Insider Trading and Short Interest Indicate Market Skepticism. Though the stock is likely to remain volatile in the near term, the strong growth outlook will help it once again reach the $200 level once the current crisis abates. Since going public in early May, Beyond Meat's stock has soared more than 450 percent and its market value is over $8 billion. Consensus estimates expect revenue will grow 61% YoY in 2020, and just 17% YoY by 2025, per Figure 1. 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. 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. Looking ahead to 2021, consensus earnings estimates are a much higher $0.47/share. 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. 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. Creating effective ad campaigns is every marketers struggle but thats where customer data comes in. Even though the number of vegans and vegetarians was increasing in 2013 when the company launched its first products, the market for plant-based burgers was small: only 0.5% growth in this category. Further, consensus estimates for Beyond Meats 2020 earnings are now $0.07/share. 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. Distribution and use of this material are governed by Net revenues were $406.8 million, an increase of 36.6% year-over-year. Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. Rising beef prices, coupled with the overwhelming at-home food consumption trend, present an unforeseen opportunity for the company to entice new customers by doubling down on grocery sales. Competition- Beyond Meat has created competition by completing innovating meat and how meat is viewed. Beyond Meat was the first company to sell plant-based burgers in grocery stores meat sections. Engineered plant-based burger patties from food, company Beyond Meat are visible on shelves among other meat alternatives at a grocery store in San Ramon, California, August 28, 2019. 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? Performance goals for cash bonuses could be determined by achievement of GAAP or non-GAAP financial measures and may be adjusted by the compensation committee for any reason. 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. This competitive disadvantage only makes Beyond Meats path to sustainable profitability that much more difficult. Among the items Beyond Meat excludes when calculating its adjusted EBITDA are equity-based compensation, restructuring expenses, and a vague line item labeled other. The plant-based food market will grow bigger and bigger every year. Acquisitions completed at these prices would be truly accretive to Kraft Heinzs shareholders. Instead, they persevered. While the market hasnt liked this news, both the CEOs of Beyond Meat and McDonalds have stated that there isno changein the relationship between the two companies. Our marketing speaks very much to the ability for the highest-performing people in our society to perform not just as good, but better as result of the consumption of plant-based meat, particularly, our plant-based meat.. 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. this also includes knowledge of every product that comes in contact with your body on a daily basis. 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. The key variables are the weighted average cost of capital (WACC) and ROIC for assessing different hurdle rates for a deal to create value. While Beyond Meats stock performance is attractive to many momentum traders, investors with fiduciary responsibilities should consider the deteriorating fundamentals, weak prospects to compete at the scale of its competition, and the unrealistic increase in profits implied by the current valuation. When vegan meat alternatives first started to appear on the market, many people saw them as a fad. In any case, I view recent moves as encouraging as Beyond makes moves to improve its footing to grow as a . These sales represent 5% of shares outstanding. Over 2Q20, Beyond Meat removed $1.5 million (1% of revenue) in other expenses when calculating adjusted EBITDA. Beyond Meat's marketing strategy is to convert carnivores into occasional vegans. 2. This would, in turn, take BYNDs market cap to about $14 billion by 2023, from $9.6 billion currently. Along with continued marketing investment, the plant-based company strikes partnerships with McDonald's and Yum! 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. Expand the definition of your target market. One of the most important pieces of furniture we own. The first six months of 2020 have visibly transformed Beyond Meat 's ( BYND -0.58%) approach to marketing its plant-based, meat substitute products. Its stock value gained 163% on the day of its stock introduction. It's unfortunately difficult for investors to gauge the impact of this promotion on profits, since Beyond Meat books the discount as a reduction in sales to arrive at net revenue, rather than a reduction in gross profit margin. 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. For example, Tyson Food, one of the biggest and earliest investors in Beyond Meat, which had a 5% stake in 2016 exited in 2019. Investors should note that maximizing customer acquisition through the retail channel will probably crimp the company's admirable growth rate, as future promotions and new iterations of discounted value packs will reduce the amount of recorded sales (net revenue), as we've discussed above. Apart fromtotal debtwhich includes the operating leases noted above, the most notable adjustment to shareholder value was $572 million inoutstanding employee stock options. Still, it's clear that Brown's idea has caught on: The 10-year old company went public earlier this month at a $1.5 billion valuation. However, the fundamentals reveal this stock is more style than substance. Economic earnings, which account for the unusual items on the income statement and . 