Beyond Meat is coming to a breakfast menu near you. Sister restaurants Carl’s Jr. and Hardee’s announced they are adding Beyond Meat sausage sandwiches and burritos to their breakfast offerings.
The announcement is the latest in a string of high-profile wins for Beyond Meat, as restaurant groups fight to stay ahead of the meatless phenomenon:Subway: Is testing a meatless marinara sub in 685 U.S. and Canadian locations.
- Dunkin’ Donuts: Launched a Beyond Meat sausage sandwich in November after a successful test in Manhattan.
- Blue Apron: Added multiple Beyond Meat recipes.
- McDonald’s: Has been slower on the uptake, but recently announced it is testing a “PLT” burger (plant-lettuce-tomato) burger in Canada.
Overall, Beyond Meats’ business mix is an even split between retailers (Whole Foods, Krogers) and restaurant groups. Since its IPO in May, the company has added 11,000 locations to both its retail and restaurant distribution networks.
Beyond Meats’ first six months as a public company has been dramatic. After pricing its IPO at $25 in early May, shares seemingly levitated to a high of $240 by late July. Since then, it’s been a slow grind downwards as investors try to suss out whether the faux-meat phenomenon is here to stay. On Thursday, shares closed at $77.36. Still up big from the IPO, but down meaningfully from all-time-highs.
The Market Opportunity
One of the biggest questions for investors is: just how large is the addressable market for faux-meat?
The Beyond Meat View: In their latest investor presentation, they compare the plant-based meat opportunity to the plant-based milk market.
They claim plant-based milk (soy, almond, coconut) represents 13% of the total milk market. Applying that same percentage to the total value of the U.S. meat market of $270 billion, and that equates to a total potential market of $35 billion.
- The Takeaway: The median analyst believes Beyond Meat will do $270 million in revenue in 2019, meaning the company has penetrated only 0.8% of the total *potential* addressable market. While it’s an interesting comparison, some analysts believe trying to estimate the potential market size is “fun with numbers,” meaning it’s still too early to tell how big the potential really is.
The Inside Scoop
Beyond Meat is not the only company jockeying for plant-based profits. Tyson Foods, the chicken conglomerate, recently announced its entrance into the meatless maze. And Impossible Foods, the maker of the Impossible Burger, recently raised $300 million in funding and landed a deal with Burger King for a roll-out of the Impossible Whopper.
- The Valuation: While Beyond Meat is growing healthily, many analysts believe the valuation simply got ahead of itself. The company turned its first quarterly profit in Q3, generating $4 million of net income. But relative to their market cap of $5 billion, they have a lot of beefing up to do.