Stock Market Analysis

How Does Beyond Meat Make Money?

This plant-based meat producer is the only pure-play on the market and posted record revenue in the last quarter. But how does Beyond Meat make money?

Nearly one in four people in the U.S have reduced their consumption of meat. Beyond Meat stock shot up after IPO and has remained somewhat volatile since then. The company recently reported some impressive results in Q2 of 2020 despite some challenging economic conditions. It is a first mover and benefitting from a growing trend, but how does this company make money?

What is Beyond Meat?

Beyond Meat (NASDAQ: BYND) is the producer of plant-based meat substitutes such as beef and pork which mimic the taste and texture of real meat. The company was founded in 2009 by founder and current CEO Ethan Brown and was backed by big names such as Bill Gates and Tyson Foods. It intends to disrupt the $1.4 trillion global meat market by getting consumers to switch from animal to plant-based meat. 

Start our Get Started Challenge to become a fully-fledged investor in just 7 days!

It continues to innovate and spend on research and development (R&D), and in the last fiscal year, just under 7% of revenue was allocated to R&D. Beyond Meat has consistently brought out new or improved product offerings, and in the last two years has had five new product launches. This is vital to stay ahead of the competition and to offer the best products in the markets. The company has a five-year goal which includes underpricing animal protein in at least one category, and CEO Brown is confident that this is achievable. 

Investors must be aware of the competition from other giants such as Impossible Foods and Nestle, who are also innovating in the space. However, Brown has stated, “The competitive entrants are not a surprise, nor a development we are not equipped to handle,”.

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

Colm Moran
Colm Moran
Colm is a contributing writer to MyWallSt. His favorite stock is Virgin Galactic as it is representative of his visions for our world in the future.