Roquette, the world’s largest supplier of pea protein and a supply partner of Beyond Meat, said on Sept. 27th, that the price of the ingredient will rise due to a once-in-a-century drought in Canada, overly wet weather in France and increased demand for plant-based proteins. 

Roquette predicts the price of pea protein to rise as much as 120% this year as crop yields are down 45%.

The price hikes came on the same day that Beyond Meat announced its newest product, Beyond Chicken Tenders, would begin rolling out in retail stores. 

On the day of these two announcements Beyond Meat (BYND) stock rose 2.64% from $110.46 to $113.38 only to fall -5.29% the next day and continue to drop to $100.58 at market close on Friday. Year to date Beyond Meat shares have dropped 26.3% compared to the S&P’s 16.5% gain. 

Beyond Meat is very much in a growth stage with an increase of net sales of 31% to $149.4 million from last year while at the same time the company’s research and development expenses for the quarter ending June 30, 2021 had an increase of 129.77% year-over-year.  Some investors aren’t worried because upcoming partnerships with PepsiCo and McDonald’s and the company’s expansion in China and Europe could yield great returns in the long-term. 

“Beyond’s stock will suffer during a short period, because of the shortage of peas, and other volatilities in the market, ” said Jesse Shuja, shareholder and host of PlantStock on YouTube  in an interview on Oct.1st. “That is just a golden opportunity for us long-term investors to buy more.” 

The increase in the price of pea protein might slow down the company’s goal of reaching a price parity with traditional meat. Currently the price per pound of Beyond Meat is down to about $5.70 while lean ground beef can cost $4.10 to $6.00 according to the US Bureau of Labor Statistics. Achieving a price parity to animal protein has been one of the main goals of the company since it was founded. 

The launch of Beyond Chicken Tenders might offset some of the pain of increased pea protein prices.  Although Beyond Chicken Tenders contain a small amount of pea protein, its main protein source is fava beans.  

Americans currently consume about 122.75 pounds of chicken per year versus 81.74 pounds of beef.  Beyond Chicken Tenders have already been successful in the foodservice market, and  if they become a major seller for the company that could lessen its dependence on pea protein. 

Some stock analysts are hesitant about the company. 

“Beyond is an early leader in plant-based meat, but we believe its current all-channel retail momentum lags consensus expectations, and our food-service estimates may be high, too,” a Piper Sandler senior research analyst, Michael Lavery, wrote in his note on Sept. 16th about the company

Piper Sandler downgraded the stock to “underweight” from “neutral.’

Other investors have more hope for the brand in the long-term. 

“There are plenty of innovative companies that are working on how to grow both peas in a more efficient manner.  Benson Hill is one such company that has mentioned Beyond Meat as a perfect customer in the near term future. When you look at 5-10 years ahead, this is just short term noise,” said Shuja.  

When contacted for a statement regarding the increased price in pea protein and retail debut of Beyond Chicken Tenders, the company did not return a request for comment.