A Historic Rise — Beyond Meat’s IPO
If you are still unaware of Beyond Meat and their sky-rocketing shares, you are clearly out of the loop, but do not fret, after reading this you will know about the amazing breakthrough of Beyond Meat.
Beyond Meat, the company famous for their meat-like plant based burgers, started in 2009 by vegan advocate Ethan Browne, had raised near a quarter of a billion dollars to grow its business. 10 years down the line Beyond Meat hasn’t just done well for itself, it has cemented itself globally with this year’s best preforming initial public offering.
The makers of the Beyond Burger, which is sold in Whole Foods and TGIF, while still spreading fast, went IPO with an initial $25 a share. However, the California based company stock price saw a rapid increase within only a few days. At its session high, the stocked booked a 645% gain from its initial price. This gave the company a market capitalisation of $11.2bn — surpassing the likes of established companies such as Whirlpool, Xerox, Harley-Davidson and TripAdvisor. Beyond Meat’s, BYND, triumph positively contrasts with other companies that have rushed to public market this year, including big named ride-haling apps Uber and Lyft, which are respectively down 3 and 18 percent from their IPO prices.
Adam Samuelson an analyst at Goldman Sachs stated that “Beyond’s results and outlook revealed strong underlying business momentum across retail and food service channels and healthy gross margin leverage.”
Beyond Meat is expecting the alternative meat category to become a multibillion-dollar market over time and to take significant share from the $1.4 trillion global market for meat. The company is planning to mimic the strategy used by the plant-based dairy industry, which currently is the same size as about 13% of the dairy milk industry at about $2 billion in 2017.
“The success of the plant-based dairy industry was based on a strategy of creating plant-based dairy products that tasted better than previous non-dairy substitutes, packaged and merchandised adjacent to their dairy equivalents,” says the prospectus.
Using that same strategy could boost the plant-based meat category to the same proportion of the roughly $270 billion meat category in the U.S. — or $35 billion in the U.S. alone.
On the other hand, some analysts and investors remain bullish on the company’s prospects along with the prospects of the FoodTech industry. However, given the growing appetite for plant-based protein, with consumers looking for healthier and more environmentally responsible alternatives to meat, there is clear traction in the FoodTech ecosystem, with it only looking to grow bigger. Forbes, has just come out with a prediction that the FoodTech industry itself will be valued at $250 Billion, not in the next 10 or 15 years, but by 2022, a crazy increase of 1470% on its current valuation of $17 Billion. However, given the historic growth of the space over the last 5 years, this does not seem too far fetched.
One can see the rise in the market with continuous competition from other big partnerships such as Impossible Foods distribution deal with Burger King for their plant-based Impossible Burger — the best voted tech at 2019 CES Tech show. In addition, the major FMCG packaged goods company Nestlé has also launched meat-free burgers. This shows an important trend in the industry, which does not show any sign in slowing down, as not only are startups booming and pioneering a positive future, larger companies such as Nestlé are recognising the necessity to jump on the FoodTech train, in order not to get left behind. This is the future and the sooner one realises that the more it will benefit everyone.
A key test for Beyond Meat’s historic rise will come on the 29th of October, when their 180-day lock-up period expires and more shares hit the market.
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Written by Armaan Dobberstein — Marketing Associate at Forward Fooding, avid Foodie and FoodTech fan!
