Unlike most, Beyond Meat is thriving in 2020.
The company’s stock is up 114% as of October 27, far outpacing the S&P 500’s 6.5% return, and shares have skyrocketed 548% since the company’s IPO in May 2019.
The recipe for success seems strong. Beyond Meat has itself moved beyond its initial offerings, expanding the product line in 2020 from its primary ground “beef” option to include “meat”-balls and sausage links and patties. The company made its meat lookalikes easier to find than ever; Beyond Meat is on the shelves at more than 112,000 retail and foodservice outlets in 85 countries worldwide, and tripled its presence at Walmart this fall.
Beyond Meat doesn’t target vegetarians, but rather, consumers who want to reduce their overall meat consumption; the product can even be found in the meat aisle. But there’s one major issue holding the brand back from dominating both the butcher counter and tofu towers: vegetarians are turned off by the “meaty” taste and texture, and meat eaters would rather just have a burger.
Many meat eaters have tried the product for novelty and some haven’t been impressed enough to make the patty a permanent part of their diet.
“Beyond burgers come close on texture and looks, and they’re better than most restaurant burgers that aren’t cooked well,” said Matt Spelker, 27, whose grandfather was a butcher. “I’d give them a C+”.
It’s a conundrum that’s haunted the brand since its inception, and one that also weighs on rival competitor Impossible Foods.
However, the pandemic that has changed everything is changing consumers’ dietary habits as well, potentially providing an opening for Beyond Meat to crack its consumer code.
Increasing awareness of meat production practices, bolstered with coronavirus outbreaks at meat processing plants has caused a broader base of consumers to be skeptical of their meat and where it comes from. The pandemic also exposed the fragility of the American food system, sparking Tyson, the world’s second largest processor and marketer of chicken, beef, and pork to take out a full page ad warning that “the food supply chain is breaking.”
The coming months will be key in understanding how these events have shifted consumers’ attitudes, and if Beyond Meat can capitalize.
Beyond Meat’s Q3 earnings, which will be released on November 9th, will offer investors clues on if Beyond has managed to leverage its five minutes of fame to establish a strong consumer base, or if their success is as fleeting as the dietary resolutions that bring consumers to their products in the first place.