beyond meat marketing strategy
Performance goals for cash bonuses could be determined by achievement of GAAP or non-GAAP financial measures and may be adjusted by the compensation committee for any reason. Clearly, vegan meat alternatives were no longer a fad. 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 constantly reinvests their earnings in further research and development, as well as in marketing, and in scaling up production and distribution. 8 Facts About Pelotons Marketing Strategy You Need to Know, Dirty Lemons Marketing & Growth Strategy, How it Became a Success, Crocs Marketing Strategy. In 2020, they even signed a deal to open another production facility in Shanghai! Its stock value gained 163% on the day of its stock introduction. Create a great product. Without having that partnership in the beginning Beyond Meat may have floundered for many years trying to build a customer base on its own. 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. [1]My firms core earnings are a superior measure of profits, as demonstrated inCore Earnings: New Data & Evidencea paper by professors at Harvard Business School (HBS) & MIT Sloan. If you think about the first time you heard about Beyond Meat it very well many have been when the product launched at a large fast food chain. Distribution and use of this material are governed by The QSR is looking to get the lion's share of the meat substitute market with Beyond Meat. But thats what BYNDs investors are betting will not happen! 4 Challenges That Could Hurt Beyond Meat Stock | The Motley Fool And this failure didnt break them for a few reasons most importantly, because they already had new products in the works. Beyond Meat Reports Fourth Quarter and Full Year 2020 Financial Could they suit flexitarians, meat-eaters? Balance Sheet: I made $290 million of adjustments to calculate invested capital with a net decrease of $228 million. Plant-based burgers have existed for decades before Beyond Meat. 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. 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. 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. Fiduciaries should avoid Beyond Meat Inc. (BYND). BYND revenues saw a rise of 36.6% y-o-y in 2020, which was sharply lower than historical growth rates. 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. 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. Beyond Meat Inc. is revamping its retail sales strategy to center on five major grocers and hiring a new marketing executive as part of an effort to reinvigorate the plant-based food. Beyond Meat - Corporate Counsel - IP, Marketing & Brand Management Investors should note that maximizing customer acquisition through the retail channel will probably crimp the company's admirable growth rate, as future promotions and new iterations of discounted value packs will reduce the amount of recorded sales (net revenue), as we've discussed above. Dollar figures in millions. When I use myreverse discounted cash flow (DCF) modelto analyze the expectations implied by the stock price, BYND appears significantly overvalued. Beyond Meat stock has staged a dramatic recovery in January, rising by more than 50% since the end of last year. The alternative meat producer is reportedly focusing its retail . All rights reserved. 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. I also assume Beyond Meat achieves an 8% NOPAT margin, which equals the average of Beyond Meats and Kraft Heinzs TTM NOPAT margins. this also includes knowledge of every product that comes in contact with your body on a daily basis. 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. Beyond Meat's Competitive Advantage, Market Driver, and The - Medium As we touched on earlier, not everything was easy for Beyond Meat they made their fair share of mistakes along the way. Lets have a look at their most serious competitor: Impossible Foods. While consumer interest in protecting the environment or having a healthier lifestyle continues to grow it doesnt always mean consumption follows. Dont be afraid to really study the competition and pay attention to all the little details that have made them successful. How did Beyond Meat become the leader it is today? As of 2020, the Beyond Meat company sells: Cookout Classic (10 plant-based burgers). You can see all the adjustments made to Beyond Meats income statementhere. Are they only for vegans? DOI: 10.2991/assehr.k.211209.003. Then, followed by J.J. Redick, Maya Moore, April Ross, Eric Bledsoe, Maggie Vessey, and Tia Blanco. 