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Friday, May 27, 2022

Beyond the meat: the crossroads

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Beyond beef burgers

the part of beyond the meat (NASDAQ:TSFT) may be at a crossroads. Or before a turning point for many investment theses. It’s no longer a secret that things are not going well for the maker of plant-based meat alternatives. Neither the share price nor the operating figures have been satisfactory recently.

But go on: the latest partnerships don’t seem to work either. Even expanding the reach hasn’t achieved operational change at Beyond Meat. The investment thesis is unstable, and that can definitely be very important.

Beyond meat: It’s not just about McDonald’s!

It’s true that Beyond Meat has recently made headlines again at McDonald’s. Rumors and analyzes have yet to be verified. In any case, BTIG has stated that McPlant may be off to a rocky start. The new burger would sell quite slowly in select metropolitan areas, and even more slowly in rural areas. Therefore, it is not clear whether the ambitious forecasts are sustainable and whether all franchisees are involved in the product launch.

But it’s not just McDonald’s. No, Beyond Meat management has ensured that their own products are used by many catering chains and restaurants in the system. The reach of supermarkets and retail stores also increased significantly. Nationally in the US market, but also internationally. However, the rudder could not actually be turned.

This is very important for an investment thesis. And again it leads to the question that is of great relevance to investors: Is the market ready for the products?

Is the market the problem…?

Beyond Meat is on a mission: to make the world a better place by replacing animal products with plant-based products. First of all, this seems to be a very clear market. So it’s not mainly vegetarians, but Otto-Normal consumers who are supposed to become flexitarians. That is the salient point and possibly now failed.

The question remains whether consumers are ready for this change. Or if interest persists even after an initial testing phase. Of course, price and taste also play a role. But above all the question of whether the market wants to change or sticks to long-established consumption habits.

Despite the increasing reach in supermarkets and the catering system, figures have been weak recently. Will the change of course take place in 2022? Expect. However, when in doubt, every investor should ask themselves in the coming weeks and months how much patience they still want to have with this investment thesis. Especially when the market may not be ready for the changes.

Beyond Meat’s article first appeared in The Motley Fool Germany.

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Vincent owns shares of Beyond Meat. The Motley Fool owns shares and recommends Beyond Meat.

Motley Fool Germany 2022

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