Therefore, the future will be bright, but they need to continuously gain market share by introducing new products and innovation within the plant-based space. This competitive disadvantage only makes Beyond Meats path to sustainable profitability that much more difficult. Brands. Beyond Meatis one of them for the plant-based segment. Firstly, the gradual lifting of lockdowns in recent months will help the restaurant segment register strong growth along with sales from retail chains. Each of the above scenarios also assumes Beyond Meat is able to grow revenue, NOPAT, and FCF without increasing working capital or fixed assets. Even though the firm doesnt necessarily hold logistical or technological advantages over its competitors, I think it helps to quantify what, if any, acquisition hopes are priced into the stock. Eat What You Love Sign up for our Newsletter to receive free, insightful tips on all things brand! By 2015, even Walmart was selling Beyond Meats plant-based products! 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. Problem Recognition- Consumers did not know about the conditions of the animals that are actively being slaughtered to create meat. Resourceful, strategic, and self-directed leader with a proven record of achievement in global account management, business development and sales strategy leadership. Beyond Meat, a producer of plant-based meat substitutes, was founded in 2009 in Los Angeles, California. The emphasis on the grocery channel will now almost certainly evolve into a long-term focal point for Beyond Meat. 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. Our goal is to give you the key to understanding Beyond Meats rapid success, to show you the hidden reasons for their success. Market Drivers- Market drives come from the availability of knowledge on healthy products vs. mass marketing for bad products. 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. Sustainable Competitive Advantage- Beyond Meats formula for the perfect flavoring to taste just like a real burger. 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. Beyond Meat also has big contracts with fast-food chains, as mentioned before, which is a distribution canal bringing lots of cash flow. Instead, they persevered. Figure 11 shows the implied values for Beyond Meat assuming Kraft Heinz wants to achieve an ROIC on the acquisition that equals 6%. To make the world smarter, happier, and richer. 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. this also includes knowledge of every product that comes in contact with your body on a daily basis. Cost basis and return based on previous market day close. 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. This has come from the increased consumer-knowledge on healthy products, plant-based diets,. Beyond Meat will face difficulty maintaining an innovative edge over its peers, who already spend much more on research and development (R&D). 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. 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. But what has allowed them to be so successful despite their setbacks? Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. For instance, over the TTM, ConAgra spent 15 times more on SG&A than Beyond Meat. 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. Read the full post on my retail trends blog by clicking here. Competition- Beyond Meat has created competition by completing innovating meat and how meat is viewed. This all ended with Beyond Meats new look. 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 . 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.
Beyond Meat revamps its retail strategy, hires new marketing executive Apart fromtotal debtwhich includes the operating leases noted above, the most notable adjustment to shareholder value was $572 million inoutstanding employee stock options. 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.
Beyond Meat Announces New Executive Leadership Appointments to 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. Instead Beyond Meat fought for placement within the meat section of grocery stores. The organizational goals have to be settled and explained. Valuation: I made $757 million of adjustments with a net effect of decreasing shareholder value by $513 million. Like Comment Share . Prior to that Mr. Oghoghomeh served as Head of Recruitment Marketing - West Zone for Amazon, an eCommerce company from 2019 to 2021.
Beyond Meat strategy Beyond Meat Has Completely Altered Its Go-to-Market Strategy 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. With these headwinds Beyond Meat had to convince meat lovers that its products passed the test.
Mission | Beyond Meat Inside Beyond Meat's lab, where the company transforms plants into faux meat with microscopic analysis and robot mouths. Learn More. 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.
Beyond Meat: Focus List: Short Winner That Will Fall Further In total, the global market for meat substitutes is set to grow to $23.4 billion by 2024, according to market research company Euromonitor. However, it hasnt always been smooth sailing for Beyond Meat in March 2019, Don Lee Farms filed a civil suit against its former business partner. Remember the man-ish look of the burger boxes, the focus on the amounts of protein? Beyond Meat has been working with them since February 2019. I conservatively assume that Kraft Heinz can grow Beyond Meats revenue and NOPAT without spending any working capital or fixed assets beyond the original purchase price. 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. Weve tried to run straight at the question: is a plant-based meat sufficient for humans to be vital and robust,saysBrown. Beyond Meat and Impossible Foods have many common points. Beyond Meat's marketing strategy is to convert carnivores into occasional vegans. 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. While consumer interest in protecting the environment or having a healthier lifestyle continues to grow it doesnt always mean consumption follows. 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. 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.
Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. Beyond Meat constantly reinvests their earnings in further research and development, as well as in marketing, and in scaling up production and distribution. Find out how 3 brands use customer data to find success! However, we can define the general key aspects: Targeting meat-eaters as well, not only vegans/vegetarians, Identifying the collective reputation of plant-based products, and changing it, Relying on its reputation to appear on restaurant menus and get cheap advertising.
Beyond Meat Announces New Executive Leadership Appointments to 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. (Photo Illustration by Drew Angerer/Getty Images). See all adjustments to Beyond Meats valuationhere. on July 4th, eating a hot dog with your family. What kind of external factors/changes do you think may have inspired the birth of Beyond Meat? Even with that success, Brown continues to think big . And while their Chicken-Free Strips were sold at big-name stores like Whole Foods all across the US, they were later discontinued in 2019. However, this trend is expected to reverse in the short term and the company will once again get on its fast growth track and there are multiple trends that support this growth outlook. 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. Word of . 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. When the Chicken-Free Strips failed, it wasnt only about the taste something was just off.
