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A Successful Exit: Beyond Meat Exemplifies the Value-Driven Investments that TR Ventures Seeks

The COVID-19 pandemic has challenged consumers’ sense of well-being, but even prior to the pandemic we were witnessing a shift in consumer behavior toward plant-based, meat alternative diets. A shift in consumer values that reflect prioritizing personal health and essentials in the past year - and decade - have paved the way for disruptors like Beyond Meat (NASDAQ: BYND), established in 2009, to witness tremendous growth.

Shares in the relatively young company have jumped 451% since its initial public offering (IPO) in May 2019. Impossible Foods, Beyond Meat’s fiercest competition, has yet to go public.

Leading the charge with an aggressive global expansion, Beyond Meat is a solid growth stock seeking to support long-term adoption of their product and the lifestyle it conveys. As of September, Beyond Meat has tripled its domestic Walmart distribution to 2,400 locations and announced an international expansion to Shanghai.

In China, the world’s leading consumer of pork, the average individual consumes 69 pounds of pork per year. As pork production in China faces strain from the COVID-19 pandemic and volatility resulting from disease outbreak amongst pig herds, Beyond Meat’s expansion to Shanghai and offering of a plant-based minced pork alternative sets the stage for explosive international growth in the Chinese market.

While Beyond Meat witnessed a weak third quarter, it’s wise to consider year-to-date returns rather than quarterly returns due to the unexpected hiccups and erratic purchasing behaviors of consumers during the COVID-19 pandemic. For instance, increased purchases in the second quarter may reflect consumers stocking up their freezers in anticipation of more stringent lockdowns in the third, thus yielding less than optimal growth this fall.

However, the company witnessed a stock high at $194.95 this October, following their announcement of both domestic and international expansion.

Alongside its international expansion, the company has also invested heavily in acquiring its co-manufacturers in efforts to bring its production operations in-house and command greater power over its supply chain. As CFO Mark Nelson explains:

“... This acquisition complements our ongoing capacity expansion projects in Europe and China, all of which collectively advance our long-term strategic goal of closing the price gap of our products relative to animal protein.”

By heavily investing in growth initiatives in 2020, Beyond Meat positions itself for greater long-term cost savings and supply chain control, which will boost the brand’s ability to dominate both the domestic and international playgrounds it seeks to strengthen.


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