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. Especially when competitors will try to introduce products that may be better than the original. 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. Going forward, Beyond Meat will find it even more difficult to grow revenue and profits as competitors flood the market. Weve previously shown how linking executive compensation to faulty metrics such asadjusted EBITDAcan lead to the destruction of shareholder value. This is one of the biggest first-day pop-ups in recent history. Is It Time to Buy? Cost basis and return based on previous market day close. 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. Catalyst: Others Success Could Come at Beyond Meats Expense. BYND entered into a partnership with Alibaba Group, whereby its products will be available in Freshippo stores (Alibabas supermarkets) in Shanghai. 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. The Motley Fool has a disclosure policy. This year also saw Beyond Meat join forces with Mcdonalds to develop their McPlant option. Inside Beyond Meat's lab, where the company transforms plants into faux meat with microscopic analysis and robot mouths. And if this happens, you need to have others you can roll out. But instead of doubling down and spending millions of dollars more to try and fix a product receiving a lukewarm response at best Beyond Meat chose to pivot. The main difference is that Impossible Foods takes its proteins from soy whereas Beyond Meat extracts it from peas. Beyond Meat, Inc. (NASDAQ: BYND) is one of the fastest growing publicly-traded food companies in the United States, offering a portfolio of revolutionary plant-based proteins made from simple ingredients without GMOs, bioengineered ingredients, hormones, antibiotics or cholesterol. Beyond Meat also has big contracts with fast-food chains, as mentioned before, which is a distribution canal bringing lots of cash flow. Beyond Meats massive revenue growth cannot last forever. 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. With low margins and little control over the majority of distribution, I think shares can fall sharply from current levels. 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. Beyond Meat ( NASDAQ: BYND) is streamlining its sales strategy, according to internal documents reviewed by the Wall Street Journal. Heres a post fromBeyond Meats Facebook page: There is no mention at all that the Even-Better Beyond Burger is plant based. As of 2020, the Beyond Meat company sells: Cookout Classic (10 plant-based burgers). We hope this article helped you understand how crucial a good marketing strategy is for a companys success. It began trading at $25/share on the Nasdaq stock exchange and ended the day at $65.75. Beyond Meat (NASDAQ: BYND) was founded in 2009 by Ethan Brown, a Californian entrepreneur with an interest in environmental topics, who is also a vegan. How did Beyond Meat become the leader it is today? This indicates an extremely successful uptake by consumers. Some of the largest retailers in the world including Zara and H&M are in the fast fashion business which is not environmentally friendly. Their products are now sold in 17,000 grocery stores and 12,000 eateries. Beyond Meat, the company that is making eating plant-based protein mainstream continues to grow at a fast pace. In 2020, they even signed a deal to open another production facility in Shanghai! Its stock value gained 163% on the day of its stock introduction. We believe Beyond Meat Revenues have the potential to rise close to 2.7x from the level of $407 million in 2020 to $1.1 billion by 2023, representing a growth rate of roughly 40% per year (for context, the compounded annual growth rate was a very healthy at 164% between 2016 and 2019). This vision can be found throughout Beyond Meats marketing collateral. Beyond Meat Announces New Executive Leadership Appointments to Accelerate and Support the Company's Vision for Strategic Growth. Though BYNDs margins remained negative at close to -13% in 2020 (due to the impact of the pandemic), the companys operations are expected to improve and turn profitable in 2022, with projected margins of 3%. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. In2016 Whole Foods decided to give the company a chance by placing Beyond Meat in its meat section. With a sound marketing strategy, Beyond Meat may be able to make its product cool again. The following table, covering Q2 2020, shows how drastically this dynamic has changed, as management has leaned into winning customers at the grocery shelf during a near-cessation in dining-out activities: Beyond Meat is now incentivizing potential retail customers to try its products via a limited-time offering it dubs the "Cookout Classic" burger value pack. But beneath these numbers, the dynamics of Beyond Meat's business model have been radically altered by its response to the COVID-19 pandemic. Resourceful, strategic, and self-directed leader with a proven record of achievement in global account management, business development and sales strategy leadership. 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? Its an era of growth for the still young start-up. Extensive background in CPG . 