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. Now, if Beyond Meats revenues grow 2.7x, the P/S multiple will shrink by more than 60% from its current level, assuming the stock price stays the same, correct? The company launched the Impossible Burger in 2016. In this scenario, Beyond Meat would earn ~$12.5 billion (slightly more thanMarketsandMarkets2019 estimated global plant-based meat market size of $12.1 billion) in revenue in 2031, compared to $401 million TTM. We hope this article helped you understand how crucial a good marketing strategy is for a companys success. Impossible Foods, Beyond Meat battle to achieve price parity - CNBC For example, Tyson Food, one of the biggest and earliest investors in Beyond Meat, which had a 5% stake in 2016 exited in 2019. Weve previously shown how linking executive compensation to faulty metrics such asadjusted EBITDAcan lead to the destruction of shareholder value. Going forward, Beyond Meat will find it even more difficult to grow revenue and profits as competitors flood the market. Along with continued marketing investment, the plant-based company strikes partnerships with McDonald's and Yum! When it comes to social causes brands still need to remember if the product isnt good no social cause, no matter how important can save it. Since its high-flying IPO at $46, this stock has soared to $135. Eat What You Love Eating meat has long been associated with masculinity. 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. According to the company, this package of 10 plant-based patties reduces the price of its burgers from nearly twice that of conventional burgers to a 20% premium. In fact, it has been shown that heart disease, cancer, and diabetes, three of the top ten causes of death, are linked to eating too much meat. We can spot changes in the design since their arrival. How? Lots of small companies have also emerged and targeted the same audience, such as Purple Carrot or Sunfed Meats. Looking ahead to 2021, consensus earnings estimates are a much higher $0.47/share. This new knowledge of healthy vs. unhealthy created a new market drive for healthy products. Over the past two years, the firm has burned a cumulative $179 million (2% of market cap) in FCF. The larger the firm gets, the more difficult it becomes to achieve large year-over-year (YoY) growth rates. The Motley Fool owns shares of and recommends Beyond Meat, Inc. 2. Plant based options are the obvious choice. Changes that have inspired the birth of Beyond Meat is the increased demand on plant-based products. This created a need for plant-based foods to replace the broken system of meats. Competitors, Serious Uphill Battle for Beyond Meat to Improve Profitability. These days, fewer investors pay attention to fundamentals and the red flags buried in financial filings. 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 copy is for your personal, non-commercial use only. Option grants and RSUs directly align executives interests with the price of the companys shares and not necessarily with creating shareholder value. While many consumers are not willing to pay an average of $3 more a pound for a. Economic earnings, which account for the unusual items on the income statement and . 4. For example, Kelloggs delayed the launch of itsfirst roundof Incogmeato products due to the COVID-19 pandemic. Beyond Meats successes have inspired the giants to create new categories. See Figure 8 for details. 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. Baseball player David Wright was the first celebrity to sign a contract with the brand. As investorsfocus moreon fundamental research, research automation technology is needed to analyze all the critical financialdetails in financial filingsas shown in the Harvard Business School and MIT Sloan paper,Core Earnings: New Data and Evidence. It has put them in a competitive sustainable advantage position because others will have to spend a lot of money on research and development to get their plant-based burger to taste like theirs. 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. Beyond Meat Has Completely Altered Its Go-to-Market Strategy If you want to stay up-to-date on the latest news in the plant-based market, to learn about the most recent innovations as they come out, do not hesitate tofollow us. Valuation: I made $757 million of adjustments with a net effect of decreasing shareholder value by $513 million. Opinions expressed by Forbes Contributors are their own. . Beyond Meat's marketing strategy is to convert carnivores into occasional vegans. Beyond Meat is Wasting Its Advertising - Better Marketing Tackle stereotypes about who your customers should be. However, the poultry producer exited earlier this year . Back in 1988 when John Mackey, co-founder of Whole Foodstried to get funding to expand his companyhe was rejected by many venture capitalists. 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. Plant-based meat alternatives are on the rise and not just with vegans. January 2021. This makes a lot of sense since only2.7%of packaged meat sales in the United States are plant based. 2023 Latana GmbH. To justify its current price of $135/share, Beyond Meat must immediately improve its NOPAT margin to 5% (same as Tyson and more than double its current margin of 2%). Competition- Beyond Meat has created competition by completing innovating meat and how meat is viewed. 