Aside from trying to eat healthier and do such things as avoid cholesterol, there are a few environmental and ethical issues that younger generations in particular want to address that Beyond represents as a solution to.
Burt Beyond does NOT bring a solution to anything. There might some invisible environmental benefit that makes one trillionth of a percent difference for a dollar more per serving. But how long are people going to want to pay for that benefit? I think it is transient.
Beyond is working to make their product healthier, as well as improve upon their products to make them taste, feel, smell, and cook like real meat.
So the value proposition is you pay more for something that they hope to make equivalent?
The more Beyond improves upon it’s quality, the more it distances itself from competition, much like Budweiser or Coors are favored over Pabst or Old Milwaukee…
Budweiser and Coors have better marketing and distribution than Pabst and Old Milwaukee, but they are not favored in blind taste tests.
Meat is a $1.2 TRILLION industry worldwide. This allows something like plant based meat companies to scale to a large size very quickly.
C’mon 12x, you know better than this. The size of a market says absolutely nothing about a company’s ability to scale. That would be like saying that there 4 million road miles in the United States so that means Tesla can scale very quickly. The two have no relation.
Beyond was already in Carl’s Jr. and Del Taco as of last quarter’s results. But since then, they have been added to the menu at Dunkin Donuts and KFC, both of which got a good initial reception. Del Taco has added BYND items to their menu. Subway was a more recent addition, but I have not read any results of initial interest there.
These are good wins for BYND, I will give you that. But I am more interested in the staying power of the product in these restaurants. It isn’t enough to say Carl’s Jr. has agreed to carry the product. More to the point is the increasing of sales through these outlets every quarter. Staying power is the key.
True, competition is coming. We see Nestle, Tyson, and a few others are working on plant based meat. Whole Foods has recently signed on a British company that makes plant based meat seasoning, though they are not in direct competition with BYND at this time. BYND is working on beef, sausage, bacon, and a few other things, that, if they can duplicate the look, taste, feel, and cooking experience one would get from real meat, while making it a healthy alternative, could potentially give them a moat.
Competition is coming and more competition means commoditization. And that means LOW MARGINS.
Beyond does not use GMO or soy, unlike Impossible Burger.
There might be a small subset of people who care about no GMO, but are they enough to move the needle?
I held Beyond going into last quarter’s earnings. My thought was, not as a long term play, but a short term play, where worst case they don’t blow away earnings, but shorts would cushion any fall, as there is such a high amount of short interest in the stock (moreso going into last quarter) that many of these shorts would be eager to cover their losses. The stock traded up after hours after the earnings announcement, but then they announced a secondary offering, and the stock fell. The insiders could not wait 6 months and circumvented the lockup period via a secondary. At that point I sold because I could only see downward pressure on the stock. A few days later, the secondary was announced at $160 a share. The stock is currently trading around that, but, in my opinion, holding up quite well considering what happened. I believe this is partly due to the large amount of short interest in the stock, where, at some point, these shorts are going to eventually have to cover their short and buy the stock. I’m of the opinion this may have artificially held the stock up to levels above what I would like to enter at as any longer term play, given the uncertainty of Beyond. Namely, is it a fad, can they differentiate themselves, how big will the market be, how much of a bite will competition take out? These are unknown questions. Despite all this, I am short term optimistic about Beyond’s sales growth opportunities, and, insofar, competition (aside from their long time competitor Impossible) have made little to no inroads. They are still under development, and the market is for Beyond and Impossible to develop these deals at various restaurants.
WHOA! 12X this is way above my pay grade! I don’t get this detailed on my investments. I just try to buy good companies and hold long enough for them to out perform my personal limitations.
I have no position either, but I like watching.