Beyond Meat files for IPO: ‘There is a significant international market opportunity for our products’
According to a filing with the Securities and Exchange Commission (SEC) on Friday, the firm has applied to list on the Nasdaq under the symbol BYND, with an initial offering size of $100m. JPMorgan Chase, Goldman Sachs and Credit Suisse will lead the IPO.
Net revenue for the nine months ending September 29, 2018, was $56.4m, a 167% increase from the same period a year earlier, with net losses of $22.4m.
The Beyond Meat brand – spanning frozen grounds, strips and burgers and chilled burgers and sausages - is now in several thousand retail locations; while its biggest revenue-generator, the pea-protein-based Beyond Burger (which it claims “looks, cooks and satisfies like beef”) is now on the menu in thousands of restaurants, hotels, college campus dining halls, and hospitals, said the filing. (A press release on new hires also issued Friday says the brand is now is "more than 32,000 retail and food service outlets nationwide.")
“Many of our restaurant, hotel and other foodservice customers choose to prominently feature our brand name on their menu and within item descriptions, in addition to displaying Beyond Meat branded signage throughout their venue. We believe that we have established our brand as one with “halo” benefits to our partners, as evidenced by the speed of adoption by key partners.
“For example, Beyond Meat was the fastest new-product launch in the history of both A&W Canada and TGI Fridays, and a number of our key partners are investing their own resources to tap into our brand and product awareness.”
"If we insist meat be defined by origin—namely poultry, pigs and cows—we face limited choices. But if we define meat by composition and structure—amino acids, lipids, trace minerals, vitamins, and water woven together in the familiar assembly of muscle, or meat—we can innovate toward a solution.
"...Having looked under the hood and through the microscope, we can say with confidence that we see no material obstacles to a perfect build of meat from plants. With each advance, I believe the market for our products will increase, and our sales will grow.
"This summer, for twelve consecutive weeks, The Beyond Burger outsold (by unit) all packaged beef patties in the meat case across the Southern California division of Ralph’s, a subsidiary of Kroger, one of the nation’s largest conventional grocers. This outcome surprised us—our aspiration as the only plant-based entrant in the meat case was to simply hold our own.
"And we learned that from January through June this year, nationwide across Kroger, 93% of consumers who bought The Beyond Burger also put animal meat in their shopping cart—an important indication of mainstream appeal."
Ethan Brown, Beyond Meat CEO, SEC filing, November 16, 2018
'We intend to establish production capabilities in Europe in 2020'
The brand also has ambitious international expansion plans, said the filing: “Our recent success with A&W Canada illustrates the growing international demand for our products. We launched in Europe in August 2018 through contracts with three major distributors and have also received strong expressions of interest from some of Europe’s largest grocery and restaurant chains.
“We intend to establish production capabilities in Europe in 2020. Additionally, for several years we have maintained a presence and generated brand awareness in Hong Kong through our local distributor and expect further expansion in Asia over time.”
The size of the prize
So what’s the addressable market for Beyond Meat?
Right now, plant-based milks account for c. 13% of the fluid milk category in the US and there’s no reason that plant-based meat cannot achieve similar market penetration, said Beyond Meat.
“We believe that by applying the same strategy to the plant-based meat category, it can grow to be at least the same proportion of the approximately $270bn meat category in the United States, which over time would represent a category size of $35bn in the United States alone.
“As a market leader in the plant-based meats category, we believe we are well-positioned to capture and drive a significant amount of this category growth. We also believe there is a significant international market opportunity for our products.”
Co-founded by Ethan Brown and Brent Taylor in 2009, Beyond Meat launched its first products on the national stage in 2013, and has appeal to vegans/vegetarians and meat eaters alike, according to executive chairman Seth Goldman, who said the majority of Beyond Burger fans were flexitarians - meat eaters cutting down on meat – validating the initially controversial decision to merchandise the product in the meat case.
A strong pipeline of products in development
Beyond Meat recently opened a 30,000 square foot innovation center in El Segundo, California, started production at a new manufacturing facility in Columbia, Missouri, and struck deals with several co-manufacturers: “By the end of the first quarter of 2019, we expect to triple our monthly production capacity as compared to the end of the second quarter of 2018.”
The firm also has “a strong pipeline of products in development.”
Ingredients list, Beyond Burger: Water, pea protein isolate, expeller-pressed canola oil, refined coconut oil, contains 2% or less of the following: cellulose from bamboo, methylcellulose, potato starch, natural flavor, maltodextrin, yeast extract, salt, sunflower oil, vegetable glycerin, dried yeast, gum arabic, citrus extract (to protect quality), ascorbic acid (to maintain color), beet juice extract (for color), acetic acid, succinic acid, modified food starch, annatto (for color).