Beyond Meats (BYND)As you may well know it shot up over 160% on its first day of trading and has continued to climb since. I think this will likely be a largely expanding market in the coming years. Any opinions on valuation or the company itself?
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The product, a pea based soylent green has few trade secrets associated with it. Substitutes will be numerous and likely better. The product is a commodity. Product differentiation will be hard. Individual producers will face a near horizontal demand curve. The opinion on this product is mixed. Its better than a veggie burger, perhaps, but it lacks a lot of what it is trying to imitate. Ohhhh excuse me it is beyond that…..ie they can not duplicate a hamburger so they have moved beyond. As will every other major producer of such products.
I’m tired of being told this is the one product I must try. Not by those who have eaten it but by hypsters. Read the label. Buyer beware.
I like the product just fine for vegetarians or those trying to cut down on meat for environmental or compassionate/ethical/cultural reasons, it tastes OK and mimics meat flavor and texture a lot better than anything else I’ve tried, though it doesn’t seem likely to be meaningfully “healthier” — and the Impossible Burger is, I’m told by our vegetarian test subjects, substantially better than the Beyond Meat burger. I agree that competition is likely to come in hard from the existing meat companies and packaged food firms, though there is clearly some differentiation among just these two products and there will be differences with whatever Tyson and the other folks come up with, too.
Whether Beyond or Impossible creates a real brand value in these early days, before bigger players introduce their variations, is probably the biggest question, the current share price is obviously ludicrous based on the current size of the business and the near-term economics, but the investor hope comes from the massive, massive size of the end market and the potential for scaling up production and becoming dramatically more efficient over time to make the products price-competitive.
Impossible is still private, and is a little younger than Beyond, but will probably go public before too long as well — they raised a lot of money privately just this month, and they are ramping up capacity for Burger King and hoping to be in retail stores by the end of the year, a year or so behind Beyond Meat’s large-scale rollout.
Fascinating story, but I wouldn’t buy BYND personally — I wouldn’t short it, either, given the clear investor enthusiasm, but I think it would be crazily overpriced at half the current share price. Will be interesting to see how the two-player competition heats up when they both can ramp up production enough, and who else tries to enter the fray, but I’ll watch from the sidelines for now.
Do you think this lawsuit is significant: https://www.businesswire.com/news/home/20190307005952/en/Meat%C2%AE-Sued-Fraud-Negligence-Breach-Contract-Don
I watched Beyond Meat CEO Ethan Brown on CNBC the day the earnings were posted October 28 I believe and very interesting vision of the future of food. He indicated they want to be a protein manufacturing company. Very noteworthy commentary about plants and how animals uptake plants in their diet , reconfigure those ingested plants and absorb the nutrients into muscle … then we harvest the muscle as meat. Interesting how he unbundled the challenge for creating those proteins directly from the plants skipping the processing into meat altogether. All organic I think with time in evolution of the process this could be a huge disruption play.
I believe you are assuming that the energy cost of creating some of the essential aspects of animal products can be avoided somehow. Men eat meat not because they want to trash the environment, but because for the entire length of their existence there has been no more efficient way to raise a healthy population. I believe that the individual is free to be whatever he/she wants to be, and can micromanage the situation. The economics of large groups is considerably different. We are told that what has come to us over the millenniums is inefficient but we have yet to fully understand the systems that many are so willing to change. From my perspective, I have no reason not to eat the product, but I will always reserve the right to eat animal meat. My forefathers grew up that way and from what I have personally experienced their good reason to continue. After thousands of years as predominant vegetarianism, the Indian Nation can not convince me that there is any distinct advantage. Generally, this is the same kind of hypocritical hype I experienced when I was a vegetarian in my earlier years. But now, the children of the people who laughed and criticized me for my ways, avoid the truths of the matter by threatening to kill my generation to fund their uneconomical moves into hysteria.