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 . Why? Net revenues were $406.8 million, an increase of 36.6% year-over-year. Beyond Meat will face difficulty maintaining an innovative edge over its peers, who already spend much more on research and development (R&D). Recent Improvement in Profitability Was Short-Lived. This year also saw Beyond Meat join forces with Mcdonalds to develop their McPlant option. Also, seeing that a lot of slaughter houses will absolutely not let anyone come see the inside conditions that animals are facing. Big brands have started plant-based meats and substances that are more healthy in order to show that Beyond Meat is not the only plant-based guys in town and gain some market share. Resourceful, strategic, and self-directed leader with a proven record of achievement in global account management, business development and sales strategy leadership. What can you learn from this? Their main rival is the company Impossible Foods. As of December 31, 2020, Beyond Meat had products available at approximately 122,000 retail and foodservice outlets in over 80 countries worldwide. For example, without any existing shelf space, and only recently announcing an e-commerce platform, Beyond Meat must spend more on not only convincing consumers to try their products, but also on retailers to display their products. The Impossible Foods start-up was founded in 2011 in California by Patrick O. As Kroger invests further in its Simple Truth brand, wed expect the firm to allocate more shelf space to its own in-house brands, rather than a competitor such as Beyond Meat. Join the Team | Beyond Meat Careers | Beyond Meat Beyond Meats case also shows that a marketing strategy is not fixed: it has to evolve along with the companys positioning. It doesnt matter what industry your brand is in theres always a chance consumers wont take to your product or service. Beyond Meat was the first company to sell plant-based burgers in grocery stores meat sections. Previously, people were limited to information they see on television which is in the best interests of companies that can afford those ad campaigns. Among the items Beyond Meat excludes when calculating its adjusted EBITDA are equity-based compensation, restructuring expenses, and a vague line item labeled other. Beyond is working to streamline its operations and reverse declining sales. 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. Beyond Meat: Analysis of a Successful Marketing Strategy Read the full post on my retail trends blog by clicking here. 2 Reasons to Avoid a Roth 401(k) for Your Retirement Savings, Warren Buffett's Latest $2.9 Billion Buy Brings His Total Investment in This Stock to $66 Billion in 4 Years, Want $1 Million in Retirement? It began trading at $25/share on the Nasdaq stock exchange and ended the day at $65.75. If you do subscribe to our retail trends newsletter to get the latest retail insights & trends delivered to your inbox. KFC, Beyond Meat ready nationwide plant-based chicken rollout Knowing that the meat is expired and poses a hazard to eat it. Extensive background in CPG . Should Kellogg continue to push the marketing of Incogmeato and swiftly gain customers, investors may kiss the ultra-high expectations baked into BYND goodbye. Beyond Meat just IPOd last year, it is very interesting to me to see that it is a 9.30B company as of today. Figure 9 compares the firms implied future NOPAT in this scenario to its historical NOPAT. The paper empirically shows that my firms data is superior to Operating Income After Depreciation and Income Before Special Items from Compustat, owned by S&P Global (SPGI). 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. Beyond Meats success comes partially from the fact that it has been able to evolve alongside or prior to consumer demand. After all, nothing could replace a real burger, could it? Competition Will Eat Beyond Meat Alive - Forbes Find out how 3 brands use customer data to find success! In 2014 they developed their first simulated beef product and expanded their presence from 1,500 to 6,000 stores in the US. This would, in turn, take BYNDs market cap to about $14 billion by 2023, from $9.6 billion currently. Beyond Meat is a Los Angeles-based producer of plant-based meat substitutes, including vegan versions of burgers and sausages. The main difference is that Impossible Foods takes its proteins from soy whereas Beyond Meat extracts it from peas. Eating plants is the best thing you can do for your diet. Rising beef prices, coupled with the overwhelming at-home food consumption trend, present an unforeseen opportunity for the company to entice new customers by doubling down on grocery sales. More than simply providing a case study of a successful plant-based start-up, this analysis can provide your plant-based business with a complete understanding of the market. Investors are beginning to worry whether or not Beyond Meat will be able to sustain the $4 billion valuation in stock it currently has. Per Figure 5, Beyond Meat saw significant improvement in profitability in 2018, but the improvement was short lived. Mission | 