beyond meat marketing strategy

BYND revenues saw a rise of 36.6% y-o-y in 2020, which was sharply lower than historical growth rates. Also, these meat products are offered by themselves at the grocery stores. 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. Create a great product. .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. 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. Additionally, when their Chicken-Free Strips were finally taken off the market in 2019, they did so quietly. Production Supervisor - 2nd Shift. 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. In2016 Whole Foods decided to give the company a chance by placing Beyond Meat in its meat section. 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. It looks like meat, tastes like meat, and even feels like meatbut its made entirely of plants. While this may seem like a minor detail using beetroot juice to mimic blood it helped the Beyond Burger get one step close to winning over non-vegans. I also assume Beyond Meat achieves an 8% NOPAT margin, which equals the average of Beyond Meats and Kraft Heinzs TTM NOPAT margins. They exploit their established brand engagement to build more brand equity, at a low cost, because they dont pay a cent for restaurants to make this kind of indirect advertising for them. This is not by accident but instead by design. Figure 8: Current Valuation Implies Massive Revenue Growth, Significant Downside in a More Realistic Scenario. First, investors need to know that Beyond Meat has a large liability that makes it more expensive than the accounting numbers would initially suggest. Additionally, the companys new partnerships will also drive impressive top line growth. 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". Our goal is to give you the key to understanding Beyond Meats rapid success, to show you the hidden reasons for their success. Information Search- Consumers using this new information to do their own research on the history of slaughter houses and the conditions in which animals are being tortured and killed to create meat. The design softened. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. This makes a lot of sense since only2.7%of packaged meat sales in the United States are plant based. 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.. We're here to help brands make better marketing decisions by delivering world-class, scalable insights. Lets take a look at data from Germany. Invest better with The Motley Fool. KFC and Beyond Meat are partnering with YouTube star and influencer Liza Koshy to help reveal the debut. Not knowing what is in the hot dog, not knowing where the hot dog came from, the conditions of the animals at the house in which the meat was slaughtered. The mattress. But for a young organization that wants to leapfrog rivals in gaining plant-based mindshare, the shift isn't illogical, and it may result in a durable competitive advantage. By constantly innovating, pivoting when necessary, and having a real eye for detail, in just under 10 years, Beyond Meat has become one of the biggest names in a previously unheard-of industry. This indicates an extremely successful uptake by consumers. This allows consumers to make their own informed decision. As in all markets, there are leaders. Some of the largest retailers in the world including Zara and H&M are in the fast fashion business which is not environmentally friendly. There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. June 4, 2021 . What are your predictions for the future of this company? Beyond Meat positioned its products as similar to animal meat as they could. They both rearrange proteins to create their plant-based products. The mission of the company is focused on plant-based meat alternatives, using pea and other plant protein isolates. Get the latest information and insights into the world of brand. Beyond Meat will face difficulty maintaining an innovative edge over its peers, who already spend much more on research and development (R&D). 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. Dont be afraid to really study the competition and pay attention to all the little details that have made them successful. https://www.wsj.com/articles/beyond-meat-hires-marketing-executive-revamps-retail-strategy-11675379688. Over the past twelve months, insiders have purchased 700 thousand shares and sold 4 million shares for a net effect of 3.3 million shares sold. Inside Beyond Meat's lab, where the company transforms plants into faux meat with microscopic analysis and robot mouths. Stun is a creative branding agency. Eating plants is the best thing you can do for your diet. 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 . Even in the most optimistic of scenarios, Beyond Meat is worth less than its current share price. CEO and founder Ethan Brown understood that the target audience was not only vegetarians and vegans, but also flexitarians, or meat-eaters who occasionally want a healthier, high-quality option. Over the TTM, Beyond Meat removed $23.7 million (6% of revenue) in share-based compensation and $7.5 million in restructuring expenses (2% of revenue) when calculating adjusted EBITDA. After adjusting for this liability, I can model multiple purchase price scenarios. Asit Sharma has no position in any of the stocks mentioned. The implied stock values in this scenario are significantly below Beyond Meats current price. Eating meat is associated with strength and power while a plant based diet is not, at least not for now. Beyond Meat also has big contracts with fast-food chains, as mentioned before, which is a distribution canal bringing lots of cash flow. See allTrefis Featured AnalysesandDownloadTrefis Datahere. Each implied price is based on a goal ROIC assuming different levels of revenue growth. Letting go of your vision and plans is hard, but if its the right thing to do, you have to be willing to pivot. 