With a phenomenal surge in demand for Beyond Meat’s products, the company has had to revise its full year profit earnings.
Although Beyond Meat Inc’s shares have slipped just three months after its IPO, demand for its plant-based burgers and sausages are seeing a phenomenal rise and as a result the company has revised its full-year sales forecast.
Beyond Meat has earmarked proceeds to raise funds for expanding its manufacturing facilities that are currently being stretched due to heightened demand for its meat alternatives.
Since its IPO in May, Beyond Meat’s shares have surged by more than 780% with the company’s meat alternatives being stocked on the shelves of grocers such Kroger Co as well as entering in the
menus of restaurants such as Carl’s Jr.
The rise in demand for plant-based meat alternatives have even sparked interest from veteran meat companies such as Tyson Foods Inc and Perdue Foods, which have started offering meat protein products mixed with plants.
“For another growth stock, the top-line beat and raises would be enough to see a post-market rally, but there are a lot of Beyond Meat investors out there looking for any excuse to sell a stock that has rocketed so much since its IPO,” said Kamal Khan, an analyst at Investing.com.
In a statement, Beyond Meat’s CEO Ethan Brown said, its products are now “sold at more than 53,000 retailers and restaurants worldwide”.
Supermarket chain Morton Williams, which owns 16 locations across New York City, which stock Beyond Meat burger patties and sausages by the case, customers are picking them up by the dozens, said Victor Colello, the chain’s director of meat and fish.
“Beyond Meat is really flying off the shelves. My business with it has almost doubled and we’re sold out at times,” said Colello. The latest version of the burgers is made from peas, brown rice, sunflower seeds and mung beans.
According to Refinitiv IBES data, Beyond Meat’s net revenues have risen by nearly 400% to $67.3 million in the three months ended June 29; this is above Wall Street’s estimate of $52.71 million. The company has stated, it expects net revenues to rise by over 170% to $240 million in 2019, up from $210 million from its previous forecast from last month.
According to Karen Formanski, an analyst at Mintel who authored a consumer research report on plant-based protein, there is no slowing down in demand for meat alternatives in the market; 38% of U.S. consumers are adding more plant-based protein to their diet.
“But with growing competition, criticism over processed food and clean eating getting more important, companies will have to adapt and offer more variety than just burgers” said Formanski.
Rejecting criticism that Beyond Meat’s products are overly processed and thus unhealthy, Brown said it was not a question of whether they were processed but how they are processed.
“There are an almost endless amount of crops you can pull from…and it is really important that Beyond is leading the effort of bringing new proteins into the market,” said Brown.