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. Prior to that Mr. Oghoghomeh served as Head of Recruitment Marketing - West Zone for Amazon, an eCommerce company from 2019 to 2021. Sounds too good to be true, right? (Photo by Smith Collection/Gado/Getty Images), BYND Operating Expense As Of Revenue Beyond Meat, BYND Current Valuation Implies Massive Revenue, BYND Implied Acquisition Prices For Value Neutral, BYND Implied Acquisition Prices For Value, See the math behind this reverse DCF scenario, directly correlated with creating shareholder value, The lack of competitive advantages that nearly all competitors possess, Doing the math: stock price implies huge increase in revenue/profits, Incogmeato by Morningstar Farms, owned by Kellogg Co. (K), Simply Plant-Based Meatless Burger, a SYSCO Corp. (SYY) exclusive product, Simple Truth plant-based meat, owned by The Kroger Co. (KR), Sweet Earth Brand, owned by Nestle (NSRGY), Happy Little Plants, owned by Hormel (HRL), Lightlife Foods, owned by Maple Leaf Foods, Shelf space large amounts of space, which can be very difficult to acquire, especially from firms like Kroger who directly control shelf space allocation, Marketing and advertising capacity existing businesses generate lots of cash flow that enables these firms to spend much more on marketing and advertising than Beyond Meat, Strong brand decades-long relationships with consumers across multiple brands that engender the trust that enables quicker adoption of newer products, Valuation implies massive improvement in profitability with sustained revenue growth rates, Domini Sustainable Solutions Fund (LIFEX) 3.4% allocation and unattractive rating. Stun is a creative branding agency. Here's how KFC is marketing its updated Beyond Meat faux - Ad Age Beyond Meat went from very dark and meat-like packagings to a fresher and smoother look. And while there are a few ways to do this, brand monitoring software is your best bet, as it allows you to track your chosen brand KPIs for the target audiences that matter. For example. 2 1 Comment. What can you learn from this? Beyond Meat Announces New Executive Leadership Appointments to Accelerate and Support the Company's Vision for Strategic Growth. 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. This report helps investors of all types see just how extreme the risk in BYND is based on: Growth Will Slow Down, but Competitors Wont. There was also a long standing view which only recently has begun to change that veganism or vegetarianism will only be embraced by a narrow part of society. Fourth Quarter 2021. Your brand, too, needs the liberty to change. Beyond Meat stated that its mission is to push boundaries and disrupt. There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. Figure 6: Beyond Meats Adjusted EBITDA Misleads on Profitability, BYND Adjusted EBITDA Misleads On Profitability, Doing the Math: Valuation Implies Significant Disruption of the Entire Meat Industry. the stock is worth just $30/share today - a 57% . Probably not, considering that revenues are likely to grow almost 2.7x by 2023, with net income turning positive in 2022 and growing steadily thereafter, generating continued returns for shareholders. + Follow. Below is a short list of some of Beyond Meats alternative meat competitors: This list is not exhaustive and doesnt include any of the traditional meat products that continue to garner a large share of consumer dollars. https://www.wsj.com/articles/beyond-meat-hires-marketing-executive-revamps-retail-strategy-11675379688. This scenario represents the minimum level of performance required not to destroy value. Beyond Meat Stock: A Competitive Analysis | Nasdaq No more comparison with animal meat products: Beyond Meat has nothing more to prove, its products are famous, recognized as good for the palate and for our health. And if youre looking to follow in this impressive brands footsteps, keep our above tips in mind and consider adding brand tracking software to your lineup because, without insight into how consumers feel about your brand, you wont know where to grow next. Several of Beyond Meats competitors, including Hormel, Nestle, Kellogg, Tyson, Kroger, ConAgra, and Kraft Heinz, enjoy key competitive advantages: These advantages are very important and very difficult, if not impossible, for new entrants like Beyond Meat to match or overcome in the near term, if ever. Things Are Only Getting Worse for Beyond Meat Stock. Beyond Meat is Wasting Its Advertising The company's strategy promotes plant-based meat as a category, not as a brand, which is ideal for its competitors Hermes Rivera via Unsplash From one perspective, Beyond Meat could hardly be in a better position. Learn how you can use Latana to improve your brand marketing and grow faster. Beyond Meats massive revenue growth cannot last forever. However, the fundamentals reveal this stock is more style than substance. Stage of Market Lifestyle- The stage of the market lifestyle will influence the company on a few different categories.