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. Market Drivers- Market drives come from the availability of knowledge on healthy products vs. mass marketing for bad products. According to the Partners In Leadership Happiness at Work survey, when employees are happier at work, 85% take more initiative. Their products are now sold in 17,000 grocery stores and 12,000 eateries. Made from "soy powder, gluten-free flour, carrot fiber and other ingredients", they used a food extrusion machine to create a chicken-like texture. With such high expectations, nearly any negative news could place Beyond Meats future earnings in doubt and cause shares to fall. Its an era of growth for the still young start-up. There are countless advertisements with men barbequing burgers or hanging out with their friends as they bond over their favourite protein, read meat. So, what can you learn from Beyond Meat's marketing strategy? In 2021 Beyond Meat's revenue increased by 14.2% to reach $464.7 million. In 2020, they even signed a deal to open another production facility in Shanghai! Beyond Meat stock has staged a dramatic recovery in January, rising by more than 50% since the end of last year. Figure 4: Expenses as % of Revenue: Beyond Meat 2Q19 vs. 2Q20, BYND Operating Expense As Of Revenue 2Q19 Vs. 2Q20. 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. Plant based burgers are not new but Beyond Meat has been able to capture more of the . Beyond Meat is seeking a marketing, advertising, regulatory, and trademark attorney with 10-12 years of experience. Various trademarks held by their owners. 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. Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. The difference with other plant-based patties is that their name is a synonym of quality for their clients. Figure 3: Operating Expense as % of Revenue: Beyond Meat vs. Fourth Quarter 2021. (Photo Illustration by Drew Angerer/Getty Images). Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Weve tried to run straight at the question: is a plant-based meat sufficient for humans to be vital and robust,saysBrown. The first six months of 2020 have visibly transformed Beyond Meat's(BYND 5.83%) approach to marketing its plant-based, meat substitute products. Buy These 2 Stocks in 2023 and Hold for the Next Decade, 2 Growth Stocks to Buy Before the Big Bull Rally, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. Plant-based foods are more than a fad, they are a huge economic trend. When Beyond Meat was met with the failure of their Chicken-Free Strips their first real product they didnt fold. Even with that success, Brown continues to think big . Despite less transparency, I know that Beyond Meats executive compensation plan consists of a cash bonus, option grants, and restricted share units (RSUs). Competitors. The key variables are the weighted average cost of capital (WACC) and ROIC for assessing different hurdle rates for a deal to create value. Its stock value gained 163% on the day of its stock introduction. 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. It began trading at $25/share on the Nasdaq stock exchange and ended the day at $65.75. This is rather than Beyond Meat actually creating a meat brand that is real meat. Plant-based burgers have existed for decades before Beyond Meat. You can see all the adjustments made to Beyond Meats income statementhere. 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. This would be unreadable! 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. Why? By 2015, even Walmart was selling Beyond Meats plant-based products! To fight this incorrect belief, Ethan Brown launched a campaign featuring famous athletes. Attracted by Beyond Meats impressive growth rates and soaring market value, multiple competitors are entering the alternative meat industry. If Beyond Meat created the healthiest plant based products that dont taste very good then it wouldnt be in business very long. illustration, packages of Beyond Meat "The Beyond Burger" sit in a refrigerator, June 13, 2019 in the Brooklyn borough of New York City. The first six months of 2020 have visibly transformed Beyond Meat 's ( BYND -0.58%) approach to marketing its plant-based, meat substitute products. Strategic Windows- Beyond Meat knew that because of the health craze in the world and the expansion of knowledge surrounding healthy food has widened, that they have a short window to get in and get it done right when it comes to plant-based foods. A lot of people are trading so I know a lot of people are interested in the future of this company. 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. By Christopher Lombardo. 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. Plants come directly from the sun and reap the energy created from the sun. While I think a plethora of competitors have already developed a competing product, its plausible that a competitor could decide to buy Beyond Meat rather than continue building its own plant-based protein brand. Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. Tackle stereotypes about who your customers should be. The founder, Ethan Brown, said in June that the companys objective is to make plant-based meat cheaper than animal protein. Before the advent of the COVID-19 pandemic, Beyond Meat's "go-to-market" strategy -- its plan for marketing and promoting its brand, coupled with its framework for product distribution -- relied heavily on foodservice penetration. Success of any of Beyond Meats competitors could also further threaten future profit growth for Beyond Meat. 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. They clearly prioritize innovation. The organizational goals have to be settled and explained. Could they suit flexitarians, meat-eaters? Figure 11: Implied Acquisition Prices to Create Value. Also, because of technology, people are becoming more and more informed about problems with big brands and the cancerous chemicals used in products for decades. 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. Since going public, four of its six quarters have shown improvement from. We can spot changes in the design since their arrival. 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. 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). With a market cap of over $9.6 billion, the stock now trades a little over 17x projected 2021 revenues, despite the fact that 2020 was the toughest year for the company due to the pandemic and it also missed analysts expectations for Q1 2021. See Figure 8 for details. *Average returns of all recommendations since inception. Part of this shift happened without much intervention by management, as consumption in restaurants and other institutional foodservice outlets has plummeted since the spring, while at-home consumption has soared. Net revenues were $406.8 million, an increase of 36.6% year-over-year. Lets have a look at their most serious competitor: Impossible Foods. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. This year also saw Beyond Meat join forces with Mcdonalds to develop their McPlant option. revenue grows at consensus rates in 2021, 2022, and 2023, and. This competitive disadvantage only makes Beyond Meats path to sustainable profitability that much more difficult. However, Beyond Meat staunchly defended itself and its food safety protocols, turning the tables on Don Lee and saying: We simply couldnt get Don Lee Farms to meet our standards. Even in 2021, the dispute is still going on, though both sides seem to have claimed victory. 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. Should Kellogg continue to push the marketing of Incogmeato and swiftly gain customers, investors may kiss the ultra-high expectations baked into BYND goodbye. Even more impressive is that Beyond Meat is, well, a food company (it develops plant-based meat products) and the sales for 2018 were only $87.9 million (and yes, the company has yet to post a . In this scenario, Beyond Meat grows revenue by 37% compounded annually (which results in NOPAT growing 42% compounded annually) for the next 12 years. Acquisitions completed at these prices would be truly accretive to Kraft Heinzs shareholders. She has also held senior leadership roles across PepsiCo's North America business during her more than 15-year career at the food . Beyond Meat Is Down 93% From Its High. Over the TTM period, FCF is -$164 million. 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. Learn More. Why did it work for them? Showing that meat is not necessary to enjoy the same flavors while reaping more plant-based benefits. Its worth noting that any deal that only achieves a 4.4% ROIC would not be accretive to shareholder value, as the return on the deal would equal Kraft Heinzs WACC. What kind of external factors/changes do you think may have inspired the birth of Beyond Meat? . However, the improvement in Beyond Meat's margins has been eye-popping. . But at this stage of Beyond Meat's growth, converting new customers remains the utmost priority. While vegans and vegetarians are less picky when it comes to whether or not meat substitutes really taste and feel like meat, regular meat-eaters are much more tricky to convince. For comparison, this scenario implies Beyond Meat would generate more sales than incumbent competitors such as Pilgrims Pride (PPC), ConAgra Foods (CAG), and Hormel Foods (HRL) in their last fiscal years. 2019: A Change In the Branding Strategy With the Arrival of Stun. 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. For example. Furthermore, Beyond Meat has a history of significant free cash flow (FCF) burn that is unlikely to change anytime soon. With a sound marketing strategy, Beyond Meat may be able to make its product cool again. It began trading at $25/share on the Nasdaq stock exchange and ended the day at $65.75. This created a need for plant-based foods to replace the broken system of meats. 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. Beyond Meat constantly reinvests their earnings in further research and development, as well as in marketing, and in scaling up production and distribution. The redistribution of cash flow to its investors is a challenge. This Beyond Meat Burger in particular cooks like a burger and looks like one,saidJoe Wood, who was the mid-Atlantic meat coordinator for Whole Foods Market at the time.

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