Published: Sun, June 09, 2019
Markets | By Otis Pena

Beyond Meat expects to sell a lot more meatless meat in 2019

Beyond Meat expects to sell a lot more meatless meat in 2019

Restaurant chains' growing enthusiasm for plant-based meat products can be seen in Beyond Meat's finances and its stock price.

As for the rest of the year, Beyond Meat is forecasting net revenues to exceed Dollars 210 Million, representing a 140% increase year-over-year.

The company said it expects revenue of $210 million this year, which would be up 140% over 2018.

Plant-based meat maker Beyond Meat beat expectations in its first earnings report since its stock market debut last month. Beyond Meat's burgers and sausages are made from pea protein because customers didn't want to eat more soy or gluten, he said. Analysts consider Beyond Meat's strategic placement a "strong advantage" over competitors and a differentiating factor in reaching the broadest possible USA market which they estimate to be $100 billion by 2035.

Sales are growing as people seek to cut down on meat for health and environmental reasons.

The company reported a net loss US$6.6 million, wider than the loss of US$5.7 million a year earlier. What's more, food giants like Tyson Foods Inc. and Nestle SA are working on competing products.

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"We're being very conservative", CEO and president Ethan Brown said.

"This is hugely important because it means that the brand is driving same-store foot traffic rather than just cannibalizing existing sales", they wrote. Companies have been making center-of-plate products based on Beyond Meat's offerings, as well as those from rival Impossible Foods.

But while Beyond Meat requests stores sell its products next to real meat, there are no contractual obligations on product placement, according to interviews with nine retail chains. Beyond Meat is now valued at almost $6 billion.

"Looking ahead, we believe we are in the early stages of achieving the growth that Beyond Meat is capable of", he added. Shares of Beyond sank as much as 7% Monday on the news that Nestle, a major competitor, would release its own veggie burger in the United States. One-third of specialty food shoppers have said they were buying a plant-based food and beverage, so more companies are bound to invest in this space. Euromonitor predicts the market for plant-based meat substitutes will reach $2.5 billion by 2023. While a great alternative for consumers conscious of the environment, the company still needs to put in the work to get more takers as its products cost much more than beef burgers.

In particular, investors will look for details about Beyond Meat's expansion plans in Europe, where it launched its business less than a year ago, and a multi-year brand awareness campaign in Hong Kong, it revealed in the IPO filing, as well as revenue guidance for the rest of 2019.

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