Beyond Meat in midst of sales strategy revamp - WSJ Without having that partnership in the beginning Beyond Meat may have floundered for many years trying to build a customer base on its own. 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. Additionally, when their Chicken-Free Strips were finally taken off the market in 2019, they did so quietly. Create a great product. 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. 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. People are able to do extensive research on problems after recognizing that there is an issue. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently. Beyond Meat was one of the most successful IPOs (Initial Public Offerings) of 2019. Furthermore, many of the firms in Figure 2 have other key advantages multi-year relationships and existing distribution networks with grocery stores and quick-serve restaurants such asTyson, or in the case of Kroger, direct control of distribution and the end-consumer relationship. 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..
Join the Team | Beyond Meat Careers | Beyond Meat Furthermore, Don Lee alleged significant concerns about food safety protocols concerning the raw materials that Beyond Meat sent. 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. Some of the largest retailers in the world including Zara and H&M are in the fast fashion business which is not environmentally friendly. 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. Digital Marketing @ Beyond Meat | Award-Winning Author | Driving Success Through Tech, Creativity, & Strategy Pittsburgh, Pennsylvania, United States 631 followers 500+ connections However, the lack of fervor for their first product did nothing to stop Beyond Meat from trudging forward. A lot of people are trading so I know a lot of people are interested in the future of this company. Critical Details Found in Financial Filings by My Firms Robo-Analyst Technology. For example, Kelloggs delayed the launch of its first round of Incogmeato products due to the COVID-19 pandemic. 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. Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, sector, style, or theme. While Tyson Foods posted almost 5% margin in FY2020 (ending 3rd Oct, 2020), the company is a dominant force in the market with its size being significantly larger in comparison, which makes it probably unreasonable to expect similar margins for Beyond Meat, which has still not made any profits. Per Figure 2, Beyond Meats NOPAT margin and return on invested capital (ROIC) are below each of the competitors listed above, and well below the market-cap-weighted average of all the Food Processing firms under coverage. The number of shares sold short has increased by 10% since last month. 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. This adjustment represented 3% of reported net assets. When I use myreverse discounted cash flow (DCF) modelto analyze the expectations implied by the stock price, BYND appears significantly overvalued. How did Beyond Meat become the leader it is today? Over the TTM period, FCF is -$164 million. What is Beyond Meats marketing strategy? So, what can you learn from Beyond Meat's marketing strategy? Especially when competitors will try to introduce products that may be better than the original. Extensive background in CPG . In 2014 they developed their first simulated beef product and expanded their presence from 1,500 to 6,000 stores in the US. By focusing on their fresh foods, like their Beyond Burger patties which many agreed pulled off the meatless meat trick more convincingly they were able to put their time and effort into a product that was going to make them more successful in the long run. This vision can be found throughout Beyond Meats marketing collateral. Plant based meats are not filled with dead animals which include bacteria growth and can contain other substances such as feces. One of the most important pieces of furniture we own. In this scenario, Beyond Meat grows revenue by 37% compounded annually (which results in NOPAT growing 42% compounded annually) for the next 12 years. How Beyond Meat's Marketing Strategy Set it Apart . What are your predictions for the future of this company? First of all, think of the big picture when it comes to segmentation: who will really buy your products? DOI: 10.2991/assehr.k.211209.003.
Beyond Meat and the Competitive Landscape | Toptal If Beyond Meat can improve its NOPAT margin to 5% (equal to Tysons TTM margin) and grow revenue at 61% in 2020, 55% in 2021, and 47% in 2022 (consensus estimates) and by 20% compounded annually thereafter, the stock has significant downside risk. Heres a post fromBeyond Meats Facebook page: There is no mention at all that the Even-Better Beyond Burger is plant based. 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). However, the fundamentals reveal this stock is more style than substance. The Motley Fool owns shares of and recommends Beyond Meat, Inc. Concentrating on the health market, they were able to target a broad range of people seeking a better meat option than real meat. 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. 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%. By Christopher Lombardo. 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. It is better to create a plant-based meat product, not only because of meat expiration issues, but bacterial issues with animals, mad cow disease, and so many other factors that clearly make eating plants natural to humans and such a better option. The companys marketing strategy is multiple layers one and has evolved over time, to keep up with the market trend. If revenues expand 2.7x over the next few years, instead of the P/S shrinking from around 17x presently to less than 10x, a scenario where the P/S metric falls more modestly, perhaps to about 13x looks more likely, considering the fact that profitability is also projected to see sharp improvement. 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. How? Shares have fallen 10% since news onJune 25, 2020that McDonalds was discontinuing testing of a plant-based burger it dubbed the PLT made with a Beyond Meat patty in several Canadian markets. Its stock value gained 163% on the day of its stock introduction. We're here to help brands make better marketing decisions by delivering world-class, scalable insights. The key variables are the weighted average cost of capital (WACC) and ROIC for assessing different hurdle rates for a deal to create value. It doesnt matter what industry your brand is in theres always a chance consumers wont take to your product or service. Plant-based eaters now account for 8% of the global population. As of 2020, the Beyond Meat company sells: Cookout Classic (10 plant-based burgers). In the first quarter of 2019, Beyond Meat's first as a public company, its gross profit was just 26.8% of net revenue. 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. One of Beyond Meat's biggest and earliest investors was Tyson Foods, which had a 5 percent stake in 2016, later raised to 6.52 percent. While Beyond Meat could continue to rally, it faces four challenges that. Considering these competitors are already supplying plant-based protein products, Beyond Meat faces an increasingly uphill battle to reach the size it needs to match the cost efficiencies of larger competitors like these two established firms.