Briana Chen - Digital Marketing Intern - Beyond Meat | LinkedIn 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. Weve tried to run straight at the question: is a plant-based meat sufficient for humans to be vital and robust,saysBrown. For example, Tyson Food, one of the biggest and earliest investors in Beyond Meat, which had a 5% stake in 2016 exited in 2019. Over the TTM period, FCF is -$164 million. 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. As of December 31, 2020, Beyond Meat had products available at approximately 122,000 retail and foodservice outlets in over 80 countries worldwide. strategy uncovers and shares the "bold vision, . Stun is a creative branding agency. These launches create a lot of buzz and put Beyond the Meat on the map. 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. Organic growth along with benefits from the recent partnerships are expected to support continued healthy growth in retail as well as the restaurant segments of Beyond Meat, potentially taking the companys revenues to almost $1.1 billion by 2023. 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. After adjusting for this liability, I can model multiple purchase price scenarios. Competition- Beyond Meat has created competition by completing innovating meat and how meat is viewed. Apart fromtotal debtwhich includes the operating leases noted above, the most notable adjustment to shareholder value was $572 million inoutstanding employee stock options. Management's flexibility and willingness to alter the company's go-to-market strategy during the era of COVID-19 has the potential to pay off handsomely over a multiyear horizon. Their main rival is the company Impossible Foods. Market Drivers- Market drives come from the availability of knowledge on healthy products vs. mass marketing for bad products. This is one of the biggest first-day pop-ups in recent history. The superior scale of Beyond Meats peers will also challenge what the firm believes to be a critical competitive advantage its innovation. Beyond Meat Announces Global Strategic Partnership with Yum! Brands to See the math behind this reverse DCF scenario. As in all markets, there are leaders. This assumption is highly unlikely but allows us to create best-case scenarios that demonstrate how high expectations embedded in the current valuation are. Baseball player David Wright was the first celebrity to sign a contract with the brand. Instead, they persevered. Beyond Meat might be the pioneer in this segment, but now it faces fierce competition. Here's how KFC is marketing its updated Beyond Meat faux - Ad Age revenue grows 24% a year from 2023-2027 (continuation of 2023 consensus), then. This created a need for plant-based foods to replace the broken system of meats. Sign up for our Newsletter to receive free, insightful tips on all things brand! These sales represent 5% of shares outstanding. We believe there's a better way to feed our future. 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. They both rearrange proteins to create their plant-based products. All rights reserved. Valuation: I made $757 million of adjustments with a net effect of decreasing shareholder value by $513 million. 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. 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. https://www.wsj.com/articles/beyond-meat-hires-marketing-executive-revamps-retail-strategy-11675379688. 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. The company has a culture of accountability among its employees: they are all responsible for driving up performances by making suggestions, pointing out what is not working. However, one of the biggest deal breakers for potential. 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. Figure 7: Current Valuation Implies Drastic Profit Growth. Beyond Meat's marketing strategy is to convert carnivores into occasional vegans. Beyond Meat - Corporate Counsel - IP, Marketing & Brand Management A vegan burger that bleeds. This is a full-time position, reporting to the Chief Legal Officer. With such high expectations, nearly any negative news could place Beyond Meats future earnings in doubt and cause shares to fall. The original packaging did not display vegetables, and the words meat and best in the products names were not chosen randomly. Beyond Meat Announces New Executive Leadership Appointments to Accelerate and Support the Company's Vision for Strategic Growth. See allTrefis Featured AnalysesandDownloadTrefis Datahere. When Beyond Meat was met with the failure of their Chicken-Free Strips their first real product they didnt fold. Clearly, vegan meat alternatives were no longer a fad. Going forward, Beyond Meat will find it even more difficult to grow revenue and profits as competitors flood the market. Part of Beyond Meats strategy is to redefine what the best source of protein is. 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. 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. I also assume Beyond Meat achieves an 8% NOPAT margin, which equals the average of Beyond Meats and Kraft Heinzs TTM NOPAT margins. Since going public in early May, Beyond Meat's stock has soared more than 450 percent and its market value is over $8 billion. Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, sector, style, or theme. Nestl, JBS, and Tyson have all recently launched plant-based burgers. Lots of small companies have also emerged and targeted the same audience, such as Purple Carrot or Sunfed Meats. 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. 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. . Like Comment Share . Therefore, they have a lot of time and competitive advantage before others to create the most well-known category before all other competitors. What can you learn from this? Beyond Meat Stock (NASDAQ:BYND): Looking Beyond the Headwinds First, investors need to know that Beyond Meat has a large liability that makes it more expensive than the accounting numbers would initially suggest. Resourceful, strategic, and self-directed leader with a proven record of achievement in global account management, business development and sales strategy leadership. But how they handled it is what makes them a successful brand. Word of . 