Hype surrounding Beyond Meat continues - 287 percent increase in revenue

30-Jul-2019 - USA

The success story of Beyond Meat continues for the time being: The meat replacement specialist with the coveted vegan burgers is still growing rapidly. In the second quarter, sales increased by a whopping 287 percent year-on-year to 67.3 million dollars (60.4 million euros), as Beyond Meat announced on Monday after the close of the US stock market. The hype about the Californian company, whose meatballs look and taste like meat without containing any, does not want to end.

"We believe that our positive momentum reflects the growing desire of mainstream consumers," said CEO Ethan Brown. Beyond Meat produces meat alternatives based on plants - without any animal ingredients. Especially the vegan burgers of the company caused a big rush. When the previously only available wholesale Bratlings at Metro went on sale at the Lidl discount store in May, they were quickly sold out in Germany.

Also in the US home market the hype around the company supported by celebrities like Microsoft <US5949181045> co-founder Bill Gates and Hollywood star Leonardo DiCaprio is big. With its products, Beyond Meat is fully in line with the trend of a time when many people are reconsidering their eating habits and the total or partial renunciation of meat is enjoying great popularity. Added to this is clever marketing, which, instead of business interests, identifies health, animal and climate protection and the rescue of the planet in the face of dwindling resources as a mission.

In fact, the business model has not yet made any money. In the second quarter, the loss increased by more than a quarter year-on-year to $9.4 million.

Compared to other US start-ups, however, this is a snap, and operating earnings before interest, taxes, depreciation and amortization, adjusted for special effects, have already made it into the black. Financial professionals usually pay more attention to this key figure anyway - and thanks to significantly higher profit margins there was a plus of 6.9 million dollars here.

No wonder that the company, founded in El Segundo, California in 2009, is not only attracting a lot of attention on the food market, but also on the capital market. Since a furious IPO at the beginning of May, Beyond Meat has quickly become Wall Street's favorite. The share recently traded around nine times higher than the issue price of 25 dollars. Many analysts have been warning of setbacks for some time, but so far there has been little evidence of them. It is not often that the market value of a company increases from 1.5 billion to 13.4 billion dollars in about three months.

According to the quarterly report, post-trading US trading initially fell sharply. However, this was probably due to a capital increase announced in parallel and not to the figures.

The outlook remains rosy - Beyond Meat raised its sales forecast for 2019 substantially and expects a positive operating result. The competition's not asleep. Impossible Foods is another successful specialist supplier. In addition, food giants such as Nestlé and Tyson Foods are entering the market.

And Beyond Meat doesn't meet with love everywhere. Among the more harmless critics is the US fast food chain Arby's (slogan: "We have the meat"). She turned the tables at the beginning of July and blew in a bizarre way to counterattack - with vegetables made of meat. The company promises a whole new food category: "Meat Vegetables", or "Megetables" for short. Arby's has already presented a first product - a turkey breast carrot called "Marrot". The whole thing was by no means just meant as a joke, a spokesman assured upon request.

Nevertheless, Arby's attack can probably be dismissed as a humorous side blow and an attempt to profit from the hype. But there are also serious voices that sound unimpressed. Nutrition researchers point out, for example, that fake meat does not have to represent any progress from the point of view of health compared to the original.

The proportion of sodium and saturated fat is roughly the same, warned diet coach Alissa Rumsey on the US channel CNBC. It is also cause for suspicion that products from the laboratories of Beyond Meat and Impossible Foods actually correspond to the epitome of ecologically frowned upon industrially processed food.

The fact that tolerance for highly processed foods sometimes knows limits is also one of the reasons why Beyond Meat and Impossible Foods do not open doors at all fast food companies. "We've talked to them, and unfortunately it doesn't fit with our "food with integrity" principles," said Brian Niccol, head of the Texmex Chipotle chain, recently "Yahoo Finance". This is due to the high degree of processing required to make plants taste like meat. Note: Other chains - from TGI Fridays to White Castle to Burger King - are ripping for vegan burgers./hbr/DP/zb

Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.

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