If you are a vegetarian or a vegan, or if you go on a vegetarian diet sometimes (together with my wife, we go on a vegetarian diet every 1st and 15th of a lunar month due to religion), then this brand name ‘Beyond Meat’ should be familiar to you – you can easily find the company’s products under the frozen food section in any of the major supermarket chains in Singapore.
Had you invested in the company back when it was first listed on the NASDAQ stock exchange at $25.00 per share in 03 May 2019, based on its closing price of $112.27 yesterday (20 September 2021), you would have enjoyed a capital appreciation of 350% in just slightly more than 2 years!
In today’s post, you will read about all the researches I have done about Beyond Meat Inc. (ticker symbol NASDAQ:BYND) – including the company’s businesses, financial results and debt profile (between FY2019 and FY2020 – the company has a financial year end every 31 December), a comparison of its financial results for the first half of the current financial year against the same time period last year, and also my outlook for the company ahead.
Beyond Meat Inc.’s Businesses
Beyond Meat Inc., according to the company’s website, is ‘one of the fastest growing’ food companies in the United States, offering a portfolio of ‘revolutionary plant-based meals’ – where the company ‘build’ meat (particularly beef, pork, as well as poultry) directly from plants, through an innovation that allow their consumers to experience the taste, texture, and other sensory attributes of the animal-based meat products while at the same time enjoying the nutritional and environmental benefits of eating their plant-based meat products.
The company’s catalogue of products (all of them are certified Kosher [food that complies with the strict dietary standards of the traditional Jewish Law] and Halal, except for Beyond Beef Crumbles) include:
(i) Beyond Burger – it is the world’s first 100% plant-based burger, where it is designed to look, cook, and taste like a traditional beef burger;
(ii) Beyond Sausage – made from a blend of pea, rice, and faba bean proteins, it is designed to look, cook, as well as taste like a pork sausage;
(iii) Beyond Beef – which is designed to have the meaty taste and texture of ground beef – except that it has 35% less saturated fat than 80/20 beef (or 5 grams per 4-ounce serving);
(iv) Beyond Meatballs – made from a blend of peas and brown rice, they are pre-formed and designed to replicate ground beef or pork meatballs;
(v) Beyond Breakfast Sausage Patties and Beyond Breakfast Sausage Links – made from a blend of pea and rice proteins, and seasoned with savoury herbs and spices, they are designed to replicate a classic pork breakfast sausage patty or link;
(vi) Beyond Beef Crumbles – which are ready-to-eat products designed to look and taste like minced or ground beef;
As at the end of the financial year 2020 (on 31 December 2020), Beyond Meat’s catalogue of plant-based meat products can be found in 122,000 retail and foodservice outlets (also known as F&B outlets in Singapore terms) in more than 80 countries worldwide.
As the company is only listed since 03 May 2019, in this section, I will be looking at its statistics over a 2-year period – between FY2019 and FY2020:
The 36.6% year-on-year (y-o-y) improvement in the company’s total revenue can be attributed to an increase in retail sales volume, largely offset by a decline in sales volume from the F&B outlets due to the ongoing Covid-19 pandemic (where varying degrees of lockdowns or movement restrictions brought upon a reduction in footfall and sales to these F&B outlets, leading to a decrease in volume in terms of their orders).
As a result of a lower net price per pound (due to the company’s strategic investments in promotional activities, as well as product mix shifts to larger-pack items which have a lower net price per pound), along with expenses attributable to Covid-19, on a y-o-y basis, its gross profit margin fell by 9.1 percentage points to 25.2%.
Finally, its net profit weakened further (to -$53m in FY2020 compared to -$12m in FY2019) due to expenses related to the ongoing pandemic – particularly from inventory write-offs.
Moving on, let us take a look at the company’s debt profile in the table below (just like in the previous section where I studied its financial performance, I’ll be looking at the statistics recorded between FY2019 and FY2020):
|Cash & Cash Equivalent|
While the company is in a net cash position in the 2 financial years I have looked at, its net cash position recorded for FY2020 have fallen by close to 50.0% due to a similar scale of drop in its cash and cash equivalent.
1H FY2020 vs. 1H FY2021
The following table is a summary of some of the key financial figures for the first half of the financial year 2021 (period between 01 January 2021 and 03 July 2021) compared against the same time period last year (i.e. the first half of financial year 2020 between 01 January 2020 and 30 June 2020):
|1H FY2020||1H FY2021||% Variance|
|Cash & Cash Equivalent|
Compared to the first half of last year (i.e. 1H FY2019), results reported for the first half of the current financial year (i.e. 1H FY2020) was again a mixed one – things I like about its latest set of results include the 22.4% growth in its total revenue (due to improvements in its sales volume from retail, as well as from F&B outlets), along with its net cash position recording a significant improvement.
On the other hand, the company’s gross profit margin declined (largely due to a 8.6% percentage point drop in the first quarter of the current financial year (compared against the first quarter of the previous financial year) due to higher transportation and warehousing costs, lower net price realisation due to trade discounts and changes in product sales mix, higher depreciation and amortisation expense primarily attributable to incremental fixed assets associated with the company’s production facilities in Pennsylvania, the Netherlands, and China, and increased fixed overhead costs), and also its net profit continued to be in a net loss position.
Overall, I am optimistic of the company’s growth ahead, as an increasing number people are switching to consuming a plant-based version of meat for environmental reasons (you can read about the environmental benefits here) – and Beyond Meat will definitely benefit from this trend.
As far as sales volume from the F&B outlets are concerned, as countries around the world slowly ease their movement restrictions after reaching a certain level of vaccination rate amongst its population, demand for Beyond Meat’s products should further improve with time (even though the growth rate will be a slow one, as many of these F&B outlets allow dining in only for fully vaccinated individuals, and this will definitely lead to a certain degree of drop in terms of demand compared to before the pandemic.)
Last but not least, the company’s business is not without risks – competition from other companies for one (in time to come, there will be more and more companies producing such plant-based meat products) and the company may see its profit margin may come down as consumers have more to choose from (and more often than not, they will buy based on price.)
With that, I have come to the end of my share on Beyond Meat Inc. Please note that everything (particularly the opinions) you have read above is purely my own, which I’m sharing for educational purposes only. As always, please do your own due diligence before you make any investment decisions.
Finally, on the sidetone, have you tried out any of the products produced by Beyond Meat before? If you do, what are your thoughts about them – do you think they are as close as it get to consuming animal-based meat products? Feel free to share with me (as well as fellow readers of this post) your experience with Beyond Meat’s products below…
Disclaimer: At the time of writing, I am a shareholder of Beyond Meat Inc.
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