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. Is It Time to Buy? 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. Beyond Meat went from very dark and meat-like packagings to a fresher and smoother look. 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. This does not boil down to just knowledge on slaughter houses, animal conditions, bacteria etc. But keep in mind to do this, youll need data on how consumers are responding to your competitors. Beyond Meat entered into a partnership with PepsiCo. Ads like this are created to convert the masses instead of targeting a niche market. While comprising only 5% of its total revenue, Tyson outspent Beyond Meats SG&A by 20 times over the TTM. 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. In 2014 they developed their first simulated beef product and expanded their presence from 1,500 to 6,000 stores in the US. To make the world smarter, happier, and richer. 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. Michelle Amador - Sr. Director, Global Strategic Partnerships - Beyond 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. You can find Beyond Meat in many places from small restaurants to national chains but what really accelerated its growth in the beginning was its partnership with Whole Foods. Additionally, Beyond Meat is introducing its plant-based meatballs in Coles, the second largest supermarket chain in Australia with over 2,500 stores. This all ended with Beyond Meats new look. Brands. BEYOND MEAT ANNOUNCES NEW . Full Year 2020 Financial Highlights1. Purchase Decision- When consumers are informed of the evaluation of options, information is readily available, and they have recognized a problem, it is so easy for consumers to make a newly informed decision. After much anticipation, Beyond Meat announced a three-year partnership with McDonalds in February 2021, under which BYND will be McDonalds preferred supplier for the patty in the McPlant, a new plant-based burger being tested in select McDonalds markets globally. Opinions expressed by Forbes Contributors are their own. Beyond is working to streamline its operations and reverse declining sales. Whos to say that its red meat? Considering our revenue projections of roughly $1.1 billion and 6% margins, almost $66 million in net income is possible by 2023. Beyond Meat will face difficulty maintaining an innovative edge over its peers, who already spend much more on research and development (R&D). 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. Beyond Meat Narrows Its Losses. A year ago, the consumer discretionary upstart's top line reflected the depth of its marketing and supply chain investment in the restaurant business: These sales were nearly identical to their retail counterpart: Source: Beyond Meat. 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. Moral of the story? This makes a lot of sense since only2.7%of packaged meat sales in the United States are plant based. See Figure 8 for details. The Audacious (and Risky) Strategy That Made Beyond Meat a Billion 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. This indicates an extremely successful uptake by consumers. Another key marketing vehicle for the company is its partnerships with big brands likeMcDonalds, KFCand Pizza Hut. If, however, McDonalds chooses to not continue on with the PLT or finds another supplier for its plant-based protein items, BYND could fall even further. How Beyond Meat's Marketing Strategy Set it Apart . 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". Still, disputes aside, Beyond Meat has been doing very well these past few years. Stage of Market Lifestyle- The stage of the market lifestyle will influence the company on a few different categories. Various trademarks held by their owners. Beyond Meat strategy Economic earnings, which account for the unusual items on the income statement and . And this failure didnt break them for a few reasons most importantly, because they already had new products in the works. KFC, Beyond Meat ready nationwide plant-based chicken rollout This is the first time a vegan meat alternative has been merchandised in the meat department at Whole Foods Market.After that Beyond Meatstarted calling itself:the worldsfirst plant-based burger sold in the meat case of U.S. grocery stores.. 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). 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. Beyond Meat revamps its retail strategy, hires new marketing executive Additionally, when their Chicken-Free Strips were finally taken off the market in 2019, they did so quietly. Yet Beyond Meat's management made a critical decision during the second quarter to change course on product distribution. This would be unreadable! Plant based burgers are not new but Beyond Meat has been able to capture more of the . Fiduciaries should avoid Beyond Meat Inc. (BYND). In 2019, they partnered up with Dunkin Donuts to supply their Meatless Sausage for the breakfast chains sandwiches nationwide. 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. How Beyond Meat's Marketing Strategy Set it Apart - LinkedIn Digital Marketing @ Beyond Meat | Award-Winning Author | Driving Success Through Tech, Creativity, & Strategy Pittsburgh, Pennsylvania, United States 631 followers 500+ connections 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. They clearly prioritize innovation. word of mouth. 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. Beyond Meat constantly reinvests their earnings in further research and development, as well as in marketing, and in scaling up production and distribution.