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. Finally, innovation is another key element of success for Beyond Meat: if they are the leaders, lets not forget that it is also because their products are great, packed with plant-based proteins. Beyond Meat, the company that is making eating plant-based protein mainstream continues to grow at a fast pace. This does not boil down to just knowledge on slaughter houses, animal conditions, bacteria etc. Plant-based foods are more than a fad, they are a huge economic trend. Therefore, they have a lot of time and competitive advantage before others to create the most well-known category before all other competitors. Beyond Meats successes have inspired the giants to create new categories. The bottom line is that even if Beyond Meat can grow revenue by 51% compounded annually for five years at an 8% NOPAT margin, the firm is worth much less than $135/share. Heres a high-quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. Plant-based meats look like an attractive bet to play the future of food. Beyond Meat has earned a premium name thanks to its marketing strategies, but this premium is too much. The company launched the Impossible Burger in 2016. Another key marketing vehicle for the company is its partnerships with big brands likeMcDonalds, KFCand Pizza Hut. Placing its hamburgers and breakfast proteins in major quick-service restaurant chains was a logical approach to igniting brand awareness. It may even get heavier as more people understand healthy food from non-healthy food. Opinions expressed by Forbes Contributors are their own. revenue grows 24% a year from 2023-2027 (continuation of 2023 consensus), then. Does this make the stock expensive considering the recent volatility in the stock price? Case in point, revenue grew 239% YoY in 2019, 141% YoY in 1Q20, and 69% YoY in 2Q20. Sign up for our Newsletter to receive free, insightful tips on all things brand! Knowing that the meat is expired and poses a hazard to eat it. While there are numerous brands that have popped up over the years whove thrown their metaphorical hats into the meat alternatives ring such as Impossible Foods and Quorn Beyond Meat is still one of the most successful and well-known. 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. Beyond Meat is a Los Angeles-based producer of plant-based meat substitutes, including vegan versions of burgers and sausages. We can spot changes in the design since their arrival. By shifting from animal to plant-based meat, we can positively affect the planet, the environment, the climate and even ourselves. Sounds too good to be true, right? Nope, its just Beyond Meat. Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. Their main rival is the company Impossible Foods. This is the market drive for Beyond Meat. 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. .css-16c7pto-SnippetSignInLink{-webkit-text-decoration:underline;text-decoration:underline;cursor:pointer;}Sign In, Copyright 2023 Dow Jones & Company, Inc. All Rights Reserved, adidas Promo Code - $30 Off 1000s of Best-Sellers + Free Shipping, 60% off running shoes and apparel at Nike without a promo code, Michael Kors promo code First Order: sign up for KORSVIP + Get 10% off. I assume revenue grows 47% in years four and five, the same as year three. When the Chicken-Free Strips failed, it wasnt only about the taste something was just off. 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. This is very rare: imagine if menus displayed all the product brands they use to cook the dishes you eat. To fight this incorrect belief, Ethan Brown launched a campaign featuring famous athletes. The company's second-quarter 2020 earnings report, released Tuesday after the markets closed, revealed that it's still experiencing rampant growth. Continue reading your article witha WSJ subscription, Already a member? Lets take a look at data from Germany. The mattress. According to the company, this package of 10 plant-based patties reduces the price of its burgers from nearly twice that of conventional burgers to a 20% premium. Opinions expressed by Forbes Contributors are their own. They have sharply improved from -93.3% in 2016 to -4.2% in 2019. Often the largest risk to any bear thesis is what I call stupid money risk, which means an acquirer comes in and buys Beyond Meat at the current, or higher, share price despite the stock being overvalued. 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.. Create a great product. 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. The California-based company is orienting its retail business around Kroger Co., Walmart Inc., Publix Super Markets Inc., Costco Wholesale Corp. and Whole Foods Market, according to internal company presentations and documents. 8 Facts About Pelotons Marketing Strategy You Need to Know, Dirty Lemons Marketing & Growth Strategy, How it Became a Success, Crocs Marketing Strategy. This is a full-time position, reporting to the Chief Legal Officer. Competitors, Serious Uphill Battle for Beyond Meat to Improve Profitability. At its TTM FCF burn rate, the firm has enough cash to operate for just over 16 months before needing additional capital. In this scenario, Beyond Meat grows revenue by 37% compounded annually (which results in NOPAT growing 42% compounded annually) for the next 12 years. In order to get ahead of the competition, never stop innovating. Invest better with The Motley Fool. 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. 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. 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.

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