Beyond Meat, the plant-based meat company, started publicly trading Thursday morning, and the stock more than doubled in value right out of the gate — it’s now trading at $60, when just last week the company was estimating it would start selling at $19 to $21.
The company sells burgers that contain no meat but taste like they do. Its stated goal is to fix our food system by making such meat alternatives available everywhere and appealing to everyone. Its initial public offering (IPO) is the latest sign that alt-meat is going mainstream — and that’s a big deal.
It’s been a good few years for Beyond Meat. National chains including Del Taco, Carl’s Jr., and T.G.I. Friday’s have started carrying their products. They’ve also found their way onto grocery store shelves at Whole Foods, Kroger, and Target. In total, Beyond Meat says its products are available in more than 35,000 outlets, from hotels and college campuses to grocery stores and sports stadiums. Sales have been growing fast — last year, the company reported revenues of $87.9 million, up from $32.6 million in 2017.
Now the company is public, listed on NASDAQ as BYND. The company priced at $25 per share on Wednesday, which was a substantial increase from the expected price it first announced ($19 to $21) last week.
Beyond Meat also decided to offer more shares: 9.6 million, up from an initial planned total of 8.8 million. Between the price increase and the increase in shares, it raised $240 million from the IPO — which the company has said it plans to spend on growth, from expanding its sales to increasing product offerings.
Beyond Meat’s team is taking the striking listing-day performance — it’s exceptionally rare for companies to double their listing price — as a sign that they’ve hit on something big. “I do think it’s a validation of this opportunity,” executive chair Seth Goldman told me.
“It’s easy to be skeptical and say this is a plant-based burger for vegans,” he said, but that niche is too small to support a multibillion-dollar company. Beyond Meat’s valuation, he argued, reflects that it appeals to a much broader audience. “This is about letting people eat what they love, and just doing it with meat made from plants.”
Beyond Meat was founded in 2009 by CEO Ethan Brown, and the Los Angeles-based company’s products first hit supermarket shelves in 2013. Its rapid rise — food is not an easy industry to break into — reflects intense consumer demand and investor interest in meat alternatives. The company has never been profitable, and lost $29 million in 2018, but its rapidly growing revenues have some investors persuaded it’s a good bet — as does its positioning on the frontier of a transformation of our food system.
“Beyond Meat was the first company to really set its sights on creating meat from plants that could compete on the basis of the things that meat eaters like about meat,” Bruce Friedrich of the Good Food Institute, which works on policy and investment surrounding meat alternatives, told me. “Before Beyond Meat and Impossible Foods, there was really this sense that plant-based foods were for vegetarians. People like Ethan Brown said, ‘No, we can make plant-based foods that meat eaters like just as much.’”
Brown now has a $3.4 billion company to prove it. And while Beyond Meat is the first plant-based meat company to go public, it looks likely that it won’t be the last. The trend that brought Beyond Meat racing to its billion-dollar valuation and IPO is just getting started — and that has the potential to be game-changing, not just for the industry but for the world.
Plant-based meat alternatives are getting big
There’s a lot wrong with our food system. Producing meat by raising animals on factory farms produces tons of greenhouse gases, and many analysts think we can’t tackle climate change without tackling the enormous emissions that go into agriculture. Animals in close quarters are fed low-dose antibiotics constantly so they don’t make one another sick, which contributes to antibiotic resistance, a huge threat on the horizon for public health. And animals on factory farms are routinely subjected to intense cruelty and conditions that disgust the average American consumer.
That’s what inspired people to start working on meat alternatives — and it may be what’s inspiring the consumer enthusiasm that has buoyed them in recent years. Products like veggie burgers, fake chicken, and soy and almond milk are growing in popularity and market share. Even better, they’re getting tastier and harder to distinguish from animal products.
New breakthroughs in food science have made it easier to imitate the flavor and texture of real meat. While early veggie burgers were almost exclusively purchased by vegetarians, Brown says that 93 percent of Beyond Meat customers buy regular meat too — suggesting the company has succeeded at making something that appeals to meat eaters.
Beyond Meat was among the pioneers of this new generation of plant-based meat, which aimed to replace bean-based veggie burgers marketed mostly to vegans. Now it’s the first plant-based meat company to have an IPO. It’s a remarkable success for the company. It’s also remarkable because food companies rarely go public, Friedrich told me: “The food industry is highly centralized, and most exits are mergers or acquisitions by large food conglomerates.”
Last year, there were rumors that the industry giant (and Beyond Meat investor) Tyson Foods was considering buying the company. Beyond Meat stayed independent, though. A few months later, the company added the chief financial officers of Coca-Cola and Twitter to its board, signaling that it was bringing on the expertise it needed to become a huge public company.
Goldman said Beyond Meat has seen fast growth in all its channels — grocery stores, where it’s launching Beyond Beef ground beef and Beyond Sausage breakfast sausages; restaurants, with Carl’s Jr. and Del Taco signed on; and internationally, with expansions in Canada and Europe. Their biggest problem, in fact, has been supplying enough burgers to meet demand. “We had tough years both 2017 and 2018 because we weren’t able to keep in stock,” Goldman said. The team hopes raising money will allow them to avoid that problem again.
The rest of the plant-based meat industry has been thriving too. Qdoba announced last week that it will serve Beyond Meat competitor Impossible Foods. Earlier in April, Burger King launched the Impossible Whopper, and it did so well, it’ll soon be available nationwide. Tyson and Purdue are pursuing their own plant-based product lines. A few years ago, the Impossible Burger was available in a handful of restaurants; now it can be found in more than 5,000.
“There’s a sense that there’s a movement going on that’s much bigger than any one company,” Brown told Vox in April.
The interesting thing about that movement is that plant-based meats don’t have to displace all animal meats in order to make a big difference. Every burger replaced with a Beyond Burger has an impact on CO2 emissions and demand for factory farming and antibiotics. The more the plant-based meat industry grows, the more those impacts will be visible — and that might, in turn, fuel more interest in plant-based meats.
Beyond Meat’s team doesn’t just believe they’ve found a niche — they say they’ve figured out the “Future of Protein.” The IPO is a chance for investors to take bets on whether they’re right.
Listen to this
Tamar Haspel, a food policy columnist at the Washington Post, joins Sean Rameswaram to discuss the rise — and potential impact — of the meatless meat movement.
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